SaaS Customer Retention – 14 Battle Proven Strategies from Top Experts

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Masooma Memon
May 26, 2021
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Within this article you'll find 14 SaaS Retention Strategies that Boost Growth from top companies.

Building relationships with your customers is at the heart of most SaaS retention strategies. So start with personalizing your onboarding process, sharing a welcome video, engaging regularly with users, and offering support.

14 SaaS Retention Strategies that Boost Growth

So you’ve got tons of new users signing up daily and a stellar onboarding process that shows them how valuable your product is. High-five!

 

But did you know that without employing any meaningful SaaS retention strategies, you aren’t doing anything to keep those hard-won customers?

 

Before long, those users will become water in a bucket full of holes. They’ll slip through leaving you to acquire new customers, which costs five times more than retaining customers.

 

The solution, you ask? Leveraging SaaS customer retention tactics to keep customers.

 

But we understand that starting out cold can be a bit like shooting darts in the dark. So we’ve done the legwork for you by putting together 14 proven SaaS retention strategies that are working well for other SaaS businesses (and will for you too!).

 

Ready to learn? Dig in.

1. Talk to your Customers


You’d assume your customer relationship building responsibility is over once you’ve reeled in and onboarded a user. Except, if you’re serious about retaining customers, you need to continue building strong relationships with customers.

 

The team at AirFocus, for instance, regularly talks to their customers. “Businesses often focus on selling the software that they stop trying to grow relationships with their clients once the purchase is made,” shares Malte Scholz.

 

However, we believe that the best recommendation is word of mouth and what better way to get it than by building strong relationships with all our clients.”

 

Besides word of mouth recommendations, building relationships with customers helps you keep users engaged – an essential for retaining SaaS customers.

 

In fact, AirFocus’s team saw this as an additional benefit of talking to their customers. “A huge percentage of our customers referred one or more clients to our product. Plus, they all kept renewing subscriptions regularly which was an indicator that the interaction gave very good results.”

 

Action step: Keep in touch with your customers. Ideally, it’s best to pick up the phone and talk to them. Otherwise, a value-packed (less business-sy, more relationship building centered) newsletter works just fine. If your target audience tends to be active over social media, keep in touch using a Facebook or LinkedIn group.

 

2. Use Video to Personalize their Experience After Signing Up


Image: Pexels.com



Users typically expect a generic, welcome email after they sign up.

 

You could go with the flow. Or, you could get the customer retention ball rolling right off the bat by surprising users with a personalized video welcome message.

 

Admittedly, only 20% of businesses leverage videos in their product management process. This means using a video to welcome customers will give you an instant edge over others.

 

Not to forget, video messaging introduces a human element to the early onboarding process. Not only does it engage customers immediately, but it also encourages them to talk to you.

 

Wondering how well the strategy works? Hear it from Bonjoro’s team that has employed the strategy and seen a “0-3-month churn improved by about 14% across a sample size of several thousand customers,” Casey Hill highlights.

 

Hill talks about how video for a personalized welcome message works: “The best strategy we have seen to improve retention and CLTV, is to personally thank each new sign-up with a quick video email.”

 

Here’s how the team executes this SaaS retention tactic (and you can too): “We use Bonjoro to do this and find that this creates a human connection off the bat, makes the customers more likely to reach out when they need help, and makes them feel closer with the brand.

 

We also add CTA (Call-to-Action) buttons on those intro video messages to encourage them to join our Facebook community so they are more engaged and have a wider network of support.”

 

Action step: Use video to welcome customers.

 

3. Make Sure it’s Easy to Invite the Rest of the Team (B2B)

Bitter truth: If your customers experience friction (even a minor problem) in inviting their team to your product, they’re mostly likely to make a beeline for the exit.

 

Warren Wu from CoastApp agrees: “The quickest way to make your new users churn is if they’re unable to get their team into their account fast.”

 

To retain users, it’s crucial you ensure inviting others to your app isn’t rocket science – but a simple, (ideally) one-step affair. “Make sure the invite user flow is bulletproof and multiple reminders are sent to the invitee to make sure they join their team,” Wu adds.

 

And does this SaaS customer retention strategy work? You bet. Take CoastApp itself. Their activation rate went from 10% to 15% simply by making it easy to invite team members to their app.

 

Action step: Revisit your product’s invite-your-team workflow. Take each step yourself and see if you get stuck along the way or a step takes an extra effort. Simultaneously, get feedback from users. Ask them if they got stuck somewhere while adding their teammates. What could you have done better to ensure a smooth process?

 

4. Educate your customers

Image: Pexels.com

Educating customers comes with a boatload of benefits like:

 

  • Customers start seeing you as an expert in your area, therefore, trust you better.
  • Customers see that you offer them value every step of the way – proving that you’re invested in their success, which retains them.

 

No wonder, Mags Espada recommends educating customers as one of the best SaaS retention strategies. “Education is vital; create video tutorials to help your customers learn more about your product features and apply them.”

 

And it’s not just Espada who focuses on educating (and offering free value) to their users, but several other SaaS businesses.

 

CoSchedule, for example, hands out free templates, worksheets, and checklists to their audience. They’ve gone on to offer a free headline analyzing tool as well.

 

Similarly, Trello covers blog posts that teach users how to use their boards in different ways – from managing content production to handling support, HR and operation.

 

The results, you ask? Happy customers that stay longer than you can expect according to Espada.

 

Action step: Start creating resources to help customers – these could be video tutorials, text-based guides, even checklists that highlight using product features.

 

5. Increase product adoption with defined documentation

I recently downloaded a habit tracker that looked exactly like what I was looking for. Set up was relatively easy, but when I revisited the app, it made no sense to me.

 

Where and how was I supposed to track the habit that I added? All I could see was ‘2 FREE HABITS REMAINING.’ Disappointed, I hopped on to Google to see if I could find some resources from the product company that could guide me.

 

But I found nothing.

 

Guess what happened next? I ditched the app altogether. If this were your app, you’d want to retain users. And a simple way to do it: provide detailed documentation. For example, if I google ‘how to start a new Google Meet meeting,’ I get my hands on Google’s support docs instantly – that’s documentation done right.

 

Not convinced documentation helps retain SaaS users? Let's look at a #IRL example of Userpilot.

 

Andrea Saez explains, “[We have] a very defined set of pages that answered how our product complemented various development frameworks, as well as a set of language guides that helped complement that. People use different methods and strategies, so reducing the friction with an agnostic tool was important.”

 

And the results? “It certainly reduced the friction in adoption (and retention) with teams that use different methodologies,” Saez points out.

 

“[Customers] can sometimes get a bit stuck with their own internal lingo and how to translate that to a tool, so having a guide was incredibly helpful.”

 

Action step: Start documenting using your product covering each small step along the way.

 

6. Define a Very Detailed Onboarding Process

40-60% of the users signing up for a SaaS app open it once. That’s roughly half (!) of your users signing up, but never using your product.

 

As heartbreaking as it is, it’s certainly avoidable with a smooth onboarding process.

 

The aim: take customers from step 0 to their ‘aha moment’ so they can realize the full value of your service as easily and quickly as possible.

 

Triangle IP manages this in three steps. Thomas Franklin elaborates: “Once onboarded:

 

I.     We engage with customers across multiple channels.

II.     Send a set of personalized three welcome and essential training videos to them (it’s challenging, but our customers appreciate this).

III.     Finally, we keep them in a loop of feedback and improvements.”

 

In the same vein, MoreBusiness recommends a “detailed 30-60-90-day customer onboarding plan to make your clients successful with your SaaS product,” writes Raj Khera.

 

And to make sure you aren’t doing guesswork, “monitor their usage to ensure your DAU/MAU ratio (daily active users divided by monthly active users) is at least 25%.”

 

The results you’ll get from implementing a thorough onboarding process will help you retain engaged users in addition to other benefits.

 

The team at Triangle IP, for example, was “able to add three more new features to our existing product in the last six months. These features were based on the feedback we received.” Therefore, creating a product that satisfies users.

 

Remember, “Adoption is critical to retention. If they’re not using your product regularly, they won’t renew,” Khera summarizes.

 

Action step: “Provide your customers with helpful information that helps them do their job better. It could be some training videos, relevant content from the industry, or a product feature,” in Franklin’s words.

 

7. Get in touch with customers right after they Sign Up

This could be a subtle welcome or thank you note as we suggested above. Or, you could proactively reach out to new customers, offering help.

 

Again, the strategy humanizes the onboarding process. It also shows that you value customers and are committed to helping them succeed.

 

Now, you’d think a formal email would do. But retaining customers and turning them into product loyalists requires you go the extra mile. How? Take a page from RecurPost’s SaaS retention strategies.

 

“The best retention strategy for us was to get the users started the right way. We started asking all of our new users to get on a call with us as a lot of cancellations were from new users,” comments Dinesh Agarwal.

 

“It may sound like we have a UI or UX problem, but working a lot in that regard did not help us.” Agarwal recalls. “We then asked around and figured Startups are really good at blaming themselves for the issues.

 

Our offering wasn’t simple for them to understand and thus they needed the initial hand holding. This has by far been the best strategy for retention.”

 

By using this tactic, RecurPost “reduced cancellation rates by more than 50%.” What’s more, Agarwal adds, “Our LTV went up by over 25% in just one quarter consequently.”

 

Action step: Work on your cancellation rate to retain customers. The best way to do so is ask your customers what’s helping and what’s hindering them. And, if you have to, “start removing [product] features” until your cancellation rate gets better, Agarwal advises.

 

8. Use Case Studies to Retain New Customers

Case studies work in multiple ways:

 

  • Provide social proof or the psychological validation that most people seek before they do business with others.
  • Visualize others’ success story – showing how viewers can benefit like the business featured in the case study.

 

Besides, customer’s love case studies and testimonials – simply anything that means someone else is talking about your business. In fact, 37% rate testimonial videos as more authentic than a business’s self-pitch.

 

EmbedSocial’s Danche Azmanova echoes the same: “Rather than simply talking about our products’ benefits, customer success stories and testimonials allow us to provide evidence of how real clients have used our products and services.

 

A well-written success story shows how our brand can accomplish what we say based on real stories and accurate results. These stories help our customers to remain even more loyal and spread positive word of mouth.”

 

It’s no wonder, the SaaS business taps into their “existing customer feedback” to win and retain customers. “Our customers give us the most significant input on what’s great about our product and what they believe should be improved,” notes Azmanova.

 

“We value their feedback and believe it should be shown publicly. So, with our reviews tool, we automatically collect these customers’ testimonials and display them on our website, serving as social proof. Or, in collaboration with clients, we create success stories where we dive deep into their experience.”

 

EmbedSocial isn’t alone in leveraging customer testimonials as a SaaS customer retention strategy. Segment creates testimonial videos, whereas, Later writes case study stories. Vimeo takes it to the next level by capturing customer success stories in eBooks.

 

Action step: “Seek out the best client stories to share,” Azmanova writes. Uncover these stories by keeping in touch with your customers and investing in their success. Doing so will help you see customers ever willing to share their story for your case studies.

 

9. Spend your efforts on Product Development

While all the SaaS retention strategies shared so far are tried and true, no strategy will reap significant results if you don’t focus on product development.

 

Why? Because if the product itself doesn’t serve customers’ needs, there’s no reason they’ll continue using it.

 

Here’s the key to successful product development: improve your product based on customer feedback.

 

Maze, a rapid testing tool for remote teams, created a Customer Advisory Board to this end.

Participating customers regularly share product suggestions and their feedback on strategic decisions in the group. In fact, their Customer Success Lead shares they’ve introduced new features based on the customer feedback.

 

The team at Cash Flow Portal takes the same approach. “Instead of investing funds into marketing campaigns or sales reps’ salaries, we hire the best software engineers from Silicon Valley, constantly deploy new features and enhance our product.” Alexandra Kazakova points out.

  

Action step: Get in touch with your customer support and success teams to identify customers willing to share their feedback with you. From there, work on polishing your product to meet customers’ expectations/needs.

 

10. Build a Customer Success Team

A customer success team is dedicated to your users’ success – offering help, reliable support, and useful resources. In doing so, the team “makes sure that all users within an account understand the value proposition of [the] software,” as Cody Miles from Ashore puts it.

 

It’s why Miles opines “the best retention strategy we’ve seen with our proofing and approval software, Ashoreapp.com, is a dedicated customer success manager.”

 

“After devoting a customer success manager for each new sign-up, our average customer lifetime value doubled,” Miles reminisces. “The impacts of this reached beyond the value we see on the surface; many of our clients come to us through word-of-mouth recommendations, so our happy clients attract more happy clients, and the cycle continues”

 

Thinking you can do without a customer success team? Miles counters this, noting, “The temptation for SaaS companies is to model their business after unicorns such as Airbnb or Dropbox that are almost completely self-service.”

 

However, “the reality is that most companies do not have the infrastructure to support an entirely self-service model, and they can’t succeed this way. SaaS startups can benefit more by implementing great customer success teams.”

 

Action step: Dedicate resources to creating a customer success team to help users onboard, use, and understand your app’s value proposition.

 

11. Offer Transparent pricing throughout the Customer Journey

Have you ever been excited to order something online, but stopped short of doing so when you saw the hidden (tax or shipping) charge at checkout?

 

This has happened at least twice with me. After both the incidents, I’ve never returned to the brand’s site.

 

Talk about duping customers!

 

While this lack of transparency in pricing may or may not decrease your sales, the reverse – cost transparency – can increase purchase interest as well as grow sales by 20%.

 

“It’s all about the psychology of disclosure and trust,” one of the researchers behind this study, Ryan Buell of Harvard Business School, explains, “Cost transparency represents an act of intimate disclosure and fosters trust. Heightened trust enhances consumers’ willingness to purchase from a business.”

 

It’s why Force by Mojio’s Daivat Dholakia observes, “A game-changing retention strategy we implemented at Force by Mojio is simplifying the process for the customer to gauge how much money they’ll spend with us.”

 

“As a fleet management service, we charge per vehicle – no hidden fees and the GPS device is included with a subscription,” Dholakia continues. “Our website’s pricing page even has a feature where you can get an instant quote.”

 

In fact, adopting this SaaS customer retention strategy led to an uptick of new subscribers for the app. On top of this, Dholakia discloses, “this strategy has definitely been a key part of our growth over the past couple years.”

 

Action step: Review your pricing and analyze users’ behavior on the page. If they’re constantly dropping off, work on simplifying the packages you offer.

 

12. Implement a Product-Led Growth Approach

Image: ProductLed.com

You can also center all your customer retention strategies around your product. How? By offering an unparalleled product experience and an unbeatable value proposition.

 

BeaconStac saw “a 10% jump in referral customers and 5X more revenue from our repeat customers,” Monika Adarsh reveals.  

 

Here’s exactly how they achieved this: “Our SaaS product itself championed the cause of improving our customer retention.

 

We used a trial upgrade email campaign to allow our trial users to experience the versatility and impact of our product. By helping users to derive value from our product, we were able to persuade them to stay and even upgrade organically.”

 

The takeaway? “When you help your customers derive tangible benefit by using your product, you help them achieve their goals, and in turn, they will help you achieve yours,” Adarsh concludes.

 

Action step: Ask yourself: what is that your product offers and how can you ensure your customers experience that value proposition?

 

13. Provide Ongoing and Proactive Customer Support

Like a customer success team, a customer support team is also ultimately dedicated to customer satisfaction. Except, the support team is responsible for answering any questions that customers may have, guiding them when they get stuck executing a workflow, and taking complaints and feedback on your app and features.

 

Deel, a global payment transaction app, for example, offers incredible support. The support team replies within minutes and responsibly helps solve problems.

 

Like Deel, Keka has created a strong support team that helped them “reduce the number of escalations, increase CSAT scores, reduce churn rate & increase trust to spread the workaround,” outlines Chetan.

 

Essentially, Chetan recalls, “Our retention strategy took birth from our learnings from the past which is quite straightforward. We all say that SaaS retention strategy should start from the moment the customer pays for the product, but I believe in building the best customer experience before even they decide to pay us.”

 

As a means to this, the Keka team created a support team that elevates their audience’s experience – both pre and post purchase. In fact, Chetan notes that people trust the customer support team as “they know they are talking to the right person.”

 

“People will always be happy to share their problems, thoughts etc. to someone who understands them,” Chetan goes on. “The better we can understand our customers, the longer we can get them to stay with us.”

 

Action step: Create a customer support team that collects customer data pre-sales, gathers and shares feedback with internal departments around market needs, customer expectations, and more.

 

14. Define a Calendar of ‘Proactive Engagement’ with your Customers

Throughout this piece, we’ve focused on several SaaS retention strategies that are centered around building relationships with users. This final customer retention tip will help you steadily chip at building relationships. How? By maintaining a customer engagement calendar.

 

As simple as it sounds, most SaaS companies touch base with their users when the renewal date is round the corner. It’s why Annie Gray from LiveHelpNow advises, “The best retention policy is proactive engagement throughout the contract, not just as the renewal date looms.”

 

“Create a tiered communication calendar of proactively reaching out to the highest tier a minimum of every three weeks and those in the lowest tier every six weeks.”

 

This SaaS retention tactic helped LiveHelpNow grow their “retention rates from 77% to 99% in just one year. It allowed us to be aware of any potential issues very early on and intervene successfully before the customer started looking for alternative solutions.”

 

Action step: Workout a calendar to stay in touch with your customer throughout their contract. Feel free to ask customers if you can help them with something in these interactions.

 

In short

To recap, building relationships with your customers is at the heart of most SaaS retention strategies. So start with personalizing your onboarding process, sharing a welcome video, engaging regularly with users, and offering support.

 

And, throughout your customers’ journey with you, don’t forget to make sure you’re showering them with free value. Educate customers, share others’ success stories, and document using your product. Doing so will help you retain customers in no time. 


Here’s to your success. 🎉

Masooma Memon

Masooma Memon is a freelance writer for B2B SaaS who has worked with awesome publications like Hootsuite, Vimeo, Trello, and Databox among others. You’ll usually find her writing in-depth content, making to-do lists, or reading a fantasy novel.