At this point, your sales team has done its job, and they've successfully closed a new paying customer. Now, it's important to keep proving and demonstrating value by providing dedicated onboarding, providing proactive customer success management, and asking for and responding to their customer feedback.
The goal isn't just to get a customer to purchase your product -- you want them to become weekly or daily active users, too. Because most SaaS products are sold on a monthly subscription basis, it is easy for customers to cancel and switch to a competitor if they're unhappy or not seeing utility with your product.
Make sure to provide outreach, education, and resources to prevent common roadblocks that lead customers to churn. After months or even a year of successfully using your product, your customer has to renew to keep using it. Before these times, it's important to maintain close communication with your customer to make sure you know if there are any possible objections that could cause customers not to renew. Make sure your customers are familiar with the benefits of being a member of your loyalty program so they can be rewarded for being customers.
At this point, not only have your customers renewed their subscription and joined your customer loyalty program, but they're such happy customers that they're power users who tell their friends and colleagues about your product.
Through word-of-mouth marketing, writing customer reviews, serving as testimonials and case studies, and becoming affiliates, your happiest customers become your SaaS product's best sales rep. Sales 1 Integrations HubSpot integrations with apps, tools, and software you use every day. Customer Stories Case Studies Reviews. The average user who quit spent 35 seconds using Groove in their first session, and logged in an average of 0.
They realized they needed to optimize their onboarding communications. Core tasks may be creating a task, uploading a file, inviting a team member, etc. You can use tools like KISSmetrics to create funnel reports to monitor the core task completions: Completing core tasks leads to happy, paying customers.
Trial to Paid Conversions: The percentage of trial users who convert to paying customers. This is really what is all boils down to. They are two distinctly different metrics. Retention really boils down to churn. You already know providing awesome customer success and support are key to retaining happy, loyal customers.
Below are a few additional ways to be be proactive and avoid churn. Define red flag metrics to help identify and retain customers before they churn.
Some common red flag metrics for subscription-based businesses include: A past-due or failed payment attempt is an indication of churn potential. Some examples of dunning communications include: Reducing churn is fantastic, but no business can completely eradicate churn.
Customers are going to churn for various reasons. He points out sometimes just having the option to cancel in-app is all a user needs to feel more comfortable with your product. I also recommend using exit surveys. Exit surveys can be presented in various ways: When Groove tested exit surveys with close-ended and open-ended questions, the survey with an open-ended question had dramatically higher response rates.
Once you have churn under control, the key retention metric for growth is Expansion MRR. Increased revenue from upsells and cross-sells. As we explained in a previous blog , happy, paying customers make ideal upsell candidates. Once a customer is fully engaged and has extracted value from your product, they are more likely to upgrade for advanced features and functionality.
Expansion MRR allows you to work towards negative churn! Negative churn occurs when upgrades and up-sells are greater than what is lost by cancellations and downgrades. Want to learn more about negative churn?
Check out this great post from Tomasz Tunguz. But all of the improvements combined almost doubled Please keep in mind that these are simply theoretical numbers, but they are not far off from many SaaS benchmarks you may see.
All the individual improvements move the needle in the right direction, but all of them combined have a HUGE impact on revenue growth. Directors and leadership must unite to understand all key metrics across the entire funnel. While all the metrics are important to optimize, sometimes your biggest growth levers may not be your biggest priorities — you can change that! If you want to read more on optimizing portions of the SaaS customer lifecycle funnel, check out these related blogs: What does churn look like?
Joel York, author of the popular blog Chaotic Flow, understands the struggle. That’s why he’s providing five ways to build effective marketing into your product design. For a .
This is called the customer lifecycle. Interestingly, the customer lifecycle is similar across all SaaS businesses – from low-touch web apps to highly-customizable enterprise software. Customer success managers (CSMs) must understand the lifecycle in terms of their organization because they play a role in most parts.
The final takeaway: It is easy to only focus on one portion of the SaaS customer lifecycle funnel, but don’t let tunnel vision distract you from looking at the bigger picture. Directors and leadership must unite to understand all key metrics across the entire funnel. Software-as-a-service (SaaS) is more than just a software deployment model; it's a business model that ties vendors' success to your own. To drive upsell and renewals and achieve profitability, leading SaaS vendors are embracing customer success programs that help clients achieve long-term business results.
The SaaS customer lifecycle covers the acquisition, engagement and retention of your customers. Depending on where they are in their lifecycle, customers need different things from your company to help them achieve their desired outcomes and move to the next stage in the cycle.. Today I’m breaking the SaaS customer lifecycle down into . The SaaS customer lifecycle can be broken down into three stages -- the acquisition, engagement, and retention of your customers.