Customer retention is challenging for SaaS (Software as a Service) founders. Customer churn is inevitable and investing in optimized SaaS retention strategies turns out to be crucial. In this article, we’ll share some of the best Saas customer retention strategies with Gramener’s SaaS-specific and low-code subscription-based model.
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The SaaS business model has seen two decades in the software market and has experienced rapid growth. The first use of the term to describe software on-demand dates back to 2001. To date, this remains the largest market segment with a size of over $100 billion in 2020, Gartner estimates.
SaaS differs from traditional software offerings in multiple ways. It has shifted the balance of power to the customer. It has put pressure on the product to be easy to use and customer-responsive. And yet, competitive market and regular churn enable some of the best customer retention strategies to come out in the SaaS world.
The customer-centricity of SaaS is a natural fit for Gramener’s churn analysis approach to delight customers and retain them. It serves as the catalyst for the creation of our SaaS-specific lens.
Most SaaS go-to-market strategies accelerate customer acquisition by drastically reducing sales friction. It significantly shortens the sales cycle and minimizes customer objections.
Different from traditional software, fulfillment happens every day, week, and month in SaaS. As a result, most SaaS companies are building customer success organizations finely tuned to the customer’s experience while using the software.
This stage forces founders and CX managers to brainstorm about how to improve customer retention. In the SaaS model, customer retention becomes the most important metric to watch after acquisition/growth rate. Forecasting and operationalizing renewals require a firm grasp of customer experience.
It includes each and every touchpoint that is now influencing the customer’s decision to renew. The importance of renewals leads to certain teams/functions gaining more emphasis in SaaS companies.
Many SaaS Customer retention strategies begin as soon as they acquire customers. The first block of any customer retention strategy is to understand what customers want. Why? Because you want them not just for a one-year contract. You want them to engage for years and give you business. A planned customer onboarding process would allow you to gather data about customer expectations.
Along with selling software, SaaS companies also provide effective manuals to use them. Create SaaS-friendly content such as instruction manuals, guides, videos exhibiting the features of the software, or monthly email newsletters showcasing software upgrades. Build a team to give real-time product training to your customers. Walk them through each and every aspect of your product. You becoming part of customer learning gives a personalized experience to your customer. This keeps you close to the customer and shares a sense of loyalty.
Yes! The secret sauce to any customer retention strategy in the SaaS business is on-time delivery. Stick to the deadline. A properly planned project timeline is one of the things that would add value to your customers. Maintain a regular interaction schedule with your customer to exchange notes on progress. Business transactions run on trust and you need to earn your customers’ trust with dedicated interactions and on-time delivery.
Customer engagement data hides tonnes of insights. You can identify patterns in the customer journey and how they use your product. You would understand what product features do they use the most. Custom-build customer experience data applications catch the behavior of customers that exhibit churn so you can stay a step ahead and retarget your customers with the right messaging.
Maintaining long-term relationships with existing customers is one of the best customer retention strategies. Identify gaps in the customer’s organization and business processes where you can integrate your SaaS ideology to benefit them in some way. Helping customers to resolve multiple pain points at a time is a great way to show your commitment to customer relationships.
Taking customer feedback is the first step to identifying loopholes in your product and service. With the help of customer sentiment analysis method, it is possible to determine whether or not your customers are satisfied with the products and services offered. It allows you to understand what went wrong, which resulted in customer churn. Design a customer survey with closed-end and open-ended questions. Exit surveys will give you enormous insights. Although there is a slight chance that the customer giving you the feedback might stay. However, the insights will help you increase customer retention in the future.
In the SaaS model, the Account Manager doesn’t need to wait or be surprised by a customer requesting to cancel. Teams may get a well-informed view of the customer’s engagement with the product much before the cancelation thought comes into the customer’s mind.
At Gramener, we help clients build strategies backed with data and focus on the few metrics which any company should, to improve customer retention in the SaaS business.
Below are a few customer retention industry benchmarks that any SaaS company should be aware of.
We leverage our CX experts to better understand the customers’ journey.
Gramener has been helping SaaS-based companies in improving their customers’ experience with customized NPS Analytics solutions. We work for many Fortune 500 companies to build custom CX solutions. Team Gramener will help you in defining the CX needs based on your company’s CX maturity and handhold you through the process. For more information, contact Amit Garg at amit.garg@gramener.com.
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