How customer retention can avoid churn for your SaaS?
We discuss how you can apply customer retention for your SaaS with insights and examples from growth marketing experts and SaaS founders.
Table of Contents
- How customer support can help avoid churn
- How to compete in a crowded SaaS category against bigger competitors?
- 8 Techniques to create SaaS customer retention and avoid churn
- 1. Consider ditching promotional giveaways & limited-time specials—these do NOT build long-term customer loyalty.
- 2. You'll lose customers if they have to repeat their problems to customer experience bots
- 3. Surprise current customers w/ freebies.
- 4. Before customers churn, you'll likely see a dip in engagement
- 5. Churn isn't always intentional—it's often caused by an expired credit card
- 6. Create a personalized welcome
- 7. Make your checkout process frictionless
- 8. Customer feedback surveys
Note: SaaSwrites is a curated growth marketing hub and resource built to help SaaS founders grow their products. We sincerely thank all our experts for their constant value addition to this world.
Updated on: 04/04/2022
Churn can kill your SaaS business. Here is how Customer Support and other techniques from experts can help you increase customer retention and avoid churn.
Customer Support is the most under-appreciated role in SaaS. When you're doing support, you're also doing:
- Marketing (word-of-mouth)
- Customer interviews
- Public relations
- Inbound sales
Customer service is one of the most important pillars for an indie SaaS. It's a clear way for you to differentiate yourself from the big incumbents who are trying to automate support with chat bots. Good customer support should be part of your brand.
The answer is to care about the customer more than they do.
- Go the extra mile.
- Engage with them.
- Be curious about what they’re trying to accomplish.
Acquiring a new user costs 5x more than retaining one!!!! So keep the customers you already have.
Customer retention comes from:
- Loyalty: Build affinity through a quality user experience
- Incentives: Align your value prop w/ users' desires
- Frictionless experience: Make it easy for customers to repeat buy
1. Consider ditching promotional giveaways & limited-time specials—these do NOT build long-term customer loyalty.
- They might get users to try something—but not stick around.
- And they train customers to ONLY buy from you when you're running a promo.
Instead of short-term promos, consider creating an enticing rewards program.
Check out @thredUP's :
- Gamifies experience w/ multiple ways to earn & redeem points.
- Creates urgency through expiry dates (E.g. "Use by Aug 24").
- Progress bar encourages continued engagement.
- Refer to notes from previous conversations.
- Use real names/faces—they're comforting.
- Escalate to your team quickly if your bots can't solve the problem.
- Don't wait for birthdays—that's when customers receive gifts from lots of other brands.
- Relate gifts to your core offering for more affinity.
E.g. @chewy randomly sends customers pet portrait
When you start seeing low engagement, offer a down-sell (lower-cost alternative) to keep customers from churning.
When you start seeing low engagement, offer a down-sell (lower-cost alternative) to keep customers from churning. You'll gain trust by selling only what they need—and not what they can't afford.
For subscription companies:
- Retry the card on-file again.
- If you need to contact customers, send a mobile-friendly link to collect card info.
- Follow up w/ SMS.
Tools like @churnbuster can help
Instead of greeting all visitors the same way, show returning customers a personalized welcome popup and remind them of your value prop. Booking includes a "welcome back" message for returning visitors (tracked through cookies).
3 tactics to try:
- Enable one-click checkout using tools like @Fast.
- Reduce options on your navbar to prevent distractions. Existing customers already want to buy from you. Remove friction for repeat purchases.
- Encourage account registration—but don't require it. First-time buyers may not be ready to commit. Wait until after they purchase to send an email explaining registration perks, like tracking shipments, viewing order history, and rewards.
Improve retention by building loyalty, removing friction, & aligning incentives.
Something a lot of people selling through Facebook Ads don't realize is that FB sends out surveys to people after they purchase from you. These are called Customer Feedback Surveys.
- To ensure the customer has received their product FB will wait a few weeks until sending the survey. The survey will show up on the user's timeline and typically just ask one basic question. Something along the lines of "How satisfied are you with your purchase?"
- After enough users fill out the survey FB will give you a Customer Feedback Score. This score ranges from 0-5 and is only associated with the FB page you are running the ads with. If your page's score is below a 2 there are two ways you can be penalized.
- If your score is between 1-2 then Facebook will make it more expensive for you to reach the same amount of people as someone with a page score above 2.
- If you page score is below 1 then your FB page will be disabled and you will not be allowed to run ads.
- Once your page falls below a score of 3 FB will send you an email with a link to your feedback dashboard.
There you will be able to see the negative feedback that you have received on that specific FB page.
So it's important to try and provide a quality purchase experience for your customers so you don't even have to think about your Customer Feedback Score.
What is Growth Marketing for your SaaS?
How to acquire your early-stage SaaS customers? (2022)
How to onboard your early-stage SaaS customers (2022)
How to use A/B test to skyrocket your SaaS CTR
How referrals and word of mouth can help your SaaS grow? (2022)