Optimizing SaaS Cancellation Flow: Balancing Churn Reduction and Customer Experience

[00:00:00]when designing the ideal cancellation flow for your SAS product you really want to strike a balance between two core things first of all you want to make it as easi as possible for your customers to cancel because the last thing you want to do is hold them hostage never make it difficult for them to cancel and never make them jump through too many hoops and secondly you want to make the most of what may end up being the last touch point you have with a customer who's cancelling not burning your final opportunity to win them back getting information you can use to inform future product decisions and making sure they leave with a good taste in their mouth sounds simple enough right well I'm sure by now you probably wouldn't be surprised that I can list over a dozen extremely well-known software companies that have terrible cancellation flows just off the top of my head and of course we all know companies that are notorious for holding customers hostage I won't name specific examples just yet but before we continue I need you to throw out assumptions you have that things are okay to do because you can point to other companies that do them if your bar is as high as well I'm going to do something and justify it by pointing to a big company that also does it it's probably safe to say that you're not in the right headp space to build a category leading software company and I hope you eventually realize that you aren't really comparable to that big company you have in mind anyway big companies can get away with a lot that companies under 10 to 20 million in AR just can't just to be clear this isn't meant to be a littl in comment I simply mean to say you shouldn't strive to draw this comparison anyway when you can do things better comparisons are great when looking at strategies that have worked for others to acquire customers build brand and so on based on what's publicly available they're not great when it comes to processes like cancellations things that people fault big companies for and are things that you have in your power to do better in other words why aim low when you can do better the good news is that you've made it this far in this video which tells me you know you can do better and are ready to improve your cancellation flow so without further Ado let's get started number one the entry point where do customers think to go when they want to cancel the entry point for your cancellation flow should be in a logical place it shouldn't require 10 hops to figure out where it is and it definitely shouldn't require checking the article in your documentation that shows a user how to cancel which you should still have but should really only be a last resort and basically just serve as a place to send people when your customer support team gets the question from a user let's take a look at some logical examples of cancellation flow entry points slack does a great job of this you can get to their billing settings page anywhere in the app just by hovering over tools and settings and then clicking billing getting to the page in your app where a user can initiate the cancellation process should be equally as easy as it is in slack UI as a second example where it's an extra click but still acceptable is versel from their overview page you can head to the main set settings page first before you dive into the billing tab within that page this is technically an extra click but by no means makes it harder for the user to find another similar example is the runcloud dashboard where you simply click on your profile picture and then can jump straight to your bilding settings from the main nav bar here so as long as you're using your best judgment here and think that a user will logically think to go there when they want to cancel you should be on the right track but if the entry point for your cancellation flow is hard to find your users will probably do a good job of telling you that so you'll know soon enough or feel free to ask someone like me for input if you want an example of an entry point that is too hard to find Twitter or x.com is currently a good example it's really the only one that comes to mind of the subscriptions that we still have I do however have to cut them some slack because this is partially due to the fact that subscriptions are managed through the App Store that said this definitely still serves as a good example of a user Journey that's confusing there are too many Hops and potential places a user would go thinking that this would be the place to cancel and when you finally get to the page the font size is so incredibly small that you might just miss the fact that you can actually cancel but only do so on iOS another example that comes to mind is circle theirs isn't particularly difficult or doesn't include nearly as many hops but because their product also has a billing feature that lets you charge your community members a subscription fee the plan option which relates to your circle subscription is right next to the pay wall option psychologically just because all menu items are so similar it's easy to block that out missing the one menu item you're looking for I personally missed it when looking through the software products we use for a good example however this still Falls within the boundaries of what I would consider acceptable and perhaps even good that said it could perhaps be a little more clear by modifying the menu item to read something along the lines of your circle plan so it's more self-evident at a glance that that's where you'd be heading to manage your subscription to Circle itself all right now that we have the entry point out of the way let's move on to the cancellation survey number two the cancellation or exit survey this is your chance to ask questions here's a simple template you can hand off to your product designer to tweak to make it suitable for your product a simple UI screen with a heading that says confirm your cancellation followed by a subheading one last question to help us improve insert your product name here for teams like yours and then the question is what made you decide to downg grade choosing an option in answer to this multiple choice question can be a required step to proceed there's nothing wrong with that of the options to include I recommend including switched to another insert software category here such as let's say applicant tracking system content management system next you could have too expensive didn't use product name enough no longer need the product for example the project has ended or the business has closed and last but not least is the other option and underneath those options you should have a box where a user can add a comment this should be optional keep it simple don't overload users with too many options and the chances you'll get qualitative feedback which is the most valuable feedback are higher the add a comment box shouldn't only be available if the user selects the other option but it also shouldn't be required regardless of which option the user chooses that way you aren't crossing the boundary into the territory of creating too much friction checking an option from a list of five is easy enough you may still get a handful of complaints from non-serious users of your product but especially in B2B this is significantly more straightforward than what most users are used to as a side note which really goes without saying there may be specifics you'll want to tweak depending on your product and its primary target market but those would be pretty hard to cover considering they're specific to just you watching this video and your product but I don't know what you're doing feel free to connect with me on Twitter or elsewhere if you want to chat about what you're building moving on to number three the reminder of what you're missing now that your users have given a bit of feedback and are about to confirm their cancellation you want to do due diligence to make sure that they know what they're doing there is a segment of people that consider this taking it a step too far including things that the user already knows by reiterating what is on your product's paid plan but we have seen countless cases where users cancel their subscriptions and don't realize things like the fact that their data is going to be deleted they're going to lose access to something specific and the Timeline under which all of these things are going to happen so simply put remind them and if you do so eloquently enough it also serves as a great reminder for the value that your product serves to the user and why they may want to reconsider that cancellation after all without it feeling too much like a step you've added just for the sake of doing that slack is again a good example of this but specific to a product that also offers a free plan publer which is the social media management software we currently use has a similar implementation of this that works well for a paid product in their subscription cancellation confirmation popup you're peacefully reminded of everything that you're going to be losing by continuing with the cancellation this doesn't really create extra friction neither just ticking that extra check boox that they've added it creates security because actually cancelling a product subscription for something you've been using doesn't have to be so easy that you could do it by mistake of course there are companies that take it too far the prime example of this being Adobe though this shouldn't really need to be said using Adobe as the Benchmark of how not to do cancellation is quite a low bar seeing as Adobe was Sued By Us Regulators over exactly how they handle that subscription cancellations an extra that you may decide to include as a part of your reminder of what's missing section number three of your cancellation flow or as a section four that appears after this step is an offer to win them back this could be something as simple as a 20% discount on the rest of the year of their subscription or for 6 months or for 3 months there are various mechanics that you can test with I would caution you to be careful with how you handle this implementation specifically as it relates to the design of the implementation in your product and the experience that a user has with a flow like this why simply put that extra step of offering a discount can feel a little bit pushy and also from what we've seen can be taken advantage of because once customers know that they can unlock a discount just by going through the cancellation flow for X number of months you can Bank on the fact that a good of your customers are going to take advantage of it as you probably would too for any of the products that you subscribe to I hope you enjoyed this quick primer on cancellation flows for your SAS product before you go let's wrap up with an important reminder your North Star metric should always be customer happiness everything else yes Revenue included fundamentally trickles down from this if improving customer happiness is ever at odds with reducing churn you have a bigger fundamental problem to diagnose your cancellation flow is part of your product and even happy customers want to know that they can cancel without calling waiting for some customer success rep to confirm their cancellation request or jumping through some other arbitrary Hoops you create under the guise of controlling churn your chance to control churn is before a customer makes the decision to start the cancellation process that is however not to say that you can't subtly take non-disruptive chances at winning them back getting the feedback you want to improve your product and leaving them with a good taste in their mouth times are always always going to be tough for some portion of your users and sometimes something extra as simple as a discount is what sways someone's decision to keeping that extra subscription meaning a well-designed cancellation flow shouldn't not do anything to reduce the number of people who Churn it should just do so without making those who still end up churning despite those last ditch attempts to win them back leave with a bad taste in their mouth if you want input from us at scal math a team that's been working with category leading software companies for years please feel free to shoot an email to Alex scale.com we're here and always happy to help oh and don't forget to hit that like button and subscribe if you want more like this to show up in your feed and I'll see you in the next one