My friend Charles Laughlin recently sent me this thought-provoking article about the SaaS world, “Why Subscription Businesses Need To Let Their Users Quit.“ Just imagine a world of paid apps and software solutions in which turning them off is just as easy as turning them on.
This would represent a very different world from what we have now. Most SaaS companies seem to have decided to make it difficult to churn in order to squeeze out a few more months of recurring revenue. This stands to reason since exiting a SaaS solution isn’t exactly easy today.
The Ironies of SaaS
Here’s an odd irony. Part of the original idea behind SaaS was that buyers could turn the software on and off easily. Yet investors and finance people have focused so much on churn numbers that the notion took hold that making it easy for customers to gracefully exit is bad for business.
Here’s another irony. The article puts forth that making it easy to cancel a SaaS account will accrue meaningful benefits to the business. For one, the existing customer is made to feel nearly as special on the way out as they were on the way in. Doing this might just create some cognitive dissonance. As in, “Wow, they made it so easy to cancel, maybe I shouldn’t.”
A second positive outcome might be that the customer shares this story with a business partner or peer for whom the SaaS solution might be a superior fit for their situation. What if the customer that is churning is too small or too big for your solution, or is in the wrong vertical? Yet they may have 100 peers in their network who are the right size or in the right vertical. What if they became an advocate who steers these better-suited customers your way?
Why wouldn’t I recommend a solution that didn’t quite work for my business but is perfect for a friend’s? One obvious possibility would be a bad experience trying to exit the platform.
Do Customers Value Experiences or Products?
I think companies see customers who exit as perhaps “not liking” their product. I think companies may be overestimating their customers’ emotional connection to the software. While customers may connect with the salesperson or the customer experience team, it’s unlikely they form much of a bond, positive or negative, with the product itself.
As the article points out, making the exit process difficult only delays the inevitable and cements a negative customer experience. So the next time you bury those terms and conditions to make exiting challenging realize that you may have lost an opportunity to trigger an advocate to say good things about your business.