Last editedApr 20232 min read
Finding new and innovative ways to defeat customer churn is one of the main tasks for any founder attempting to scale their SaaS business. For businesses running on a subscription pricing model, customers are only spending a fraction of their customer lifetime value (CLV) upfront, making customer retention vital for the long-term viability of your company.
Cost-effective B2B SaaS customer retention strategies not only help you retain your old customers, but lay the groundwork for boosting revenue via referrals, upsells, cross-sells, and upgrades. We’ve put together a guide to help you improve customer retention and ensure your SaaS company continues to grow.
Get the lowdown on our top five B2B SaaS customer retention strategies, right here.
1. Identify the right user retention metrics
Before you start crafting customer retention strategies in earnest, it’s important to make sure your metrics are up to scratch. There are a range of different user retention metrics that you may need to keep track of. Do you know the difference between churn rate and retention rate? How about revenue churn, monthly recurring revenue, or customer lifetime value. Establishing KPIs and benchmarks based on the correct metrics lays the foundation for developing the SaaS customer retention strategies that your business can use to reduce customer churn and spur growth.
2. Establish why your customers are churning
After you’ve set up your user retention metrics, you should also make use of customer feedback (i.e., using Net Promoter Scores, or NPS) and historical churn data to identify churn patterns and predict churn. Once you have a better sense of when customers churn, which customers churn, and how customer churn is influenced by factors like price and customer experience, you can proactively take the right steps to solve your customers’ pain points, prevent churn, and improve customer retention.
3. Create a plan to reduce churn
At this point in the process, you should have a strong grasp of the triggers behind customers churning. Now, you can start thinking about tying everything together. Set attainable goals based on the triggers and user retention metrics that you’ve uncovered and determine what data you need to achieve those goals. For example, you may think about updating your product/service, increasing prices, following up on inactive users, boosting your response rate, and so on.
Furthermore, this is the perfect time to build out the service infrastructure you need to reduce churn and improve customer retention. This may involve a formal ticketing process and the onboarding of more staff. However, you should also consider whether you can automate some aspects of this service infrastructure.
4. Start thinking about customer engagement
Once you’ve set up a plan to improve customer retention, you should also think about rolling out some B2B SaaS customer retention strategies specifically focused on boosting customer engagement. After all, more engaged customers are customers who are far less likely to churn. There is a wide range of strategies that you may decide to implement, including VIP customer portals, exclusivity (i.e., access to beta features), and customer-only newsletters.
5. Provide a painless billing experience
When it comes to boosting your SaaS retention rate, it’s important not to forget about the importance of creating a seamless payment process. That’s where GoCardless comes in. GoCardless is the payments solution for collecting recurring and one-off payments at a lower price point than cards. It’s easy to set up and manage subscription payments either using the GoCardless dashboard directly, or via one of our 350+ partners, like Xero.
Using Direct Debit and Open Banking to collect payments directly from your customer’s bank accounts, it’s simple for customers to set up their payment once, and then forget all about it. In short, it makes their lives easier, meaning that they’re more likely to remain loyal customers. Furthermore, GoCardless gives your business the tools you need to fight payment failures and reduce churn.
With GoCardless, you can successfully collect 99% of one-off payments and 97.3% of recurring payments on the first try. In this sense, improving your SaaS retention rate is a natural outcome of managing your payments process with GoCardless.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.