As your business grows, retaining your existing customer base becomes just as important as generating new customers.
A leaky funnel in a SaaS business will have you overspending on customer acquisition and will prevent you from reaching your growth goals.
Whether you come from a B2B or B2C SaaS organization, here are seven effective ways you can use to improve customer retention, loyalty, and referrals.
1. Set Recurring Revenue Goals
What percentage of your annual revenue do you rely on from repeat business?
For subscription-based business, the ratio of existing-to-new customers will continue to increase over time.
How do you measure success over three, six, and 12 months?
A few common goals around recurring revenue include:
- Lowering churn.
- Increasing upsell revenue from existing customers.
- Increasing the volume of new customers.
Now that you know what success needs to look like, it’s time to benchmark where you stand today.
2. Survey & Segment
How frequently do you gather customer feedback?
NPS (net promoter score) is one of the most common ways for businesses to assess customer satisfaction over time, but surveying can happen in a number of ways.
By gathering customer NPS every 3 to 6 months, you can segment your customers’ satisfaction levels within different periods of their lifetime.
This is useful for understanding what approximate period of time it takes for the customer to meet certain friction points with your product.
From there, you can align your customer success team to best help reduce or limit this friction.
After segmenting your customers by NPS, you have a clear idea of what percentage of your customers are promoters, passives, or detractors. These three lists are a powerful starting point in helping you prioritize where to focus your retention efforts.
Now that you have a clear benchmark and segmentation of your customer base, here are a few things you can do to help your organization grow recurring revenue.
3. Strengthen Your Onboarding Process
What are your processes the day the customer signs the contract?
Onboarding your customers with the proper expectations of outcomes, at the right pace, with the right educational and implementation program, is key to making good first impressions.
One of the keys to successful onboarding is capitalizing on the excitement and momentum the customer hopefully has by the time they sign the contract.
A few elements to incorporate into your onboarding include:
- Quick and frequent communication of the next steps.
- Clear and transparent documentation of the onboarding process.
- Proper tracking and analytics of your customers’ behavior to ensure they are reaching the leading indicators for customer success.
After successful onboarding, you need an ongoing system and process for ensuring that customers continue to receive value from your products/services.
4. Implement Automation Triggers for Customer Retention
Your customers are all in different phases of their lifecycle with your products.
One of the ways to lower churn and identify quick ways for customers to buy more is by implementing automated notification triggers for your marketing, sales, and customer success teams.
Here are a few examples of effective triggers that most marketing automation systems can deliver upon: