Here’s What SaaS Companies are Doing to Increase Retention
May 8, 2019 | Contributed by: Bill Dinan
According to the US Small Business Administration’s 2018 Small Business Profile, there are 30.2 million SMBs in the US. A number this high provides a massive market opportunity for SaaS companies who sell their services to these business, but that doesn’t mean the road to get there isn’t without common challenges.
Arguably the biggest problem SaaS companies currently face is improving customer retention. And, as we know, it’s far easier to sell to an existing customer than to gain a new one. In fact, the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is significantly less at 5-20%.
However, companies are starting to get more creative in their attempts to reduce churn and hold onto customers for the long-term. Here are a few of the tactics being utilized.
Improving Customer Service
In order to retain customers, it’s imperative that companies provide great customer service, and assist their customers in realizing real value from their product. Small business owners are focused on their number one priority – running their businesses. It’s up to SaaS companies to provide them with readily accessible customer service options that put them at ease and address any questions or concerns they may have regarding the software.
Providing Additional Pricing Options
With these types of services, one size certainly doesn’t fit all. Small businesses differ greatly in terms of their needs, so it’s important that pricing options reflect that. By offering customized, tiered or tailored pricing (one of SMBs greatest pain points), SaaS companies can increase their chances of obtaining customers for the long haul and lowering churn.
Visual Communication of ROI
Small business owners want to know that the they are investing is providing positive results and helping them solve their problems. Companies shouldn’t simply tell SMBs what’s going on but physically show them.
At a previous LSA event, a representative from Google presented data that showed a direction correlation between lower churn rates and more frequent results reporting. It highlighted that frequent reporting led to higher ratings and satisfaction with the provided reports. Over half (54%) of Google’s customers rated reporting as excellent or very good when they received weekly reports.
The more satisfied a customer feels with their results, and the means in which they are communicated, the better the likelihood that they will remain a customer.
Just because a customer purchases a product, doesn’t necessarily mean they are going to use it. It is therefore up to the SaaS companies to ensure that these SMBs are engaging with the software and fully understand the different components that can be utilized.
Regularly reviewing your customer’s goals and confirm that their products are assisting them in achieving those goals is important. Customers often need reassuring that you’re there to help provide changes in software or feedback to improve processes in real-time. You want to help resolve their questions/issues in a timely manner (at the speed of business) and thereby increase their brand loyalty, or risk them changing providers when that time arises.
There will, unfortunately, always be a reason for a customer to leave, whether it’s lack of engagement, poor customer service or a competitor with a better offer. By providing your customers with real value, real engagement and timely support, you can transition from a one-time, simple purchase to the long-term partner these small businesses want you to be.
Hear local businesses tell their stories, as we help you answer these questions and investigate other ways you can use customer-centric techniques to reduce churn and increase engagement at our upcoming LOCALOGY ENGAGE: SaaS/SMB event in Washington, D.C. on June 3-4, 2019. If you’re interested in attending use my code 200DINAN and get $200 off your registration.