Contact us anytime to know more - Abhishek P., Founder & CFO CISIN
Losing key clients through churn is one of the greatest threats SaaS organizations face. While customer churn rate is unavoidable, having a comprehensive customer retention strategy five times cheaper than recruiting new ones may help limit its effects and mitigate its cost.
Did you know that increasing client retention by just five per cent can boost earnings by 25-95%? Also, companies have an estimated 60-70% chance of selling to existing clients instead of newcomers; prioritizing existing clients pays dividends. Here, we aim to teach you everything there is to know about effective customer retention tactics for SaaS and provide proven strategies to ensure customer loyalty, ultimately improving retention rates and increasing revenue streams.
What Is SaaS Retention?
Retention in SaaS companies refers to activities and tactics employed to maintain client retention rates over time. SaaS retention is an indicator that measures your capacity to uphold high customer loyalty to your product or service over time, keeping clients loyal to and engaged with it over time.
Why SaaS Customer Retention Is So Important
Due to SaaS being built around subscription pricing models, SaaS customer retention is of critical importance for long-term business success. Retention serves as a reliable indicator of overall consumer happiness while being an indicator of company stability, expansion, and total profitability - in other words, the higher your retention rate, the more income growth increases while simultaneously expanding lifetime value.
Customer retention optimization is one of the most cost-efficient strategies to maintain and increase recurring revenue streams. Upselling to longstanding, satisfied customers make upselling easier while increasing lifetime value - two essential key metrics for business. Involvement with existing customers accounts for approximately 65-75% of company revenues, according to data - thus, a loyal customer base may serve as a powerful recurring revenue generators.
However, poor customer retention could mean money losses; recruiting customers is generally more costly. If current customers leave before making enough payments to break even on their acquisition cost, that would indicate an effective strategy and could end up exhausting all possible customer feedback, potentially disastrous to any firm.
Defining Your SaaS Retention Strategy
At the center of retention is conducting an in-depth customer retention metrics study that establishes whether clients are staying, churning, upgrading, or downgrading. You ideally want customers who renew multiple times as it reduces customer acquisition cost (CAC) and increases profitability - take time defining goals and considering appropriate SaaS retention strategies that could achieve these.
Here Are Some Ways Top SaaS Companies Create Loyal Customers
Include Your Customers In The Evolution Of Your Product Or Service
As your product tours evolve and adapts to meet client needs, clients must be kept abreast of how you're upgrading and refining it to serve them best. When clients witness these developments firsthand, customer retention rates and loyalty increase - and as previously discussed in terms of MRR (Minimum Recurring Revenue), that means more revenue.
Keep Customers Engaged With A Changelog
Customer success teams will become more engaged if they see your staff working tirelessly to upgrade and enhance your product teams rather than remaining static continuously. They tend to appreciate teams that show them they care. Customers could only notice key upgrades and advancements if these developments are communicated clearly. No sound will be heard when product updates change without anyone listening; therefore, it is up to you as business leaders to openly announce any advancement in products or services provided to your clients. Submitting emails has become less effective over some time, with open and click-through rates declining and spam bins growing increasingly more significant.
It makes this task easy. One of its signature offerings, an in-app or site changelog, seamlessly integrates into any interface to notify customers about upgrades, key feature releases, or general news relating to their experience using your product or app. Please take advantage of their time period using it by making their expertise work harder for you in more ways than one.
Customers can quickly access your chronological updates by clicking a "What's New" button or icon, with photographs, movies, GIFs, and links added for more excellent amusement. Social media also simplifies commenting, reacting, and sharing posts, increasing word-of-mouth marketing strategy.
Give Your Customer Base The Content They Want
Today, we live in an age of feeds, spending our hours scrolling down and filtering information across everything from social media platforms to work tools. Refrain from overwhelming users with irrelevant material. As part of your regular engagement strategy, leverage client data you gather on clients to learn more about them, create profiles for each one, and customer segment audiences so you can provide relevant content to the target audience. Make it worthwhile for potential customer expectations to read your updates by providing valuable updates.
We can help your team organize updates so customers only receive those most pertinent to them, increasing engagement and improving customer experiences. By being so close and intuitive, customers will be able to make all the changes made by your team.
Create groups, filter updates using different factors, and send personalized messages directly to specific customer types. Customer service becomes more loyal if they feel you speak directly to them, which can only boost customer engagement with SaaS applications. For more on using personalization to increase SaaS user engagement, we wrote an entire blog post dedicated to it.
Notify Users Wherever They Are
Your products and services may play an integral role in their daily lives; however, there may still be occasions when customers become disengaged due to other matters or just plain forgetful of updating information that should have been read earlier. How can you ensure updates reach customers at optimal moments?
We offer two notification solutions that allow you to provide essential updates even when clients aren't actively browsing your changelog or website or are signed out of your app: Push Notification and SNS Notification.
- Notifications inside your app or site: Send in-app notifications for crucial app or website updates, significantly if they affect customer satisfaction who may not be paying attention. Remind them about them with an in-app notice bar, snippet, tooltip, or modal window message.
- Notifications outside your app or site: Push notifications to extend your reach. Even when users are locked out or browsing other websites, push notifications give you the power to send announcements directly. With these announcements in place, customers will return when needed - giving your company peace of mind.
Maintain Open And Constant Lines Of Communication
Effective communication is the cornerstone of building successful customer relationships, yet doing it online is often challenging. You must create direct lines of dialogue with clients since phone numbers no longer suffice as an avenue of contact. More "touchpoints" of communication are generally better. Many businesses now feature active social media pages, blogs and forums, chatbots, support emails, hotlines, and agents specialized in handling more extensive customer relationships.
At its heart lies an issue of communication - supporting those techniques most appropriate to your clients and finding an equilibrium between automated (bots, support centres, or tutorials) and human-based (a phone number or ticket system) approaches to connecting. Your target consumer base and communication style will dictate your desired approach, but make sure clear communication paths exist so your clients know exactly where they can find information - chatbots for sales/support and for company announcements are great resources for information sharing.
Build A Solid Emotional Connection
Human interaction and ongoing, varied communication have become essential to customer loyalty. Even if your sales and support operations are automated, ensure they feel personal by adding custom fields that allow customers to add personalized information such as their function, firm name, and industry details for direct outreach emails.
For instance, creating email templates that contain 95% complete direct outreach emails could have these custom fields for added personal touches that include the persona of each lead's function, firm name, or industry details. This is helpful when creating email templates that reach out directly.
Show Your Human Side
Many businesses advertise "We Treat Our Clients Like Family and Friends," yet few go beyond saying the words to act upon this commitment. Declaring yourself to be "warm" or "human" without actually showing those characteristics when engaging clients is meaningless unless that "warmth or humanity" can be seen when engaging clients and customers directly. Remember, product or brand identity extends beyond simply text on internal memos - it should be visibly present wherever customer interactions occur with your product/brand identity.
To add an individualized and more familiar feel, some companies personalize client communications by signing their emails with human names and faces and employing language more indicative of regular conversation. Some businesses were especially adept at this as they provided honest updates regarding how their team operated on both their blog and social media pages as they evolved as a company.
Be upfront and honest as a business. Customers expect companies, brands, products, and services to engage them just like people; open communication helps build trust between both sides. If your team encounters challenges or makes mistakes, communicate it clearly to clients in your client communications and be open and honest about company practices.
Feedback Needs An Answer
Feedback should not simply be seen as a means for relieving user frustrations; it must serve the business-customer relationship. Feedback needs to be addressed to encourage repeat clients ' negative experiences to return repeatedly, both listening and acting.
Review client feedback, identifying and addressing users' most pressing pain points. To close the feedback loop, notify the user experience about any modifications made before repeating this cycle. Show customers you care by showing them you value what they say. The ultimate aim should be enhancing customer loyalty programs while building long-term customer relationships.
Concluding
These SaaS strategies for customer loyalty may assist your firm in decreasing churn and increasing client lifetime value. We handle global compliance, and risk management reporting & analytics so you can focus on providing excellent products & services while increasing sales and recovering revenues through tailor-made solutions, we look forward to supporting you.
Please reach out if you have any inquiries about our services or would like someone from the team to talk with. We take great pleasure in developing relationships within the industry and learning more about those running businesses of various sizes - we know we can assist them all to grow.
