Reduce Churn: What The Best SaaS Cancellation Flows Have In Common

Customer acquisition costs (CAC) have steadily risen for both B2B and B2C companies. With CAC up roughly 60% compared to five years prior, it is more expensive than ever to acquire a new paying user for your SaaS product.

So, once you acquire a new customer, it’s crucial you deliver the value and user experience to keep them around. This is the whole point of the product-led growth (PLG) movement and is usually a major optimization focus. Make the product so good that they can’t imagine life without it.

But, even though we believe wholeheartedly in PLG, it’s naively idealistic to assume you’ll never send a customer to the brink of cancellation on your product experience alone. So, another lever you can pull to reduce churn is adding or optimizing a cancellation flow.

Rather than approaching a customer who is looking to cancel as a lost cause, take it as an opportunity to listen to their needs and finally address them with the right experience or offer.

There are plenty of SaaS companies out there that are already getting it right. In our work with clients, we’ve researched and reviewed hundreds of cancellation flows and analyzed them to determine what works to reduce churn. We’ve also conducted rapid tests to validate our ideas.

In this article, we’re opening the box on these learnings to show you what the best SaaS cancellation flows have in common and what really saves users within the online cancellation journey. Make the most of that sunk CAC, and let’s optimize your flow.

What is a cancellation flow?

A SaaS cancellation flow is the process that guides users through the steps to cancel their subscription or account for a software tool. It typically takes place while the user is logged into their account and includes multiple steps that gather data/feedback about their experience and offer alternatives or incentives with the goal of retention.

The cancellation journey can happen either on-site or in-app, depending on the tool. Either way, it typically follows a flow of:

• The user navigates to their profile/dashboard and clicks ‘cancel’
• They are prompted to choose a reason and sometimes a sub-reason for cancellation
• The tool offers some sort of product switch/downgrade offer
• The user either accepts the offer or proceeds to cancel
• Post-cancellation, the tool typically sends a follow-up confirming cancellation

For product teams, the cancellation journey can offer rich insights into what your customers value and what is missing from your product experience. The ‘reason for canceling’ along with the user profile data can paint a clear picture of where you might need to focus optimization efforts.

When to implement or optimize a cancellation flow

Beyond being good practice to review your digital journey regularly, there are some additional events that should prompt you to focus on the cancellation flow:

• High churn rates: If significant numbers of customers are turning over, it is probably time to address your cancellation flow. Review or add a step that collects feedback on why they are leaving.
• Customer feedback gaps: If you are collecting customer feedback but aren’t getting answers about why they’re leaving, a cancellation flow can help gather insights into customer dissatisfaction.
• Regulatory compliance: As your business scales, you need to ensure continued compliance with regulations like GDPR. Leveraging a clear cancellation process where users can opt-out is not only good practice but also a requirement in most places.
• New product launches or changes: If a company is launching new features or making significant changes to its service, a cancellation flow can gather early feedback on customer reactions and find ways to ease the transition.

What the best cancellation flows have in common (with examples)

From dashboard interactions to post-cancellation follow-ups, effective cancellation flows share common strategies for reducing churn.

Let’s break this down phase by phase, with real-world examples to inspire your optimization efforts.

Phase 1: Before initiating cancellation

The dashboard is the first line of defense against churn. Here’s what works:

• Reinforce the benefits of being a subscriber with compelling content.
  • Highlight subscription benefits like exclusive features.
  • Showcase features the user isn’t engaging with.
• Offer easy ways to solve common issues before users cancel
  • Let users validate their subscription status without clicking cancel
  • Show solutions to common technical issues
• Tailor the dashboard to the type of user
  • Require users with high cancellation intent to scroll through value-focused content before clicking cancel.
  • Give users with limited paid features the opportunity to upgrade from the dashboard.
  • For mid-funnel users, share options to downgrade their plan or, at minimum, show less expensive plan options.
• Provide alternatives to cancellation.
  • Offer compelling ways to manage their subscriptions that are not cancellation: pause, skip, snooze, report an issue, remind me later, etc.

Example: Canva value-focused dashboard

Canva is an online graphic design tool that lets users create visuals like social posts, posters, presentations, and more.

The Canva dashboard for premium users focuses on all the benefits and opportunities to use the tool. It includes new features, drops, and changes. It highlights where users aren’t making the most of their subscription ‘Star designs’ or ‘remove backgrounds’ as CTAs are benefits-focused. This keeps users engaged and always finding new value in the product.

Example: Opus’ clear subscription status and plan management options

Opus is an AI video repurposing tool that clips and captions long-form videos into short-form content.

Along with having quick reminders about how to use the tool on the main dashboard log-in (‘turn long videos into viral shorts’ and ‘add captions only’), once a user clicks on the ‘Subscription’ button, there is a clear overview of current plan status and management options. Users are presented with options to change their plan, add more packs, and review all of the features of their current subscription, all before the cancel button.

Phase 2: During the cancellation flow

Once users start the cancellation flow, the goal shifts to retaining them through clear communication and targeted offers. Key strategies include:

• Personalize offers based on the reason for canceling
  • For users who cite “too expensive” as a reason for canceling, an offer or discount is presented to appeal to their price sensitivity.
  • For users who cite “don’t use the tool,” an alternative to cancellation is presented (like pause, snooze, etc.)
• Emphasize the value users will lose if they cancel
  • Show the subscriber exclusive benefits to which they will lose access.
  • Remind free trial users of what they are giving up on by canceling their subscription before the trial ends.
• Differentiate the final cancellation step from the rest of the flow
  • Emphasize what the user is about to lose.
  • Ensure it’s visually distinct from the rest of the cancellation journey in messaging and design, instilling a sense of missing out and finality.

Example: Rocket Money engaging flow with multiple downgrade options

Rocket Money is a budgeting app that analyzes users’ bills and spending so they can find places to save.

In the cancellation flow, the tool offers multiple save tactics, including pick your own pricing, valuable features that haven’t been used (‘get your credit report’), and clear opportunities to reactivate post-cancellation.

Phase 3: After cancellation

Even after cancellation, there’s a chance to re-engage users. Effective post-cancellation strategies include:

• Sending emails highlighting new features or exclusive offers.
• Using the dashboard as a reactivation hub for canceled subscribers or free-tier users.

Example: Audible re-engagement offers after cancellation

Audible is an audiobook app from Amazon that allows users to purchase and listen to a library of books.

After canceling an account, a user is redirected to their dashboard, which clearly shows when they have their subscription, a special offer to reactivate the subscription, and recommended books that would interest the user.

Example: Evernote re-engagement offers after cancellation

Evernote is a task management and note-taking app that can be used as a virtual notebook.

Post-cancellation, Evernote sends an email letting the user know about new features: Evernote now syncs with Microsoft Outlook Calendar. The user is offered a week of Evernote Professional to try out the feature.

Example: Grammarly ‘Premium Update’ Weekly Emails

Grammarly is a cloud-based writing assistant that checks grammar, spelling, and more for users.

Grammarly Premium users receive a weekly ‘premium update’ email with statistics about their usage, writing, and productivity. The bottom of the email shows the features you are using and what you are missing. Post-cancellation, users continue to receive these emails until their original subscription period is up. This keeps the value in front of them and reminds them what they will miss out on when their subscription ends.

Reducing churn goes beyond an optimized cancellation flow

Optimizing your cancellation flow is only one part of the churn-reduction equation. The insights gathered—such as common reasons for canceling—can guide broader improvements in your customer experience.

Leverage surveys/customer service data to understand why people are canceling, their profiles, and when they drop off. Analyze the reasons for cancellations and retention rate data to find out why they are dropping off and optimize the experience long before they even get to the point of cancellation.

To reduce churn effectively, focus on:

• Transparency and ease of cancellation
• Feedback collection via short exit surveys
• Personalized retention offers
• Data-driven insights & continuous optimization

If you need support optimizing your cancellation flow or beyond, get in touch with our team at The Good. We operate as your fractional product team and can pinpoint opportunities you’d otherwise miss out on.