Every SaaS has the information available to improve what they’re doing from the customer’s perspective, but are you really unlocking this potential?
Tracking and analysing customer data is one way Saas can get the information required to adjust, improve or even pivot to achieve better growth and retention rates. SaaS who are more successful tend to be those who are better at using customer data to their advantage.
How can you make better use of your customer data? We’ve got a few thoughts based on what we’ve seen working successfully for SaaS:
Know Your Current Numbers
We’ve all heard the saying “that what gets measured, gets managed” and that’s the point of knowing where your current numbers are at first.
You should know your growth rates, churn rates and retention rates so that you can attribute any improvements correctly to actions you have taken based on your data.
The number that most owners and investors are particularly interested in is churn. How many customers were signed up and how many of those left? What were their reasons for leaving? If you don’t have a good grasp on why people are leaving, putting a mechanism in place to record this is a good start.
Understand Critical Behaviors
Each SaaS will be different in terms of the customer behaviors which are considered critical indicators for retention. Your starting point is understanding what those are for your SaaS. This could be defined as the list of actions or behaviors a customer must take to increase the chances that they will stay with you.
Typical items might include:
- Completion of your onboarding process. Customers who complete onboarding are more likely to renew than those who don’t.
- Weekly or monthly usage statistics. This will be a variable depending on the SaaS, but you will usually find a usage pattern which is indicative of those who stay compared to those who leave.
- Critical tasks. Which tasks within the app are critical for those who stay? For example, are they leveraging your platform analytics?
- Usage rates of any new functionality.
- Engagement with email or other forms of communication.
Create Defined Processes
Any data you gather is really only as good as the process you have for ensuring accuracy and actually taking action on it. Electronic data gathering and predictive analytics give us several advantages now which weren’t so easy to come by in the past.
Have in place a clearly defined process for data gathering and reporting so that you’re not essentially just playing with numbers. SaaS with larger teams will probably allocate this task to customer success or even marketing so that they have the opportunity to drill down on any churn indicators and act through customer segmentation and better personalization of messaging.
An overall aim of your process is to gather data relevant to those critical metrics and actions you’ve already identified so that you can make a plan of action to improve them, then monitor the results after that plan has been enacted.
Remember Non-Electronic Contact
It’s relatively easy to set up processes for gathering data on in-app and electronic communications, however you need to remember those non-electronic communications which can provide valuable added information.
For example, what if you’re dealing with a customer over the phone or face to face? How do you incorporate that feedback into a process? Sometimes it may be the case that customers are complaining, reporting an issue or even cancelling over the phone and you could miss valuable, actionable information if you don’t have a way to record it.
The bottom line is that for the sake of accuracy, you need to have a process in place to record all customer interactions. If you do so, you can then watch for any patterns that emerge between your verbal feedback and the actions you are able to record electronically. Is there an effect on usage statistics or a clear correlation leading to churn?
What is the bigger picture of overall customer health? How do all the moving parts affect engagement, retention and upsells?
[tweetthis]Does your SaaS record data from non-electronic contact?[/tweetthis]
Qualitative Data Matters
Kissmetrics examined different types of data and had this to say: “Qualitative data connects you with your visitors and target customers. You can learn why they do what they do…”
Qualitative data steps in because the quantitative metrics you gather, such as app usage statistics, don’t tell you the full picture. They might tell you the what, but they sure don’t tell you the why.
You need to know more about the emotions behind customer decisions, why did they check you out in the first place, or take any action with you? You need a broader picture so that your own potential biases don’t get in the way of decision making.
That qualitative data comes from those non-electronic interactions. It comes from feedback in the form of emails or surveys and any other format where a customer is able to provide something that is raw and in their own words. (You could even use a tool such as Retained which helps to gather feedback on customer sentiment).
Data for the Win
Of course, the key to really using customer data successfully lies in what you do with it. How does it tie back to key goals, such as improving satisfaction and retention rates?
Kissmetrics recommend a starting point with qualitative data; using it to enhance what you offer and increase conversions through:
- Product / Market Fit
- User Experience / User Interface
- New Features
The second two are about better user engagement and retention too, particularly if they’re rooted in how the user really feels and experiences your product. It’s not always easy to put yourself in the customer’s shoes, and, as mentioned, without actual qualitative data, you risk paying too much attention to your own biases.
Google’s Marissa Mayer worked this out quickly and deliberately chose to use a dial-up connection in order to experience and really feel what many of Google’s users did. (Ugh, no word on how many laptops were harmed during this experiment!). Her experience along with user feedback formed a big part of the reason Google decided to put a lot of focus on page speed with their products.
We would add to those three and say that collecting good qualitative data will help you to better define customer success for your SaaS and have it underpin those other three suggestions. You’ve got to know your customer beyond the actions you see them take and understand what really appeals to them on a personal level.
Customer data tracking is imperative for SaaS who want a deeper understanding of their vital numbers and what they can be doing to improve them.
It starts with knowing what your goals and core metrics need to be, along with any critical indicators which contribute to them.
Many of these will be quantitative measures which are relatively simple to track using electronic means, however these only provide you with part of the picture. A fuller view comes when you record qualitative data too and can understand your customer’s “why.”
Use your data to take action to improve user experience overall, and you can improve your vital numbers such as retention and churn.