They're Not Ready To Buy.

The wrong people are signing up for your product.

Tire Kickers

Tire kickers are people who just want to look around your app, look at the design, the onboarding process, etc. They're mostly designers and developer wasting time, clicking a link from Twitter or Facebook. Example: you’ll see a higher churn rate if you get linked on a major tech “news” outlet.

Software companies whose target market are developers and designers will have more tire kickers. I’m guilty of signing up for lot of products and just skimming through them without giving most a chance.

Procrastinators

LessAccounting is a bookkeeping product, and no one likes bookkeeping. We find many people postpone choosing accounting software until tax season. Health gyms have the same issue. You might find your potential customers are waiting for a particular time of year when they “have more time,” “have more money,” or “be in a better position to decide”. If these excuses sound familiar you should realize that your churn rate will fluctuate during non-seasonal months.

Reducing Tire-kickers & Procrastinators

If you’re spending too much time with signups who aren’t ready to buy, require a credit card on sign up. This will reduce your signups to people interested in paying you money for your hard work.

Decision Makers vs. Researchers vs. Users

You might find that the people who use your software aren’t the same people who hold those purse strings. Example: you might sell time-tracking software, the people using it are development team members but the person making the decision on the software is the team’s manager.

Improve this situation

You can improve this situation by helping these users -- the people actually using the product -- sell the value of your product to their boss. Turn users into sales advocates by giving them the information they can pass along to their supervisors to help them see the value without having to use the product themselves, which many won’t make time to do.