How Customer Success Initiatives Can Reduce Churn for SaaS Companies
Traditionally, businesses viewed customers as the drivers of the bottom line. However, from a CS perspective, customers are the bottom line for a SaaS business. It is an interplay of churn, retention, and customer success.
While customer churn is unavoidable, SaaS businesses can apply foundational tactics (like enhanced customer care) to their customer success initiative in an attempt to reduce churn.
In fact, churn reduction is one of the top priorities assigned by responding organizations in a survey conducted by SuperOffice – 66% believe that reducing customer churn and increasing product adoption is at the helm of their CS initiatives.
Let’s explore how churn and customer success are intricately twined together.
How Does Churn Impact Business in the Long Run?
Surprisingly, most organizations miss the significance of reducing churn when the numbers are quite evident in spelling out the consequences. According to Neil Patel, most companies focus on acquisitions rather than churn reduction, even though the costs are seven times as high.
Wooing an existing customer is, by nature, simpler than explaining everything to a complete stranger. Now consider the case of SaaS companies that rely on the subscription model to further their revenues and business. For these companies, the larger revenue begins to stream after the initial sale.
According to Front Entrepreneurs, the revenue for such companies would only be up to 30% from the initial sale, and the remaining (up to 95%) comes from renewals and upsells. Renewals and upsells are linked to existing customers who have every reason to churn to competitors if the time-to-value from the current product is too high.
Customer success, thus, needs to play its part in showing these customers the value vested in your product so that they initiate further purchases and get the next revenue stream flowing for you.
The initial challenge would be to design a product that truly addresses a problem and solves it quicker and more efficiently than your competitors.
The second challenge is to deploy customer success initiatives through onboarding, continued support, incentives, and other methods to help customers advance through the subscription pipelines.
How Customer Success Can Reduce Churn – If Done Right
Customer success initiatives have a latent power to keep customers engaged with your product and moving forward with your business. Consider the strategies detailed below:
Caring for the best customers
While working with customers already at the cusp of churning is important, preventing your good customers from reaching that limit is equally crucial, if not more.
Consider investing resources into making your brand experience good enough for customers to talk about. For example, improving customer experience translates tangibly into customer advocacy over time, as demonstrated by SuperOffice:
Long story short, invest equally in improving CX to prevent an incident of customer frustration, which would ultimately lead to churn.
Don’t meet customers halfway – go the extra mile
Put yourself in your customer’s shoes: what would you appreciate more – a quickly resolved query or a proactive call that prevents your query from being raised?
A simple act of understanding your customers’ perspectives establishes that you are as invested in the customer as they are in your product. Proactive support and personalizing the customers’ journeys with your brand and product are classic instances of customer success initiatives in their simplest form.
Leverage data and analytics to streamline offerings
Today’s world is data-driven; if you are operationalizing your strategies without smart analytics, you are setting yourself up for failure. Where customer success and churn reduction are involved, tracking trigger events and probabilities is essential instead of acting on a hunch.
Exhaustive analytics help you understand churn metrics and flags and help you ramp up your customer success initiatives along with data-driven personalizations.
Onboard your customers diligently and seriously
Streamlining onboarding is not an option for SaaS companies – it is a necessity. If you observe the most successful SaaS companies, you would not be surprised to find how quick and efficient their onboarding experience is.
The best way is to provide a variety of onboarding channels and options and allow your customers to choose what they prefer – whether email, call, video-based tutorial, or a step-by-step how-to guide. Better yet, find innovative ways to help customers quickly navigate from A to B without roadblocks.
Offer incentives at the right time
Identifying when and where a customer is feeling stuck is crucial. Leverage data and analytics to help you understand customer problems and provide the right kind of support, value, or incentive (whichever works for the situation) the customer needs to move forward.
Real-time triggers may help your company see how a customer is utilizing your product and identify usage patterns that potentially lead to problems.
Churn and Customer Success Aren’t Exclusive
Implementing customer success initiatives is your starting point to ultimately reduce churn as a SaaS company. Challenging as it is, customer success isn’t achieved in a day. Achieving your desired goals requires continuous application, experimentation, and evolution. Trantor can help your business drive value for and from your customers in an organic way.
The CSaaS solutions (Customer Success as a Service) Trantor provides a holistic approach towards foundational improvement of the entire setup, including CX, revenue operations, and support operations.