I pay for many (too many) SaaS subscriptions. (There! I admitted it publicly.)
Most are in the $20 – $40 per month price range, so I’m not talking about inexpensive consumer apps (although I probably pay for too many of those too. Shhhhh!).
Over the past few months, I have become more aware that one reality of my adventurous SaaS habit (and my day job, family commitments, etc.) is that I don’t have time to actively use many of my subscriptions.
My Money Keeps Flowing Out …
I really enjoy supporting indie SaaS teams, so I don’t regret spending the money (despite protestations from my bride and our CPA).
Until I regret wasting that money because I am not really using the apps.
There will come a time when I will prune my inactive SaaS subscriptions, and I am not alone.
… but no engagement from SaaS teams
I have yet to be contacted by a single SaaS team with encouragement to engage with the product—or even with questions about why I am not using it.
This strikes me as a huge lost opportunity.
This also seems very odd to me. On the other hand, the more I think about it, the more I speculate that this is a common practice. Despite the ease with which most SaaS teams could readily detect waning (or non-existent) usage, it must be more compelling to think about the next feature and the prospects of adding new users than it is to focus on keeping existing users.
Timeless business truth: It is much easier (and far cheaper) to get money from existing customers than it is to go find new customers.
So why aren’t I being pestered about my “zombie” status by all these SaaS teams?
I recognize that the “customer success” function into which high-touch retention activities would neatly fit is not something most indy SaaS teams have the luxury to afford, but can’t this be automated? (That was a rhetorical question.)
I also realize that there are (yet more) SaaS products which can (ironically) nag me about all of my SaaS spending. I’m good, but …
Harsh business truth: Inactive users are churn just waiting to happen
Churn is Kryptonite to SaaS
- Lose existing subscribers (“churn”) faster than you can start collecting money from new subscribers, and it’s very quickly Game Over.
Given this unforgiving reality, I just cannot understand why SaaS teams are not infinitely more attentive to their inactive (but paying) customers.
My Takeaways
I am working (at a tortuously slow pace, as I find spare moments) on building a SaaS product as a side project.
I know for sure that the last thing I want is for hard-won customers to drift away from something I have poured my heart into, so I have been pondering this “SaaS Zombies” conundrum. This has inspired me to:
- Think hard about how to design retention into the user experience.
- To that end, think even harder about how to create a truly compelling user experience
- Not in a creepy Facebook-addiction way, but in an “OMG, there is So. Much. Value!” way.
- Build “customer success” logic into the app.
- This might include some form of “activity-based” charging, such as:
- Inactive for X amount of time?
- I will suspend your subscription charges, which makes me want to talk to you. Now.
- Inactive for X amount of time?
- This might include some form of “activity-based” charging, such as:
- Publish this article to get a conversation going about this topic.
What is your experience?
Are you paying for SaaS subscriptions you don’t use? (I am the last person who can judge you if you are.)
If so, have you experienced any outreach from those teams to encourage you to re-engage?
If so, what did you find that worked to get you re-engaged?
Conversely, what outreach may have turned you away from resuming your activity with that app?
Jeff,
I have a different prospective on this. I think the “subscription” cartels are definitely the way to make money – you subscribe, give them a charge card and then forget about it until they send an email saying that your subscription will renew in 30 days. I have Ancestry, Sirius, Family Search, etc and when I get that notice I say “Yeah, I need to start back using that…”. But if I were to receive “ticklers” on a regular basis that I hadn’t been using it, I might pause to reevaluate and say “Yeah, I can do without that…”
Do you have any data that reflects “retention” rates of subscriptions that people just shelve?
Do these indie SaaS folks have value added products that people might further investigate and subscribe?
Do you have any data on how reminders encourage people to drop their subscriptions?
I relate to our personal reminders from providers for flu vaccs or for our pets for their vaccs – we’d send 3 and then give up. I’ve long ago forgotten the metrics but I recall the first reminder was worth while but dropped off considerably with the next two… But there’s a personal incentive for us to respond to those ticklers for our own good or our pets for it would affect us physiologically and not economically. I think people ignore their economics but may reconsider if reminded more often – ie their unused subscriptions?
I also think of the phone reminders from Hyatt and Marriott that we get routinely which really piss us off and we hang up or hit “2” to never call again – but they do…
Anyway, Just some thoughts:)
Good points, Rick.
To clarify, I’m referring to subscriptions that do not remind you about the monthly charges. Many are happy to let you sign up, then silently bill your card forever–whether you are active with the service or not.
To your broader points, in email conversations with a couple of people who make their living from subscription services (like SaaS and technical training), they pointed out that we will unlikely tp ever gather the data to support or refute my hunch because the people running those services are unanimously opposed to trying what I suggest–as in “Why would they stab themselves just so they can confirm that it would hurt?”
I certainly understand that, but one guy (who runs a huge technical training site) made a very compelling point: Many people are happy to continue paying for something they may not be using because they want to support the people behind that service. That definitely resonated with me, because I am one of those people. In fact, I have been paying that guy $29/mo for YEARS (for exactly that reason) without using the material more than a few times.
I should probably modify this article to focus more on the “subscription activation” angle (re: SaaS cancellations happen a lot because new subscribers don’t engage enough shortly after signing up)– or at least pose this as more of a “have you tried this?” as opposed to a bold assertion I will not be able to back up without getting the data that no sane person would share. 🙂