Churn can be measured in terms of ARR and # of customers and both are important to measure and track. Knowing your churn is important for forecasting, but the real value lies in understanding why customers choose to cancel their subscriptions. We have run several projects with our portfolio companies to understand the root causes of churn and improve the value proposition.

1. Fight churn!
Six initiatives to keep your
customers

2. We help Nordic software
companies scale.
That’s all we do.

3. Investment focus
Type of companies
§ B2B software
§ Revenues 3+ meur
§ Growing, large potential
§ Supporting work processes
Investment profile
§ Active minority investor
§ Investment 5-15 meur
§ Primary/secondary
§ Founder friendly

4. Annual Recurring Revenues (ARR) – the holy grail of SaaS
100
120
20
10 15
Churn
5
ARR
(end of
period)
Price increaseUpsalesARR
(beginning
of period)
New sales
Existing customers
(mnok)

5. Six initiatives too fight churn
1
2
3
4
5
6
Define your ideal customer
Segment your customers
Use data to narrow your efforts
Onboard for success!
Align incentives across departments
Find the root cause of churn

6. Find the root cause of churn1
ROOT
CAUSE
SYMPTOM
SYM
PTOM
SYMPTOM
SYMPTOM
Look at data
Talk to your
customers
The customer believes the product
is too expensive
Why did the customer churn?
The customer doesn’t get enough
value from using the product
Why?
Nobody at the customer actually
uses the product
Why?
The customer was not properly
onboarded
Why?
We have no incentives for
onboarding the customer
Why?

7. Define your ideal customer2
CUSTOMER’S
VALUE FROM USING
PRODUCT
YOUR
COMPANY’S VALUE FROM
HAVING CUSTOMER
HIGHLOW
LOW
HIGH

8. Segment your customers and differentiate your efforts3
LOW TOUCH
TECH TOUCH
ARR
potential
High
Low
«Human
touch»
High
Low
(Share of ARR)
(1/3)
(1/3)
(1/3)
HIGH TOUCH

9. Use data to be proactive4
0
5
10
15
Customer A
50
Customer B
30
20
10
40
Example customer health score
inputs
• Product usage
• Usage of the most sticky parts
of the product
• Share of modules used
• Number of users
• Length of customer
relationship
• Customer satisfaction scores
• Support usage
• Payment history
Number of logins per week
Week

10. Onboard for success!5
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
Customer B
Customer A
1021 874 953 6
Number of messages sent using the software
Threshold
Onboarding completed when
some kind of data driven
threshold is reached
# of weeks after signing

11. Align incentives across departments6
Milestone
Effect
Traditional
model
100% of bonus paid for every new
customer closed
Sellers sell to everyone, even though
the customer is not a good fit –
leading to high churn levels
Alternative
model
50% of bonus paid for every new
customer closed
50% of bonus paid when onboarding
is completed (as measured by some
data driven metric)
Sellers will prioritize customers that
are a good fit – leading to less churn
ONBOARDING CUSTOMER SUCCESSNEW SALES

12. Six initiatives too fight churn
1
2
3
4
5
6
Define your ideal customer
Segment your customers
Use data to narrow your efforts
Onboard for success!
Align incentives across departments
Find the root cause of churn