Who’s responsible for retaining your SaaS customers? Sales? Marketing? Customer support? Customer success?
All of the above!
Because retention is a team sport — and customer churn is the opponent.
10 Ways to Reduce SaaS Customer Churn and Create Loyal, Long-term Users
- Call new prospects
- Focus on successful onboarding
- Make help options easily accessible
- Continuously create helpful content
- Say and give thanks
- Foster loyalty
- Build user communities
- Feature customers in your content
- Engage with customers via social media
- Keep an eye on your users
As Anna Talerico, co-founder of SaaSX, writes,
“I eventually came to learn that customer retention must be a fully shared KPI across the entire organization. And it must be shared equally. Operations, engineering, product, sales, marketing, customer success, etc. No single department can have a greater responsibility for hitting the customer retention KPI. That’s full alignment, and that’s when teams win the SaaS customer churn war.”
The Key: Value Nurturing
As they say, a problem well-stated is a problem half-solved. So, let’s begin by identifying what causes churn.
4 Reasons SaaS customers cancel their subscription are:
- It doesn’t satisfy their need.
- They don’t recognize its value.
- They discover a solution they like better.
- They no longer have the need.
In her great book, Subscription Marketing, author Anne Janzer introduces the notion of “value nurturing.” Though it’s not exactly a mainstream term, the idea is easy enough to understand:
The goal, of course, is to motivate customers to continue subscribing month after month. So let’s look at the tactics your company can employ to “value nurture,” and who has the responsibility for each.
1. Call New Prospects
Your company is probably in the habit of reaching out to prospective customers shortly after they sign up for a trial or opt in to an offer.
This role, most likely addressed by someone on the sales team, should aim to create a strong first impression.
Messaging is simple.
- Welcome them.
- Thank them.
- Encourage them.
- Give suggestions and make offers that facilitate adoption and overcome any obstacles.
2. Focus on Successful Onboarding
The importance of the customer onboarding process cannot be overstated. Every new customer should receive an onboarding call from a member of your sales or customer success team.
This is an ideal opportunity to help users fall in love with your solution:
- Discuss the customer’s expectations.
- Answer questions.
- Deliver the guidance required to teach new customers how to use your solution effectively.
Examine what a successful new customer path looks like and put programs in place to make it happen as often as possible.
If yours is a complex platform best learned via real-time interaction and in a hands-on environment, consider employing a virtual instructor-led training (VILT) solution.
3. Make Help Options Easily Accessible
A customer that struggles to find help is likely to have a foot out the door. Everyone in-the-know regarding common help requests should put their heads together to create a variety of convenient help options.
Make it easy to reach a knowledgeable assistant via:
- live chat
- a support widget
With the help of the marketing team, take care to create a thorough and helpful FAQ page or help section.
With the help of developers, consider building interactive guidance into your solution.
4. Continuously Create Helpful Content
Though marketing needs to be involved here, sales professionals should step up and step in by helping guide the ship. Customers need customers educational content and useful tips for realizing optimum value. No one understands the features and outcomes they care about better than sales reps.
Automation can help power these efforts.
For instance, when a customer completes a task, you might have an email queued up that delivers helpful tips going forward. Highly specific how-to guides are likely to be useful and well-received.
Of course, webinars might be the ultimate value nurturing tactic. If your software requires training, “show and tell” presentations could prove invaluable.
Again, like the onboarding process, virtual live training may be the most effective way to transfer information. It can be interactive and rely on real-world challenges the users wrestle with.
Another great tactic for delivering helpful content is offering your customers online learning assets such as Wishpond does with a deep library of free courses it calls the Wishpond Academy.
5. Say and Give “Thanks”
Sales professionals should make a concerted effort to foster goodwill with unsolicited expressions of appreciation. Happy — and appreciated — customers are likely to share their experiences with their colleagues.
Here are 3 ways to show appreciation to your customers:
- Send a thank-you email.
- Call to thank them.
- Send them small gifts, plaques, or bonus offers.
6. Foster Loyalty
Marketing and/or customer success may both work on this initiative.
SaaS profits are generated through renewals, upsells, and additional after-sales services. And according to a Bain & Company/Harvard Business School report, increasing your retention rate by just 5% can boost profits 25–95%.
Bottom line, loyalty programs help you keep your customers and drive revenue. And they need not be expensive or complicated. Think in terms of a simple rewards program that offers:
- An occasional discount, gift card, bonus
- Special “members only” content
You can also “gamify” the experience by recognizing and scoring different activities, which may inspire customers to use your software more often.
7. Build User Communities
Building user communities creates benefits that go both ways. Get customers to interact and collaborate online and the benefits are many:
- Sales and marketing can conduct market research, gain insights for future campaign development and sales methods, and foster customer advocacy.
- Customer service and support may be able to be more helpful and foster knowledge sharing. What’s more, customer service demands can recede.
- Product developers are likely to gather the feedback needed to deliver customer-driven innovations and product improvements.
Evernote offers its customers a community that offers exclusive access to members-only webinars and events and a forum for sharing knowledge and tools. The program also includes a gamification element because users can “unlock special rewards along the way.”
8. Feature Customers in Your Content
Everyone wins when you collaborate with customers to create content that celebrates their accomplishments.
Easy ways to create content that features your customers:
- Writing case studies
- Publishing interviews
- Social media promotions
- Writing eBooks
- Doing webinars
- Creating videos
While this process is most likely to rely on the help of marketing team, sales reps can do much to assist.
One of my favorite customer recognition programs is Kajabi Heroes, which recognizes customers and their accomplishments in “turning their passion into profit.” The program features a vlog series titled, “Heart of a Hero,” and also has a social media community building element to it where users are encouraged to share their progress and success using the hashtag #KajabiHero.
9. Engage with Customers Via Social Media
Marketing is generally responsible for social media, but sales reps should actively support your brand’s social media efforts.
No brand is too big to take social media interaction for granted. Consider how and where retention fits into your “social selling” strategy. The following ideas might help your cause:
- Let customers know you’re available via social channels. Inform them how to connect with you there.
- When a customer follows you on social media, follow them back.
- Provide support via Twitter.
- Create private groups on LinkedIn or Facebook.
10. Keep an Eye on Your Users
Success with this initiative depends on everyone’s involvement: Customer Success, Sales, Marketing, Operations and anyone else who supports customers or tracks user behavior.
As you know, having a customer sign up for a SaaS solution doesn’t mean they’ll consistently use it. Inactive users are soon to be goners, so it’s important to be proactive about engaging users and helping them begin using the product.
For that, you need to keep an eye on user behavior metrics. But don’t just watch how they use the product. Watch out for potential defectors.
There are often warning signs before a customer unsubscribes. Avoid churn by creating an early warning system based on pre-departure triggers.
- Develop a risk assessment process and early warning system based on critical metrics (e.g., login activity, adoption, customer satisfaction scores).
- Set up dashboards to track critical renewal information.
The goal is to know which customers are (and are not) getting value from your service. Put a process in place so you can alert the proper players when usage dips.
When You Lose Customers, Make It a Win
You obviously don’t want to lose customers. As you’ve gathered, there are many ways sales professionals and their brothers/sisters in arms can put programs and processes in place to increase customer retention.
But in the SaaS business, some degree of churn is inevitable.
Try to make the goodbyes useful learning experiences. Some of the defectors may be amenable to answering questions, either through an exit survey or phone interview.
Be careful though. Refrain from making your goal to change their mind but aim to understand what happened. You’ll gather invaluable information that may potentially transform your approach and create more value for existing customers.
Your goal is simply to ask them why they left.
Take the actions you can, but don’t discount the value of knowledge. The more you know about unsatisfied customers, the more you’ll understand what it takes to retain your existing and future customers.