Retaining your customers is critical to achieving sustainable growth in SaaS, but it’s an ongoing challenge. Customers typically have multiple options, and even if you believe your product or service is superior, many other things are at play. Competitors can offer lower price points, enticing promotions, and aggressive tactics to convince customers to churn.
If you do not continue to improve your product by adding new features and functionalities while evaluating your offering versus competitors, you risk your customers not using your product until they ultimately churn
Customer loyalty programs and ongoing outreach can help, but if your SaaS company is not actively and aggressively pursuing customer retention tactics, it will be challenging to grow your revenue sustainably.
Churn kills profits. For every customer you lose, you have to replace them with a new customer just to break even. Yet, there’s a significantly higher cost for new customer acquisition, so your costs go up every time a customer churns.
With that in mind, here are actionable strategies for improving customer retention for your eCommerce SaaS business.
A customer's first impression after purchasing your products or services can set the tone for customer retention in eCommerce. A poor experience or a great experience becomes the foundation for customer expectations - so make sure that the first impression is great.
SaaS platforms must provide a streamlined onboarding process to demonstrate the value of the product and help users get started right away. The easier it is for users to start utilizing the product, the higher the probability that they will seamlessly integrate it into their workflow, enabling immediate value delivery.
Personalized onboarding support can also help create loyal customers and improve customer relationships.
For example, offering ongoing tutorials on using advanced software features can help users leverage the full benefit of your offer and impact how customers feel about your platform.
Customer support is about so much more than just answering questions, resolving issues, and collecting payments. Prompt and efficient customer support is often the difference between customer satisfaction and churn.
Offering customers ongoing education, self-service options for managing their accounts or subscriptions, and providing proactive customer service will boost your retention rates.
By running nurture campaigns post sign-up, you can also provide helpful and relevant information as part of your retention marketing. Email marketing, content marketing, blogs, webinars, videos, and social media outreach can help guide and support customers.
Many companies will use automated retention campaigns to nurture customers and implement customer success programs to proactively engage with high-value customers and offer personalized recommendations for retaining customers.
Data is key to your customer retention tactics. By analyzing data on behavior, patterns, and preferences, you can uncover warning signs that indicate a customer is about to churn. You can also use this data to identify key touchpoints in the customer lifecycle and find opportunities to enhance customer relationships.
For example, by analyzing historical data and segmenting customers, you can find the right time to send marketing messages that lead to renewal. Personalize offers to deliver specific product recommendations or features and provide tailored experiences to improve customer loyalty.
Predictive analytics can forecast customer behavior based on baselines of similar customers. For example, when a customer displays similar behavior that preceded customer churn in others, you can customize renewal strategies to keep users from leaving. In other words, you can intervene and take proactive measures before customers churn.
You can use data to measure key performance indicators (KPIs) to make sure customers track customer health.
By tracking key metrics, you can see what strategies work most effectively, such as:
Cleverbridge, for example, captures all of your key data points to provide a comprehensive look at your customers. This enables you to monitor trends at a glance or take a deep dive into detailed reports.
As an AI-powered churn reduction solution, Cleverbridge uses advanced machine learning algorithms to analyze complex customer data sets and generate valuable insights.
The power of AI lies in its ability to process large amounts of data far more efficiently than a human ever could. It analyzes past and present customer behavior, usage patterns, subscription details, and other relevant factors to create comprehensive customer profiles. This profiling allows for highly targeted and personalized customer interactions, improving customer satisfaction and reducing churn.
One of the standout features of AI in Cleverbridge is its predictive analytics capabilities. By learning from historical customer data, Cleverbridge's AI models can predict which customers will likely churn before they do. This allows businesses to proactively intervene and address potential issues, such as product dissatisfaction or lack of engagement, thereby preventing churn.
Furthermore, the AI system continually learns and improves. It refines its algorithms based on new data and feedback, becoming more accurate over time in its churn predictions. This capacity for ongoing learning ensures that Cleverbridge's AI keeps up with evolving customer behavior and market trends, providing businesses with the most accurate and current insights.
By tracking customers across every stage of the customer lifecycle, these insights become invaluable in developing and implementing your retention marketing.
With a firm understanding of customer behavior and by identifying red flags indicating churn, you can test personalized offers to increase renewals and employ various customer retention strategies.
A/B testing helps customer retention in eCommerce by optimizing the customer experience and helping determine which marketing approaches work best.
Once you know which offers produce the best results for segments of your user base and increase customer renewals, you can apply broader strategies to the rest of your customer base to improve your eCommerce customer retention.
It’s always less expensive and difficult to generate revenue from an existing customer than spend on new customer acquisition. The right customer success software can automate personalized cross-sell and upsell offers to your customers to increase lifetime customer value (CLV).
At the same time, when customers buy additional products or services, they become more invested in your brand. Not only does this grow revenue, but it helps increase customer retention when they make repeat purchases.
Employing automatic renewal can keep some customers from churning.
The right auto-renewal program can also proactively improve customer retention by reducing passive churn. Passive churn can make up as much as half of churn, such as expired credit cards or declined payments.
By employing renewal automation with engaged customers during the customer lifecycle rather than waiting for a payment to be declined or when churn occurs.
Automated tools and processes can be deployed during key touchpoints in the customer lifecycle to engage with users. When you engage with customers regularly, you generate significantly more loyalty.
This is key to retention and growth. Fully-engaged customers are shown to improve revenue profitability by 23% or more.
You want a renewal automation solution that provides:
More than eight in ten customers try to resolve issues on their own before ever reaching out to a support team member. Not only do they want the ability to manage their account themselves, but they expect it.
When it comes to managing subscriptions, renewals, account and credit information, it’s crucial to offer self-serve abilities. The more difficult it is for customers to renew, the more likely they are to churn.
So, if they have to call to renew, they likely won’t.
How bad is it?
One recent study said that 42% of customers would rather clean a toilet than have to call customer support for anything.
A Harvard Business Review study showed that customers who can’t figure out how to use self-serve tools and have to call customer support are 10% more disloyal and likely to churn.
Self-service also provides a long list of benefits for businesses, including:
SaaS platforms, products, and services must always monitor customer satisfaction to reduce churn and improve retention.
As such, it’s important to regularly contact customers to see how they feel about your product. Smart companies will gauge customer satisfaction at key touchpoints, especially when customers show warning signs of churn.
User feedback can be collected in various ways, including surveys, reviews, email, social media, and word of mouth. The best customer success platforms will also allow you to independently analyze the data that may indicate customer dissatisfaction.
For example, if a customer’s usage level drops or seems to have difficulty completing simple tasks, it’s a red flag that should trigger interaction.
Companies that gather user feedback and take proactive action based on what their customers tell them are among the most successful SaaS businesses.
This feedback can form the foundation for product enhancements and educational materials for existing customers to enhance their product use.
Another important retention strategy is to talk to customers that do not renew or are inactive.
When someone cancels their subscription or deletes their account, for example, knowing why they did so is important information that can help you prevent others from churning or recapturing lapsed customers.
Cancellation surveys are an excellent tool to gather feedback from customers who have canceled their subscriptions or service.
It aims to understand the reasons behind their decision to churn, which can provide valuable insights to help the company improve its products, services, or customer support.
Cancellation surveys typically ask questions such as:
The responses from these surveys can reveal patterns and common issues that are driving customers away. For example, if many customers leave due to poor customer service, the company will know that they need to invest in improving their support. Or if customers are finding the product difficult to use, that suggests a need for better user experience design or customer education.
If you find that customers are leaving because of the price point, you may consider offering a one-time discount if they renew.
If they churn because they find particular features or benefits lacking, you can intervene and show them how your platform can do what they need.
So, your customer retention strategies should go beyond just asking for the renewal; they should uncover the reasons why customers choose not to renew and offer personalized recommendations to get them to reconsider.
Showing appreciation for your most loyal (and highest-value customers) also engenders even greater loyalty. A customer loyalty program encourages customers to engage more frequently and make additional purchases.
Enhancing the customer relationship with your best customers protects your user base and creates greater customer satisfaction. This leads to increased loyalty and customer lifetime value. It also produces brand advocates who will share your message with colleagues and friends or through social media and reviews.
A consistent focus on customer retention and a customer success platform like Cleverbridge can ensure a stable revenue stream and build loyalty, advocacy, and customer retention.
Auto-renewal, retention automation, and customer email cadences can help nurture and improve customer relationships at the optimal time to improve retention, up-sells, and cross-sells. Artificial intelligence (AI) and machine learning (ML) allow continuous delivery and testing, creating optimized campaigns for constantly improving performance.
The Cleverbridge customer success platform is designed for eCommerce and SaaS platforms to orchestrate and automate their subscriptions, payments, and customer retention strategies to maximize customer lifetime value and build a sustainable growth plan.