The truth about why people churn
Why Customers Churn in B2B SaaS: Perception vs. Reality
B2B SaaS companies often grapple with customer churn, and understanding its true causes is critical for sustainable growth. While internal teams may have their theories, the real drivers of churn are often more nuanced and systemic than they appear.
Common Perceptions: Why We Think Customers Churn
Many SaaS providers attribute churn to surface-level factors, such as:
Price was too high
Customer went out of business
The internal champion left
Low product usage
Customer Success Manager (CSM) wasn't proactive enough
Cancellation was made "too easy"
While these reasons may play a role, they rarely tell the full story.
What Actually Drives Churn in B2B SaaS
A closer look at churn data and industry research reveals deeper, recurring patterns:
1. Poor Customer-Product Fit
Churn often starts at the very beginning-with the wrong customers. If your product doesn't align with a client's needs, they're unlikely to stick around, no matter how good your support or pricing is. This misalignment typically stems from unclear messaging or an overly broad sales approach.
2. Overselling and Mismanaged Expectations
When a customer is oversold during the initial deal-promised features or outcomes that the product can't deliver-they quickly become disillusioned. False expectations set the stage for disappointment and eventual churn.
3. Ineffective Onboarding
A lackluster onboarding process is one of the most cited reasons for early churn. If customers struggle to implement the product or fail to see value quickly, they may never fully adopt it. Effective onboarding is about more than just setup; it's about enabling early wins and building confidence.
In this case using Zengain adopt can assist the team with a full understanding of areas to help drive adoption and activation.
4. Lack of Adoption of Sticky Features
Customers who don't engage with your product's most valuable or "sticky" features are at high risk of churning. Without deep integration into their workflows, your solution remains expendable.
Again, Zengain adopt allows you to target every user and see what key features they have used or not used quickly and easily - allowing you to target trainings or other processes to ensure they experience the “missing” features.
5. Single Use Case or Project-Limited Adoption
If your product is only used for a single project or use case, renewal becomes much harder to justify. Broader adoption across teams and functions is key to retention.
6. Limited Awareness of Product Capabilities
Customers may not realize the full value of your product simply because they don't know what it can do. This knowledge gap often results from inadequate training, documentation, or customer education.
In this case using Zengain Retain allows the team to continue to monitor usage across all the new users added to your product and look at both trends of engagement and individual users allowing for a targeted plan to keep the customers value up and to expand awareness of the best features to help drive value across the customer.
7. Decision-Maker Buy-In Fails
When above-the-line decision makers (those with budget authority) don't see clear, ongoing value, they're unlikely to approve renewals-even if users are satisfied. Demonstrating ROI and business impact is essential.
Churn: Not Just a Customer Success Problem
It's a misconception to view churn as solely a Customer Success (CS) issue.
Churn is a business-wide challenge:
Sales must ensure the right fit and set realistic expectations.
Product must deliver on promises and continually evolve to meet customer needs.
Onboarding and Support must drive early and ongoing value.
Marketing must clearly communicate capabilities and outcomes.
As the SaaS industry shifts from selling access to selling outcomes, every team's role in retention becomes more critical-and the bar for customer success rises accordingly.
Proactive Churn Management: The Role of Customer Tracking
To address these root causes, SaaS companies need more than reactive support-they need proactive customer lifecycle management. Platforms like Zengain can help by tracking customer engagement, feature adoption, and health metrics throughout the customer journey. This visibility allows teams to:
Identify at-risk accounts early
Intervene before dissatisfaction leads to churn
Tailor onboarding and training to drive deeper adoption
Ensure alignment between customer goals and product outcomes
By leveraging such tools, SaaS providers can remediate issues before they become reasons to leave, turning churn from a mysterious loss into a manageable, measurable business metric.
Conclusion
Customer churn in B2B SaaS is rarely about price or convenience alone. It's about fit, value, adoption, and alignment across the customer journey. By recognizing churn as a business problem-and using tools like Zengain to monitor and address the real drivers-SaaS companies can raise the bar for retention and long-term growth.
Sources: Hat tip to https://substack.com/@kylepoyar for some great inspiration
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