SaaS Retention and Engagement: 10 Things to Get Right

Avoid your SaaS subscription business turning into a leaky bucket with customers leaving faster than new ones arrive

Retaining customers is cheaper than acquiring new ones.

Depending on your industry, acquiring new customers can cost between 5 and 25 times more than keeping hold of the ones you already have.

With subscriptions forming the foundation of the SaaS business model, young businesses without retention marketing expertise risk turning into a leaky bucket with subscribers leaving faster than new ones arrive.

If you're a product-focused SaaS founder still building your business and wearing many hats yourself, there's a risk that retention and engagement slip off your radar.

Try not to let this happen. Retention and engagement need to be a priority if you want to build a SaaS business with strong monthly recurring revenue and a low rate of churn.

How? Here are 10 things to get right.

1. Don't oversell

Under promise and overdeliver.

That way you're going to delight more people than you disappoint.

If you promise the world in your marketing and then deliver something not quite up to expectations, customers will leave with a bad taste in their mouths. You don't want unhappy customers spreading the word about how disappointed they are with you.

Overpromising sets you up for failure. Instead, be honest and transparent throughout the customer journey.

2. Gather data on how customers behave

Once you've released your SaaS product into the wild, collect data on how people use it to find out what you're getting right and what you can get better.

As well as helping you spot bugs and improve your product, data is also useful for feeding customer engagement strategies.

The more you know about your customers the more you can tailor how you interact with them.

This will help make sure the messages you send are relevant and effective.

Two examples:

  • An active customer suddenly stops using your product. Have a plan in place for how to bring them back.

  • A customer is only using a small part of what your software is capable of doing. Get the right content in front of them.

3. Personalise interactions

Customers don't want to think they're on the receiving end of a mass broadcast.

According to research by McKinsey, 71% of customers expect personalisation and 76% get frustrated when they don't find it.

Look for opportunities to personalise your messages and make them as relevant as you can.

Two examples of personalisation for SaaS businesses:

  • Show a custom welcome page. The information that's useful for somebody who logs in for the first time is different to what an experienced user will want to see.

  • Share relevant customer stories and testimonials. Show examples from the same industry, or from customers that use your software for similar purposes.

Word of warning: personalisation can backfire if you get it wrong. You don't want to make your customers think you're looking over their shoulder all the time. Don't do anything to freak them out.

4. Listen to what people say about your business

Two of the most effective ways to know what people have to say about your business are to ask them directly and listen to what they say on social media.

Surveys

Your analytics are giving you a heavy flow of quantitative data, but this isn't telling you the whole story.

Ask customers questions to get more detail. Surveys are a great way to do this at different stages of the customer journey.

For example, you can ask:

Why they cancelled their subscription

Look for trending problems and do something to fix them.

Think carefully about the options you include on the cancellation form, and it's worth adding a text box for people to provide more detail if they want.

Avoid implementing it in a way that frustrates the cancellation process, it's not a good time to annoy your customers even more.

If they got the info they needed from your knowledge base

It's frustrating when you have a problem and can't find the solution, so building up a knowledge base to answer common issues is a great help.

A good way to fill in the gaps is to ask your visitors if there's anything they can't find the answer to or want more detail on.

Why they subscribed

Detail on why people choose to subscribe can help you pick up on what's attracting people to your product. This can then help you figure out where to focus your engagement and retention efforts.

Social listening

Tools like Sprout Social and Hootsuite give you the tools to monitor social mentions and engagement so you can respond directly and contribute to the conversations.

Why is this useful?

  • People may post questions about how to use your product, which is an opportunity for your team to step in and help them out.

  • It will help you pick up on feature requests, complaints and compliments so you can engage to resolve issues and build loyalty.

5. Keep subscribers engaged with content marketing

Content marketing isn't only for attracting new clients. It's also a very effective way of engaging and retaining your existing subscribers.

Publish blog posts, videos and newsletters. Your content could include tips on:

  • How to make the most of your software.
  • Updates on developments in the industry.
  • Tips to help your customers do their jobs better.

It's easier to position your product as a great solution when it's coming from a business that customers look to for advice and leadership. If you can position your business as a thought leader then the software you provide will become more important to your customers.

But don't just publish your content on your website and call it a day. It's important to have an effective distribution strategy in place. Email marketing can open a direct channel between you and your customers, and posting to social media will help you reach them where they spend their time.

There's also the option of sending people to useful content from within the software itself.

6. Teach customers how to make the most of your software

Building an amazing product doesn't mean much if your customers don't know how to use it.

Tutorials

Publishing tutorials and making them easy to find will help more of your customers use your software to its full potential.

It's worth thinking strategically about which features to show your customers and when.

For example, you can use your onboarding email series to help new customers learn the basics, whereas more active customers could benefit from advanced tutorials like training on how to use new features.

Knowledge base

As your SaaS product grows in features it's worth building a dedicated knowledge base where people can go to learn more and figure out how to get things done.

Make this easy to find and available to the public so you can benefit from organic search traffic. Many of your customers will ask Google questions before they come to you so it makes sense to have a knowledge base that's optimised for search.

Announce new features

Show customers major new features as they use the software. This lets you show them in context and guide your customers on how to use them.

This can be more powerful than announcing them outside of the software as customers may not notice or forget by the time they log in again.

7. Invest in customer service

We all make mistakes.

Your customers are more likely to put up with yours if you go out of your way to fix them when they happen.

The quality of your customer service can make or break your relationship with your customers and have a significant impact on subscriber retention. Bad customer service will lead to cancellations and word can spread fast if you've done something that really irritates your customers.

Provide good customer service by:

  • Making it easy for customers to find the information they need.

  • Making it smooth for customers to contact you. Then respond to them quickly.

Live chat is a great way to show your customers that you're there in case they need any help. But be careful not to frustrate them.

Consider giving customers options on how they'd prefer to get support.

Some people are happy to be guided to the correct section of your knowledge base by an AI chatbot, while others might need to speak to somebody as soon as possible about an urgent issue.

8. Encourage loyalty and reward it

Loyal customers deserve special treatment.

After all, they've stuck with you for months or years and helped to fund your business as it grew into what it is today.

Three ways to reward loyalty:

  • Offer long-term subscribers a discount once they hit a certain milestone.

  • Offer to fix the price to protect customers from future increases.

  • Offer free upgrades or access to premium features from outside of their plan.

9. Turn happy customers into a community of advocates

Building a community around your SaaS business can make your customers feel part of a tribe, and also act as a venue for your customers to help each other and discover new ways of using your product.

Your community can also develop into an excellent place to gather feedback and shape the direction of your software. Conversations and feature requests can feed into your product roadmap. Share some of this with your customers so they know what's coming up.

Inviting people to test out beta features is a great way to make them feel part of your journey and allow them to help shape the product into something they'll want to keep using.

Consider offering referral bonuses or an affiliate scheme to give people who like what you do an extra nudge to spread the word.

10. Win back lapsed subscribers

When subscribers cancel, try to get information on why they are cancelling.

Just because a customer has left doesn't mean they'll never return.

Develop a strategy to stay in touch with lapsed subscribers. What this looks like will depend on your product and industry, but ex-subscribers may be particularly interested in your thought leadership content, promotions and new features.


That's just the tip of the iceberg.

Getting customer engagement and retention right requires a culture across your business that puts your customers at the heart of everything you do.

Marketing technology has made it possible to automate a lot of good stuff so you may be surprised how much you can get done while keeping your team at a manageable size.


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