If you have a SaaS, you ideally have monthly and annual pricing. If you just have monthly pricing, add annual prices. Annual pricing changes the game: All your revenue comes upfront + decreases churn.
The upsell strategy is very simple:
When someone signs up for your SaaS monthly plan, They click 'Buy' and pay on a month-to-month basis.
After they buy the monthly, they should get a pop-up like:
"Pay Annually And Get a 15% Discount!"
This annual upsell sounds small, but if you're doing big numbers? This upsell can add $100,000s or millions of dollars of extra revenue. And you also decrease churn! It's a win-win situation.
If they click no?
You already got the payment for a month, you don't lose anything to try a simple upsell offer.
The first thing your SaaS buyers do when they want out: They click 'Cancel'... Don't let them go that easy.
In an ethical and respectful way, of course.
When SaaS members click 'Cancel', remind them:
"You'll lose all your data, all your saved lists, and searches. There's a lot of stuff you have in there."
Down-sell a 'hibernation plan' for a low fee to save all their data. This way, you don't get user churn.
You do get revenue churn but lose fewer users. And if they really want to cancel?
The flow asks them, "why are you canceling?" It presents options to help them with whatever problems have.
The last step is to offer a discount. If it works, great. If it doesn't?
They clearly aren't your ideal customer. They weren't going to be with you long-term anyways.
Understand churn and how to lower it
Your SaaS must be a core part of someone's business/personal life.
Preferably your SaaS plays a DAILY role in your buyers' lives. Churn is gonna be low if your customers use it every day.
There are two types of SaaS for a business:
Solves a 'need'
Solves a 'want'
Imagine money got tight:
Which are they going to cancel first?
Their Netflix subscription or their internet service?
To have low churn, Build a SaaS they can't live without. And structure your pricing to that.
The more they use your SaaS, the more they pay. As they grow their business, so do you.
And they will gladly pay for it. They're growing because of you.
The only reasons they will cancel: They go out of business or go to a competitor.
Align team incentives around retention
Almost every department within every SaaS company measures success differently.
Sales teams are responsible for revenue figures, marketing tracks the qualified leads and product tracks the delivery and sprint points thus creating the division and not leading to a coherent strategy
David Cancel, founder and CEO of Drift, shared a simple solution in
design your internal metrics for every department to incentivize customer retention. This one change, he argued, could help SaaS companies dramatically improve their retention rates.
What does that look like in practice?
For sales teams: Limit by geographical area or industry vertical the number of prospects each salesperson is responsible for, and modify commission structures so sales teams receive some percentage only after customers stick around. This keeps sales staff from running through leads too quickly.
For marketing teams: Focus on lead quality over volume. Instead of tracking the number of marketing qualified leads (MQLs), try tracking the number of sales-qualified leads (SQLs) as a success metric. Also, integrate more closely with sales by embedding business development reps on the marketing team to better qualify leads.
For product teams: Make sure product managers have direct and open access to speak with customers. Without direct feedback, product improvements will be haphazard and, ultimately, won’t help retain customers. Align the NPS score to product.
Make onboarding your top priority
Onboarding is important for SaaS firms as this sets up the customer for success.
Week 1 retention: Can you get your users to use your product more than once?
Mid-term retention (weeks 2-4): Can you establish any pattern of usage?
Long-term retention (weeks 4+): How does your product become an indispensable tool?
Most companies put more effort into improving long-term retention—but it turns out that improving early retention through better onboarding cascades into the rest of your customer life cycle, creating ongoing retention gains.
Dan’s efforts to improve the onboarding experience at HubSpot’s now-defunct Sidekick product drove up first-week retention nearly 15%. What’s more interesting, though, is that those effects continued indefinitely. At week 12, those initial improvements had boosted retention from roughly 15% to over 25%—an improvement of over 60%.
So how can you improve your onboarding and see similar results in your own SaaS?
, even though the definition is fairly straightforward:
"Customer Success is when your customers achieve their Desired Outcome through their interactions with your company."
The key emphasis here is interactions with your company, as Murphy explains:
"Rather than saying 'with your product,' the focus is on all of the interactions your customer has with your company; starting at the earliest touch points of marketing and sales, moving through closing and onboarding, and continuing through their entire lifecycle with you."
Ongoing feedback and engagement with customers are key to combating customer churn—and with the sheer number of engagement and interaction tools on the market today, it’s easy to get started.
First, make sure you’re communicating with customers across multiple channels. In-app notifications target customers when they're actually receiving value and don't require switching programs, catching them in the right place at the right time. Phone calls are especially important for retaining large-ACV, enterprise-level customers. And
(over 50 videos each day), the company was able to reduce their churn rate nearly 15% in only a month.
Finally, invite your customers to provide feedback. Customer success managers and support team members have a direct line into how their customers are using the product and what’s keeping them from reaching their goals, making them the ideal channels for collecting and managing product feedback. This feedback can help you gain a better understanding of your users’ needs and how you could improve your product and service to best meet those needs.
If you’re just getting started, sending out a simple net promoter score (NPS) survey is a great way to start tracking customer satisfaction, but it won’t provide a lot of useful qualitative feedback. Make sure you
Of course, when one customer submits a lot of tickets, it could be a sign that they’re engaging closely with your product. But if those tickets take a long time to close—or worse, many of them end up unresolved—that’s a strong sign the
The best ways to combat churn with exceptional customer service? Be proactive. Look for patterns that might indicate customers are having trouble—recurring support tickets for the same problem, or customers having lots of tickets that remain unresolved. For every ticket, see if there’s an opportunity to proactively monitor for that kind of problem in the future, and either prevent it from happening in the first place or address it more quickly.
Building trust with customers through great support is crucial, especially when
Their post explained in great detail what went wrong, what they’d already done to fix it, and how they were being proactive about preventing it in the future, no doubt helping to retain many customers who might otherwise have churned.
Stellar support brings side benefits for your business as well—besides providing more personalized support, strong customer relationships give you more opportunities you’ll create for upsells and cross-sells. Ian Landsman gives an example of using customer support as an upsell opportunity over on
"Customer B is frustrated, and a bit overwhelmed. He thought he was paying for something already, and it turns out that’s not what he bought. What B needs is on a higher cost tier — but now is not the time to have a salesy and promotional tone.
B didn’t call you wanting to pay more. In fact, he doesn’t feel what he’s paying for right now is valuable. Consider what you can offer him to make him feel heard, and make him feel accommodated.
Hi B, we’re sorry to hear about your concerns. We do offer that feature on our Premium level plan, which also includes… We understand you weren’t expecting to upgrade today. Would you like to try our premium features free for 30 days? We wouldn’t expect any commitment to that plan at this time.”
Reduce Product Outages
If your product is critical for a business and going down repeatedly, then you can use
This technique helps in identifying which instances to focus first in product development to reduce the risk of the platform from going down. This can take 2-3 months in implementation and can increase your uptime to 99.99%
The problem? Discounts don’t create loyalty; instead, loyalty needs to be earned through providing an excellent product and service that customers can't get anywhere else. And the best way to do that is to raise your prices.
Charging more automatically increases the perceived value of your product, boosting the chances your customers will remain loyal to your company. Raising prices also lets you allocate more resources to customer success, giving customers a better experience and further increasing the likelihood of them sticking around for the long term.
Know your metrics and choose the right tools
You can’t improve what you aren’t measuring. Without a clear idea of where your retention rate stands right now and how you’re progressing toward your churn reduction goals, you might end up making poor decisions that could kill your progress and stifle your growth.
Tools and metrics can’t fix your churn problem, but they can take care of a lot of heavy lifting for you:
. User churn is helpful in understanding how well your positioning, customer success, and pricing are working for your business, but MRR retention lets you know whether your company is truly sustainable.
Say you have 100 customers, and 7 of them churn within the same month—that would be a 93% user retention rate. If those customers are all on your highest plan, though, that could end up being a much higher percentage of your revenue. If you only look at the user churn rate, you might assume you’re doing great—while meanwhile, you’re leaking revenue at a prodigious rate.
It’s also helpful to break down customer retention by cohort. A cohort is simply a group of users who share the same sign-up date. Breaking down your customer base by cohort can help you understand when customers are at the highest risk of churn. Here’s an
and notice that churn is highest after the first month, it might mean you need more product education to help combat that increase in churn.
Set Customer Expectations
One of the major reasons for churn is user expectations not being met. This happens when the user is promised something which the product is not able to deliver on.
It is essential to be very clear in your messaging about how you add value for your users. Tell them exactly what they get when they sign up. Besides that is is a good practice to slightly underpromise on the perceived value add and overdeliver, which leads to customers being delighted. Even if you don’t practice this, remember that the vice versa, overpromising value and under delivering on it is a recipe for disaster.
Give them the “A-Ha” Moment
The “A-Ha” moment is the moment the customer starts seeing the value your service adds. From the moment a user signs up, the user experience should be targeted towards getting them to this moment as soon and as smoothly as possible. For this, focus on optimizing your onboarding. Send out instructional content initially to get users acquainted with the service and its features. If your service is more complex, it makes sense to offer free training to the users – people interested in your product will want to learn how it works, and by training them you’re guiding them to the “aha” moment.
Highlight your Value Proposition
Your value proposition is what makes your product unique. A good value proposition is simple, tells the users the concrete results they will get, and can be read and understood in about 5 seconds. It also avoids hype words and business jargon. Clarity is the key.
Constant delivery on the value proposition is a must. It is what your users signed up for, and it is what will get them to stay. It is also a good practice to remind them about your value proposition from time to time.
Showing them what they’re gaining will encourage them to continue their subscription.
The biggest benefit of long-term customers and forming relationships with them is also one of the best customer retention strategies. Users turn into long-term customers as they see the value you provide.
Upselling is a win-win, users get better services, and you get more revenue. It also has a two-fold effect. You are now tackling multiple pain points for the user, so your relationship deepens. With higher billing amounts, the user commitment increases, making them more likely to stick around longer.
Send Targeted Tips For Increased Engagement
You can set up automated emails which get triggered when the user performs a specific action to engage them further. For example, if the user completes designing a sales page, you can send them an email saying, “Congratulations on setting up your first page. Here is how to get the best out of your sales pages”, and direct them to a blog or an informative video.
For example, in this case, you could tell them how pairing your sales page with an exit pop-up can help, and direct them to the pop-up designer in your app. Help like this adds value to the customers’ efforts and makes them stay.
Maintain a Regular Interaction Schedule
Imagine subscribing to a service and hearing from them only when money is getting withdrawn from your bank account. Not pleasant, right? Via your interactions, you have to make the user mindful of the value you provide so they don’t end up associating you with the feeling of losing money for nothing.
This is why maintaining regular customer interaction is crucial for retention. Even if you don’t if you’re not regularly sending content heavy emails, call them once in a while just to say “hi” or see how they are doing with the product. It shows the users that you care beyond the money - you actually want to help them achieve their goals.
Keep Adding Upgrades and Releasing New Versions
This is another way to let users know that you’re working to help them achieve their goals. Invite constructive feedback on your product (more about this later), and keep improving your product via upgrades and new features.
As users see more value over time, customer retention rates will keep increasing. Churn also occurs sometimes due to boredom –as users interact with a similar platform over time, it may result in decreased perceived value and lesser engagement consequently. Releasing new versions will help fight that.
Avoid Surveys on Service Tickets
Feedback on the customer service resolution experience can be a great way to optimize your process, but it can also annoy the user in unwanted ways. Put yourself in the users’ shoes. You faced an issue and went through the trouble of getting it resolved. Thankfully, (assuming) the resolution process was smooth. But now the team keeps on pestering you to give feedback on your experience. It’s the same as the annoying reporter asking a crash victim questions about their rescue as soon as they’re saved. The key to getting them to talk is the time and place.
Feedback From The Right Places
Ask for feedback in places where you need to make users feel a sense of being in power. So you could try placing a link on your pricing page, or when you send out your monthly newsletter etc. Make sure it is visually appealing and inviting for users to actually give their feedback.
Make Users Part of a Community
Building a support community around your brand is a great idea. It has benefits for both the user and the company. By getting to interact with other users and you, the users will get a feeling of belonging. That’s where you move from a formal to a personal relationship for them. Interacting with your users at a grassroots level is also a source of invaluable feedback. Moz’s feature request forum is a great example of a mix of these concepts. It allows users to ask for features they’d like to see, where either other users or the company representatives can reply.
Let’s be clear – if someone wants to leave, never make it hard for them to do it. This approach which works in real life holds true for SaaS as well. Make your cancellation policy super simple to avoid breakouts on social media by grumpy users. People mostly leave for a reason, and here you can leverage exit surveys to gain enormous insight into things you are doing wrong. This will help you increase retention for future users.
Use interactive walkthroughs, not product tours
How many times have you been excited to try a new product, started a free trial, and then been
The classic problem with traditional product tours like this is that they show all users the same generic features in the same generic order each time. There’s no personalization to the user’s individual needs or use case.
In other words, it’s a top-down tour where the user has to follow along and obey passively.
Newsflash: no-one learns like this. That’s why mainstream education sucks, by the way.
, crippling your SaaS business before it’s even had a chance to get off the ground.
By contrast, an interactive walkthrough is more like a two-way conversation. The user is directed to the specific features that are most useful to their specific use case, based on the information the customer shares in-app.
This strategy works best when you only show the user the specific features they need to use in order to activate. If you do any more than that in your walkthrough, you risk causing churn by overwhelming the user with too much at once.
Social sharing app Kontentino created their interactive walkthrough using Userpilot. After collecting some initial data about the user in a welcome screen, they elegantly point them towards the two main features the user needs to activate: connecting their social media account (see above) and making their first post.
The result? Kontentino increased their user activation by 10% within one month of installing Userpilot. That’s a lot of users who didn’t churn in the first few days. You can read a full case study about
Rather than collect initial user data through a dry survey, why not have users choose from a variety of preset avatars? It will feel like the beginning of an MMO game!
Other common gamification elements include:
Points – especially combined with leaderboards
Funny success messages
Setting users missions or quests
Playful rivalry between groups of users
Back in 2009, a lot of Foursquare’s initial user retention was down to gamification. Whenever a user visited a new place on Foursquare, they received points, with the possibility of becoming the “Mayor” of a given location if they visited it for a certain length of time.
Naturally, everyone wanted to be the mayor, and so users kept using Foursquare over and over in a frenzy. And retention went through the roof.
Reduce product friction (most of the time)
Nobody wants to use a product that makes you fill in endless forms with loads of pointless fields. The Internet has reduced our attention span and made us lazy!
To retain more customers, consider removing as many unnecessary roadblocks from your experience flows as possible, especially your
Here are some specific roadblocks you could get rid of:
Lazy Registration: if it’s possible to wait until after a user has registered to get a piece of data that you need to personalize their experience, then do so. Don’t burden them in the sign-up flow longer than you need to.
Third party registration:No-one likes creating a new account – we have so many already. So if you can get users to sign up for your app through a third party like Google or Facebook, you will stop a percentage of users from rage-quitting.
Minimize sign-up fields:Self-explanatory. Would you want to fill out a form that has 65 fields?
Use Autofill:Have phone fields autofill with dashes and date fields autofill with slashes. Any time you can save the user will translate into higher retention.
If you want an example of what a frictionless sign-up form should look like, look no further than Airtable:
Super simple, no more fields needed than necessary. And note the nice third-party registration via Google at the bottom for the laziest customers (including yours truly).
Fill empty states
Have you ever tried to start a portrait, a picture, or an extended piece of writing? The worst moment is when you stare at the blank piece of paper and feel this overwhelming sense of lacking inspiration.
It’s much more motivating once you have a few sketches or paragraphs. Even if your first effort is poor, it’s always easier to edit than it is to create.
You can make the same argument for SaaS businesses.
The empty dashboards that often greet users when they start using a new product or a new feature are really rather depressing. There’s nothing going on there, so the activation energy required to create something from scratch seems overwhelming.
If a user is on a platform like this, it’s sometimes easier to quit the platform completely than to start using it from scratch.
The way to solve this problem is to create templates, case studies and placeholder data, and include them in your product to show users what they could potentially do.
Marketing automation tool Autopilot used this strategy and shared it with Userpilot in a talk at our
to describe the process of repetitively chasing a reward that always seems just out of reach. Schüll originally observed ludic loops in the world of gambling and slot machines, but the concept is just as relevant for SaaS businesses.
The four components of a ludic loop are:
No end in sight
In other words, if you can design a product that a customer can use when alone with their device, that instantly offers a psychological reward that varies each time, and that experience can be never-ending, you’ve created a ludic loop.
This is basically a recipe for addiction by design. World of Warcraft and slot machines all follow this same model.
If you want an example of a software product that has retained users through a ludic loop, look no further than Facebook. How many of us have spent hours using the endless scroll feature? It’s a ludic loop because:
You can use it on your own with your device
You never know quite what you’re going to see when you scroll (variable rewards)
There’s a superficial feeling of pleasure when you see pictures of your friends, cat videos, or other content you’re interested in
And the scrolling can be done ad infinitum
if you’re going to use this strategy, so please ensure that you’re encouraging your customers to use something that’s actually going to make their lives better!
to encourage a user to save their email as a template. This is something that will save someone who is using Hubspot frequently a lot of time, so it’s a tip that’s aimed at an advanced user, not a beginner.
A user receiving a tip like this would be less likely to churn due to frustration with endless copying and pasting.
on a monthly basis and track changes over time (hey, we allow you to do that!), you’ll have a way to predict which customers are likely to churn and which you are likely to retain. It’s a good idea for customer support to seek dialogue with the Passives to nip any issues in the bud before they become Detractors.
The very best companies will complement the quantitative data they get from NPS surveys with
as well. This gives you more data at your fingertips to understand why a given user is scoring your SaaS in a particular way.
It’s possible to create both NPS surveys and qualitative follow-up surveys in-app using Userpilot. We like surveying users in-app rather than by email, because this means that they’re not distracted by opening email surveys and will spend more time in your SaaS product.
Categorize Customer Support issues
The more your SaaS grows, the more customer support data you’ll need to manage and the greater the need to keep it organized and categorized.
Having an organized customer support database will allow you to respond quickly to concerns using templates that already proved successful at solving similar issues in the past. Customers will appreciate your responsiveness, and you can expect this to translate into higher retention.
Here are the main categories by which you should sort the feedback that you get:
Solicited or unsolicited. When you ask for feedback directly, you control the question and when it’s asked, but you only get feedback issues you asked about.
User type:SaaS businesses will generally want to respond faster to the concerns of power users than those of regular ones. New users ask different questions than other types of users. Sometimes the most honest users to get feedback from are those who are exiting your product. All these types of users need to be treated differently.
Issue type:The most common recurring support tickets in SaaS business generally relate to billing issues, software bugs, feature requests, and UI issues.
Severity:Issues regarding privacy, security and billing have serious consequences if left unaddressed. By contrast, a quick thank you note probably doesn’t need to be answered immediately.
Sentiment:This is as simple as sorting positive feedback from criticism.
Of course, once you’ve categorized the feedback, you will still need to follow up on it and take action! Otherwise the whole act of categorization will be for nothing.
Start a customer loyalty program
This retention strategy is all about making your customers feel special and like they are part of a privileged few.
Customer loyalty programs are generally set up in one of three ways:
Points-based: Customers earn points for actions such as purchases, referrals, subscribing to your newsletter, or following your brand on Facebook. These points can then be exchanged for perks, such as discounts. Almost every popular supermarket has mastered this strategy.
Events-based:Customers earn rewards for special events, such as their birthday or the anniversary of when they started using your product. Reddit uses this strategy by giving users trophies to celebrate each year of them being a member.
Fee-based:Customers pay a little extra to be part of a club with exclusive benefits. Think of something like Amazon Prime, in which customers pay to access free shipping, free movies and other exclusive deals.
Use content to address issues pre-emptively
If you’ve worked in a customer-facing role in a SaaS business, like customer support or customer success, you’ll know that after a while you start to see the same issues cropping up multiple times.
Sure, it’s valuable to address each issue manually with the individual who raised it, but it’s even more valuable to address these issues pre-emptively, before they become a problem for users. Prevention is the best cure.
This starts with building a knowledge base so that users can fix some of their issues on their own, without requiring to talk to your support team.
Personalize your messaging
If you recall from earlier, the key reason why product tours suck is because they deliver a generic list of generic features to all users. The solution here is to deliver an interactive walkthrough that is personalized to the needs of the individual customer.
To extrapolate a general principle from this example: the more
52% of customers will choose to shop elsewhere if they receive an email that isn’t personalized.
79% of customers will only consider an offer if it has been personalized to reflect previous interactions they have had with the company.
75% of customers say that they are more likely to buy from a company that knows their first name and purchase history.
In the modern digital era, the way to really show customers that they matter is to take the time to connect with them in the real, analog world.
Userpilot sends each of our customers personal, hand-written Christmas cards.
It’s just a small gesture, but our customers love it. It turns our online relationship into an offline one. Both are real, but opening these physical letters adds a visceral element that the Internet cannot match.
Be consistent in your messaging and positioning
Do what you say and say what you’ll do.
Just as your friends and family will judge you for not holding yourself to a high standard of personal integrity, so your customers will judge your SaaS company for not being consistent with how you position yourself in the marketplace.
Why is consistent messaging important to retain customers? Consider the following:
The paradox of choice is a psychological concept that suggests that we feel more overwhelmed when we have more choices to think about. A SaaS business that has a consistent message presents a very clear, binary choice for a customer. Either they like what you’re selling, or they don’t. If you keep your messaging consistent, those that like it will stick around.
SaaS companies very often compete globally. You can’t expect to make an impression on such a competitive landscape if you don’t stand for something. Inconsistent brands fail to make an impression on customers because they just don’t know what the brand represents.
You should never overpromise and underdeliver. For example, there’s nothing necessarily wrong about being an early-stage business, but it’s better to be honest about that upfront in your communication with customers.
100 Days communication plan
The first 100 days are going to be important, create a specific 100 days communication plan with your users
The communication plan should take into account that its frequency and mode can change based on your product but here is a simple plan, you can create your plan based on the platforms suitable for your users
Source: Robert Skrob
Find your customer advocates
Get your customers to help you do the selling. With product analytics, you can identify which customers are your power users and champions. These are the customers who can provide compelling testimonials that encourage others to use a software and pay for upsells. They also show new customers the value of the software, which is a huge win for retention.
Raise your price.
A higher price creates a perception of greater value. Such a perception turns into a reality once the customer spends the money. They have committed to a cost, and that cost is reflected on their balance sheet.
Now that they’ve made the expenditure, the customer is far more likely to use the product (engagement). Engagement is the number-one predictor of customer retention. You’ve effectively sparked engagement and reduced the likelihood of that customer canceling.
Emphasize engagement as soon as possible.
The most important way to improve your churn rate is to drive engagement. Here’s how
: “Engagement is when your customer is realizing value from your SaaS.”
How does a customer realize value from your SaaS? By using it.
Whatever you can do to and for the customer to get them to use your product, do it. Emails, questions, phone calls, encouragements, bribery: get the customer to use your service.
The sooner they use it, the quicker they realize value. The quicker they realize value, the less likely they are to quit.
Provide free training
The more complex your software, the more users will want to learn about its power. Provide free webinars or training sessions to coach users on how to get more value out of the SaaS.
There are several advantages to such an approach. First, you’re increasing the value of the SaaS to the customer. Second, you’re creating a deeper relationship between you and the customer. Both of these features can help to reduce churn.
When customers suggest improvements, they are investing themselves in the life and existence of the company. They feel a sense of ownership.
Since this is true, make feedback a significant part of your retention strategy. I’m not simply referring to some “suggestion box” tucked away in a dark corner of your website. Instead, create overt invitations for improvements on your pricing page, a link from your monthly invoice, or some other place where customers will see it.
Respond instantly to customer needs.
Make it your goal to respond to all customer inquiries in 24 hours or less. If it’s during the workday, shave that time down to two hours. Customers deserve your immediate attention.
Follow your customers on social media.
If your customers follow you on social media, follow them back. This serves two purposes. First, you make them feel good — like they are a valued part of your social circles. Second, you can
By constantly monitoring the social web, the customer success team ensures that they quickly reply to all inquiries or feedback. In fact, many users have lauded companies for their quick responses on Facebook and Twitter.
Build out social profiles to develop multiple ways of interacting
The more touch points you have with your customers, the more likely they are to stay highly engaged. Be sure to create a robust social presence so your customers will both see you and be able to reach out to you on whatever forum they prefer.
Obviously, social media is not strictly a retention strategy, but it does encourage awareness of your SaaS in front of the customer. This awareness, in turn, can improve engagement. And engagement, as you’ve learned, is the number-one way to
Psychologists have discovered that when people progress towards a goal, they feel much happier and fulfilled.
You can apply this truth to your life as a whole, and you can apply it to the microcosm of SaaS. When SaaS users work towards a goal, they develop an eagerness and intensity to have more interaction with the SaaS.
The most obvious place we see this is with games, in which users attain new levels and rankings. But the same holds true for non-game applications. LinkedIn, for example, indicates a user’s progress towards filling out their profile. The Audible App gives users badges for listening to their audiobooks at a certain time or with certain patterns.
If you can delight your customers with simple goal-focused actions, you can retain them better and reduce churn.
Create a retention team
If you create a retention team, it proves that you’re serious about customer retention.
Plus, a retention team provides you with a dedicated resource for engaging with clients. Here’s what your retention team can do:
Analyze churn rates
Reach out to clients on a regular schedule
Devise & Implement new retention techniques
Monitor customer engagement
Identify risk areas for customer churn
The more aggressively you tackle the problem of turnover, the better you’ll succeed in retaining your customers.
Brand yourself as a service, not a software.
SaaS providers live in a tricky world. They have to be both a service and software. They can’t fake it on either front or just pretend that they’re a software or a service. They have to truly be both.
But why is it that your customers pay you every month? Because you’re serving them. Can they see that? Can they feel that? Do they know that? If you can provide service in tangible ways, you will become vastly more successful at retaining customers.
Create a strategy to roll out service improvements on a schedule that corresponds to your billing schedule. Every month, the customer watches a payment withdrawn for their recurring billing. They need to feel like they are getting something in return. Increase security, upgrade storage, or implement other features that make the customer feel like they’re getting additional value.
In reality, SaaS can be incredibly secure. You just have to prove it to your customers.
Customers want to hear that you are taking active measures to secure their data. The way that you can do this is by incrementally adding new layers of security, rolling it out, and announcing it to your clients.
With every new security iteration, you can build the confidence of your customers. Be aware, however, that this technique has diminishing returns. If you keep making things more and more secure, they may start to wonder why you’re beefing up security. Is there a threat?
Make the changes, with a full disclosure that there is no threat, but you are simply committed to the highest level of security that technology allows
Upgrade the customer automatically.
How would you feel is you were subscribing to, say, Buzzfeed, a content sharing analysis tool. You were plodding along at the pro level for $99/month. You used it a lot, and kind of wished you had enough in your budget to afford the agency level plan.
One day, you get an email from a BuzzSumo VP. He says, “Hey, I noticed you’ve been using Buzzfeed quite a bit. We’d like to upgrade your membership, at no charge, to the agency level subscription. You’ll get quite a bit more power out of the tool, and plenty more mentions. I hope you find it useful. The change is effective immediately.”
I’d say you’d be pretty happy about that. I’d even go on to say that you’d stick with BuzzSumo for a long time. How much did it cost BuzzSumo to upgrade your membership? Probably not much. A few pennies maybe.
How much did it increase your likelihood of remaining a customer? A whole lot.
Surprise gifts or delightful experiences are a powerful way of turning laissez faire users into passionate evangelists. Not only do you amp up your marketing, but you also improve your retention rate.
Conduct exit interviews.
If a customer is committed to leaving, so be it. But can you have a word with them before they walk away?
Some customers will be so disgruntled that they won’t want to have anything else to do with you. Others will be amenable to answering a few questions or chatting on the phone. Remember, your goal isn’t to get them back. Don’t even try.
Instead, make it your point to understand why they left. You can use this information to transform your process and create more value for your existing customers.
Assign each customer a retention specialist
I’ve suggested that you create a customer retention team. To take this a level deeper, I also suggest that you assign each customer a retention specialist.
If you have a few clients, each paying a lot of money, this technique is extremely effective. A customer retention specialist is someone whose job it is to interact with the client on a regular basis. They may not be able to answer advanced technical questions, but they can at least keep customers happy.
If a customer goes on alert, it’s too late to form a relationship and salvage them. The care and relationship need to be happening long before that point. A customer retention specialist will keep that care and nurture in place
Offer in-app onboarding for new customers
In-app onboarding means embedding content like step-by-step
allows you to “show” customers how your app works while they use it, rather than tell them what to do via a lengthy demo or a knowledge base outside of the app. Through real-time guidance, in-app onboarding makes it easier for customers to derive value from your app and thus remain a customer.
Step-by-step instructions or walkthroughs to explain how to perform complex actions in your app
Tooltips to help customers use each app feature in the best way possible
Task lists to make your customer onboarding more organized
Offer Self-Help Options for customers
Self-help options allow customers to troubleshoot product problems on their own, without waiting in long customer service queues on the phone or another customer service channel. Interestingly,
on their own before contacting customer support for assistance, which makes self-help important.
There are various self-help options you can add to your website or app, so customers can help themselves. These include:
Self-help widgets in each section of your app
A knowledge base with detailed tutorials and troubleshooting guides
Chatbots that instantaneously respond to customer queries
A Frequently Asked Questions (FAQs) page
With more customers preferring a self-service support model, adopting self-help options can be a huge driver in customer retention.
The Self Help menu is contextual, which means it only displays information related to the section of the app a user is in and relevant to the user’s role (admin, manager, and so on).
Ask customers for feedback
Customer feedback gives you insight into how each customer is (and isn’t) using your app. Using this intel, you can offer individual support to provide value to customers one at a time – helping to retain customers.
Additionally, new customer feedback also reveals insights that may boost your overall retention efforts. For instance, if you consistently hear that onboarding is confusing, your product team can use that feedback to reassess onboarding flow to make a clearer, more welcoming experience for new customers to increase retention. Or, if certain customers tell you your product isn’t a good fit for them, you could refine your marketing messages to attract the right kind of users that are likely to use your product longer.
Ask new customers for feedback at critical points in their product journey: after they’ve filled in their profile, after they’ve completed an important task in your app, and after they’ve been a customer for a certain period. Send in-app surveys, so customers can respond when your product is top of mind. Tools such as Chameleon are good options to create in-app surveys.
uses a similar survey, but it also asks users what they find difficult to do within the product, so it can help the current customer and improve its onboarding process, too:
For new customers who don’t use your app frequently, send a quick note asking about their experience so far and how you can help them get more value out of your product.
Send regular progress reports to your customers' end-users
Your app, product, or service may not always be top of mind for your customers, but their goals and pain points are. Sending updates reminds users of the important problems they wanted to solve and connects your product back to something that’s inherently valuable to your customers.
Email is a good channel to share progress reports with users. Progress reports usually list the most recent activities a user has performed within an app and any significant achievements they’ve made, like money saved or calories avoided. If different groups of people use your app, the report may also include updates of what different team members are up to within the app.
, content helps potential buyers habitually think about your product or service. If you regularly share helpful content with current and new customers, they’re likely to see your brand and product as trustworthy. In addition, you can add calls to action within your content to drive readers back to your product.
To engage existing users, create content that helps them overcome challenges they face regularly and get better at their job. Tutorials, product guides, ideas for projects, and original research are good options to touch base regularly with existing customers.
Zapier is a good example of a SaaS product that harnesses content to engage customers. It publishes a ton of
, as well as general guides on productivity and wellness.
Within each piece of content is a quick call to action for users to try a given feature or process with Zapier, thus leading readers back to the product.
Identify red flags for signs of customer churn
The best way to prevent churn is to identify which customers are likely to churn and proactively reach out to win them back. Your most successful customers likely perform certain actions in your app within a certain period of time, which keeps them invested in your product. When customers don’t complete these key actions in your product in a given time, it may be a red flag for churn.
To identify red flags for churn, first identify product usage patterns for your most successful customers such as:
How many sessions do they complete in your app in the first week or month?
What are the key actions they complete within your app within their first week or month?
How often do they log in to your app in a given period?
Once you’ve identified usage patterns for regular users, use them as benchmarks to compare user activity for all customers. Product analytics tools such as Mixpanel and Heap can help you track usage data for different customers.
GrooveHQ uses red flag metrics to identify which customers are likely to churn and reach out to it. For instance, two of its red flag metrics are frequency of logins and length of the first session in the first 30 days. Users who leave after 30 days have short first sessions and log in less often. Thus, Groove’s customer success team keeps an eye out for these red flags and reaches out to at-risk users by email.
Give customers early access to new offerings
Giving power customers early access to new features has two main benefits:
It gives you helpful feedback from someone who knows your product well.
It makes power customers and users feel like they have a say in your product development roadmap.