7 Effective SaaS Retention Strategies
This article was originally published on our website as a blog.
When you’re an early- or growth-stage SaaS, it’s easy to spend most of your time on customer acquisition. And it makes sense. You can’t grow revenue if you can’t convert leads. However, having strong SaaS retention strategies can re-engage current customers.
Why focus here? Regarding revenue growth, a high churn rate is like filling a leaky bucket. Smart SaaS companies don’t waste their time and money trying to patch the holes. They upgrade their bucket instead.
Why managing churn is essential for SaaS companies
To deliver a great experience, you need to consider the customer’s entire journey with you — including when they want to pause or cancel their subscription. It’s not enough to be frictionless at purchase; you must be easy to do business with at every stage.
When you deliver a better customer retention experience, you’re increasing the likelihood that customers will stay longer, upgrade their subscription or refer others. Any of these options provide you with more stable monthly recurring revenues, making it easier to plan with confidence.
7 effective SaaS retention strategies
ProsperStack’s data shows that you can save 10–30% of customers who want to cancel. To achieve these results for your SaaS, we recommend viewing a customer’s retention as a series of steps you can guide them through. This helps you see how many options you have — all of which you can deliver seamlessly using automated tools and straightforward integrations.
Keep reading to get ProspeStack’s 7 effective SaaS retention strategies.
Strategy #1: Start with onboarding
If you want to hang onto your customers, you need to design the entire experience to keep them — and that starts with onboarding. How are you helping customers get to know your product and get value from it quickly? Can you strengthen your approach by putting support options front and center? Do you provide links to your knowledge base and make it easy to connect with support/success representatives via phone or chat? If not, start here.
Strategy #2: Add a self-service cancellation flow
Don’t make your cancellation experience a gauntlet that will frustrate customers. Instead, create a self-cancellation experience that lets customers direct the cancellation process themselves. While this seems counterintuitive, offering customers the ability to cancel their accounts easily can help you win them back and improve your business — it’s all about creating a cancellation experience.
Strategy #3: Implement a retention survey
If customers don’t see enough value in your product to keep their subscription, you want to know why. We recommend adding a brief survey to your SaaS exit flow. It doesn’t have to be complicated. You can ask just two simple questions:
- What is your primary reason for leaving? (multiple choice format)
- How can we improve? (open-ended format)
Related reading: The 2 questions every customer exit survey should ask
Strategy #4: Remind customers of your value
When you remind customers of your product’s value, some customers may reconsider cancellation. This could be a personalized account summary showing customers what data or information they’d lose upon cancellation. Or you can ask customers to accept an acknowledgment (that illustrates the value of what they’re leaving behind) as part of the cancellation flow. The goal here is to showcase value rather than price.
Strategy #5: Provide an alternative to cancellation
Next, you can offer customers options to avoid cancellation. For example, can you provide support materials or tips on using your product? Would temporarily pausing their account be enough to keep them? (If you offer a temporary pause, make sure it’s for a fixed time frame. We recommend three to six months.)
Strategy #6: Offer a personalized incentive to stay
At this point, your next move is to offer a discount or plan upgrade, especially to price-sensitive customers or folks that said they weren’t getting enough value from your product or service. To increase effectiveness, you can segment offers based on answers from your customer exit survey. For example:
- Support –Include a free support upgrade for people who indicated difficulty using your product.
- Coupons — Offer a coupon to discount the rate for customers that say your product is too expensive. We recommend savings of 25–50% for three to six months.
- Trial extensions — Offer a trial extension to customers with a free trial so they have more time to explore your product and see its value.
- Plan changes — Provide extra value at no additional charge (whether that’s more features, storage, or support). Or offer access to a special plan only available for a limited time.
Strategy #7: Use exit survey feedback to improve your product
The last of our SaaS exit strategies capitalize on customer feedback. Even when you put forth your best effort, you won’t save 100% of customers who want to cancel. Sometimes, you have to part ways (or start planning a winback campaign for six months down the road). But before you turn your attention to other things, remember that you can learn a lot from customers who want to cancel. Be sure to make the most of it.
For example, if you consistently receive feedback that customers are leaving because you don’t have a specific product feature, it makes sense to prioritize it on your roadmap. You can also share exit survey insights with your marketing and customer success teams to help them better meet customer needs.
SaaS Retention with ProsperStack
Taking the time to design SaaS customer retention strategies that reinforce your product’s value, provide cancellation alternatives, and persuade customers to stay with special offers is well worth the effort. But not every company has the internal resources to take on this process — especially if you want to integrate with your payments platform to automate the process.
We’re ProsperStack — the only platform that automates and enhances customer acquisition and SaaS exit experiences so you can keep the customers you’ve already earned.
We are built to be a seamless, user-friendly, and low-code solution that your development team can implement within days versus months. Best of all, we integrate easily with the most popular billing platforms and CRMs so you can use your existing data to prevent churn.
If you’re ready to design a highly effective SaaS customer exit experience and implement new Saas retention strategies, we can help.