Trying to hang onto your customers but can’t seem to increase your retention rate? Forget everything you think you know about retention. Even if another SaaS swears by it, if a strategy isn’t working for you, there’s no point in trying to recreate their magic. Instead, you should test out different strategies that may be unorthodox or counterintuitive.
That’s exactly what we’ll cover in this post.
What follows is a list of unusual retention strategies that you’ve probably not considered for your SaaS, but you should. Let’s discuss.
Take a Look at the Reasons Why Your Customers Churn
Before you can successfully retain customers, you’ve got to figure out why they’re leaving in the first place.
Some churn is inevitable. Your key contact/ decision-maker leaves his job. Reduced cash flow forces your customer to cut expenses, starting with the subscription to your service. Your customer dies. Things happen.
However, the majority of churn is a reaction to something you did (or didn’t do). Perhaps your customer service isn’t the best. Perhaps your customer onboarding could use some work. Perhaps you’ve wooed the wrong type of customer and they can’t make your service fit their needs. There are tons of reasons why churn happens, and it’s up to you to figure out why it’s happening to you.
There are three easy ways to do this:
Conduct Exit Interviews
When a customer is dead-set on leaving your SaaS, don’t stand in their way. But do ask them why they’re leaving. While not everyone will respond, the ones who do will help prevent future customers from suffering the same fate.
Don’t overwhelm your customers with too many questions, either. Keep your exit interview limited to five questions or less.
Take a Look at Your Customer Complaints
When searching for the reasons why your customers churn, don’t overlook your customer complaints. Learn what frustrates your customers.
It’s easy to loathe the squeaky wheels. No one likes an annoying squeaky wheel. However, instead of rolling your eyes when you see a customer with the same ‘ole complaint, take it as a gift. Not everyone will complain. Many customers have the same frustrations but they simply cancel without saying a word (or responding to your exit interview).
Use these complaints to find the most common issues that plague your SaaS. I bet there’s a pattern. Correct that pattern and you’ll reduce churn.
In addition to reviewing tickets from your support desk, take a look at what’s said over social media. With the help of a social media listening tool (like Hootsuite), periodically check for mentions of your name or your product. Find out what your customers are saying, and address those issues immediately, even if the customer hasn’t attempted to contact you directly.
Take a Look at Your Customer Praise
You should also look at customers who’ve had success with your service. What features do they say are the most useful? What can you learn by monitoring their behavior in-app?
If you’re doing something right, people will tell you about it. Don’t brush it off. And don’t just turn them into testimonials. Everyone does that. Instead, use their positive feedback to improve your SaaS. Double down on the things that you do well, and do more of it. If your customer service is tops, find ways to make it even better.
Strategy #1: Increase Your Price
Really? Will raising your prices equal higher retention rates?
Yes and here’s why:
Raising your prices also raises your perceived value. If something is too cheap, it seems less important, and it’s easier for a customer to throw it away.
For example, are you more likely to get rid of a sweater that you brought from a fancy boutique for $250 or a sweater you grabbed from the big box store that cost $5.99? It’s harder to part with that pricey sweater because you’re more invested. It feels more important.
The same can be said about your service. If you charge more, your customers will likely feel like your service is more valuable.
How often should you increase your prices? At the very least, once every three years. But, depending on your market, you may be able to increase your prices annually. Here’s how to price your SaaS product.
And speaking of raising prices, consider upselling your new customers, too. An upsell will increase your customer’s lifetime value. While you can do it at the point of sale (test to see if this will work with your customer base), it’s often better to wait until after they’ve had the opportunity to try, use, and love your service. A well-timed email with an upsell offer can retain more of your customers for longer while also increasing their value to your SaaS.
For 6 tips on increasing your prices, check out the downloadable resource at the bottom of this post.
Strategy #2: Compare Yourself to Your Competition
Conventional wisdom says to stop comparing yourself to your competition. That sounds nice, but it’s not going to improve your retention rates.
Even if you’re not pitting yourself against your nearest competitor, your customers are.
Don’t delude yourself into thinking that you’re in a class all by yourself and that no one else does what you do. Of course, you have competition.
Competition is not a bad thing. It proves that there is an audience who needs your service.
Instead of ignoring your competition, acknowledge them. Prepare a comparison chart and publish it to your site. This will help prospective customers see the benefits of your product at a glance. But here’s how to make it count for retaining your customers:
Pick out the top three things that your SaaS provides that your competitors can’t match. Then send out an email to let your customers know about your competitive advantage.
Are you bragging? Yes.
But will it help customers stick around because you clearly offer the better deal? Absolutely.
You can’t wait for your customers to do the math. You’ve got to add it up for them. It may seem like shameless self-promotion, but if you look at it from a different angle, you’re actually providing a service for your customers. When renewal time comes, and they recoil at the higher price, you can help your customer see the value of your product and the inferiority of your nearest competitor.
Strategy #3: Prevent Involuntary Churn
Are your customers leaving without actually wanting to? That’s known as involuntary churn, and it’s a silent killer that’s bludgeoning your retention rate.
[tweetthis]Involuntary churn is killing your retention rate. Here’s how to stop the bleeding:[/tweetthis]
One of the most common causes of involuntary churn is a failed payment. Whether you’re dealing with an upcoming expiration date or a card that’s been canceled due to loss or theft, some payments fail without your customer even knowing about it. Instead of simply blocking access to your service (which doesn’t do much for your retention rate), give your customers a heads up on a failed payment. That way, they can deal with it as it happens or even before it happens.
With Stunning, you can reach out to your customers via email, text, or in-app to notify them of a billing issue. It’s better for them to find out before they attempt to login but find that their access has been denied. When confronted with a closed gate, a lot of customers will just shrug their shoulders and check out your competition.
To retain these customers, get Stunning and get in front of failed payments. Learn more about our dunning and pre-dunning features.
Before you go, check out these related posts:
- Best Practices for SaaS Subscription Renewal
- How to Inspire Customer Loyalty in Your SaaS
- Cancellation Vs. Churn: What’s the Difference?