Hidden growth opportunities for SaaS companies in an economic downturn

By Marc McDougall

I wanted to make this post because I’ve been hearing lots of people struggling with retention and activation as of late.

This is my attempt to try and poke a ray of light into their world.

Prefer to listen?

I did a podcast on this same topic with Edward Ford on the Growth Hub Podcast. Go check that out and show Edward some love if you like it!

Listen to the interview


Alrighty, let’s kick this off…

#1: Tighten up your value proposition & positioning

People are unsubscribing out the wazoo right now — what are you going to do about it?

The reasons that people unsubscribe are universal.  They haven’t changed now that there’s a global pandemic.

If people are cancelling your service right now, it’s because it’s not valuable enough to them to justify the cost.  Period.

Do you think people are cancelling licenses to their HR software?  Their email marketing tools?  Unlikely — they’re directly tied to revenue creation or cost reduction.

So, what can you do if you’re not one of the lucky few that’s deemed “essential”?  You can become essential.

When someone unsubscribes…

When a loyal subscriber defects, shoot them a quick email offering them a $50 Amazon gift card in exchange for 15 minutes of their time to discuss why they unsubscribed.  Ask them a few questions and try to uncover what they found valuable about your product.

You want to get a feel for how they see your product.

This kind of information is critical to your functioning as a SaaS company.

You can use this information to either pivot, or refocus your positioning on things that might have got them to stay.

Quick Tip!

Why not just get ahead of the churn by making your SaaS product completely free for the next 4 months?  Not only will you keep all your existing customers, you’ll be building an enormous amount of rapport with them.

For those that stick around…

You likely have a core group of “evangelists” that are sticking with you despite the hard times.

To them, you are probably business-critical.  You’re an incredibly-valuable service that they absolutely must keep.

Why is that?

This is such a good opportunity to hop on the phone with these guys and get to the root of what’s truly valuable about your product.  Then, you can embellish these features more on your marketing site so that when things go back to normal, you can land more of them sweet, sweet evangelist customers.

#2: Listen to your new customers and get ahead of the churn

You’re probably seeing a ton of folks signing up for your SaaS app, and immediately cancelling it to take advantage of the free trial.

People are scared right now — this is normal.

However…these new customers probably have some specific concerns about your app that are causing them to do this.

Maybe they’re not sure if you’re going to help them with the business problem they have.

Maybe they don’t trust that your solution will connect with their internal CMS?

Who knows? …well…the customer does, of course!

So, before they inevitably-churn away after their trial expires, try to talk with them.  Ask them how they’re doing right now, and what (if anything), you can do to make your solution more valuable to them.

(Psst, this is something you should be doing already, but the pandemic situation is forcing everyone to do it now.)

#3: Cool down your burn rate by auditing your monthly subscriptions

Your SaaS app is probably experiencing a ton of churn right now because people are evaluating what services are absolutely essential, and curtailing spend on the rest.

The good news is: you get to do that, too!

The current climate is forcing companies everywhere to re-evaluate their costs, so you’ll likely see a “soft reset” on all those expensive monthly fees you’ve been paying, and your burn rate will thank you.

Quick Tip!

If you’re not already using a tool like Custodian to handle spend management, now might be a good time to set that up…😉

#4: Learn how to market to your customers better than ever before

In the end, an economic downturn of any sort forces companies (especially SaaS companies), to hunker down and have better conversations with their customers.

These conversations will turn on light-bulbs and illuminate different marketing ideas that you may have never considered before.

But…what do you mean?

Alright, so let’s say you’re talking to a customer.

They say “I wish your product did X” — something totally unrelated to your core offering.  You can throw up a microsite that solves this problem, and link back to your SaaS app somewhere in the body of the site.

BOOM!  You’re now solving a painful problem that most of your customers probably have, and using that solution to market your core product.

The bottom line

Look, the current COVID-19 craziness is not a positive thing — I’m not trying to spin it that way.

All I’m saying here is that you can use it as a customer discovery experiment and watch your churn drop off, your customer activation improve, and prime your marketing efforts for when things get back to normal.

But in the end, this is just another fancy way of saying “talk to your customers” — it’s just so much more important right now.

Stay safe out there.