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Stop the cycle: here’s how content slows your churn

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Businesses track dozens—sometimes even hundreds—of different metrics to determine what marketing efforts are most effective. 

Do your social media ads actually drive sales? Does using Google Ads increase signups? Does using questions in blog post titles drive more traffic? 

There’s only one way to know—track it. 

The problem is, it can be overwhelming to track so many different metrics. And sometimes it might not be clear what caused a specific metric to change. 

However, there is one metric that has a direct impact on your bottom line that many businesses don’t track—and that is average customer churn rate. 

Failure to track and improve customer churn rates can lead to the death of your business, particularly for subscription services that rely heavily on repeat customers.  

So what causes customer churn, and how can you use content to improve churn rates? Here’s what you need to know. 

What causes customer churn? 

Churn, or the percentage of customers a business loses each month, can be a tough metric to tackle. Customers may leave for many reasons—maybe they are trimming their budget, maybe they’ve decided to use a different tool, maybe their credit card expired, and they just didn’t notice. 

With so many different causes, is it really worth it to track customer churn? 

Yes, because uncontrolled customer churn can devastate your bottom line. 

Here’s why: 

Consider the chart below, which visualizes the total customers between two companies—one with a five percent churn rate and another with a 10 percent churn rate. Not much difference, right? Just five percent. 

Over two years, company A (with the five percent churn rate) has nearly five times the total customers. 

churn

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That is a huge difference in overall customer count from just a five percent difference in churn rate.  

In fact, according to research done by Bain and Company, increasing customer retention by just five percent can increase profits by 25 to 95 percent

Of course, some customers leave for reasons totally outside of your control. A customer who is just opening their business, for example, might not have a use for a tool designed to grow an established business. 

Those types of customers might simply not be a good fit for your product—at least, not right now. 

However, there are several reasons customers leave that you can control. Some of the most common reasons customers tend to churn, are the following: 

  • You’re attracting the wrong customers
  • Lack of engagement/not achieving their desired outcome 
  • Poor customer service 
  • Customers think your competitors are a better fit
  • Poor understanding of the value of your product/service
  • Customers think your product is too expensive
  • Credit card payment failures

There is good news, however. Creating the right type of content can drastically reduce customer churn rates by attracting the right customers, keeping existing customers happy and better informed on all that you offer. Here’s how. 

How content reduces churn  

Reducing customer churn can be a hard nut to crack. If your products are terrible, for example, great content won’t make much of a difference. 

However, if your products and customer service are solid, then creating content can highlight the value of your products or service, and keep customers coming back month after month. 

Here are three ways content can reduce churn and increase revenue. 

Content educates 

If customers don’t understand how your product or service works, they won’t get the most out of it. This might lead to churn—not because your product or service isn’t valuable, but rather because they don’t understand how that value applies to them. 

Creating detailed onboarding information, FAQs, videos, and guides can help customers navigate the features of your product or service so they can see the value for themselves. 

Buffer, a social media scheduling and analytics platform, does this well by creating guides for the products it integrates with, such as this guide to using Buffer and Shopify together. 

buffer + shopify

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The guide walks through how to connect the two platforms, as well as the data and insights customers can access. 

Content can be personalized 

Not all customers have the same needs. For example, a B2B customer likely tracks different metrics than a B2C customer. By creating content that targets both types of customers, brands can explain how their tool or product helps each kind of customer. 

For example, Profitwell offers separate landing pages for direct to customer subscription companies and B2B companies. 

The content, statistics, and current customer list are all targeted to each type of customer. 

ProfitWell

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But does personalization really matter? 

It does. 

According to Instapage, 87 percent of customers say that personalized content positively influences how they think about a brand.

This makes sense. When content is relevant to your needs, you are more inclined to think the company is a good fit. 

Content helps increase engagement 

When we talk about customer engagement, most people see it as the interaction between customers and businesses through platforms like email, social media, or blog posts. 

Those examples, however, fail to look at the larger picture. 

The true benefit of customer engagement lies in the emotional connection customers (or prospective customers) develop with a brand. Engaged customers are more likely to share your content, buy from you, and tell their friends about you. 

For example, Leadfeeder produced a series of content for sales and marketing teams to adapt after Covid-19. Here is an example of a blog post on email templates for SDRs

leadfeeder

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This blog post gained 12,000 new users in less than 30 days for Leadfeeder. Those users increased conversions by 20 percent. 

Creating intriguing, useful content that improves your customers’ lives, makes their jobs easier, as well as making them think deeply about a complex topic helps increase engagement and build an emotional connection with your brand. 

And that emotional connection leads to a lower churn rate. 

Tips for creating better content to reduce churn 

Ready to create content that reduces churn? Here are three strategies for creating content that keeps customers coming back. 

Find out your net promoter score 

Before you create content, figure out where you stand with your customers by calculating your net promoter score. 

A net promoter score gauges customer loyalty based on how likely they are to recommend your company to a friend or colleague. 

This score allows you to segment your customer base into detractors (those who are unlikely to recommend your company), passives (who are likely under-engaged with your brand), and promoters (who love and promote your company on your behalf.) 

NPS

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Although the scale is based on one question—”Would you recommend our brand?” asking customers why they feel that way will provide additional insight into how your company can improve. 

This feedback can be critical to understanding how you can turn detractors into promoters that are less likely to churn and more likely to share your company with other people in their network. 

For example, if you find that many detractors find your product hard to use, then you know that creating educational content will help improve your net promoter score, and thus decrease churn rates. 

Repurpose content into different formats 

Repurposing content allows your brand to make the most out of the content you’ve already created by packaging it in different ways. 

Different formats make it easier for customers to access the content you create. Some customers might prefer a video walk-through of a new feature while others might prefer an ebook. Or, if you might have vastly different customer bases who have different needs, your content may need to take a different angle. 

Codeless suggests turning blog posts into a video, podcast, or other offline materials to increase customer engagement and make the most out of content. 

Additionally, offering your content in platforms, like a podcast or video, can also impact growth.

format

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You could also create an infographic or webinar that covers the same topic as an ebook in an easier-to-digest format. 

Create a detailed FAQ or resource center 

When customers have unresolved issues, they tend to churn. Think about it—if you bought an SEO tool that felt too complex to use, would you call customer support to learn more about the tool? Or would you be more likely to cancel and find a tool that better fits your needs? 

A detailed FAQ guide or resource center makes it easier for customers to quickly access the information they need to make the most out of your product or service. 

For example, InMotion hosting created this detailed FAQ page: 

Inmotion

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It covers questions customers are likely to ask, such as when support is available and what types of payments the company accepts. 

They also break down questions into different topics such as General Questions, Pre-Sales Questions, Technical Questions, Domain Questions, and Add-On Questions. This makes the guide easier to navigate. 

Making it easier for customers to find the information they need has two significant benefits. It increases customer satisfaction, but it also reduces customer service costs because fewer customers will call in with basic questions. 

Ready to get started? 

Customer churn is one of the most critical metrics for all businesses, but particularly for subscription businesses. Start by finding out what the average churn rate is in your industry and then calculating your rate

Then, use the strategies above to create personalized content that will educate and engage your users—helping you reduce your customer churn rate. 


About the author

annaleacrowe_headshot

Over the last 10+ years, Anna has developed SEO and content strategies for major brands like Brother, Marriott, IHG, Hearst Magazine, PMI, Mailboat Records, Dollar Thrifty Rental, to name a few. Anna is the Assistant Editor at Search Engine Journal. She enjoys burritos and puppies (in that order).

Source: https://www.profitwell.com/blog/content-churn

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We need a new field of AI to combat racial bias

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Since widespread protests over racial inequality began, IBM announced it would cancel its facial recognition programs to advance racial equity in law enforcement. Amazon suspended police use of its Rekognition software for one year to “put in place stronger regulations to govern the ethical use of facial recognition technology.”

But we need more than regulatory change; the entire field of artificial intelligence (AI) must mature out of the computer science lab and accept the embrace of the entire community.

We can develop amazing AI that works in the world in largely unbiased ways. But to accomplish this, AI can’t be just a subfield of computer science (CS) and computer engineering (CE), like it is right now. We must create an academic discipline of AI that takes the complexity of human behavior into account. We need to move from computer science-owned AI to computer science-enabled AI. The problems with AI don’t occur in the lab; they occur when scientists move the tech into the real world of people. Training data in the CS lab often lacks the context and complexity of the world you and I inhabit. This flaw perpetuates biases.

AI-powered algorithms have been found to display bias against people of color and against women. In 2014, for example, Amazon found that an AI algorithm it developed to automate headhunting taught itself to bias against female candidates. MIT researchers reported in January 2019 that facial recognition software is less accurate in identifying humans with darker pigmentation. Most recently, in a study late last year by the National Institute of Standards and Technology (NIST), researchers found evidence of racial bias in nearly 200 facial recognition algorithms.

In spite of the countless examples of AI errors, the zeal continues. This is why the IBM and Amazon announcements generated so much positive news coverage. Global use of artificial intelligence grew by 270% from 2015 to 2019, with the market expected to generate revenue of $118.6 billion by 2025. According to Gallup, nearly 90% Americans are already using AI products in their everyday lives – often without even realizing it.

Beyond a 12-month hiatus, we must acknowledge that while building AI is a technology challenge, using AI requires non-software development heavy disciplines such as social science, law and politics. But despite our increasingly ubiquitous use of AI, AI as a field of study is still lumped into the fields of CS and CE. At North Carolina State University, for example, algorithms and AI are taught in the CS program. MIT houses the study of AI under both CS and CE. AI must make it into humanities programs, race and gender studies curricula, and business schools. Let’s develop an AI track in political science departments. In my own program at Georgetown University, we teach AI and Machine Learning concepts to Security Studies students. This needs to become common practice.

Without a broader approach to the professionalization of AI, we will almost certainly perpetuate biases and discriminatory practices in existence today. We just may discriminate at a lower cost — not a noble goal for technology. We require the intentional establishment of a field of AI whose purpose is to understand the development of neural networks and the social contexts into which the technology will be deployed.

In computer engineering, a student studies programming and computer fundamentals. In computer science, they study computational and programmatic theory, including the basis of algorithmic learning. These are solid foundations for the study of AI – but they should only be considered components. These foundations are necessary for understanding the field of AI but not sufficient on their own.

For the population to gain comfort with broad deployment of AI so that tech companies like Amazon and IBM, and countless others, can deploy these innovations, the entire discipline needs to move beyond the CS lab. Those who work in disciplines like psychology, sociology, anthropology and neuroscience are needed. Understanding human behavior patterns, biases in data generation processes are needed. I could not have created the software I developed to identify human trafficking, money laundering and other illicit behaviors without my background in behavioral science.

Responsibly managing machine learning processes is no longer just a desirable component of progress but a necessary one. We have to recognize the pitfalls of human bias and the errors of replicating these biases in the machines of tomorrow, and the social sciences and humanities provide the keys. We can only accomplish this if a new field of AI, encompassing all of these disciplines, is created.

Source: https://techcrunch.com/2020/07/03/we-need-a-new-field-of-ai-to-combat-racial-bias/

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As Q3 kicks off, four more companies join the $100M ARR club

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Welcome back to our $100 million annual recurring revenue (ARR) series, in which we take irregular looks at companies that have reached material scale while still private. The goal of our project is simple: uncovering companies of real worth beyond how they are valued by private investors.


The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.


It’s all well and good to get a $1 billion valuation, call yourself a unicorn and march around like you invented the internet. But reaching material revenue scale means that, unlike some highly valued companies, you’re actually hard to kill. (And more valuable, and more likely to go public, we reckon.)

Before we dive into today’s new companies, keep in mind that we’ve expanded the type of company that can make it into the $100M ARR club to include companies that reach a $100 million annual run rate pace. Why? Because we don’t only want to collect SaaS companies, and if we could go back in time we’d probably draw a different box around the companies we are tracking.

$100M ARR or bust

If you need to catch up, you can find the two most recent entries in the series here and here. For everyone who’s current, today we are adding Snow Software, A Cloud Guru, Zeta Global and Upgrade to the club. Let’s go!

Snow Software

Just this week, Snow Software announced that it has crossed the $100 million ARR mark, according to a release shared with TechCrunch. The Swedish software asset management company has raised a few private rounds, including a $120 million private equity round in 2017. But, unlike many American companies that make this list, we don’t have a historical record of needing extensive private capital to scale.

Source: https://techcrunch.com/2020/07/03/as-q3-kicks-off-four-more-companies-join-the-100m-arr-club/

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U.S. Fintech Saas Company HighRadius Continues European Expansion with Opening of New Frankfurt, Germany Office

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HighRadius, a U.S.-based fintech enterprise Software-as-a-Service (SaaS) company specializing in integrated receivables, announced on Thursday it has continued its European expansion efforts by opening its new Frankfurt, Germany office.

Founded in 2006, HighRadius claims its HighRadius Integrated Receivables platform optimizes cash flow through automation of receivables and payments processes across credit, collections, cash application, deductions, electronic billing and payment processing.

“Powered by the Rivana Artificial Intelligence Engine and Freda Virtual Assistant for Credit-to-Cash, HighRadius Integrated Receivables enables teams to leverage machine learning for accurate decision making and future outcomes. The radiusOne B2B payment network allows suppliers to digitally connect with buyers, closing the loop from supplier receivable processes to buyer payable processes.”]

HighRadius reported it had a 250% increase in bookings, 25 new customers, and a fourfold increase in employees in EMEA in the last 12 months. HighRadius noted that the new office will it to support more customers to accelerate their recovery from the impact of COVID-19.

“The pandemic has increased demand for agile and intelligent credit and collections solutions as organizations focus on maintaining cash flows and strengthening business resilience.”

Speaking about the expansion, Jon Keating, HighRadius’ Vice President and General Manager, added:

“Frankfurt’s position in central Germany makes other parts of the country readily accessible, and its status as the financial center of the country opens up a gateway to a deep pool of talent and relevant partnerships.”

Source: https://www.crowdfundinsider.com/2020/07/163566-u-s-fintech-saas-company-highradius-continues-european-expansion-with-opening-of-new-frankfurt-germany-office/

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