7 Customer Retention Strategies for SaaS Companies
Customer retention means the world specially for SaaS companies. It is what they all need to be successful. Customer acquisition combined with customer retention is what makes SaaS companies tick. As per Groove, the prospects of selling to a new customer is lower than 5 percent. For existing customers, there is 70 percent chance of a successful sale. Existing customers mean a lot to a company in terms of value, cash inflows, and more.
Why is customer retention important?
Customer churn is important for any business. It is the reason businesses sustain. As customer churn reduces revenue consistently, it is customer retention that helps plug those holes. Customer retention is important for customer engagement. As customers are retained, they become more used to the product and become loyal. This increases their lifetime value (LTV), increases opportunities to upsell, and promotion aspects. This will also bring in more referrals word of mouth to improve customer value over time.
Customer retention helps-
- Attract investors
- Measure customer health
- Improve revenues
- Save money on marketing
- Get best feedback
7 Customer Retention Strategies for SaaS companies
Customer retention is getting your customer to engage and stay with the product or service. The strategies for customer retention in SaaS companies are necessary for their survival.
Set the right expectations
Customer expectations are simply what customers expect from the company. Why would any customer leave? Because their expectations were not met right. Make sure you set your customers expectations realistically. Do not build castles in the air. Under-promise and over-deliver. Set expectations for targets you can achieve. When you meet those expectations, customers will be satisfied.
Respond to customer needs
Keep in mind the adage that customer is king. Respond to all customer enquiries in 24 hours or 48 hours. Make it your goal to keep them updated and aware of all product updates. The faster you respond, the better they feel. Your customers deserve your immediate attention and that is important.
Accept Customer feedback
Whenever customers suggest any improvements, it is better to accept them. Make feedback a center of your strategy. You must be aware of what customer’s think of your brand. Quarterly or monthly feedback can help immensely. Acting upon the feedback is important. These issues must be addresses with less delay.
Consider a loyalty program
Loyalty programs build respect and value. Simple loyalty programs will keep customers with the company. They will stick with you when they like the program. A loyalty program needs to be effective and not complicated. Gift cards and loyalty rewards program will help users feel valued. If customers sign up for a loyalty program, the rewards will keep them from switching. In most SaaS product based companies, loyalty programs can include chances of upselling. This will encourage users to be invested with the product to get results for their patience.
Improve customer engagement
Improving customer engagement is another priority for retaining customers. Through marketing automation, you can engage your customers in a better manner. Maintain a schedule to engage with them via content, social media, mail and more will be crucial for retention. It shows users that you care for their responses and want to help them achieve their goals. Customer engagement is important for customer success as a whole. It keeps the customer invested and allows them to feel involved.
Educate the customer
Customer education means making the customer aware about the product. It refers to the company’s role in providing information and skills to the customer in using the product. A set of programs that will help your customers know how to use the product can improve engagement and boost retention. Customer education will also reduce the chances of churn as customers are aware of the positives attached with product usage.
Upgrade your product
Making sure your product is in tune with the latest advancements in technology is crucial for customer retention. If your product is not updated as per client requirements, the chances of churn are more. Integrating features that serve customer purpose is another important key to customer retention in SaaS companies. If the product is what they love, they will not churn in any manner. Customising the product as per client feedback is another way to keep them retained with the company.
Bottom Line: Service Sticks for SaaS companies
Customer retention for SaaS companies is all bout understanding the exact problems of the user and making it reduce or simple. People want to be associated with brands who help them solve their issues. The more you understand your users and their issues, the chances of them staying are more. Pick a strategy that works and stick to it. Measure your retention rates and notice how they improve. Customer retention creates a reputation for a brand and is a big asset for any organisation.