You’ve heard the speech about renewals over and over. No one needs to tell you that a successful renewal strategy is critical to the growth of a SaaS company. Or that it costs five times more to recruit a new customer than to retain an existing one. However, research shows that many companies are still not giving renewals the focus they deserve. That’s a shame, because implementing a winning SaaS renewal strategy really comes down to acknowledging just two facts about why you are losing customers.
While there may be a list of possible reasons customers select in their exit survey, they pretty much fall under these two scenarios:
A poor onboarding experience is like a ship that leaves port with a hole in the hull Tweet. It might float for a while, but eventually it’s going to sink. Don’t let this happen to your customers. Here are three ways to avoid it.
Users are patient and accommodating when they know what to expect. Don’t make claims that you know aren’t attainable. Be realistic about setup time. If you say it takes two minutes to get started, be sure that’s all it takes. If it will take a few weeks for users to see concrete returns, your sales team should make it explicitly clear in conversations with prospects that your solution is a long-term investment. Surprises will frustrate users from the beginning and sour them on the idea of sticking with you.
Users appreciate those aha moments when they discover or are exposed to a feature than can help them complete a task or solve a problem in a novel or smarter way. If possible, you should create as many of these moments as you can throughout the onboarding process.
How? You must fully understand the problems and buying decisions of your target audience. Map out their conversion journey based on what you know about their persona and use that data to deliver personalized tips via email, live chat, or within the product itself. App designers often use this method to acquaint new users with their products. Think about the last time you set up a new phone or Google got a redesign. These designers often guide you through the product, revealing functionality you had no idea existed. Create these eye-opening moments for your customers and you’ll not only gain their loyalty, but you’ll get their referrals too.
Not only do you need to be sure your users can easily contact you via e-mail, on the phone, or within the product, but you need to reach out to them early and often. Not hearing from a customer after they’ve been with you for two weeks isn’t necessarily a good thing: that silence might mean everything is going fine, but it might also mean they’re already disengaged and planning on dropping you. The adoption period is the most important time for your customer success team to form a relationship with a customer, and answer questions before they even arise.
If you are losing a customer, it most likely is because they’re not seeing the full value of your product Tweet. Value is closely related to your onboarding process, like we discussed in the above steps. However, value can diminish over time. Like any relationship, you need to take steps to nurture it.
And not just by having a stellar product. Customers need to see, in concrete terms, what they are getting out of your solution on a regular basis. For instance, Zendesk, the support ticketing software, regularly sends emails to its customers with stats on how many tickets they’ve solved and the average ticket response time compared with the previous month. By frequently reminding customers of its value, Zendesk knows few are even going to think about going without it. The bottom line is that concrete numbers can go a long way toward making your solution seem indispensable to your customers.
Upgrades shouldn’t just be a strategy for bringing in additional revenue. They should offer features that add value, and make the user feel more invested in the product. With each upgrade, your product should become more of an integral part of their business workflow, which means upgrades must be presented as valuable tools and not just fancy add-ons. After a customer has been with you a while, offer logical upgrades based on what they use most. If they are particularly favour your software’s analytics feature, for example, promote to them an upgrade that can give them even more useful insights. Perhaps even make it a free trial, so they can see exactly how useful that extra feature will be before they commit.
Users are greatly affected by their peers. Create a community that reinforces the value of your product. Feature tips and tricks in your blog, and link to it from your social network. Ask for customer feedback about how they are using specific features. Feature testimonials and guest blog spots. Let your users hear from their industry peers.
Keep users in the loop when you are developing a new module or functionality. Ask power users to test out new features and provide valuable feedback. This will make them feel like part of the process, as well as provide you with crucial insights. Gain customer loyalty by showing you take their problems, feedback and comments seriously Tweet .
The two main culprits of low renewals are a poor onboarding experience and a lack of perceived value. If you can proactively engage new users from the start and keep showing them the value of your service, renewals will happen naturally. After all, customers want to stick with the solution they’re already using—you just need to show them that it’s worth it.
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