Every business wants to retain as many customers as possible, and for good reason. it is more cost effective than acquiring new ones. Gaining a new customer can be up to 5x more expensive than retaining an existing one. Arguably, nowhere is the need for user retention more critical than in SaaS.
To build that one of a kind user retention strategy for your SaaS business, you need to play to your strengths and craft the right objectives that meet customer needs. The difficulty is that there are many paths you can take and it can be hard to identify the best direction. In this article, we’re going to cover four critical ways SaaS companies can boost user retention.
Build a Killer Onboarding Process
A first impression is everything. Make sure your onboarding process is optimized for a great initial experience. This will set the tone for the rest of the members journey with your service. Start off with some general welcome messaging, try to include some personalization as well to make the experience feel unique. You want to be able to map out the user journey and communicate the value that is available to them. Expressing long term value is key for solidifying purpose and overcoming any doubts users may have.
Track the Right Engagement Metrics
Quantifying engagement focuses on the analytic portion that can signify if something is not going to plan. You should always be tracking your performance and comparing it as you grow. In terms of user retention, tracking new vs existing customers, acquisition costs and customer lifetime value can shine a light on whether a certain customer is worth fighting for, trends in lost/ gained customers and associated costs. This will also give you a good idea on what your monthly recurring revenue will be, which can then be compared over fiscal periods. The ultimate goal of metrics is to reflect and check what did – and didn’t – work.
Provide engagement and communication channels
Focusing now on the individual customer and their personas, engagement channels are necessary for gaining personal insight on your customers satisfaction. It is always a good idea to get routine feedback from users. Different users will identify personal points of importance, to which you can specifically cater to them, or adjust areas that need improvement. Continued personalized conversations will show users that they are valued, and that you are actively listening to make it a better experience for them. Proactively communicating new features, updates and ways to utilize the platform can also extend value and user utility.
Create a Winback Strategy
A user retention strategy for those on their way out the door involves winback offers. These can take the form of exit deals such as a percentage off of the next month’s subscription or a free month. Other examples include offering to pause a subscription instead of completely cancelling, or moving them to a free plan from a paid one. The purpose of these strategies is to create an alternative that will make users rethink cancelling. A paused subscription can result in a user coming back and resubscribing, and a downgraded user may realize they need the paid features. General education on new features to come keeps users interested, and may reduce churn by detailing what is on its way.
Simple Strategy
Improving user retention comes down to simple steps. Actively stay in tune with your customers, learn their wants and needs and fulfill them with irresistible value. Be sure to identify why users have chosen you and continue to provide that to the best of your ability. It is also important to realize that you cannot keep every customer. In some cases it may be best to let a user go that lacks significant lifetime value, and focus on gaining ones that do.
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