As your business grows, retaining your existing customer base becomes just as important as generating new customers.
A leaky funnel in a SaaS business will have you overspending on customer acquisition and will prevent you from reaching your growth goals.
Whether you come from a B2B or B2C SaaS organization, here are seven effective ways you can use to improve customer retention, loyalty, and referrals.
1. Set Recurring Revenue Goals
What percentage of your annual revenue do you rely on from repeat business?
For subscription-based business, the ratio of existing-to-new customers will continue to increase over time.
How do you measure success over three, six, and 12 months?
A few common goals around recurring revenue include:
- Lowering churn.
- Increasing upsell revenue from existing customers.
- Increasing the volume of new customers.
Now that you know what success needs to look like, it’s time to benchmark where you stand today.
2. Survey & Segment
How frequently do you gather customer feedback?
NPS (net promoter score) is one of the most common ways for businesses to assess customer satisfaction over time, but surveying can happen in a number of ways.
By gathering customer NPS every 3 to 6 months, you can segment your customers’ satisfaction levels within different periods of their lifetime.
This is useful for understanding what approximate period of time it takes for the customer to meet certain friction points with your product.
From there, you can align your customer success team to best help reduce or limit this friction.
After segmenting your customers by NPS, you have a clear idea of what percentage of your customers are promoters, passives, or detractors. These three lists are a powerful starting point in helping you prioritize where to focus your retention efforts.
Now that you have a clear benchmark and segmentation of your customer base, here are a few things you can do to help your organization grow recurring revenue.
3. Strengthen Your Onboarding Process
What are your processes the day the customer signs the contract?
Onboarding your customers with the proper expectations of outcomes, at the right pace, with the right educational and implementation program, is key to making good first impressions.
One of the keys to successful onboarding is capitalizing on the excitement and momentum the customer hopefully has by the time they sign the contract.
A few elements to incorporate into your onboarding include:
- Quick and frequent communication of the next steps.
- Clear and transparent documentation of the onboarding process.
- Proper tracking and analytics of your customers’ behavior to ensure they are reaching the leading indicators for customer success.
After successful onboarding, you need an ongoing system and process for ensuring that customers continue to receive value from your products/services.
4. Implement Automation Triggers for Customer Retention
Your customers are all in different phases of their lifecycle with your products.
One of the ways to lower churn and identify quick ways for customers to buy more is by implementing automated notification triggers for your marketing, sales, and customer success teams.
Here are a few examples of effective triggers that most marketing automation systems can deliver upon:
- Notify your customer success team when a detractor customer starts looking for a way to cancel their contract or stops using your product. Customer success can then prioritize their playbook for retaining a bought-out customer.
- Notify your account executives when a passive customer is a good fit for additional products or services based on product usage.
- Notify your customer marketing team when the promoter customer is a good fit to leave a five-star review, testimonial, or refer one of their colleagues to your company.
5. Increase Product Stickiness
Your customers hate friction. The more quickly you become a part of their day-to-day workflow, the more friction will be involved in replacing your solution when the time comes for contract renewals or when they are approached by your competitor.
Product stickiness isn’t the job of any one individual in an organization but instead is the outcome of informed decisions from product, marketing, and customer success departments.
One way to measure stickiness over time is by measuring the amount of time your customers spend in your application and the average amount of functions a customer uses within your product.
Obviously, the goal isn’t to only get customers to live in your application all day long, but rather that they turn to your application to fulfill more and more of their daily tasks.
6. Build Out Integrations
Your customers expect your product to work seamlessly with the rest of their tools. Integrations are one more way to increase product stickiness.
Integrations that become a daily part of your customers’ workflows become just as valuable as the individual solutions themselves.
Make your integrations a feature your customer can’t live without.
If you don’t have the development resources to integrate with other solutions, there are many solutions on the market now that can serve as third-party integrations, such as Zapier, IFTTT, and many other B2B and B2C solutions depending on your vertical.
7. Invest in Customer Marketing
Customer marketing can include anything that helps you strengthen the bonds with your existing customers.
An effective customer marketing department can help reduce churn, increase loyalty, product usage, and customer referrals.
Here are some of the most popular customer marketing initiatives that successful customer marketing teams use:
User Groups
User groups are a powerful way to increase loyalty by allowing customers to meet similarly minded customers, encourage product training/usage, and provide exclusive access to your beta products and employees.
Depending on the size of your user base, these could be local, regional, or national.
Generating Social Proof
When faced with a new buying decision, where’s the first place anyone looks to validate their decision?
Third-party review sites, case studies, and unbiased testimonials of your products.
As your customer base grows, continue to mine your list of NPS promoters (that are also active product users) to turn to for case study contributions or sales references.
Summary
Improving customer retention isn’t the sole job of any single department.
It takes clear revenue goals, unbiased data collection and reporting, and a unilateral focus on making your customer successful.
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Image Credits
Featured Image: Christopher Gower/Unsplash