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Why toxic cancelations are killing your SaaS

author

Lee Elliott

published

Oct 25, 2024

categories

Article

read time

4 mins

Why toxic cancelations are killing your SaaS

Bad cancelation policies can cause you to lose customers for life instead of a year. A good one can turn churned customers into opportunities.

Table of Contents

  • 1. What does a good software cancelation practice look like?

  • 2. How a simple cancelation method can slow SaaS churn

  • 3. How are savvy services saying "au revoir" right?

  • 4. Hasta la vista, maybe

  • 1. What does a good software cancelation practice look like?
  • 2. How a simple cancelation method can slow SaaS churn
  • 3. How are savvy services saying "au revoir" right?
  • 4. Hasta la vista, maybe

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You've heard of cancel culture – it tanks reputations overnight. But there's a different kind of cancellation crisis happening right now, and it's killing SaaS services daily.

Some software companies act like canceling is a betrayal. They're desperately trying to keep their customers using iffy opt-out policies.


Silly really, as canceling is just another step in the customer journey. Over 30% of SaaS subscribers end their membership in the first three months. If someone’s ready to say sayonara, so be it. 

So why are some SaaS companies so hard to quit?


People don’t always cancel a service because they’re upset. Maybe they no longer need the tool, or their interests have shifted. But when "ta-ta" feels like a trap (looking at you, Adobe), it’s not just the service they lose faith in; it’s the brand itself.

So, what does a fair cancellation process look like? And what exactly is the gold standard? Let’s find out.

What does a good software cancelation practice look like?


There are way too many subscription services out there. Razors on a monthly plan? I'll pass. I can picture them piling up in the bathroom now. Some membership models offer real value, sure, but a lot of them are just trying to squeeze extra profit. 


Often you don’t notice – until you try to cancel.


Suddenly, hidden fees pop up. Or you're hit with auto-renewals without warning. These predatory tactics might keep a few customers, but for the most part? They wreck a brand's reputation.


Canceling isn’t always an easy decision. Sometimes, axing those monthly fees feels good, but when it's a service you really like, pushing that button isn't always a joy.


When you do finally decide to pull the plug, the last thing you want is to deal with a complicated, stressful process. You’re making a smart financial move. It shouldn’t feel like a chore.


Here’s how to make canceling easier for your customers:


  • Keep it simple. No extra steps.
  • Be clear about any fees or post-cancellation terms.
  • Make the cancel button obvious.
  • Process cancellations immediately.
  • Offer fast support if needed and make it easy to find.
  • Confirm the cancellation right away.
  • Skip the guilt trips.

How a simple cancelation method can slow SaaS churn


Losing customers is never fun, but having a fair and frank cancelation process can actually help your business. Here's why getting the "goodbye" right is worth your time:


Better brand perception

You've probably invested a lot in your SaaS and worked hard to satisfy your signups, so naturally, it stings when it's time to part ways. Don't let a messy exit ruin things. Manage customer departures gracefully, and they'll remember you for it.


It makes it easy for customers to return

Business relationships aren’t like a marriage (despite what LinkedIn gurus might say). If a customer leaves, they may waltz back through your doors again when the time is right. But act in bad faith or leave a bad taste, and, well, don't hold your breath.


Positive referrals and reviews

Think of the web as one big sewing circle – people talk. A clear cancelation policy stops bad press before it starts. It might even earn you good reviews. But give s***posters an inch, and they'll gladly write another two about your terrible service. 


Frustration spreads fast. Acting like a stage-five clinger after someone says ciao may even put people off trying new SaaS entirely.


Sounds far-fetched? Name another service where it’s okay to make people feel like they’re being kept prisoner. You can’t. Alright, actual prisons – but aside from that? Escape rooms. Yes. Look, fussy cancelations are a bad idea.


How are savvy services saying "au revoir" right?


Some companies get it. They know that adios doesn’t have to mean the end. They make it easy to leave, and it builds goodwill. Think about the last time you had great service. The experience stays with you, and it makes you want to go back.


It’s really that simple. Make it easy to leave, and you make it easy for customers to return when they’re ready. No pressure. Just trust. Do that, and your reputation gets a bump as well. The following brands know respect breeds loyalty:


Netflix has a solid reputation for timely service and quality content. Quitting is as easy as binge-watching your favorite TV show. You can do it with a few clicks in your account settings.


Slack also scores with its respectful approach. There's no sneaky small print or Fitbit-busting steps to take. Before users make their final decision, Slack shows how their plan will change, giving users a sense of control. The exit is entirely transparent, and you can't say fairer than that. With its (skippable) survey, Slack even thinks of its members as they quit, as they’re using feedback to shape future updates and improve their features.


Finally, there’s Mailchimp, which gives people the option to put their subscriptions on hold. It’s a more flexible finale than a final goodbye —perfect for those who need a break but aren’t ready to cut ties completely. As Montell Jordan said, “this is how you do it.”


Hasta la vista, maybe


The true value of a SaaS goes beyond what it says on your landing page.


People don't just remember the product but how you treat them. And that feeling? Sometimes it has a bigger impact than the service itself.


So show confidence in your SaaS. Respect your customers. That's what sets the best brands apart.


A smooth departure keeps trust alive and leaves the door open for a future return. But if you give customers the ick with your exit? That door slams shut. Maybe forever.

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