Been running a bootstrapped ed-tech B2C SaaS startup since January 2023, started charging in April. We’ve been growing in revenue around 9-15% MoM but our churn is ridiculous, it’s around 21% and has been flat there for around 2 months (was previously 30-25%). Our growth in other metrics is great, we’ll hit $10k MRR this month but that churn number frightens me and I don’t know what I can do about it.
We are a freemium site and around 2% of our users are returning users (this lines up pretty much exactly with our conversion rate from free to paid accounts). Currently have around 125k users total, of which around 4k have paid for something and 1.7k have active subscriptions.
My guess, which has already been alluded to by you and other posters, is that students are using this for a specific project and when that’s over, they don’t need it anymore. That’s the beauty (to consumers) of SaaS products. I subscribe and cancel in a month for SaaS products frequently when I have a one-time need.
I would do two things:
(1) Start some experiments where you offer people something to those cancelling. Maybe it’s a free month of premium, or maybe it’s something like they get a month (or some months) of premium if they refer someone else who signs up. Do a bunch of A/B tests and see the impacts those have on MRR and renewal rates.
(2) You’re successful with students and getting traction there - that’s excellent! However, students are only one potential customer segment. I would really brainstorm and see how I could target people who perpetually need.
For example, I’d think that certain researchers, scientists, and doctors would ideally like a constant feed of new research pertaining to their field. You could probably add a feature for them (if you don’t have it), where they save a search term, and anytime new research related to that subject happens, your product does its thing and lets the customer know.
I think by staying with just one segment, you’re always going to have this issue (especially with students who are cash-strapped/conscious).
Find other segments (target markets) that:
Don’t give up on students, but expand your use cases and target market to new segments.