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5 Eye-Opening Lessons From Analyzing 1.8 Million SaaS Customers

Back in my college economics days, I stumbled upon a gem called "revealed preferences." This is the idea that what people actually buy tells us much more about their desires than what they claim.

💡Translation? Actions speak louder than words!

Fast forward to my career in building high-growth SaaS companies, and I started noticing some head-scratching stuff.

Take, for example, customers bidding adieu with a big smile, claiming it was a stellar ride, yet pulling the plug on their contracts. What?

This got me thinking – how often do our customers' actions throw a curveball at what they say?

📊 So, I began a deep dive into customer behavior by gathering as much data as possible. Eventually, I started analyzing customer retention and churn data for companies full-time.

And guess what? I've now sifted through mountains of data on 1.8 million SaaS customers across hundreds of companies.

The results are mind-blowing and challenge some of our most widely held business beliefs!

Now, I could write a whole book unpacking this treasure trove of data. [psst… I might just do that! Stay tuned! 👀]

For now, here are my 5 BIG TAKEAWAYS →

1️⃣ What customers say frequently does not match what they do.

2️⃣ Retention and churn reveal what actually matters to customers.

3️⃣ Ask customers why they stay or leave, and you'll get a laundry list of reasons.

4️⃣ But the data consistently point to just a handful of causes.

5️⃣ In fact, customer retention largely boils down to one thing: results.

This may be one of the most remarkable examples of revealed preferences ever.

📉 The data consistently shows that customer sentiment has absolutely ZERO correlation with customer retention and churn. It turns out that what customers say does not predict what they will do!

📈 On the other hand, customer results are by far the BEST predictor of retention. Customers who achieve measurable results stay 6-10 times longer than customers who don't!

Along the way, I've got a rare look inside a few SaaS companies that have discovered this secret and are using it to achieve phenomenal retention and growth! Let me know in the comments below if you'd like me to follow up and share what these companies are doing differently.

[NOTE: I've also compiled a bunch of key customer retention insights in an eBook which you can download for free here.]

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