In SaaS, your success depends on a solid rate of new subscribers (customer acquisition) and healthy rates of subscriptions (the customer retention bit).

Your SaaS product earns a major part of its revenue from existing customers—the ones who stay with you for long periods. These customers provide you with some serious revenue and value.

This means you want to improve retention rates. So, how do you do that? Well, there are plenty of options—here we explain 13 of them (along with how they can work for you). But first, let’s have a look at why it’s an essential consideration.

The importance of customer retention

Industry figures suggest it can cost five times more to acquire new customers (over simply retaining existing users).

And if you increase customer retention, your profits will grow from 25-95% (Source: Elasticpath).

The message is clear—you need to lower your churn rate and maintain loyal customers. It can have impressive results for your revenue and business’ stability.

1. Rejig your onboarding process

Onboarding is the process users go through when they're newly signed up as a customer. How this plays out can have a big impact on whether the customers stick with your product.

This means your onboarding process has to be better than good—it’s critical. It gets your customers behind your product and feeling at ease with the features and functionality.

Your best approach is to make sure customers reach the outcome they’re after. You want them to make your software a new habit. Something they’ll use day in, day out.

The standard bits of customer onboarding are:

  1. A welcome email
  2. Product tutorial
  3. Documentation
  4. The very first login
  5. Supporting emails providing user tips
  6. Notifications

All very good, but how do you go above and beyond with your process? Here are some pointers:

  • Personalize the experience: Tailor your process around each customer. They all have their concerns and outcomes they're looking for.
  • Don't overwhelm: Don't hurl all the info in the world at your customer straight away. Instead, let the important details about your software roll out slowly. You can use a task checklist for users to help them on their way.
  • Provide support at every step: Offer your customer support whenever they need it, helping them through the tricky early stages of mastering your product.
  • Flag up milestones: Celebrate customer success, hailing significant landmarks as customers hit them (such as completing a certain action). This could be through the likes of a celebratory email for a digital pat on the back.

2. Upsell

Although upselling has a negative reputation along the lines of cold calling, if you’re adding more value to your product then that’s a good thing - for both you and your customers.

Raising the level of your service leads to customers paying more. And, of course, this improves your profits. But it also provides your customers with more from your software.

Oh, and by the way, this isn’t cross-selling. Upselling is usually much more effective, as you’re adding further value onto a product the customer already likes.

3. Use a customer feedback loop

This is a nifty way to go about getting constructive feedback on your software. One way to do that is with collecting and analyzing information they provide.

So, how do you go about collecting this data? There are a few options:

  • Customer surveys/questionnaires.
  • User testing.
  • Focus groups.
  • Win-loss interviews.
  • Customer feedback call*.
  • Shadowing customers.
  • Customer Advisory Boards.

*Oh yes, these calls are worth a closer look. Here you can ask a bunch of questions for important feedback. Ask stuff like:

  • Do you think there are any features missing?
  • Are there areas you don’t know how to use?
  • How do they find their interactions with customer success?
  • Is the product easy to use?
  • What do you need that you haven’t already got?

Why bother with all of this? The details you gain can help you identify customer behavior trends. You can then provide the important information to your relevant employees—like handing UX notes to your web developers for service improvements.

With the details you get you start removing, one by one, all the niggling issues holding your business back and causing customers to cancel.

4. Offer free software training

Not all of your customers will be tech savvy, and even well intentioned help videos, tooltips, and guided digital tours can still leave some users baffled.

One effective way around this is to let customers know you’re on hand to help.

This is especially important if you’re providing a pretty complex software solution. In response, you can offer your customers the likes of free webinars and training sessions—on the house, of course.

As well as running these kinds of sessions as soon as a customer signs ups, it could be worth inviting existing customers to attend them periodically thereafter too, so they can continue to get value out of your product.

Plus, if you’ve launched new features since they joined you, this’ll give you an opportunity to talk through them, too.

This makes sure customers get the most out of your software. Plus, they’ll appreciate your efforts. A possible result? Yes, you may decrease your pesky churn rate.

5. Be proactive with your customers

Keep track of your risk customers (the ones who start using your software less and look like they’re about to jump ship).

By looking at your data, you can see who isn’t engaging with your software.

Once you identify the risk customers, you can use nifty practices to re-engage them (and stop them before they unsubscribe). Here are some ideas:

  • Spotted an expiring credit card? Drop the customer a reminder it’s about to expire. An email or a call will do the trick and help to get them back on track. Then they won’t miss out on a subscription payment.
  • Make sure your customer service is as epic as it can be. The more support you offer, the fewer issues they’ll have with your software (and, in theory, be happier and keep subscribing).
  • React quickly with deployment and configuration of software updates. As in, don’t leave customers stranded with new software that doesn’t work. Support, support, support.
  • Provide scalability, so your customers can move to new features or better packages at the drop of a hat.

6. Pile on the value

Firing across discounts and mixing that up with upselling and cross-selling is fine… but, you need to show customers you’re adding real value. And that you’re doing so all the time.

We’re an example of that! Not showing off (too much, anyway), but we let all of our SaaS membership customers know when we’re adding excellent new content. That includes templates or ondemand videos, which they spot straight away on their membership dashboard.

It’s stuff only they have access to. The result? They get a load of first-rate value.

So, you need a continuous process of enhancing the user experience. Where to begin? Take a look at your software and think about the extra value you can add. Such as:

  • Provide subscribers access to new features early (beta access).
  • Create exclusive content in your blog, newsletters etc. offering customer support.
  • Keep creating new content to support your users, including videos, guides, and walkthroughs.
  • Be on the lookout for ways to simplify your user interface (UI), so customers find your software ever easier to use.

7. Offer personalized experiences

Translation: avoid talking to your customers like they’re just another prospect. It can rub some people up the wrong way.

Instead, be personable—friendly and forthcoming with advice and support. It’s a natural way to do business that lays off overdoing a corporate approach.

This means your customers have the support they need, which you deliver in supportive and engaging fashion. As if you’re tailoring it for your customer’s very needs.

8. Take customer service to the limit

Right, taking things a step further on #7. With customer service a hot topic in the world of SaaS, your support needs to be epic. And we’ve said that once before in this post already. So you know it’s important.

The best practices include a rapid response customer support team. And acting fairly and politely towards complaints. If there’s an issue, do what you can to resolve it.

That’s especially true if complaint trends emerge. That may mean there’s a recurring problem with your product. One you’ll need to fix pronto to avoid further complaints.

If you have the resources, the best approach you can have is a 24/7 support system. With customers all over the world, you should be there to support them.

It’s a big undertaking, but it’s a necessary step to add more value to your service.

9. Surprise your customers

Going out of your way to offer special rewards to customers can have many benefits.

Here’s an example from your SaaS writer. There’s a popcorn brand in the UK I’ve dedicated myself to. Back in 2015, with no warning, they sent a box of popcorn to my workplace. And that included a personalized message and a discount coupon.

Result? I remember the lovely gesture. And I continue to remain a slave to the business’ popcorn cause.

It’s something a lot of businesses could take away, whatever the industry. Or whether you’re in SaaS, PaaS, or IaaS. You make a sweeping gesture, leave a lasting impression, and you’ve got fans for life (or at least a few more years of subscribing).

You also get extra perks, such as happy customers taking to social media to boast about your generosity. So you get ROI through some social engagement.

10. Create a customer loyalty program

You can go a step further on #7 and create a loyalty program. This acts as a reward for long-term commitment and provides incentives for customers to stay with your software.

Although the origins for this idea are from retail, it’s still an awesome strategy to consider.

While it can help you keep current customers subscribing, you can also boast about your program on your site. And this can attract other customers to sign up.

Of course, you should get a solid understanding of what your customers may want in their package. To do that, ask about with your current users. What would they like to see?

This may involve free tutorials, discounts, dedicated customer support etc.

11. Create a customer retention team

Using a dedicated resource to keep customers with your business? It may seem OTT, but it’s a highly targeted way to keep your churn rate low.

Along with analyzing why your churn rates are happening, you can take steps to control the problem. And you can:

  • Contact clients on a regular basis for feedback.
  • Come up with customer retention techniques.
  • Keep track of user engagement.
  • Identify your customer churn risk scenarios.

If you have the spare resources, then this could potentially provide some serious ROI.

You’ll master your understanding of why customers are leaving. And put in place supporting strategies to minimize your losses.

12. Simplify your unsubscription process

It may seem counterproductive, but do make it easy for customers to call it quits.

Making it difficult can involve using multiple exit screens for customers to wade through. Or using an unclear unsubscribe process.

If you’re putting up barriers, one of your soon-to-be former customers is probably going to complain. And that can lead to bad word of mouth (and negative online reviews).

Ultimately, if someone is leaving… they’re leaving. Churn rate is inevitable, so help your customers out with a clear and simple process.

13. Increase your subscription costs

This is a suggestion from industry legend Neil Patel. He says on his customer retention strategies from 2018:

“A higher price creates a perception of greater value. Such a perception turns into a reality once the customer spends the money. They have committed to a cost, and that cost is reflected on their balance sheet.”

If you’re pushing up your price, you should back up your decision with evidence. Why do you think your software is worth the price?

If you’ve got a radical new feature that wows the industry, then that’s a solid justification. Otherwise, you don’t want to price yourself too high.

Because you might price your way out of the market. Or you may have the opposite effect, making customers quit.

You shouldn’t go too crazy with your new prices, but the logic behind the tactic is customers commit to a higher cost.

So, they’re more likely to stick with your product to get their money’s worth—use the software, get to understand its benefits, and stay on long-term.

You can support this cost hike with details on your site explaining the benefits of your software. It’s essential to explain the value you’re providing to your users.