Seven Causes of Revenue Leakage in SaaS Companies|

Customer success and customer experience in SaaS companies have gained momentum in recent years, with more and more technology enterprises putting their minds to providing the best user experience to their customers. However, it’s also true that some companies are still behind in this area, with many of them overlooking potential revenue leakage and failing to capitalize on the full potential of the customer-company relationship. In this article, we will be talking about seven causes of revenue leakage in SaaS companies that are often overlooked by entrepreneurs. Once you read them, you will know how to prevent these things from happening in your business!

Churn Rates

The churn rate measures how many customers are leaving a service during a specific period. If they leave, they also stop paying, resulting in more financial leakage. Therefore, it is critical to understand your churn rates and track them regularly.

Failing to Focus on Customer Success

The customer is key to any business that relies on recurring revenue. If you don’t focus on customer success, there will be leakage in your revenue.

Poor Pricing Policy

When you do not have a pricing policy, and often change your prices over time, customers get confused. Even if they still want to buy, they might wait until your next sale or drop a subscription all together.

Lack of Automation

One big reason a company might not be able to track its lead sources is because they lack a marketing automation system. If a customer moves through your sales funnel, but you don’t have an automated way to tell what source generated their interest, then there’s no way to analyze your revenue leaks.

Loss in Potential Customers

There are many ways that a user can be lost during a customer's experience with your product. They might lose interest while learning about your product, they might not trust you and leave after signing up for free trial, or they might sign up for free trial but not convert to paid subscription due to some technical issues.

Feature Creep

Too many unimportant features, especially those implemented by overzealous employees rather than customers, is a common reason for poor customer experience. If a company adds too many insignificant features to an app, customers will find it difficult to find what they really need.

Unwillingness To Ask for Referrals

A satisfied customer is more likely to refer his friend or colleague to your business than a dissatisfied one. Hence, it’s important to ask for referrals and make customers feel valued when they give them.