How to collect cancellation reasons with Paddle Billing

Why collecting cancellation reasons is valuable to founders

When a customer cancels it's not the best feeling in the world. It's worst for new founders where every customer matters. But even successful entrepreneurs with flourishing businesses keep a close eye on churn.

SaaS Know-How: Churn is a metric representing how many customers a business has lost. To get that value you divide the number of customers lost (e.g. cancelled) during a given period by the total number of customers at the beginning of that period.

But every rejection is also a chance to learn, to improve and come out stronger the other end. One way is to gather feedback when someone cancels.

Understanding and analysing the reasons behind customer cancellations will keep churn low and grow your business. Specifically you should keep an eye out for

trends (e.g. market recession as people cut budgets or lack of a feature people have come to expect from your category of software),
missing plans or pricing weaknesses (e.g. user hits a certain limit on one plan but would have to increase to and pay for a much higher tier that includes a bunch of features they don't need or want)

As company you can't be left guessing why someone cancels.

When and how do I ask for the reason for cancelling?

Essentially you have two options: before they cancel or after they cancel.

Standing in the way of the cancellation must be well considered. Customer's do not appreciate significant resistance to cancelling your service.
Asking after the cancellation may be fruitless. After all in your customer's mind they've closed that chapter and any extra ask is just adding another task on their plate.

In any case make it simple for the user to provide an answer to your question.

1. Best option: Ask for the reason just prior to cancelling

The best way is to simply integrate it into your cancellation workflow. Just before they click on the confirmation button, quickly ask them to select from a list of common reasons (on input their own). User's have come to expect a one click survey before they leave, so won't be surprised. You can even make it optional if you want to make it extra user-friendly.

You don't want to overwhelm your users with a long list of reasons to choose from. The most common ones we've encountered are:

Technical issues
Support issues
Missing features
Too expensive
Switching to different service
Company closed
Just testing

But it helps to offer a last option "Other" and let the user enter a reason if they don't feel any of the predefined ones match.

If you're using Paddle Billing for your subscription payments you can just switch on the cancellation survey in the Boathouse Customer Portal. See below for step-by-step instructions. (If you're using Stripe, have a look at this guide.)

2. Option for VIP customers and early founders: Call the customer and ask personally

By far the best insights can be gathered if you pick up the phone and call the customer. If they're willing to talk, and yes that can be a big IF, plead your case. Not in terms of winning them back but try the "mea culpa" approach. Explain you'd like to improve your offering and thank them for any feedback of input. Using this approach you can get deep insights into how they work and why your software didn't work for them. If you're lucky they might even be open to being contacted again once the product evolves.

3. Hail Mary option: Send a survey via e-mail

If none of the first options work, then sending an e-mail to the customer to ask for a reason may still work. But it just becomes another email with another task in their mailbox, so response rates are bound to be worse than the first two options.

TL;DR & Steps to add a cancellation survey to Paddle Billing

Switching on cancellation surveys is such a simple way to collect feedback and improve your product. It's also not going to be big ask for your customers to answer a one question survey if you integrate it directly into your cancellation workflow. Using the Boathouse Customer Portal for Paddle you can easily add a cancellation survey before they end their subscription with these simple steps:

1. Sign up for Boathouse

If you haven't already, create a Boathouse account and connect it to your Paddle Billing account.

2. Switch on Cancellation Surveys in Boathouse

In the customer portal configuration page simply check the box to "Ask customers for a cancellation reason" to use our default cancellation reasons. Or switch on other settings and customize the list of reasons to your liking.