Dealing with losing a customer for the first time

by OverlyRuminative. Posted on Sep 16, 2020    9    9

Hi guys,

Long-time lurker looking for some advice. I and 2 others run a boot-strapped B2B SaaS startup that is bringing in moderate revenues after 2 years of operation. Despite coronavirus disruption we have improved on our cash position in the past 6 months, surviving relatively unscathed and improving on where we were this time last year.

We just however got told by a customer of ours that they are ending their subscription, opting instead for a subscription with a tech giant whose tech is far superior and more broad than ours, so as to allow them to fulfill their requirement within a single platform as opposed to a number of smaller, more tailored offerings (which included a subscription with us).

This is our first loss of a customer. Whilst it's not devastating, I guess it's a big blow for me personally to lose a customer like this. It's stuck in my head that we could lose more customers and then quickly find ourselves in trouble. This is despite the fact that I know the majority of our customers are very happy and not thinking of ending their subscription or anything like that.

It's causing me a lot of stress and so I just wanted to check in with people here about their experience of losing their first customer. We are growing well, currently looking to raise and building more exciting tech, with a full scalable plan for the future, but it's hard to see past the loss of the first customer - I understand that attrition will always happen regardless, but it just hit a bit harder than I expected.

Thanks :)


JadeGrapes 1

You didn't do anything wrong. This was bound to happen sooner or later. I mean you weren't going to go 100 years with never losing a customer, right?

It's like your first romantic breakup as a teenage, it feels significant because it's a new experience. It's normal to have some introspection, just don't catastrophize.

Large companies have preferred vendor lists because keeping track of the contracts and support gets unwieldy/fragile. This is a pretty normal/ blameless breakup.

I get that it feels like a sock to the gut, that just means you're human. Practice some self care and ride it out, this sort of thing comes and goes. It will be behind you soon.

anandp29 1

Churn will happen whether you're big or small. And I know as an early founder it can be hard on you, that's completely fine. It's okay to feel that disappoinment. However, take the opportunity to learn from it. Similar to how HR does exit interviews with employees that leave, hold an exit interview with your prior customer (hopefully they do it for free but you may need to incentivize them).

It seems like you have some info on why they're leaving but try to dig further. What made them realize they needed an all in one solution? What frustrations were causing this need? Could they see your product filling that role someday in the future, why/why not? What did they love about their time with you? Etc.

I don't know anything about your product or market strategy, but it's very possible that your solution is ideal for a specific segment and once someone grows out of that segment, they go elsewhere. As another person said above, be happy that their business grew to that point and you were part of that journey.

Not all companies will stay with Wave or QuickBooks as they become more sophisticated. Same with Trello or Asana for project management. And similar for payments with Stripe or Braintree. What you need at one phase is not always the same at a future phase.

Be the best you can for your target market. Sometimes people will churn because they're no longer a good fit. That's not a bad thing. You can't be everything to everyone.

Good luck and let me know if you have any other questions. I'm always happy to chat!

DancinWithWolves 1

As a solo founder with a reasonable but not huge user base, I under stand how crushing it is to lose one of them. Especially when you're pushing hard to lift MRR all the time. However, it can be a great learning experience.

You listed some reasons why they left. Have you spoken with them in a bit of detail about this? Are the features they wanted something other users are wanting? Is there something you can hear from your users to allow you to improve?

While not every feature request should be considered for the product roadmap, some should. Especially those that make people leave.

Sorry you lost a user, but it sounds like a chance to get more info.

AdamKyleWilson 2

Get over it. This is show business not show friends. This isn’t a personal thing and you gotta get your head out of that space or you’ll lose. You will churn customers. You should be focused on getting a solid sales funnel in place. It sounds like all your eggs are in a very few baskets, that’s not a sustainable business model. Everyone will quit your product eventually. Be focused on acquiring more customers and keeping them longer, not trying to keep the ones you already have forever.

AccidentalCEO82 2

Silver lining. There is nothing more motivating than knowing every one of your customers might run out the door.

Mister_Story 2

Hi u/OverlyRuminative - whilst I don't have the experience to give you specific advice on your challenge, I selfishly do want to understand how you went about developing your SaaS product as I am about to embark on creating a SaaS product too.

However, I would say this in regards to your current challenge and its based on what I do in my day job. I lead large sales for one of the largest consultancy firms in the world - and as part of that it involves selling large technology transformation programmes to our clients - eg SAP, Oracle, Microsoft, Salesforce etc.

More often that not, where we see smaller technology firms successful, is when they build a healthy network with the larger tech firms and the adivsory firms. They position their product as value added to the larger tech product and present simple and easy ways of integration and implementation.

This could be something you should explore, ie find larger partners that you can add value to and position yourself in their sales pursuits.

dulayhuncho 4

This is perfectly normal, the worst thing you can do is try and compete with the big guys, instead focus on a niche and give them a reason to choose you over the big guys

MaxPast 4

It's not that bad, actually: you customer outgrew your service, you should be happy about him :)
There is always a natural churn for reasons outside of your control: customers pivot, shutdown, die, get some other hobby, no longer need this particular type of product, etc.
And, taking into account that it's the only account you lost in 2 years, your churn rate is exciting by any measure!
So, just continue to do your work well and make your customers happy.
Don't worry about natural churn unless it becomes critical.