SaaS companies have one common enemy: customer churn.
The higher the churn, the bigger the hole in your revenue bucket, causing your recurring revenue to leak out.
To minimize the number of customers leaving, companies should seek to be ‘sticky,’ giving their customers reasons to keep coming back.
Luckily, I had the opportunity to interview founders, product managers, and customer success folks at high-growth SaaS companies, who shared their experiences, and the strategies they implemented to increase customer stickiness.
I’m so excited to share this with you.
Let’s dive straight into these seven strategies:
- Implement customer feedback
- Communicate product updates
- Invest in customer education
- Invest in high-touch customer success
- Make your product stickier
- Use customer exit surveys
- Create a customer ambassador program
1. Implement customer feedback
If there’s one thing successful companies do well beyond offering a great product and customer service, it’s listening to their customers.
Customers are churning more than ever before. To avoid this, SaaS companies need to start listening to their customers. And there’s no better way to do this than by collecting customer feedback.
Collecting customer feedback can help you understand:
- What customers think about your product overall.
- Which areas need improvement.
- How they use your product, and if it aligns with their needs.
- What features are the most important.
- What additional features, integrations, and functionalities they want implemented.
But here’s the thing – not every customer will reach out every time they want to report a bug or request a new feature.
You need to make it easy to submit feedback.
For example, Usersnap has implemented their own customer feedback solution that allows them to collect valuable insights with micro-surveys, in-app screen captures, and feature request boards.
Here’s another example. Databox has built a product roadmap page where customers can submit their requests and suggestions:
A few strategies you can implement to collect customer feedback are:
- Implementing a customer feedback software like Usersnap
- Scouring review sites like G2, Trustpilot, and Capterra
- Listening to sales & success calls
- Customer interviews
- Customer surveys
Modash also uses a #customer-feedback Slack channel where all customer-facing team members consolidate the feedback they hear in one place.
That’s not where your journey ends, though. Collecting feedback is just one half of the battle. It’s impossible to implement every piece of feedback you ever get.
You need a system to separate the useful from the useless, and identify which suggestions are the most important to implement.
Here’s a few tactics that might help. You can think about prioritizing based on:
- Potential revenue impact
- Alignment with company strategy and goals
- Feasibility & effort
The Usersnap team also segments their customers. They consider feedback from returning customers higher priority, since these customers are likely to share more sophisticated suggestions.
After successful implementation, the next step is to communicate product changes with your customers.
2. Communicate product updates
There’s no point in making improvements if your customers don’t know about them.
Ryan Prior from Modash says that communicating updates creates a feeling of excitement, progress, and ultimately – stickiness:
Since implementing a biweekly newsletter with product updates, our success team reports that customers are excited by the pace that we’re improving our product. Funny thing is – nothing changed about the pace. Only how well we communicated it.
Here’s some of the standard ways you can communicate product updates:
- In-app notifications or tooltips
- Customer newsletters
- Building in public
- Social posts (company pages and personal profiles)
- Dedicated blog posts
- Personalized outreach
Let’s look at some real-world examples of SaaS companies communicating updates in different ways.
MealPro App – dedicated customer emails
Some quick tips for sending customer update emails:
- Let your customers know that you made changes to your product based on their feedback.
- Be clear and concise.
- Thank your customers for their feedback.
- Ask them to reach out to you in case they have any questions.
Airtable - in-app notifications
Airtable uses in-app notifications to inform users where they can find new automations and integrations.
Gigasheet - Slack community
It’s a convenient way to get updates where customers are already spending a lot of their time (in Slack channels).
In all of the examples above, communicating product updates helps companies:
- Show that they are actively working on improving their product. Demonstrate that they value their customers’ inputs.
- Ensure that their product fits their customers’ needs.
- Maintain great relationships with customers.
Note: if you’re beta-testing product changes, communicate the changes only to the customer segment(s) that it immediately impacts. Let them know they’re a part of beta-testing and that their feedback matters.
3. Invest in customer education
Jason Hines says that SaaS companies have just 30 days to get integrated into their users’ workflow.
If you don’t deliver value in 30 days, the chances of churn are at least 50% higher. With a sales-led product, it’s really important that you have a tight playbook on what happens after purchase and that your solution begins to show value quickly. If it’s a product-led sale, you need to deliver value before the customer makes a purchase.
Irrespective of whether a majority of your purchases are product-led or sales-led, the first 30 days are crucial.
That means you need to do everything you can to make sure that customers know how to use your product successfully. That’s where customer education content comes in. This involves:
- Educational video series
- Knowledge base articles
- Customer success webinars
- Onboarding emails
- Customer-focused blog articles
These content types will reduce your support ticket volumes, and enable customers to get instant self-serve answers to their questions.
Modash, for example, have:
- A knowledge base
- An online educational video academy
- Recorded videos in-app
Ryan shares his thoughts on why this is important:
Influencer marketing is a new space, and there's room to get it wrong. No matter how good our product is at finding, analyzing, and monitoring influencers -- there's still more involved in running an influencer program. We help people fill those knowledge gaps with content.
Nail customer education during onboarding
To turn new customers into habitual users, SaaS companies should have a great customer onboarding program. A few companies that do it well are ClickUp, HubSpot, Modash, Notion, and Webflow.
One great method is to prepare a series of educational videos on how to use your tool, and share it in a welcome series.
Try signing up to ClickUp for a good example of educational video resources. The first welcome email you’ll get from them includes a product .gif, and links to other useful video tutorials.
Depending on the complexity of your platform, you can choose whether you want your onboarding and customer education to be self-serve / low-touch, or high-touch. Content helps a lot with low-touch models.
4. Invest in high-touch customer success
88% of respondents from HubSpot’s State of Service survey reported that customers have higher expectations than they ever did before.
Sure, you can have a self-serve onboarding program, knowledge base, and helpful videos. Also, you can have a front-line support team ready to react to customer questions.
But for high-value accounts using products that have complicated features & integrations, that’s not enough. It’s essential to invest in high-touch customer success in those cases.
You can do this by offering them a dedicated Customer Success Manager, and success plan.
Offering this level of engagement is expensive. So, it only makes sense to invest in high-touch customer success if your ARPA is high enough.
And even if you have the resources and budget, it’s important to note that not all your customers need dedicated support and onboarding.
Hence, first, you should segment your customers based on factors like revenue, customer lifetime value, the likelihood of churn, and the complexity of the product purchased.
Once you do that, you’ll have a much better understanding of which customers need high-touch engagement and which ones don’t.
5. Make your product stickier
To reduce churn, SaaS companies should build products that stick.
I’m talking about the good type of product stickiness here.
You don’t want your customers using your product just because moving to another platform will be too hard or expensive for them.
Instead, you need to create products that give users a good reason to log in every day or every week. That means building enough of the right features.
According to Klaus-M. Schremser:
SaaS companies should offer their customers enough and the right features (the ones that are valuable to them) to make them come back for more. One of the big challenges we were facing when we first launched Usersnap was our customers were using our platform on a project basis for development feedback; after which they canceled their subscriptions. That’s why we listened to customers’ feedback carefully and after we got enough clarity, we pivoted to a customer feedback solution.
Ryan from Modash reported that they faced a similar challenge.
Modash started as a tool for finding & analyzing influencers. The nature of that use case means that people can buy, find a bunch of influencers, then cancel. Then come back a few months later when they need more, then cancel again. To create a 'stickier' solution, Modash built an influencer content monitoring tool that helps marketers track their campaigns. That gives customers a reason to keep coming back every week (even when they're not actively recruiting).
Build features that keep your customers tied to your platform in a good way.
Features aren’t enough; consider UX too
You’ll never achieve product stickiness without a slick user experience.
That starts with the very first sign up, and has a big influence on activation rates. I reached out to Ryan for his input on how Modash thinks about this. He shared a specific example of how a UX improvement improved their trial activation rates from 38.7% to 51.9%:
We have lots of trial sign ups from free tools like our Fake Follower Checker. Users search a profile, and get a fake follower percentage. They can sign up to get more data. Problem was: they went through the regular sign up flow, and had to re-search the same influencer a second time. Now, we built a UX where the user can continue with the profile they searched in 1 click. Activation grew from 38.7%, to 51.9%.
Every SaaS company should identify and fix UX issues (throughout the product, not only during activations) to deliver a great user experience.
A few other ways to create sticky products are:
- Track their customers’ journey to understand where they’re dropping off. This can be done via tools like Smartlook and FullStory.
- Focus on solving a frequent problem.
- Make sure their product fits well into their customers’ workflows.
6. Use customer exit surveys to find why your users are churning
Even the most successful SaaS companies experience customers canceling their subscriptions. Some churn is outside of your control, so don’t stress about every single customer who leaves – but you should still take the time to understand why.
Klaus-M from Usersnap recommends using churn surveys for this.
Running churn surveys can provide companies valuable insights into why their customers are leaving or downgrading their plan.
Some common reasons that you might hear on a churn survey include:
- Too expensive
- Stability or reliability issues
- Missing features
- Too complicated to use
These answers can help you figure out what to do next in order to make your company stickier.
Use your survey to offer an option to pause their subscription
While you’re asking customers about their reasons for canceling, you can give an option to pause subscriptions. Here’s an example from StreamYard:
Data from churn surveys is invaluable. It can help you identify patterns and predict churn in the future. If 90% of your churned customers left you because your product is too glitchy, you need to address these technical issues.
Running churn surveys is beneficial because it can help companies:
- Understand the reasons why their customers are churning.
- Address these issues to retain their customers.
- Assure customers that they care about problems & will make extra efforts to solve them.
7. Create a customer ambassador program
Customers who feel special will keep buying again & again.
Navattic does a good job of making their customers feel special.
They run a customer ambassador program that is centered around thanking and celebrating their customers.
Natalie, Head of Growth & Operations at Navattic shared a little about their program:
Once a quarter, we do a virtual customer event where we get these ambassadors together. A majority of the event is something fun (for example, we did a virtual chocolate tasting last month). But we also had one customer share an innovative new Navattic use case. It hasn’t been long enough to collect data on the success, but we have already seen customers sharing ideas and implementing new projects because of the event.
Last quarter, Navattic invited a segment of its customers for a virtual chocolate-tasting program. A few days before the event, they sent chocolates to every customer attending the session. They had a culinary expert walk every attendant through tasting different chocolates over Zoom, which most of Navattic’s customers stated to be a “fun experience.”
Running a program like Navattic’s has several benefits:
- You can encourage customers to exchange ideas with each other, sharing use cases, and increasing product usage.
- You enable networking between customers, who often will be similar companies.
- You’re making your customers feel special. When your customers see you making extra efforts, they’ll be more likely to stay loyal and continue using your product.
Don’t let your customers slip away!
Increasing customer stickiness is on almost every SaaS practitioner’s agenda. Creating a stickier experience helps to increase recurring revenue, customer lifetime value, and build a positive brand reputation. Which strategy will you implement first?