What Causes High Churn?
Why are so many of your customers leaving?
Your customers quit for many reasons, but there are two classes of churn: Voluntary and involuntary.
- Voluntary: Reasons related to the customer CHOOSING to cancel.
- Involuntary: Reasons the user leaves not of their own accord.
- No Product Market Fit: You don't have the right features or you're too expensive.
- Product Market Fit: Your product does fit the market, but it's too hard to get started, on-boarding is confusing, or your app is ugly or too hard to use.
Voluntary reasons are divided into two more categories to indicate product-market fit.
Involuntary reasons are situations where the user leaves your product against their will. These reasons include:
- A gatekeeper doesn't like the product. For example, in our other product, LessAccounting, CPAs often want to keep all their clients in the same product.
- A credit card is declined and the revenue from this user stops.
- The client goes out of business.
Sadly most signups in most software applications register their account, click around the app, then leave. They didn’t input any data, they didn’t leave any feedback, they just left without leaving us anything to improve. These silent signups are killers.
Why do your signups have a high abandonment rate and low usage/interactions with your product?
- The wrong people are signing up
- Poor onboarding experience
- Too many features confuse them
- Not enough features
- They “got busy”
- They had a question and didn’t ask
- Not sold on your product before signing up
Let’s dig into these in depth and examine them.