How to reduce churn in SaaS business

Today, I want to chat about the best way to decrease churn.

Because if your churn rate is too high - your growth will eventually stop.

And most people I talked to who try to decrease their churn rate all make the same mistakes: they focus only on people who cancel their subscriptions.

Should you understand why people leave? Yes.

But that’s not the most important part.

There’s a graph that I really like, which shows the effort required to get good results for qualified clients VS unqualified ones.

You see that for qualified clients, you have very little effort to make to get them good results.

VS the more unqualified the client is, the more time, energy, and money you will spend.

And most companies make the same mistake.

They want to make sure they get as many customers as possible, and they target everyone.

Which ultimately leads to a super high churn.

How exactly do you reduce churn?

You need to focus on the qualified clients only.

You want to understand who they are, why they’re not churning, and what they love about your product or service.

And to find more of what we call “tier 1” customers, you need to follow three steps:

1- identifying your top tier 1 customers

2- interviewing them

3- looking for people just like them

So let’s see how you can do that exactly:

If you have a SaaS, you’re probably using Stripe as your payment processor - so that’s where I went go to find my tier 1 customers.

On Stripe, I clicked on “Top customers by spend.”

Then, I added the following filters:

1- Only repeat customers

2- First payment is before 1 year ago

3- Last payment is in the last 31 days

And voilà, you have a list of your top customers that you can extract easily.

From that list, my plan was to identify more precisely the users who are part of my tier 1.

So you can go to each customer profile and try to find a pattern:

To give you an idea of how I built my ICP (or ideal customer profile), I went to one customer’s profile and checked who they were simply by using their email address.

Since people usually have an email address that looks like:, you can search for them on Google.

With that simple info, I found the LinkedIn profile of the buyer, the company's LinkedIn profile, their website, and some data using Crunchbase.

This helped me know what the company is doing, how many employees they have, whether or not they have funding, what is their industry, what is their typical offer, etc.

The goal was to build my ICP as precisely as possible.

So I did that process for each of the customers in my top tier 1 clients list.

Now that I have a list of my top customers, I wanna go and talk to them. Too many people avoid talking to their customers… even though this is the best way to learn about them.

How do you talk to people who are using your product?

To go on a call with them, I’m just gonna contact them via email using lemlist to ask for a time to chat.

Here’s the email I’m going to use.

The goal is to add a bit more social proof, make it about them and not me, while also using the push-pull approach where you ask for something while not being too pushy.

And I usually follow up once a few days later.

A simple campaign like this can help me book 20+ meetings in just a week.

Since the goal is to identify clearly your ICP, I always have a super problem-centric approach during your calls.

Let me share the top 3 questions I asked my users:

1- What problem did you want to solve with our product?

The goal is to understand the verbatim of the users: which words do they use when they talk about their problem?

This is something you can reuse later in your marketing, sales calls, etc.

2- How did you solve this problem before getting a subscription to our tool?

Here, I want to understand what they were using before, which can be extremely helpful.

For example, in our case at lemlist, a lot of people might have been sending follow up manually. And when you do things manually, you sometimes forget to do it.

Since we offer an automatic option, for some people this is a huge added value that they didn’t know how. In other words, this is an important message that we should focus on in our messaging.

3- If tomorrow you couldn’t use our product anymore, what would you do?

This is great to spot potential ways of improving and understanding what they would do otherwise.

It gives you an idea of how important your business is.

Doing that process with 20 of your customers, you will be able to map out what you should focus on in your marketing effort to attract more client that fits that ICP.

Remember the graph that I shared?

You can people who are extremely qualified, so the more efforts you make to get them extremely good results, is as little as possible.

What is the best thing about this approach?

You don’t need to spend months on it to get results.

The whole process to find my top customers and send them messages took only a few minutes.

There’s something that very few people realize:

Whenever you’re onboarding unqualified clients, because the effort it takes to get them good results is really high, the chances that they are actually successful is really low.

The result? They’ll end up unsatisfied, they’ll leave bad reviews and spread bad word of mouth about your product.

Which will make your acquisition drop.

However, if you truly understand who are the people who benefit the most from your products and that you can solely focus on them, then everything will change for you.

People will get extremely good results, they will leave a good review, and generate better word of mouth.

Plus, it’ll require you less effort to onboard them simply because they are the right fits.

And voila, you have a full guide on how to reduce churn and increase your business revenue.

Peace, love & profit!