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Crush SaaS Churn with These 8 Tips

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If there is a word that inspires visions in SaaS executives of overlooked opportunities for success, it’s churn. Churn is perhaps the metric on which the growth of the enterprise most hinges.

What constitutes an acceptable churn rate has been debated among the experts. One study from Bessemer Venture Partners pegs an “acceptable” rate between 5 percent and 7 percent annually, whether based on customer or revenue churn. A 2015 study of private SaaS organizations compiled by Pacific Crest found companies with less than $2.5 million in revenue had a median annual churn rate of 10 percent.

Considering the high cost of acquiring new customers, retaining current customers is just as important as acquisition. Here are eight tips to keep your customers with you for the long term.

1. Get them at hello

Your retention effort kicks off at onboarding, so it’s essential to provide a smooth sign-up and activation process. Ensure this progression is user-friendly and captures all necessary customer data. On top of that, offer basic instruction on your software at this stage via short video clips or a brief tutorial. You have no chance to retain prospects if they drop off during onboarding.

Always build your onboarding system with the user in mind. In a piece on Chargify, Vinay Patankar, CEO of workflow management software Process Street, stresses the importance of building an onboarding system with a great user interface (UI).

“Don’t build an onboarding tour until you’ve proven out your UI with real users,” Patankar writes. “Very early on we built a fancy onboarding tour for our (extremely immature) app that kept breaking and causing problems for users. A few months later we ended up rebuilding the UI and had to throw away all the code. Building expensive automated onboarding before you’ve nailed your UI or reached product market fit can be risky.”

The message is clear: Take the time to develop an efficient onboarding process at the beginning and it will pay off later in higher retention.

2. Know thy customer

Become a true partner with your customer. Learn their competitive forces and pain points. Once you know those factors, you can work with them to show how your software erases those stumbling blocks.

Maintain constant contact with your customer after sign-up and activation. Emphasize you’ll be with them throughout the customer journey. Successful SaaS enterprises have established a dedicated customer success team to reach out to customers to get a pulse on how they utilize the software and where their business stands.

3. Develop “sticky” features

By gaining insight from your customers, you can develop new training courses, features or products to aid them in besting the competition in their field. Similarly, improve on those facets of the software truly valuable to your partners, such as security features.

Forentrepreneurs.com calls these “sticky” features, or those features or services that become so indispensable to your customers’ daily workflow they’ll never want to leave the platform.

4. Perfect your customer service

The first rule of great customer service remains resolving customer issues quickly. For even greater customer service, take it one step further.

After the issue has been resolved, check back in with the customer with an email asking how the encounter unfolded: Were you satisfied with the service provided? Did the customer service rep answer all your questions? Can we help you with anything else?

This type of action reinforces your commitment to customer care beyond merely handling support tickets. When customers sense this, they’re more likely stay.

5. Surprise them

Speaking of customer service, Inc. columnist Peter Economy has an interesting take on what makes it great. “The secret to delivering great customer service,” he writes, “is to give your customers a surprise — something they didn’t expect. It’s those unexpected experiences that leave customers with a story they are eager to tell.”

Those surprises can be unexpected rewards, like:

  • Free webinars or training courses
  • No charge for certain features or upgrades
  • Extra storage capacity

Those rewards can lead to greater customer satisfaction and loyalty.

6. Always be upselling

Successful platforms continuously update their product. Let your customers know about those updates so they can utilize them to improve their own business flow.

Don’t be afraid to upsell either, especially with your long-term customers. If your platform has established a relationship of trust, customers will already know what you can do for them and will be eager to purchase those new features, services or products. Upgrades can also boost retention efforts by keeping customers on your platform, which means more revenue for your organization.

7. Keep them engaged

It’s a simple truism: Engaged customers are more likely to remain with the SaaS platform. Noted customer success consultant Lincoln Murphy defines customer engagement as “when your customer is realizing value from your SaaS.” Therefore, providing good value always promotes customer retention. But how do you know if your customers are engaged?

With today’s analytic tools, it’s easy to monitor if a customer is using your software. Re-engaging or keeping them engaged happens by following the previous advice: surprising them with rewards, practicing great customer service, offering new features. Yet there’s another way to energize customer engagement: Reach out and ask them directly why they’ve fallen off the platform.

Based on their feedback, adjust the features and functionality of your software to encourage engagement. As long as customers see the value of your software, they’ll continue to pay for its use.

8. Help them help themselves

As my colleague recently shared on the Salesforce blog, proactive customer education is more effective than reactive support. If instead of waiting for problems and questions to emerge, your company offers its customers opportunities to learn best practices, they’ll value your product’s contribution to their overall business goals.

Great customer education not only reduces support costs by empowering customers to direct their own learning but it increases utilization and engagement, making them long-term customers and reducing churn.

Related reading: These 7 Metrics Tell How Effective Your Onboarding & Training Are

About the Author: Becky Krill heads up marketing at SchoolKeep, a modern platform for optimizing full-funnel training operations. You can follow Becky on Twitter @RabeckaKrill.

Published on August 10, 2016
  • Kate H

    Good tips! Thanks for the Chargify love & including the link to the blog 🙂

  • Wow, this is a great summary! Thanks for sharing, Becky!

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