Many SaaS companies have difficulty attracting new customers. Despite the fact that many of them receive a healthy number of new signups, they have difficulty converting the signups into active users. When you run a SaaS company, there are a few major goals that you should strive to accomplish.
If you don’t agree with these goals, there is a good chance that your business could be at risk.
Churn in the SaaS industry is quite common, and according to some studies, a tiny difference in your SaaS churn rate benchmark can have a dramatic effect on the valuation of your company.
In other words, a reduction in churn causes the valuation of your company to go up. It’s something we see happen with our ach integration customers all the time.
After considering this information, it should be easy to see the importance of making sure customer success, employees, marketers, and SaaS founders take all measures needed to reduce churn and increase growth.
There are several ways that you can solve the issue of churn and one of the best strategies is to empower your team and help them achieve greater customer success.
In most cases, churn prevention starts with the onboarding process. There are several strategies that you can use to help you beat SaaS industry average churn rates.
How Churn Occurs Within Your Company
We’ve already established the fact that churn is not good, but it’s really important to understand the different types of churn and what causes them.
In the SaaS industry, continuous value is extremely important. If your customers don’t continually see what value your product offers, they begin to lose interest and won’t want to renew their subscriptions.
You’ve undoubtedly heard people talk about first impressions and why they’re so important.
The reality is that the first impression formulated by customers can make or break the relationship. If customers sign up and endure a nightmarish experience, can’t see the value of your service, or don’t understand the context, you’ve lost your shot to retain the customer.
While some customers might give you another chance, you want to make the best first impression possible. Many customers will end their subscription because they don’t understand how your product benefits them. Once they start to experience buyer’s remorse, they’re much more likely to cancel their subscription.
A simple way to improve your churn metrics is to improve the value that you provide. Fortunately, improving the value provided by your product doesn’t mean you need to pay to add new services or features.
It might be easier to improve your existing service or product.
Another reason why customers might choose to leave your SaaS Company is because they perceive your competitors as better options. For example, maybe a competitor offers a money-back guarantee, lower prices, or more value.
If this happens, it’s a natural instinct to fear the competitors, but in reality, it’s a much better idea to find a way to gain an edge over the competition. One of the best ways to get started consists of producing smarter copy.
How to Gain an Advantage Over Your Competition
You should never fear our competition because it’s much more constructive to strategize and gain an advantage over them.
There are a few major ways to gain a competitive advantage. An effective strategy involves conducting surveys.
Another way to gain an edge over the competition is by adding personality. It’s true that many SaaS companies have become successful with boring text, but you can add personality to your copy and gain a strong edge over the competition.
All you have to do is inject your brand’s personality into the text, and it will foster a deeper connection with your customers.
Another strategy to producing an acceptable churn rate is to incorporate certain lifestyle triggers into the stories on your website. In other words, take a road trip, convert it into a lesson and use it to teach your audience something valuable.
At the end of the day, your goal is to find out exactly what makes your customers leave and implement changes that will solve these problems.
A Look into Real-World Onboarding
Contrary to popular belief, onboarding doesn’t actually revolve around the goals of your company. It’s actually meant to meet or exceed the expectations of your users.
During the relationship between the customer and your service, the customer will experience two major events.
The first event occurs when the customer signs up for your product, and the second event occurs when the customers achieve their first success with your product. The action that you take between these two events dramatically affects how well you’re able to retain your customers.
It’s best to keep things as simple as possible. By explaining exactly how to use your product, you can streamline the entire onboarding process and highlight the true value of your product from the start.
The very first CTA for your customers should be painless and quick.
Depending on the situation, it might be a simple greeting. Recent studies show that a simple welcome message can boost conversion by as much as 17 percent.
You should always be looking for ways to make your customers feel like they truly understand the core functionality of your product.
This is the moment they feel like all of the pieces of the puzzle have fallen into place. When this happens, the customer should feel like he or she has made real progress. Studies show that associating immediate value with your SaaS app helps to increase customer retention.
It doesn’t matter if what your customer does first is really valuable. It’s much more important for your customers to experience the feeling of accomplishment.
A great example is Instagram. When a customer uploads their very first photo to Instagram, they experience a strong sense of accomplishment. The same concept applies to users who send out their first tweet on Twitter.
Your end goal is to create an onboarding process that is as engaging and interactive as possible. You want to give your customers a strong push and make sure they have a very meaningful experience.
How to Maintain and Avoid Pitfalls
The process of customer onboarding has no end. If you own a SaaS company, you might not be able to get away with tweaking a handful of things. You’ll need to continue with the onboarding process, and there are several pitfalls that you’ll want to avoid.
If you feel like you’re running inside of a hamster wheel and making too many mistakes, then you won’t retain as many customers.
The first step involves realizing that you don’t have total control over everything, so some mistakes are bound to happen. It’s impossible to retain all of your customers, and many of the reasons why customers choose to depart are completely out of your control.
For example, many customers leave because a product isn’t the right fit for their needs. Others will leave because they’ve gone bankrupt and can no longer afford the service. There are even customers who’ll leave because they desire features that will never be built into the service.
You might even lose customers because the CMO wants to switch technology. It’s best to stay focused on the features that your team is capable of fixing and ignore all of the rest.
In many cases, the little actions can have a dramatic impact on customer retention. You can send your customers personalized messages and build a stronger relationship with them.
A great example of a small act of kindness is inviting your customers to talk to a representative over the phone. You should always strive to convert new customers into advocates for your brand. Always make sure to keep testing because you need to know what works and doesn’t work.
It’s useful to run A/B tests on your onboarding process and find out if customers would rather communicate via email support or live chat. You might even test to see if customers are more likely to come on board if they’re given a live demo.
In the past, almost all major brands would require customers to create a password and username before they would be given access. These days, you’ll find that many top brands allow users to sign up for a service using their Google, Facebook or Twitter accounts.
Another mistake to avoid is bombarding customers with onboarding tasks. You want to avoid paralyzing the onboarding experience with tutorials, webinars and countless notifications. The feeling of confusion will set in quickly, and the customer will discontinue use of your product.
It’s best to shoot for the small and progressive wins. For example, the first week might involve letting the customer know about some product features. During the second week, send them a tutorial. You want to let them gradually get to know your services.
What Does Successful Onboarding Look Like?
Fortunately, there are countless examples of successful onboarding, but you need to know where to look. A successful onboarding campaign should take the customer on an enjoyable voyage.
The purpose of the voyage is to make sure your customers gain the habits and knowledge needed to complete their objectives. If your customers don’t have a clear path from the start, you’ll have to witness your churn rate rise, which will reduce your revenue.
Asana is a great example of a successful onboarding process. All that they ask for is your email, and new users are greeted with a short video, which acquaints users with their purchase. There are endless examples that are just like this one.
Take Your Customer Onboarding to the Next Level
In a perfect world, all of your customers would purchase your software and adopt your product gracefully. Unfortunately, we don’t live in a perfect world, but by focusing on increasing customer satisfaction, you can get your SaaS metrics looking a lot more attractive.
Some of the best ways to increase customer satisfaction are avoiding common mistakes and giving your customers what they expect. If you ever want to increase customer retention, you need to focus on customer onboarding.