Your customers bring regular revenues that help your business grow. Apart from offering excellent products and services, companies must design customer retention strategies to keep current customers returning.
Retention of customers is crucial for SaaS sellers, and the SaaS tools are active in nature. The possibility for multi-year SaaS contracts with the option to add new components and services and retain customers must be the highest preference for companies to drive constant revenue.
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Retention vs. Acquisition
For any business, customer retention and acquisition are critical for success since more customers mean more revenue, which means a greater possibility to grow in your target market.
For many companies, however, getting new customers deviates from focusing on existing clients. This applies to SaaS providers. If you add another 10, 20, or 50 clients to the present customers who pay the same amount for services, overall revenue increases. It is more complex than it appears. First, getting new clients is 6 to 7 times more expensive than retaining existing ones, and you must do more to engage and convert these clients into customers and retain them. Additionally, retained customers usually spend more than new customers because they know the value of your services and offers. Even more telling? A 5% increase in retention rates can boost company revenue by 25-95%.
The result is a specific but often unexpected realization for companies trying to grow their business: While acquisition proposes a moderate gain in revenue in exchange for more sales and marketing investment, retention provides larger value for less expense.
15 SaaS Customer Retention Strategies:
- Have precise expectations
- Deliver an “aha” experience
- Customize your offering
- Show related upsells
- Make a communication schedule
- Update your product regularly
- Go above the rest
- Consider rewards offers
- Reduce conflict wherever possible
- Do Not Overlook the Feedback
- Create a product community
- Follow your KPIs carefully
- Pull data from customers who exit
- Provide self-service feasible for your customers
- Individualize your product offerings
The above-curated list will help you retain your customers and grow your business.
1. Have Precise Expectations
It helps if you include expectation setting in customer retention strategies, and it should be an uncomplicated approach. You define what customers can anticipate, how they want it to be supplied, and the time for responses to product inquiries or service tickets.
In SaaS, a service-level agreement (SLA) lays out both service provider and customer commitments. The SLA plays a crucial role in customer retention. It would help if you refrained from the temptation of over-promise, and it is better for companies to under-promise and over-deliver to keep customers returning.
2. Deliver an “A-ha” Experience
A recent survey revealed that 99% of companies use at least one SaaS provider, from Content Management Software (CMS) tools and extensive analytics services to precise, purpose-made cloud applications.
Providing your customers an “a-ha!” moment makes all the more sense, and transparency would clarify your offers. You must provide a solid starting point for new clients during onboarding. Involve them with tutorials and knowledge bases so they can tap the necessary benefits of your SaaS solution and appreciate its value.
3. Customize Your Offering
You must understand what different services you offer in the market. Define your target audience. Understand their need and offer solutions that others do not. You have to package your offers in a manner that they appear unique.
By furnishing context around who you are and what you do, you can avoid comparing your service with other SaaS providers that do not operate in the same market stretch. For example, your primary SaaS solution is a finance tool that automates vital accounting processes. You can precisely convey your deliverables by constructing a simple, contextual value proposition.
4. Show Related Upsells
SaaS offerings generally display potential add-ons, including more space for storage, advanced computing capacity, or extra software features that make connecting with other cloud-based services easier.
Upsell derives more spending from retained customers if they connect to what companies use. Suppose a company is leveraging your solution to address complicated computing processes; in that case, you could propose a deal on data storage. But if the company keeps all its data in-house, this upsell has no value. You have to keep it relevant to maintain customers spending.
5. Make a Communication Schedule
Once your customers are on board — especially if they have been your clients for a long time — it is better to concentrate elsewhere and focus on acquisition over retention.
It should not look as if you spend more time chasing new leads ignoring your current clients, and making it appear that now that you have their money, you’re no longer interested. It happens in cases where your SaaS product works as planned; if consumers have only minor complaints about your app, they may only bother for a short time, which becomes a significant challenge.
To solve this problem, design a communication schedule that allows you regularly to connect with customers. Even if this is just a simple check-in to ensure everything works fine, it makes the customers happy.
6. Update Your Product Regularly
SaaS solutions are dynamic. With the evolving cloud technologies and business requirements, software should modify to keep up with this.
While it is of utmost need that SaaS providers must keep their products current, it is also essential to keep customers in the loop about the changes. You exhibit your commitment to deploying new features and functions and make companies aware of any potential downtime or service interruption so that they can prepare themselves.
7. Go Above the Rest
It is known that 33% of Americans consider switching companies after a single bad experience. Businesses lose over $136 billion yearly to customer churn that they could have avoided.
Delivering adequate services is insufficient — you must go beyond specific parameters to keep customers connected, so you may have to go out to solve customer issues or address pain points. However, they may be marginally related to your solution.
It is also crucial because unnecessary service interchanges can lead to frustration on the part of customers if they feel their needs should be understood or their concerns appropriately handled. You can avoid typical service issues by striving to give the best services.
8. Consider a Rewards Offers
Retail companies offer rewards through money-off after a specific value of buys or the ability to earn points and coins with every product purchased. SaaS companies often offer rewards programs as discounts over time based on the signed service contract and the client’s duration. If your SaaS solution typically costs $100 per month, your offer could be a $10 discount for companies that sign up for a year and additional discounts for longer terms. You can also start a referral program for your customers and offer direct discounts on services or add-ons if they refer you to other companies in their network.
9. Reduce Conflict Wherever Possible
Friction or conflict prevents users from coming back. It is particularly valid for SaaS products companies use daily; even minor problems can cause big frustrations over time. You may lose your customer if you frustrate them.
It will mean executing tools such as form autofill to simplify everyday processes and ensuring your solution performs with various other as-a-service apps.
10. Do Not overlook the Feedback
Your customers’ thoughts and feedbacks are essential; ask them. Get client feedback through email surveys and filled-in post-purchase proformas. Regular contact with your clients helps you find where your business surpasses expectations and where it needs revision. The more reactions you manage, the better, since this will help you identify potential service trends that need to be handled, such as long wait times or inadequate responses.
Remember, you only ask for reactions and feedback after customers have received your service or support. While it may seem like a good time because you have their engagement, they might want to return to what they did before calling for service. Instead, send a follow-up a few days later to confirm everything is still working and then ask for their Feedback.
11. Create a Product Community
Your product can not be in a vacuum. If one of your customers encounters an issue, another also faces similar problems, and if one finds a better way to combine your offering, others might benefit from this knowledge. Therefore, create a product community and include your customer feedback for everyone’s knowledge and benefit.
While you act as the intermediary for gathering and transmitting this information, the benefits of creating a product community are worth regarding. This community will have knowledge bases, forums, and tutorials that users can both access and add to and furnish a way for the community itself to strengthen your brand.
12. Follow Your KPIs Carefully
Client retention is finally about the people who buy and use your services, but sustained retention also depends on effective measurement. As a result, it’s critical to track your Key Performance Indicators (KPIs). It starts with your overall customer retention rate but also includes the following:
- The total amount of consumer churn within a given period.
- The most typical reason for customers deciding to leave your service.
- Your search engine ranking compared to other, identical brands.
13. Pull Data from Customers Who Exit
Some customers leave despite your best efforts. It may not be the fault of your solution or customer service — your client’s business needs or budget may change, pressing a transition to new providers.
While you make the off-boarding process simple and seamless, getting your customer feedback is crucial. Why do they leave, were there shortfalls or service issues, and how do you convince them to return should be known to you.
You may get only some exit interviews, but those who willingly share their experiences may offer valuable insights into your shortcomings. You can act upon those in your future endeavors.
14. Make Self-service Feasible for your Customers
Excellent customer service can lower friction when clients have a problem, and Self-service options, meanwhile, can address this issue. By helping customers solve their problems with your service using manuals, uncomplicated tutorials, or an in-app knowledge base, users can quickly address their problems and get back to using your app as intended.
15. Individualize Your Product Offerings
Almost 76% of B2B consumers want companies to comprehend their needs and expectations. While your SaaS solution may perform a more all-around role, it is worth connecting with customers to evaluate their use cases and nail the opportunities to customize offerings.
Customer retention does not happen fast quickly, and it’s a journey that starts with your product itself and expands to every aspect of its commission, maintenance, upgrading, and backing. With the right plans, you can facilitate overall retention rates to push sustainable revenue and keep customers returning.
Conclusion
SaaS companies can benefit greatly from a variety of customer acquisition and retention strategies. Some of these strategies include creating valuable content, optimizing pricing and packaging, offering free trials, implementing referral programs, providing excellent customer support, and focusing on user onboarding. Acquiring new customers is important for expanding the customer base and increasing revenue. However, it is equally important to retain existing customers to ensure a loyal customer base and repeat business.
A successful SaaS company will implement a variety of acquisition and retention strategies tailored to its specific audience and business goals. It is important to constantly evaluate and adjust these strategies based on customer feedback and market trends to ensure long-term growth and success.
