9 Customer Retention Strategies for SaaS
9 Customer Retention Strategies for SaaS
Higher retention rates can mean higher customer loyalty for your business, something that’s crucial for success, especially for SaaS. And beyond the fact that it costs less to retain an existing customer than to sign a new one, customer retention is a core part of long-term stability, prospective growth, and overall profitability. If you want to throw more fire behind your customer retention strategies, keep reading for some tips and tricks to keep them going strong.
1. Track and Analyze Your Churn Metrics
Some churn is inevitable, but the more you keep an eye on the trends and patterns, the more you might be able to stop it in its tracks. Metrics you could track include:
- Customer usage behaviors — when do your customers log on, and for how long? How often do they use your product?
- Stage in the customer lifecycle journey — how recently did they sign up for a subscription? Have they recently passed an anniversary? When are they next up for renewal?
- Level of engagement with your customer success management (CSM) or other customer support interactions
- Net Promoter Score®
- Customer Effort Score (CES) — how much effort is your customer putting into solving an issue they might be having?
- Customer Satisfaction Score (CSAT) — how satisfied is your customer while engaging with your product or service?
The more data you can gather about how and when customers tend to churn, the more easily you can identify at-risk accounts and employ a customer retention strategy to help combat that possibility.
You can also break down your churn data into different cohorts, or different customer segments (such as by type of product or service, a customer’s start date, or company size) to see if you can find any patterns. This could help identify root causes of churn and ultimately prevent them in the future.
2. Implement a Customer Feedback Loop
The best way to improve your customers’ experience and motivate them to stay with you is to listen to them. A way to stay consistent about this is by creating a customer feedback loop — a system of communication by which you can ask your customers for their feedback, collect and analyze it, and make clear to your customers that you’re taking their thoughts into consideration. This sort of feedback can take the form of written reviews, customer interviews, surveys, or even monitoring online review portals.
Make sure that the data you’re collecting and analyzing from your customers is being distributed to the people in your company who are best suited to address them. When you analyze survey results, look for trends in customer behavior that could point to areas where you could improve.
Ultimately, when your company focuses on listening to and incorporating feedback, you go a long way in bridging the gap between your customer’s expectations and the reality of your support and product capabilities. This typically leads to higher levels of customer satisfaction.
A tried and true method of surveying customers is the Net Promoter Score, a single survey question that can help pinpoint where your customers stand in relation to your company. Our NPS Cheat Sheet can help you get started with this SaaS retention strategy.
3. Connect With Your Customers Using Strong Talk
Small talk has its place in our client calls and meetings, but how much do you really learn about someone from talking about the weather? Strong talk, in which you discuss your struggles, challenges, successes, and real-time questions, can help you build a deeper connection and ultimately function as a customer retention strategy.
It might seem strange at first to open up professional conversations to these sorts of topics, but conversations like these can help you get to know your customer more on a professional as well as a human level, and contribute greatly to Customer Success.
Discussing challenges and asking for advice on professional issues that might be troubling you are great opportunities to share and gain new perspectives.
4. Build a Customer Communication Calendar
Nobody wants to feel like they’ve been left behind, and sometimes, when your customers are having trouble, it might be on you to reach out and check in. Some customers churn because they feel stuck or have unanswered questions, so getting in touch and addressing concerns can be an effective customer retention strategy for SaaS.
Putting together a calendar to track past communications with customers is a great place to start. Once you have a good understanding of how often you’ve been speaking with certain customers, you can look ahead and plan out communication touchpoints proactively. If you think you should be speaking with a certain customer more or less often, that’s a detail you can work into the calendar, too. Some events that might be good opportunities to reach out to your customer base include:
- New product launches
- New resources, such as ebooks or upcoming trainings and webinars
- Changes to customer support procedures
- Sales or other offers on products and services
Not only is this a way to organize and manage customer engagements, but it can also create opportunities to upsell and cross-sell. The more in touch you are with your customers, the more you’re able to build a better understanding of their needs and the challenges they’re facing, issues you might be able to address with a certain product or service.
5. Start a Customer Education Program
Your customers might want to go off and find the answers for themselves, without getting in touch with someone on your team. In that case, it’s a good idea to create resources that customers can access on their own time, when they’re in the middle of addressing a problem on their own.
This could take the shape of a community forum, or a community formed through customer newsletters and webinars. A space where customers can go to get feedback from others who have experience with your product and your business only makes them feel more supported. Now, they’re a part of something bigger, and that makes them want to come back.
Sometimes, they might need even more support, however, and that’s where a knowledge base or resource hub can come into play as a customer retention strategy for SaaS. Webinars, one-on-one training videos, and other educational resources can make the difference between customers pushing through and throwing in the towel.
6. Invest in Successful and Smooth Customer Onboarding
Customer onboarding lays the groundwork for your customer’s experience, and hopefully for customer retention. There are certainly customer onboarding rules to live by when it comes to this process since it’s such a foundational step of your customer’s journey.
Your customers should feel supported throughout their onboarding process. They should be able to reach out if they have questions or need support in learning your product, and you should provide an opportunity for your customers to provide feedback during and after onboarding. The more streamlined your onboarding process, the more quickly and easily your customers can get to working with your product.
As with many things, communication is key. Check in with your customers at various points throughout the onboarding journey to make sure they’re on track, don’t have any outstanding questions, and are getting the most out of your product. This can look like in-app or in-product communications, automated walkthroughs of product features, or some face-to-face meeting time.
7. Reward Loyalty
Your promoters and your most loyal customers are probably doing a lot to help your business bring in new customers and maintain its profits — reward them for it. A customer loyalty program plays a large role in your SaaS retention strategy and could take many different forms.
This could look like grandfathering in prices for your longest-tenured customers when rates increase, offering free or discounted product or service add-ons, or sending surprises when customers hit milestones or important contract intervals. Rewards could also be incorporated into providing survey feedback, or giving referrals. However you choose to acknowledge your customers’ loyalty, it’ll be sure to make them happy to stick around.
8. Provide Exceptional Customer Service and Support
Customer Service, Customer Support, Customer Success — they’re all important, and they can all work in tandem to help improve customer retention. It boils down, however, to consistency: you should consistently meet your customers’ expectations about your product and your services, and you should do all your can to avoid unpleasant surprises.
It’s also important to make sure you’re providing support on the right channels. Is a chatbot the best way to address this concern, or would a hotline be more helpful for customers with immediate issues? Is a resource hub enough to address commonly asked questions, or should we have a team available to contact?
Thinking through these questions, as well as focusing on making customer support a communal effort amongst your teams, can help provide support that is complete and of high-quality and makes your customers feel like they can lean on you.
9. Learn From Churn: The Exit Interview
Not every customer is going to stay, but we can learn lessons even from the ones who churn. Follow up with the customers who do leave, and see if you can really understand the why. Don’t use this as an opportunity to try and get them back, but rather as a valuable learning experience.
There’s a number of reasons a customer might choose to stop using your product. It’s possible their priorities have changed, and your solution no longer supports their new efforts. Or, they had a difficult time learning your product, and they didn’t have the time to invest to do so. Once you’ve really dug down to that why, it’s important to do two things: track it, and work on a solution.
Make a note somewhere about why the customer has left, so that if patterns start to emerge, you’ll see them early. Then, do your best to address the problem. Maybe implement new meetings earlier in the customer journey to discuss changing priorities before they become a reason for churn, or work on creating new educational resources that onboarding customers can access at any time.
The feedback you receive — and what you do about it — could help you combat possible churn down the line, with other customers.
SaaS Retention Strategies at Your Fingertips
Every customer who signs up to use your product might be a little bit different, and some customer retention strategies might work for some of them, but not others. ChurnZero’s Churn Monster Playbook lays out all the possible reasons a customer might consider leaving, and provides plans of action to address each specific scenario. If you want to start combating churn and improving your customer retention, it’s a good place to start.
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