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4 Inconvenient Truths About SaaS Customer Retention

Forrester Research found that “70% of CMO’s did not list retention as a top priority.”

But in order for your SaaS to stay profitable, it’s critical for your business to retain more customers.

Humans are creatures of habit. So, prove to your current customers that you’re worth the recurring subscription.

For customer retention to increase, focus your team’s efforts on improving the user’s experience, addressing customer service issues, and strengthening brand loyalty.

Don’t wait until it’s too late. Create a strategy to override your current SaaS challenges.

Here are four inconvenient truths hindering your company’s growth and how to overcome them.

1. Your customer service lacks substance

In today’s marketplace, the consumer has the power. They search the Internet to find the best deals on blogs and social media channels.

And with so many competitors vying for their attention, consumers can take their business elsewhere if their needs aren’t met. So, if your customer service isn’t meeting their standards, expect them to unsubscribe today.

Experts report that “it takes 12 positive experiences to make up for one unresolved negative experience.” To take your service to the next level, find new and interesting ways to connect with your shoppers.

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Also, remember that customer service includes everything from website functionality to sales interactions to help forums.

Serial entrepreneur Neil Patel suggests following up with every customer interaction. It’s all about taking that extra effort to ensure your customer is satisfied. Here’s how the process should look:

  • Customer: We have a problem.
  • Support Team: I’ve helped you. Have a nice day.
  • Bonus Follow-Up: Hey, we helped you a couple weeks ago. How are things going now? Anything else we can help with?

Most of the time, companies are putting out fires that have already started. But what if you could forecast customer expectations?

Prep your team to provide proactive customer service (aka customer success). For example, call users and ask them about their experiences.

Learn when, where, and how they gain value from your services. These insights will help your team solve small concerns before they become major issues.

To boost retention, keep your customers happy.

2. Your strategy is shortsighted

Customer retention is a marathon, not a sprint. Therefore, develop your retention plans across the customer lifecycle.

“The data shows that the faster you get your prospects started in your Free Trial, the more likely they are to convert to a paying customer,” says Lincoln Murphy, founder of Sixteen Ventures, a SaaS growth consultancy.

“Likewise, the faster you get them on-boarded and your service adopted within their organization after becoming a customer, the more likely they are to stay a customer…for a long time.”

Fixate your attention on your customers. Activate long-term interest through gamification. Adding a gaming element to your strategy gives customers a new experience.

For example, Nike+ connected customers with a mobile and Facebook app that recorded their running goals. Users earned rewards and received personal messages from famous athletes.

As a result, the membership of Nike+ “grew by 40 percent in 2011 and helped boost revenue by 30 percent.”

Build a community. People want to be part of something special. Create a system where individuals can contribute ideas for new product features.

Then, let the community vote. It’s a two-way street for the community and the brand to communicate.

And continue to add content to your help center. FAQs become a customer journey tool.

Miko Levy, VP of Customer Acquisition at Outbrain, writes, “At Outbrain, we’ve structured our Help Center to reflect our customers’ needs from the pre-signup stage to first-time campaign creation to more advanced optimizations and reporting.”

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Consider your help center a working document that will progress as you improve your product.

Be creative. Improving the customer’s experience will impact your churn rate.

3. Your email automation needs improvement

The Direct Marketing Association found that “every $1 spent on email marketing provides an ROI of $41.” That’s a huge opportunity for your SaaS!

Email efficiently connects your product to the customer. Therefore, your business stays at the top of their minds as your team nurtures these relationships and offers valuable content.

Intercom incorporated user activity data to personalize their email experience.

The in-app messaging platform re-engages customers with trigger based email automation. Here are a few lessons they learned:

  • Target the right customers: Segment your users properly with activity and demographic data.
  • Be interesting: Always offer value. Remind customers of what they’re missing.
  • Be visual: Don’t just tell customers about a new feature. Show them what it looks like and how to use it.
  • Be thankful, honest, and respectful: Don’t take churn personally. Get the feedback to improve the product and move on.

In addition, create promotional emails worth opening.

Evernote is widely touted for their eye-catching emails. The company focuses on benefits and features before stating a compelling call-to-action.

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Evernote target one specific benefit and frame each email around one problem. Then, they offer one effective solution. The copy is short and includes action-oriented verbs with a big and bold call-to-action.

Sending well-timed emails can also bring back dormant customers. It centers on delivering the right message to the right person at the right time. What will intrigue them to use the product again?

A steady stream of engaging emails excites people. Improve your email automation to personally connect with your customers.

4. You don’t reward loyalty

Recognize customers with an effective loyalty program. They deserve a little love for sticking around. And with the help of social media your team can continue to build those relationships.

Research reveals that “people just love being VIPs or gold members of programs.” However, it’s only effective when people know there is a group below them. So, develop a loyalty program where gold members are aware of the silver group.

Also, ditch the idea that a purchase equates to loyalty. Reward shoppers for non-purchase activities.

For example, give customer points for referring a friend or joining your email list. Office Depot rewards shoppers for recycling their ink and toner cartridges.

office-max-depot-recycling-rewards

Build a social media strategy based on customer loyalty. Your team should screenshot examples of how customers love your product. Essentially, you’re transforming social media into social proof.

And don’t just let your customers talk. Join in the conversation.

One way to influence the internet’s conversation about your company is by gaining and using valuable information to your best advantage. Customer surveys are an excellent way to do just that. Address pain points head-on, and promote the living daylights out of your best reviews,” states Katy Katz, Content Director at Inturact.

Lastly, be the expert in your field to retain more customers. As a trusted advisor, consumers will rely on your company not only for your products, but also for recommendations about other services within your industry.

When your SaaS becomes the trusted source, consumers come to you first before making any future purchases. So, if you sell the product they need, it’s highly likely the customer will purchase from you first.

True Retention

Strive to increase your customer retention. Build a strategy that will challenge your team’s current tactics.

Give unmatched customer service. Think long-term when creating a plan and add gamification to the mix. And show your customers some appreciation through well-developed brand loyalty programs.

Find your truth. Retain more customers.

About the Author: Shayla Price lives at the intersection of digital marketing, technology and social responsibility. Connect with her on Twitter @shaylaprice.

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