4 Customer Retention Tactics that Help You to Build Loyalty & Boost Profits


In the SaaS industry, there are quite a few metrics you want to measure as a business owner. Customer acquisition cost, lifetime value, monthly recurring revenue, and many others. But there is one that all SaaS founders dread: churn. This is the percentage of active users that leave your company and as many experts will tell you, churn is the silent killer of any software company.

The antidote for churn is user retention. Since acquiring a new user is 7-13% more expensive than retaining an existing one, it’s obvious that retention should be a big concern for any company. Here are some great customer retention tactics which you can employ immediately for your business.

Improve your customer support

What does your customer support look like at the moment? If you have a support email inbox that you manage every day, you probably have a lot more to work on.

If a customer rates your company’s customer experience as good, they are 34% more likely to shop again and 37% more likely to recommend you to the people they know. Whichever way you look, you will find that investing in your customer support will give you an immense return on investment for your retention and company bottom line.

One way to do that is by offering a variety of customer support channels. Customers nowadays are used to having options and if they don’t see their preferred choice, they are less likely to reach out and instead of solving a problem, they may just churn. Make sure to offer:

  • Website live chat
  • Chatbots (but primarily live chat)
  • Help desk
  • Business phone
  • Email
  • Social media
  • And any other channel where your customers are

You don’t want to spread yourself too thin, but wherever your customers are, you should be there to provide support too.

One of the reasons for churn is that customers are not realizing the value of the product. In this case, some SaaS companies have hosted weekly or biweekly product onboarding webinars. During these sessions, the host can show how to get the maximum value out of the SaaS product, show certain use cases and answer customer questions. As a bonus, the customers will feel like they’re cared for. 

Another frequently underused channel you can use is self-service. According to Zendesk, 67% of customers prefer self-service to getting in touch with a customer support representative. If you want to work on this channel, you need to work hard on your:

  • Help center articles
  • Frequently asked questions
  • Blog articles revolving around your product

If your customers can solve a problem on their own, this will not only retain them more but will also help your customer support team and lighten their workload. For example, we have a range of useful self-help materials at Better Proposals, including a Proposal University, where our customers can learn the basics of writing proposals.

Gather customer feedback

If your customers aren’t complaining at all, you may as well have the ideal product/service that everyone loves. On the other hand, they just might not be reaching out to tell you that something is wrong. 

According to research, only one in 25 customers will actually complain. For the remaining 24, they just may remain silent or churn – you won’t know. So while the 1 out of 25 may seem annoying, they’re actually doing you a favor and speaking out.

There are countless ways to collect feedback, including:

  • NPS surveys
  • Emails
  • Phone calls
  • In-app surveys
  • Long-form surveys

Whichever medium you choose, make sure the questions are relevant, close-ended and short. You want to gather feedback but at the same time, you don’t want to pester your customers with irrelevant and unnecessary questions and drive even more churn instead of improving your retention.

Focus on your most important customers

All customers are equal, but some are more equal than others. You may have heard of the Pareto principle, and it applies in business too – 80% of your profit will come from 20% of your customers. These 20% spend the most with you, have been around the longest and would do the most damage to your business if they left you as a customer.

Using your internal data (from your CRM, or gathered in-app in the case of a SaaS business), determine who your most important customers are. Make sure to get in touch regularly with them, outside the traditional channels such as transactional emails. Make sure to let them know how much you value their business and do not shy away from giving them special offers such as discounts, beta access to new features or some other perks they may enjoy.

Besides making sure to retain these customers, you can nudge them into recommending you to their peers. If they are thrilled with your product, they will be highly likely to influence others to consider you as well.

Automate the way you retain customers

The great thing about doing business in 2021 is that there is so much available data. The data that should concern you is pretty simple to find: when do customers stop using my app and why?

In the SaaS industry, you can pinpoint the exact moment someone stops using your product. This could be because of poor onboarding, taking too long to get to their “aha” moment, using bad product microcopy, or something else. The point is, you can tell when someone signs up and stops using your product.

You can set up your email marketing software to send automatic transactional emails in these events. For example, if someone hasn’t scheduled a social media post in your social media scheduling tool for three weeks, you can send them an email reminding them about the things they are missing out on. Moreover, you can offer them tips and tricks to start using your product again and spark their interest once more.

This works in other industries too. For example, if you have a customer that’s been buying from your ecommerce store for months but suddenly stopped, you can set a trigger so they get an email reminding them about your latest offer.

The best part?

When analyzing your customer data for churn, you can set an internal alarm for your team and figure out well in advance if someone is about to churn or not so you can fix your product/service and boost your sales.

Conclusion

No matter what kind of business you run, focusing on improving your retention will have a major impact on your bottom line. Instead of chasing new customers, find out how to get your existing customers to find more value in your product or service, spend more and show love for you with the people they know. 

Author bio:

Petra Odak is a Chief Marketing Officer at Better Proposals, a simple yet incredibly powerful proposal software tool that helps you send high-converting, web-based business proposals in minutes. She’s a solution-oriented marketing enthusiast with more than 5 years of experience in various fields of marketing and project management.