7 Reasons Why You Need Customer Retention Software
The subscription market is massive. There are dozens – perhaps even hundreds – of options consumers can choose from within every vertical. Plus, the subscription industry is expanding quickly, with an estimated 23% YOY growth by 2025.
If you’re a SaaS or subscription provider, this level of competition and growth means it’s more challenging than ever for you to acquire new clients. And, unfortunately, the cost of acquiring those clients is increasing sharply.
Because it costs less to keep customers than to acquire them, Saas and other subscription-based products – like consumer software, streaming services, and apps – should pay very close attention to why customers leave.
For some companies, churn is a giant black hole. They have a cancel button customers click, and that’s it. They have no idea why or when customers leave, which puts them at a substantial competitive disadvantage.
Other companies have limited data. Perhaps they use a brief point-of-cancellation survey to capture why customers are leaving, but there’s no coordinated effort to understand the data. And these companies still don’t know why customers are leaving, let alone how to retain them.
This is where automated customer retention tools come into play.
These solutions integrate with the most popular billing platforms to automate the cancellation experience. As a result, you learn precisely why and when subscriptions aren’t renewing and get a chance to offer your customers a reason to stay.
As a Saas ourselves, we’re deeply familiar with the metrics most SaaS and subscription-based services watch closely. These metrics align nicely with the primary benefits you can expect from customer retention software. For example, you will:
Retain more customers – An automated customer retention solution helps you retain more of your existing customers, which, in turn, offsets customer acquisition costs. And because it costs 7x more to acquire a new customer than to retain an existing one, this can significantly impact your bottom line.
Increase lifetime value (LTV) – By saving customers at the last second with valuable offers, automated customer retention helps you grow LTV and deliver a better customer experience. The offboarding strategies we use at ProsperStack are highly persuasive and developed after studying what works for best-in-class brands.
Maximize ROI – No matter the reason, churn affects your bottom line. Lowering your churn rate increases the value of every dollar you spend acquiring new customers. Plus, statistics indicate that a 5% increase in customer retention increases profits by 25% – 95%.
Again, these are the metrics where you’d expect to see improvement. Over the course of working with numerous clients, we’ve seen some additional benefits emerge that extend into every aspect of your business.
We’ll go on record saying that an automated customer retention solution will save you money. The ROI is very clear because it’s a straightforward dollars-in-verses-dollars-out equation. As a rule, companies that increase customer retention strategies by 5% can see 25%-95% return on investment.
You won’t have to worry about putting time or effort into building retention software in-house. Instead, you can stay focused on the core competencies of your business and let a partner like ProsperStack solve your customer retention challenges for you.
As one of few customer retention solutions on the market, our most significant value is expertise. We know what strategies work in your industry. And we can get you to the point of optimization more quickly than what you’re able to achieve in-house on your own.
Once you know why your customers cancel, you’ll also know how you’re not meeting their needs. It’s hard to put a value on that level of insight.
For example, say during the cancellation experience a customer indicates they’re leaving because they need a feature you don’t offer. You can pose a follow-up question to discover what that feature is.
This allows you to correlate the MRR cost of losing customers compared to the cost of adding product features. And you can make customer-informed product roadmap decisions.
Most companies don’t realize there’s an opportunity within the customer cancellation flow to provide unique offers or incentives for customers to stay.
This is the lowest-hanging customer retention fruit there is. And it’s not unusual to start retaining customers the first day you implement an automated retention software.
And even when a customer still chooses to leave, you suddenly have actionable insights you’ve never had before. Insights you can share with marketing, finance, product, and customer success teams.
The best customer retention programs will integrate with platforms like Stripe, Chargebee, Recurly, and Chargify. Even better, because these platforms are API-powered, the solution will plug right in and run automatically. Just a few lines of code and you’re on your way to insights and results.
Imagine having everything cancellation-related organized specifically for your type of business. All of our plans include a fully customizable off-boarding flow, feedback reporting, offer analytics and A/B testing, subscription platform integrations, and unlimited users.
If you’re ready to discover why and when you’re losing customers, let’s chat. We could talk all day about customer retention software and automated customer retention but our demos take just minutes.
Prefer to learn more on your own? Get a sense of the numbers using our ROI calculator.