The challenge of acquiring users is a hard enough. But to be successful, SaaS companies also need to excel at keeping subscribers engaged. With customer acquisition costs alone usually being six to twelve times an individual subscription fee, the importance of retaining customers is paramount to keep customer lifetime value (CLV) and recurring revenues trending upwards.
The key to this is customer success, which involves a range of activities to ensure your users realize the full value of your service. The more your subscribers are engaged, the less likely they are to unsubscribe. We’ve put together some quick tips to help you ensure your customers are successfully engaged and getting ongoing value out of your service.
After signup, it’s critical to get your customer started as soon as possible while their interest is highest. Therefore, access should be immediate and getting started should be simple and intuitive.
Clear communication is important at every stage of in the customer lifecycle. Emails, dashboard messages, post-signup landing pages or even social media posts give you an opportunity to reinforce the value your service can provide and keep it top of mind.
Incorporate a call-to-action that encourages your customer to log in and include tips for getting started if they are new or new features to check out if they’re experienced users. Personalized communications work best and ensure your customers know how to reach out if they need support.
With technology and preferences changing so rapidly, SaaS companies can never be complacent. To stay ahead, get to know your customers by soliciting their feedback directly and tracking their usage patterns.
When users first sign up, probe for details about why they signed up to understand what benefit they are looking for. Similarly, ask existing users what they like and what could be improved about your existing service. This can be done through customer surveys, interviews or focus groups. This process cannot only inform your product development, it also doubles as an opportunity to set a collaborative tone for your relationship with users which builds loyalty.
It’s also important to track user success with your service. Good indictors are login frequency, what tools are being used (and which aren’t), what feedback your customer service team has been hearing and churn. To understand possible causes for churn, cross-reference usage patterns with those that have recently unsubscribed. If your churn is high, it could be a problem with your product, your customer service or both. Once you’re aware of potential issues, then you can proactively adjust.
A study by Bain & Co. reports that increasing customer retention rates by 5% increases profits anywhere between 25% to 95%. Engagement, communication and tracking customer success are all critical for staying responsive to users and must become a permanent activity for subscription services. Once you know the usage paths that most often lead to cancelations, you can be proactive to ensure your customers stay successful.
Customer success starts with effectively acquiring the right customers and then establishing and maintaining an engaged relationship. The better the experience a user has from the moment they start using your service, the more likely they are to stay. The resulting low churn rates will cause your CLV to rise, your average customer acquisition costs to decline and your recurring revenues to grow.