You need to be profitable to take your SaaS from start-up to maturity. Competitive pricing and better lead conversions might take you part of the way. But if you want to scale, you need to improve your customer retention experience.
One way to approach the challenge is to reverse engineer your customer retention experience and design it from a profitability perspective. That means knowing it costs up to 7x more to acquire new customers than keep existing ones. And it means implementing a solid customer retention strategy with proven tactics and effective solutions.
This post spells out a simple four-step process you can follow to create a more profitable customer retention experience.
To deliver a great experience, you need to consider the customer’s entire journey with you – including when they want to pause or cancel their subscription. It’s not enough to be frictionless at purchase; you must be easy to do business with at every stage.
When you deliver a better customer retention experience, you’re increasing the likelihood that customers will stay longer, upgrade their subscription or refer others. Any of these options provide you with more stable monthly recurring revenues, making it easier to plan with confidence.
We recommend these five steps to create a more profitable customer retention experience.
While it may sound counterintuitive, offering customers the ability to pause or cancel their accounts can help you win them back. Make sure your cancellation process is easy to find on your website or app, provides customers with several options, and includes the choice to cancel. Solutions like ProsperStack can automate this process.
You won’t be able to save every customer, but you want to get every customer’s feedback if they decide to cancel. This can be as simple as asking: “what’s your primary reason for leaving?”
Sometimes you’ll learn the reason has nothing to do with your SaaS. But other times, you’ll discover insights that help you improve your product, prioritize your roadmap or make your marketing and support teams more successful.
When customers tell you why they’re leaving, resent them with an offer to stay based on how they answered survey questions. For example, if they’re leaving due to price, provide a temporary discount, a plan upgrade, or a way to pause their account temporarily. You can also:
Create targeted offers by combining exit survey responses with custom data from your CRM or CDP
Segment your approach to prioritize your most profitable customers
Pit offers against each other with A/B testing to discover what converts
Your customer retention efforts should start at the moment of sign-up. For example, how are you helping customers get to know your software and benefit from its features? We’ve found that some customers – especially those at lower subscription levels – have fewer touchpoints with customer success and tend to churn when they don’t know how to use or get value from software tools.
Referring these customers to your customer success team adds value to their experience and doesn’t require you to discount their already low subscription cost.
Your relationships don’t have to end when a customer cancels. You have some natural opportunities to launch a targeted email series – a winback campaign – to reinforce your value and get customers back.
For example, if a customer leaves because you don’t have a feature, let them know when you implement it. Or reach out when you add new integrations. Here again, you can segment and prioritize winning back your best customers.
Increasing customer retention by only 5% can increase your profits from 25-95%. But that’s no consolation if you’re not sure where to start. No worries. An automated customer retention software like ProsperStack can manage the steps for you.
We’re a seamless, user-friendly, and low-code solution that your development team can implement within days. And most of our customers reduce churn by up to 30%.
Whether your customers decide to cancel or stay, make it a better customer retention experience with ProsperStack. Get a free demo.