Many SaaS product teams report up to 70% customer churn in 3 months.
No one ever likes customers going away, after spending so much time, money and effort acquiring them. Yet, that's the ground reality - and needs conscious efforts to fix.
Luckily, Voice of Customer (VoC) can be instrumental here.
Let's learn how a product team at Microsoft Azure leveraged surveys as a Voice of Customer collection mechanism to reduce their customer churn.
Background:
A deep integration product between an observability SaaS and Azure was experiencing a high churn rate. Within an eight-week period, 55% of customers were explicitly deleting the Azure resources deployed to use the integration. Despite various hypotheses, the exact reasons for this churn remained unclear.
Challenge:
Since this integrated offering was a relatively new product within the Azure ecosystem, neither the broader Microsoft feedback channels nor the SaaS partner customer success teams had customer feedback specific to this problem.
As a result, the product team was clueless, why customers were churning away.
Was it due to SaaS limitations, issues within the integration, setup workflow, documentation gaps or cost considerations - no clue.
Solution:
The team brainstormed internally and came up with an extremely simple, yet ingenious plan - an optional delete survey at the time of Azure resource deletion.
This was non-intrusive - the survey was designed to gather insights without creating a friction point that might further frustrate customers in the process of deletion.
By keeping it optional, the product team ensured that users could provide feedback voluntarily. Despite this approach, they achieved a strong response rate, with 30% of deleting customers completing the survey.
Firstly, it showed that the integration and product itself was valuable and solving a real problem - since customers cared enough to respond to the survey spending their valuable time.
Secondly, the product team gained interesting learnings, which helped them massively improve the customer experience.
Key Learnings from Voice of Customer:
The survey responses revealed several critical insights:
Development and Test workloads:
20% respondents deleted their resources, as these were dev and test workloads.
They were created to understand the product and integrations deeply, and were always meant to delete after moving to production to save costs.
Among these, some workloads never progressed to production, presenting an opportunity for further product discovery to understand roadblocks preventing full adoption.
Documentation Gaps:
10% of customers reported difficulty in understanding specific aspects of the integration between Azure and the SaaS product.
These issues were promptly addressed through documentation improvements, reducing confusion and enhancing the onboarding experience.
Product Stability & Reliability Issues:
A few cases were linked to unexpected errors or system crashes, while setting up the integrations.
Users who encountered these issues expressed frustration, leading them to churn - in fact, they even shared verbatim feedback letting the team know what errors they had faced.
Engineering teams conducted an in-depth investigation, identifying and resolving critical reliability concerns to enhance user experience.
Results:
By implementing these changes and addressing the root causes of churn, the product team successfully reduced the overall churn rate from 55% to 40%. The structured VoC approach allowed to:
Gain direct customer insights with minimal friction.
Identify and address usability and documentation gaps.
Investigate and resolve critical reliability issues.
Recognize opportunities for improving the transition from test to production environments.
Conclusion:
This case study highlights the importance of leveraging Voice of Customer (VoC) to drive product improvements and reduce churn.
By proactively gathering customer feedback at the point of resource deletion, Microsoft Azure product team were able to make data-driven decisions that enhanced the customer experience and improved retention.
Such insights continue to inform ongoing product development and customer engagement strategies at leading SaaS product teams.
If you are a SaaS team looking to amplify your product growth, one of the strategies is to optimize for reducing customer churn with Voice of Customer.
To do this quickly and effective, Flash (by Velora AI) can help.
Flash consolidates voice of customer from 30+ sources, analyzes it continuously and surfaces insights that power winning SaaS product teams prioritize the right work items on their backlog and deliver an amazing customer experience.
Regardless of whether you choose to use Flash or not, we hope that you do realize the power of Voice of Customer, and start leveraging it to amplify your product growth.
Feel free to reach out to us, if you need any help on that journey.