CATEGORY > Customer Churn

15 Reasons Why Your Customers Churn

3 February, 2023 4 min read
15 Reasons Why Your Customers Churn

Churn is a common problem for businesses that run on a SaaS model. If you don’t retain your customers, you risk losing out on potential revenue. This makes it super important to stay proactive and discover the factors that cause customers to cancel their subscriptions and comprehend the math behind your present churn rate.

Every churn has a distinctive reason, and unless you know it, you will never be able to learn from it. Here, I have tried to list down 15 common reasons your customer can churn out. The list is built around products, relationships, market dynamics, and competitors. Read on to discover.

1. Product Usability

As your customers' business grows, there may come a time when they need to re-evaluate whether your product is still the best fit for them. This can be due to an expansion in scale, a change in team structure, or an organization-wide change in the tool stack.

2. Product Functionality

It's important to always monitor how accepted your product is by customers and what additional features they might be asking for. This will give you a good idea of how well your product is meeting customer needs. Check out this article where ZapScale CEO Manasij Ganguli explains the importance of good product fitment.

3. Product Quality

The user interface (UI) is one of the most important factors to consider when checking out the quality of a product. If your UI is not impressive in comparison to not just your competitor, but also other complimentary tools that your user may be exposed to, it can reflect poorly on your company. So don't ignore your software design! It adds up to a smooth customer journey.

4. Competitive Pricing

If you don’t have any major product differentiator, pricing will always play a crucial role in a SaaS business. Competitive pricing is a key to your business success. It will not only play an important factor in customer acquisition but also in retaining them.

5. Renewal Offer

When a customer has been with you for a while, they come to expect a more personalized level of service than what you might offer to new customers. It's important to try to understand what they want and come up with a solution that would be mutually beneficial.

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6. Terms of Payment

Your company may have set payment terms, but sometimes you will need to change them to meet your customer's needs, as their company policy may have some restrictions. Ultimately, you will need to find a compromise / a middle ground that works for both parties.

7. Market Weather

Your business is always dependent on how the market is performing for your customers. If there is a slowdown or some shift in market behavior, there is a chance that it will impact how the customer looks at your subscription (asset or liability). In order to gauge your company’s long-term success, it is imperative to ensure the customers see your value and stick with your brand for longer.

8. Customer’s Organizational Circumstances

There are internal conditions that are out of your control, like change in management, change in business strategy, mergers/acquisitions, or change in business focus. It’s important to accept these changes and move forward.

9. Ease of Use

As technology advances, users expect more from the products they use. Ease of use is now one of the most important factors when choosing software, so it's important to make sure your product is accessible and easy to use. If you don't provide a good user experience, someone else will. Therefore, make sure to integrate more accessibility and ease of use into your product user journey.

10. Ease of Onboarding

The customer onboarding process experience is very important since that’s the first interaction your customer has with you and your product. You need to make it as frictionless as possible. Subsume best onboarding practices for your customers.

11. Outcome Through the Product

Ideally, you need to show ROI at every stage of the customer lifecycle. Unless you show how you are impacting your customer's business, there is always going to be uncertainty in your relationship.

12. Dependability on the Product

If your product becomes obsolete with time, you will have problems retaining your customers. This happens when a new product comes into play or your features are not adding any value to the customer or another larger tool has included your product features in their offering.

13. Vendor-Customer Relationship

However good your product is, unless you are in a monopoly space, you will need to maintain a good customer relationship.

14. Speed of Support and Service

In the current DNA age, experience is one of the most important aspects of customer success. Speedy support and service along with a good product help in providing the customer with a good experience.

15. Upgrading the Product

The tech world moves at a very fast pace. You can’t just sit back and relax. You need to constantly add features and upgrade your product based on your customers’ needs and industry standards.

There are surely many more factors that affect customer churn. However, if you keep a check on these 15, you'll be able to reduce churn to a great extent. To keep track of your customer, you need to constantly look into signals given by them. The best way is to look into customer health and identify those who need your attention.

With a growing number of customers and a lack of Customer Success resources, the urge for a good customer success tech stack has increased more than ever. Therefore, it's extremely crucial to back yourself with a customer success platform that keeps all your customer information in one place and gives you functional and actionable data.

ZapScale is a customer success platform that makes customer health calculations easy with its 40 pre-defined deep customer health KPIs, so you don’t have to spend time and effort in building your own customer health score.

Click here to know how does ZapScale deliver the deepest, most comprehensive customer health score.

Click here to Sign-up for a demo to try ZapScale for free.


Author profile image
Wilson Lobo

Wilson is an experienced marketer with a demonstrated history of working in marketing and advertising space across 17 countries. He specializes in B2B brand building.

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