5 Secrets to Retention: How to Protect Your SaaS Company’s Revenue

Churn is not the problem, but rather a symptom of it. 

In order to stem the flow of customers leaving your product or service, you will need to assess your business at several levels, see where the gaps are, and close them. Here, we’ll discuss some causes of early and mid-stage churn, and how to make sure your customers stick around. 

Encourage + Incentivize Progress

It’s safe to say we all know what it feels like to love a new tool for a week or two, only to start feeling like you’re running on a treadmill to nowhere, as opposed to making the desired progress. SaaS companies can help remedy this problem by keeping customers engaged and continuing to nudge them towards the next usage milestone. 
There are several ways to do this, and the best choice will depend on the nature of your product. Ultimately, though, success will lie in your ability to keep a close eye on how your customers are using your product or service, and providing them with individualized encouragement as they go. For example, if you use tier pricing, offering free upgrades as a reward for frequent use will promote brand loyalty and make customers feel valued. 
Gamification can also be an effective approach. Giving users a tangible representation of their engagement makes interacting with your product feel even more productive. People, by nature, love to level up and see how far they’ve come, so creating a level system or rewards program gives your customers something to work towards as they continue to use your product.   

Provide Personal + Consistent Support

If you’ve ever had an issue with a tool or platform, chances are the first thing you looked for was a way to live chat with someone on the support team. Honestly, no one wants to have to type out a whole email, then wait however many business days for a reply—or, worse, make an actual phone call. This is why it’s critical to provide your customers with a quick, convenient way to receive help from your CS or support team. 
You should also be proactive when it comes to offering support. Whether this means scheduling an email that includes tooltips, or uploading a short video guide on a specific feature, don’t wait for your users to come to you with problems. Giving customers answers  to keep in their back pockets is a helpful way to reduce friction and prevent early churn. 
One more thing to consider is the personality factor in the support you provide. Depending on the size and structure of your organization, it might be a good idea to assign specific customer support/success team members to the customers with whom they can best communicate. If you have the resources to give this kind of personalized service, it will foster stronger relationships between your existing customers and your team, thus giving customers another reason to keep coming back. 

Treat Payment Failures With Care

When we attended SaaStock in NYC last month, Patrick Campbell—Co-founder and CEO of ProfitWell—gave a session on retention. It was, in part, the inspiration for this post. One of the most interesting things he touched on was the importance of treating payment failure as an opportunity instead of as inevitable churn. 
When a customer’s payment fails, it’s important to reach out at the right time. Don’t email them in advance, because not only is pre-dunning irritating, it increases the likelihood that that person will simply churn on the spot to avoid dealing with whatever friction is to come. Once their payment has failed, send a friendly notification that nudges the customer to update their payment method. Make updating convenient, to further mitigate churn at this stage. 
Always be sure to follow up with people who don’t initially respond to dunning emails, as well. It’s understandable to be wary of coming off as spammy, but these emails serve an important function and are not likely to be seen as spam. Plus, we know it’s hard to capture people’s attention through email, and there is any number of reasons a person might not reply. It’s best in this case to follow up at least a few times to make sure they’ve received the correspondence. 

Focus on Expansion + Evangelism

It’s not uncommon for SaaS companies to be so eager to win net new business that they let their existing accounts stagnate. This is a mistake, because continuing to cultivate those relationships and expand them into additional business is a big boost for your revenue. Because the cost of acquisition is already in your rearview mirror, any additional business from existing accounts will result in increased LTV and revenue impact that is more cost-effective than net new business. Therefore, companies that focus on expansion as well as acquisition will grow faster than those that ignore opportunities for account expansion. 
As for evangelists, they can be just as valuable for driving revenue—if not more so. Encouraging loyalty and evangelism through continued, top tier customer success efforts will help bring in that coveted referral business, in addition to creating a positive buzz around your product or service. Just by effectively deploying your resources, you’ve essentially won yourself the best kind of free marketing there is. 

Widen Your Net + Keep Things Exciting

Most SaaS companies are born out of a specific problem that lacks an efficient solution. This means that users will engage only when that problem arises for them, often resulting in a product that, frankly, isn’t useful enough to be sticky. Just as great onboarding is critical to reducing early churn, strategic product development will protect you from churn that occurs when people realize that, having solved an isolated problem, they no longer need what you’re selling. 
This means that instead of being a bandaid for a single wound, your product needs to be full-body armor, or at least as close to that as you can get. Analyze your user data, get feedback from your customers, and build them what they need. New features, product offshoots—these things keep your service interesting, and allow you to grow along with your customers. 
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