3. Retention  >  Set Customer Expectations

Set customer expectations to reduce SaaS churn

Setting customer expectations lower than what you can deliver is the best approach to reduce churn. Customers churn when you fail to meet their expectations so don’t overpromise. Set crystal clear expectations upfront.

●● INTUITIVENESS

Skype

Skype clearly tell users what to expect when they purchase a Skype number.

Customer_Success_Box

Customer Success Box has a video that shows visitors how the software looks like and what they should expect.

Constant_Contact

Constant Contact has a huge list of features with pricing details to let visitors know upfront what exactly they will get with their selected plan and what they won’t get.

How to use the technique

  • Understand customer expectations. This should be easy because you have buyer personas. Ask customers and users directly after they sign up. Use our free churn optimization framework to master the art of marketing research. 
  • Start early. When new user signups for a free trial, the expectations are already set. Focus on your marketing strategy. What expectations your marketing (and sales) team are setting? Work from the beginning to ensure you don’t experience a high churn rate.
  • Optimize content including ad copy. The copy of the landing page, ad copy, and content published across various channels are how you develop customer expectations. Optimize content and copy to set clear expectations.
  • Encourage customers to read terms and policies. Clearly state everything in terms and policies. Tell customers you have added relevant information and it’s essential to go through these pages.
  • Communicate and engage. It is the crux. Even if you have developed high expectations, you can still overcome them with constant communication via blog posts, social media, email, etc.
  • Create a help section so customers can understand more about your app. It is an indirect approach to setting appropriate expectations.
  • Get feedback from customers to understand their expectations and how these are developed. Identify content pieces and tweak them if there are any content out there that’s not consistent with your strategy.
  • Improve your app to meet customer expectations. It’s hard to change customer expectations once set, however, you can amend your app. Make it consistent with expectations. Improve it. Here is a free actionable guide for more details.

Mistakes to avoid

  • Creating hype in the early days of launch is where things get out of control. Train your marketing teams and copywriters. Tell them what your app is all about so they can do it right.
  • Sales-focused marketing approach. When you focus on sales, signups, and new customers and don’t look at other metrics, your marketing and sales team will naturally set unrealistic customer expectations. A sales-focused approach should be coupled with intensive training.

Research evidence

Allon, Bassamboo, and Gurvich published an article in the Operations Research journal that focused on managing customer expectations. The findings revealed that when businesses share service delay or outage announcements with customers, it improves their probability and improves expected utility. Setting customer expectations is a predictor of a firm’s profitability.

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When businesses share service delay or outage announcements with customers, it improves their probability and improves expected utility


Related techniques SEE ALL THE TECHNIQUES >

Implement with our proven SaaS Churn Optimization Framework

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