How focusing on customer success
is one of the best customer retention strategies
“The discipline of customer success is becoming key to customer retention
and revenue generation in the software as a service market.”
– Mike Grafham, Yammer, Microsoft
In the SaaS industry, retaining customers is estimated to be five to seven times more cost-efficient than attracting new customers. While many businesses place their focus and advertising dollars on getting new customers “through the front door,” SaaS companies face some unique challenges when it comes to customer retention strategies, whether it involves engaging customers with a subscription, upgrading, or demonstrating value over a longer term.
With added concerns about data loss, security, and reliability, customers need to trust that you care about their long-term success. SaaS companies also must be scalable, but they often can’t meet demands of being “one size fits all” for a range of growing businesses and organizations.
Many SaaS companies are rising to the challenge. In a 2015 research survey, 80% of SaaS companies reported a net retention rate of 90% or better. Customer retention strategies have come a long way, but there is room for improvement. If you aren’t in the 80%, you are losing out to companies that are!
This article covers some ways to evaluate the mistakes you might be making and turn them around to improve retention. When you’re done reading, schedule a demo of our lead management software to help you maximize your customer engagement for success.
Many SaaS companies fail their subscribers by over focusing on attracting new customers or converting them from the competition, but then lacking when it comes to demonstrating value down the road. When a sales pitch promises fast results that don’t deliver or ease of use when there are bugs, data loss, slow performance, or missing features, customers feel that their ongoing success matters less than their initial buy-in.
Poor customer service and lack of ongoing engagement directly result in customers feeling neglected, giving them no reason to place trust in a continued relationship.
Other companies make the mistake of limiting feature options or upgrades out of fear that “upselling” turns off customers, but this backfires. Customers want to grow their success using the SaaS that scales with them, and many care more about added value than lower price points.
Demonstrate Value for Customer Success
For a customer retention strategies overhaul, follow these surefire steps to address mistakes and get back on track:
Tip #1: Revamp Your Onboarding Process
From the very beginning, make customer retention strategies a part of the plan. Assess how new customers are brought in to ensure you are setting them up for success. Can you emphasize unique features without overpromising? Are you managing expectations appropriately and with success in mind for the customer? New customers should be able to see a clear roadmap from buy-in to value, and your team should guide them at checkpoints along the way.
Tip #2: Drive Engagement with Tools for Success
A simple fact is that the more use a customer gets out of your products, the more value it provides over time. The best way to promote use is through targeted engagement (link “targeted engagement” to https://www.nowblitz.com/blog/engaging-millennials-capture-attention-quickly-keep/”) and incentives through many channels! Provide free training webinars, from introductions to highlighting different features or ways to boost usage, and offer motivation with email reminders and helpful tips. Offering regular interaction and a variety of tools for success is key to showing customers you care.
Tip #3: Be Available, Accessible and Accountable
Customer service seems like a no-brainer, but it’s amazing how often companies fail to respond quickly and appropriately to customer complaints or requests for help or offer painfully limited methods and hours to contact them. Increase the ways by which customers can get fast responses and solutions when something goes wrong, and be available, accessible, and accountable to build trust over time.
Tip #4: Diversify and Promote Added Value
One size does not fit all, so you must appeal to customers with different feature and plan needs and customers who are trying to grow a business. Additional feature options, upgrade plans, and levels of engagement demonstrate how your SaaS can be flexible and grow WITH them. Check in with them often; ask what added value would increase their success, and find the best way to deliver it.
Tip #5: Support Their Success Stories
Customers promote and share their success stories online and in public. SaaS can be part of their story. Show them you know who they are and appreciate their feedback, and interact with them however and wherever you can. In the same way that a positive experience can turn a customer into a brand ambassador, recognizing and promoting their success is a winning investment and one of the best customer retention strategies.
With your new strategic plans in mind, now is the time to schedule a demo of our lead management software!
What has your business done to improve customer retention? Share your experience and best strategies in the comments!