Making a new customer happy is simpler than keeping them engaged with your service month after month, year after year. It’s also much more expensive.
To run a profitable subscription business, you have to address customer retention, yet so many companies avoid it. They know it can be costly and time-consuming to build a customer retention program that addresses churn at the point of cancellation.
But what if it was possible to win customers back just as they’re about to leave? Even better, what if you could understand why they wanted to go in the first place? There are tools available today that easily integrate into your existing system to help you do just that.
Here are four successful SaaS customer retention strategies to help you reduce churn and grow revenue.
It’s surprising how many SaaS providers aren’t clear on their customer churn data. So, we always recommend using this simple calculation to learn yours.
Once you have this baseline, you can build SaaS customer retention strategies and measure your success against this metric. Looking for even more detail? An automated cancellation flow with tailored customer questions at the point of cancellation can help you dig even deeper.
You can also collect actionable data from customers when they cancel, and it’s easy to customize your survey questions at any time.
Once you start understanding why your customers considered leaving, you can use that data to segment customers based on factors like:
How long they’ve been a subscriber
The reason they’re canceling
Likelihood you can win them back
Your overall goal here is to identify which customers are the most profitable and prioritize winning them back first. Plus, you can craft more targeted win-back offers when you have clarity on why customers are canceling.
Say you have legacy customers who originally subscribed under an introductory offer. If these customers cancel, another SaaS customer retention strategy would be letting them know they’ll lose the chance to re-subscribe later at the same price. In our experience, this simple strategy is enough to deter about half of your legacy customers from canceling – an easy and direct impact on your bottom line.
Using our custom properties to segment customers is easy and works whether the data is stored at the subscription or the subscriber level. In addition, we have integrations with HubSpot, Stripe and Chargebee that give you even more data to work.
Armed with data that tells you which customers are the most profitable and why they’ve opted to leave, you can determine the best incentive to win them back. For example, you might offer new or extended discounts.
Or you could take it up a notch and use enhanced A/B testing, which allows you to really dig into the data. This SaaS customer retention strategy allows you to choose a control offer and test it against different variants:
Test coupon discounts and durations to find the most cost-effective way to increase retention
Try out varying lengths of account pauses or trial extensions
Test out different plans (upgrades, downgrades) to find out which offer is the most enticing
It would be incredibly challenging to make sense of the data if you tried to administer and measure these offers by hand, especially in an A/B format. That’s why our solution handles everything for you. Automatically.
Best-in-class SaaS companies continually look for ways to add more value to their service. It helps them stand out from competitors and build stronger, long-term customer relationships.
One of the major benefits of using cancellation surveys to gather customer data and insights is sharing timely feedback with critical internal teams. For example:
Product – could use qualitative and quantitative data to prioritize feature requests.
Customer success – could identify at-risk customers and proactively reach out to save them.
Marketing – could improve their messaging and timing.
To put it into perspective, your cancellation surveys essentially create a prioritized roadmap for you to add more value. And that can be game-changing.
Finding new customers is expensive, which is why these SaaS customer retention strategies can be so powerful. In order to achieve long-term growth and profitability as a SaaS company, you need to hold onto the customers you already have. One of the fastest ways to reduce your churn rate – and increase your revenue – is to use an automated customer retention solution.
Use our ROI calculator to see how much faster your business can grow by saving more customers. If you’re ready to take the next step in retaining customers, schedule a demo with us today!