10 Customer Retention Strategies for Saas ...

I assume that you are familiar with Saas and related customer retention formulae. Before going to retention strategies let’s agree why customer retention matters. 

• Research says - cost of acquiring a new enterprise customer is between 4x to 6x of keeping an existing customer. 

• More the number of customers, higher the probability that you can learn from them and innovate for the greater good of Market/ problem space.  

• High customer retention = more revenue and more potential for revenue growth. 

• High customer retention = better business predictability 

• High customer retention = More customers = greater market share = bigger, trusted brand. 

• Repeat customer rate and Purchase frequency are the two most important metrics for customer retention. 

I am sure you get the point. All means avoiding a leaky bucket where new customers are coming but existing customers are also leaking making it a leaky business. 

Here are 10 Saas Customer Retention Strategies. Some of these involve moving a mountain, inspiring multiple cross-functional teams and empowering customers. One silent disclaimer - I assume you know end to end customer journeys … 👍   

1 - Be Empathetic - In most of the saas companies all of the team members work on multiple customers. On both customer facing as well back office sides team members work on multiple assigned customers. In this case,  it is very easy to get lost into bigger, higher paying, most using, noise making, newly onboarded customers. And I get it, that is important. However, listen to every customer carefully, empathize with them. They are stuck with our Saas product and have to get their job done. They do not have any other solution; so we should be at least able to give them a workaround.  

One of the most cited reasons for customer leaving is that they feel no one listened to them. 

2 - Focus on Onboarding Experience - This is one of the most important and key customer touch points. The contract is signed and everyone is excited that the Saas product will now be live soon. Trust me, the customer is dreaming about the new product and they believe it will solve all their challenges, they will meet their annual goals and they will become famous in their Organisation. That is the gist behind onboarding experience. Onboarding should be planned well and executed well so the customer and users start using the product soon … 🙋  

3 - Build Executive Relations - When the saas software is getting purchased there are a lot of aspects which are not clear to a lot of team members who are involved. It is obvious that the picture is very fuzzy; even if we try to paint a clear picture, it may remain as it is. Challenges can rise, new information may be surfaced which impacts the execution and so on. In this environment it is important the executives on both sides are aligned on the ROI and value of the saas software in the long run. The temporary hiccups should be digested and communicated well on both sides for smoother execution. 

A buyer moving is one of the strongest signals for lack of customer retention. 

4 - Act on Feedback - There are a lot of touch points through which the customers/ users give feedback. Some of the examples of customer feedback are - verbal communications, NPS, support, product feedback, product enhancements, roadmap considerations and other. It is very important that appropriate action is taken on the customer feedback. There are instances where the customer feedback is not considered. In these scenarios it is critical that we notify the customer with reasons why the specific feedback was not considered. As the product scales, all customer requests must be tracked diligently … 🏆  

Here is a mid-time refresher quote for you - 

"Do what you do so well that they will want to see it again and bring their friends." 

- Walt Disney

5 - Reduce Friction - I have seen that journey mapping as a tool works well. The customer goes through research, prospecting, sales, onboarding, change management, ROI, adoption, support, renewals and more. These are a lot of steps to go through for each and every customer. Through best practices we can reduce a lot of customer friction in all these steps. We can share execution stories to customers for their industry or from a parallel industry which can inspire them. 

Reducing friction is directly visible in NPS and eventually customer references. 

6 - Create a Community - We all are here to serve and help the customer, however if there is a community the customers get empowered. Most of the time, users of customers need help on very minor items and they should not wait for someone to answer. Community solves this challenge. Additionally, the community gives confidence to prospective customers that there is a strong customer base for whom the product is working and hence it will work for us as well. 

There is usually a debate where the ROI of the community is questioned. I have seen that ROI on the customer community is multi-fold in the long run … 💰  

7 - Educate the customers - Most of the Saas products continue to evolve in feature, functionality, stability, privacy releases, etc. So the product becomes leaving and breathing. Customer users are dependent on the product on a day to day basis. So the users should be educated continuously through webinars, best practices, roadmap sessions, in-app guides and so on. 

I have seen that customers love best practices, benchmarks, use cases from their Industry, new features, relevant events and more. 

8 - Communicate Frequently - Customers expect frequent communication regarding most of the topics. The approach towards communication should be personalised. Enterprises evolve quarter over quarter and with the proliferation of AI, its responsible usage in enterprises demands frequent and personalised communication …  👏

9 - Make Employees Advocates - You can have a Customer Loyalty Program, Customer Retention Program and similar; no second thought that they are important. The drivers of these are employees who should become advocates of the Saas, find hidden opportunities, sense unseen positive signals and even go out of the line to help customers.  

When employees are advocates, magic happens. I have seen this work again and again. 

10 - Read Retention Signals - By retaining customers our objective is to upsell and cross-sell the customers. Examples of retention signals are higher Product usage, business growth, Industry, compliance updates/ initiatives, better Customer Health Score, good Sentiment, brand loyalty and so on. Analyse these signals to separate them from noise. 

I have seen that customers who create more support tickets usually stick for longer because they are using the product more and frequently.   

Hope you get the benefit of these customer retention strategies. There are tools in the market for these as well; they are good. 

Thanks for reading. 

……. 

Swagat Irsale is Growth Advocate. He works with startups and scale ups to grow revenue and build products which enterprises love to use. 

Reach him for work and partnership opportunities. 

PS about picture - got a chance to see the SpaceX facility from the Bus. I am glad I went closer to it. Very cool - space tech.