If your business provides SaaS or online software, there’s a lot to think about. You have to make sure your product aligns with new trends in technology, ethical business practices and the latest industry standards. Still, one of the biggest problems for most businesses providing online software has always been churn rates.

Before you plan anything to resolve this, it helps to understand why churn rates occur in the first place. Many existing customers simply vanish with every new subscription and don’t come back to renew. And although churn rates are unavoidable, they are controllable. Many professional SaaS providers will increase efforts to attract enough customers in one fiscal year in order to outweigh losses. This will not only result in better stability, but also more net gains of equity and profit.

Beyond controlling churn rates, there are measures you can take to make sure customers stick with your online software. In fact, some of the tactics discussed below can reduce churn rates from 50 percent for 1,000 customers to just 20 percent. In the world of SaaS services, that’s quite impressive. Let’s take a look:

1. Be proactive. First of all, you need to be proactive and aware of the SaaS community. Observe and evaluate your competitors. You need to study them closely while trying to look for specific flaws in their designs. This will allow you to identify reasons for why your service is superior to theirs.
2. Plan your marketing strategy. Once you’ve identified weaknesses in your competitors’ designs, you need to plan a marketing strategy accordingly. Let your potential and existing customers know why your service is more reliable and efficient than your competition’s. You need to show your customers that they’re making the right choice by choosing your product. This will ensure that your customers are not tempted by the illusion that your competitors are superior because of their lower prices.
3. Don’t charge fees for renewal or subscription termination. This is one of the most important steps you can take to reduce churn rates. In fact, with the specific nature of SaaS, such charges are unnecessary. Without such charges, a customer will feel less wary about coming back to your business.
4. Reward your customers. Rewarding or incentivizing your customers is quite powerful in the long run. In the past, customer loyalty programs have shown tremendous success in helping businesses keep their existing customers and attract new ones. Rewarding your customers not only helps you get recognized, but also builds long-lasting relationships.
5. Encourage customers to try out the competition. As strange as it may sound, you can even encourage your customers to try your competition. When they come back to you within a fixed period of time, offer them an incentive. This will show a lack of greed on your part. Moreover, it will portray tremendous confidence and show your customers that you’re not afraid of your competitors. Your customers will find this very impressive.
6. Show confidence. Keep your customers interested in your online software by showing confidence. It can be a bit risky, but if you’re providing exceptional services at affordable rates, it’s also a guaranteed win. Present valid proof through sharing relevant reports and documentation, including white papers, case studies, analyst reports, etc. about why you are worthy of their support. Even young startups without approved case studies can share use cases to detail how their product has worked in various examples.

Regardless of the competition, many SaaS providers want to keep their churn rates at 5 percent. However, this is virtually impossible, because when your customer base grows, the ratio of loyal customers to passing customers will fluctuate regularly. Thus, even if a majority of your customers decide to stay with your online software, the churn rate would stay at 20 percent. Be realistic and understand that this is as low as it can get. There are not many SaaS providers who get even close to that figure.