The Main Reason For Customer Churn In Enterprise SaaS Companies

Cognisaas
5 min readFeb 16, 2023

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Blog by Roshni Saraf

Why Cross Functional Teams Are Equally Responsible For Customer Churn?

Businesses lose over $75 billion each year to customer churn due to poor customer service.

According to a recent study done by Accenture, the top three traits that consumers look for in a company are fair prices (78%), good customer service (74%), and quality products (73%).

The loss of customers over a period of time is referred to as customer attrition or customer churn. It is a common problem faced by businesses in all industries and can significantly impact a company’s revenue and profitability.

Since acquiring new customers is typically five times more expensive than retaining existing ones. Therefore, enterprise SaaS companies usually focus on preventing customer churn whenever possible. There are many reasons why customers may churn, such as zero-value delivery, delayed go-lives, dissatisfaction with a product or service, a better offer from a competitor, or a change in personal circumstances.

Preventing customer churn is critical for the long-term success of enterprise SaaS businesses. Contrary to the fact that customer churn is due to poor customer success engagement, churns are undeniably an outcome of cross-functional fallbacks. It includes not just customer-facing employees, such as sales and customer service representatives, but also non-customer-facing teams, such as sales, onboarding, implementation, etc.

How Are Cross-Functional Teams Responsible For Customer Churn?

Cross-functional teams can help prevent customer churn by breaking down information silos, promoting collaboration between different departments, and bringing diverse perspectives and expertise to address customer needs and concerns. However, if the team is not adequately managed or communication is not effectively implemented due to information silos, it can lead to confusion and customer dissatisfaction.

Cross-functional teams can cause customers to churn due to information silos in several ways:

Lack Of Visibility:

When information is not shared across departments or teams, it can be difficult for team members to understand the full context of a project or customer use case. It can lead to inefficiencies and delays in decision-making and problem-solving.

Incomplete Understanding:

Without access to all relevant information, team members may not have a complete understanding of customer needs, internal processes, or external factors that impact the project. It can lead to poor decision-making and insignificant outcomes.

Duplication Of Effort:

When teams are working in silos, they may not be aware of the work that other teams are doing. It can lead to duplication of effort and wasted resources.

Lack Of Trust:

When team members can’t access and share information, they might not trust one another or the data they’re using. It can lead to a lack of collaboration and teamwork, which can further hinder the team’s ability to deliver value.

Decrease In Customer Satisfaction:

When the teams are not able to share information and coordinate their efforts, it can lead to delays, errors, and inconsistencies in delivering value to customers. These can ultimately lead to customer dissatisfaction and churn.

Ultimately, it may result in customer churn because of confusion and delays. It’s essential to ensure that everyone on the team is aware of their role and responsibilities, that there is clear communication among team members, and that customer feedback is regularly taken into consideration. In order to effectively and efficiently deliver value, cross-functional teams must promote a culture of openness and collaboration, dismantle information silos, and understand customer needs.

How Can Cross-Functional Teams Help In Preventing Customer Churn?

A seamless cross-functional collaboration can go a long way towards preventing churn by ensuring that customers have a positive interaction with your business at every touchpoint. The main goal of cross-functional teams is to offer top-notch products and services, exceptional customer experience, and ease of use for all customer use cases. If customers are churning due to dissatisfaction with your products or services, it is critical to identify and address the issues immediately.

Each team in a SaaS company has a role to play in preventing customer churn, as it requires a team effort to identify and address the root causes of churn. Cross-functional collaboration plays a crucial role in preventing customer churn by ensuring that all teams within an organization are working together effectively to address the needs and concerns of customers.

In general, enterprise SaaS companies are required to have a holistic cross-functional collaboration to help them understand customer business objectives rather than just completing the assigned tasks on JIRA or their dedicated tool. It will help them make more informed decisions and adopt customer-centricity throughout the organization. Also, it allows for better communication and understanding of the customer’s needs and preferences, which helps to identify potential churn risk factors early and take action to prevent them.

Having an understanding of customer business outcomes will help internal teams prioritize tasks and features than fire-fight at a later stage. Enabling this understanding will also ensure that the product is the right fit for the customers and that there is an increase in product adoption.

By working together in this way, teams can quickly identify and resolve issues that may be causing customers to become dissatisfied and implement strategies to prevent future churn. Additionally, cross-functional teams can use data and analytics to identify at-risk customers and proactively reach out to them to address any issues and improve their overall experience.

Enterprise SaaS businesses can then collaborate with their customers not just to sell the product but also to work as their trusted advisor. The cross-functional teams need to have a proactive approach by acknowledging their client’s problems and prioritizing high-value customers at risk of churning. It is crucial to make changes to your product or service and provide additional support and resources to ensure that your customers get the most out of your offerings.

Conclusion

With the right collaboration tool, cross-functional teams can track the KPI metrics specific to your business needs. Cross-functional teams use the best customer onboarding and implementation tool with exceptional features that allow teams to track their customer journey, prioritize tasks, reduce revenue leakage, and collaborate seamlessly with internal and external stakeholders through a shared client portal.

The cross-functional teams need a customer-centric approach and holistic view of customer data that helps eliminate information silos and save their teams valuable time and bandwidth. Regular communication with customers can help to build a strong relationship and keep them engaged with your company.

Effective cross-functional collaboration allows teams to communicate productively and keep each other in the loop of client requirements that are within the scope of the organization’s product roadmap.

In Conclusion, preventing customer churn requires cross-functional teams to adopt a proactive and customer-centric approach that includes continuously enhancing the customer experience, attending to customer concerns, and maintaining customer engagement.

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Cognisaas

Enabling onboarding and implementation teams to collaborate with internal and external stakeholders on a single source of truth platform.