In this fiercely competitive business world, one aspect that differentiates a company from another is customer experience and customer retention. Many companies often forget the importance of customer retention. It is necessary for B2B SaaS companies to be truly successful in what they offer. It is necessary for companies to have an effective strategy to retain customers.
Existing customers are important for any company. They contribute to a huge amount of company revenue. Customer retention is a long-term activity and not an over night job. Retention is less expensive than acquisition. As per Groove, there is a 5-20 percent chance of selling to a new customer. For existing customers, the chance for a successful sale is 60-70 percent. Existing customers are the base line of a company in terms of value, cash, and profitability.
What is customer retention?
Customer retention is the ability of your business to retain customers. This retention needs to be set over a specific period of time. It can be monthly, quarterly, or yearly. Customer retention rate is the percentage of customers who are with a business within a specific time period. Higher customer retention means customers return to using or buying the product in some way or the other. Customer retention is helpful in increasing profitability of a customer. It will extract more value from the customer base.
Customer retention rate = number of customers at the end- customers acquired during the period divided by number of customers at the start multiplied into 100.
The customer retention rate is a widely used metric to ascertain the profitability of a company. It shows how loyal and invested customers are in a product or service.
Need for a good customer retention strategy
A customer retention strategy is a set of activities and actions organizations can take to reduce the number of customers who defect from the company. There is a need to do customer retention right or it can result in loss of customers. The SaaS model works on profitability calculated over a period of time. As customers are acquired, profitability increases. Your customers are some of the most promising users as they have already onboarded with your company. They also know the process of service and product. Customer retention means making your customers engage and stay with your product or service till it becomes indispensable. Customer retention is making sure your users will become promoters of the product.
- Focusing on customer retention pays rich dividends in the long run
- Customer retention is lower in costs compared to acquisition
As per e-consultancy, 82 percent of companies feel that customer retention is cheaper than customer acquisition. Though companies spend more on acquisition, it is not right. Nurturing is more important for the long run of the business.
- Increased profits
Making sure customers are taken care of well leads to increased profits. When customer retention increases, there is a simultaneous increase in business profits. Other forms of customer association like upselling or cross selling can also be ventured into.
- Brand loyalty
Loyal customers will share their positive experiences. As per Yotpo, 60 percent of customers talk about the brand they are loyal to with their friends and family. Their positive experience counts as they become brand ambassadors.
7 Actionable Customer Retention Practices for B2B SaaS Company
Customer churn can blotch a hole in any business. A study found that avoidable churn costs companies nearly $140 billion a year. A stellar customer retention strategy will make sure your clients do not leave. It will fortify customer loyalty and make sure customers stay with the company.
- Make sure B2B customers are engaged and educated
In the SaaS world, customers frequently have multiple questions about the product. When customers face issues, they need to be able to solve them immediately on their own. To increase customer retention, it is necessary to enable customers with resources they can use to solve problems on their own. Start by creating quality content that will answer all their questions with a 24/7 access. Useful content such as e-books, blogs, webinars, white papers and more will be helpful in solidifying your brand. A customer’s experience does not stop at the purchase. Customer education is a great way to make customers engage with the company. Newsletters, emails and more will keep them educated and engaged. This will help in the long run in the form of rich rewards.
- Use customer feedback to improve
It is known that feedback is important. It helps constructively understand what can be made better about the system. Feedback is invaluable to know what exactly customers are thinking about your business. Using customer surveys to get feedback and note areas of dissatisfaction is a great place to understand all that needs to be fixed with the service. Customers like giving their opinion. They look for improvement based on these suggestions. This relationship will encourage them to continue being associated with the company. With feedback, offer great discounts and coupons. Exceptional customer service will make sure customers stick with the brand. Research by Dixon, Toman and DeLisi as per The Effortless Experience says that customer retention is driven by the ease of getting a problem solved.
- Improve communication
Improving communication is another great strategy to make customers stick with your brand. When customers know their voice is being heard, they will communicate more. This creates a cycle of trust in B2B relationships. A proactive communication strategy can help strengthen customer retention plans. It is a great idea to create space for communication and connection. With an automated marketing campaign, it is possible to keep track of customer campaigns and reach out at the right time. With the right communication, upselling and cross-selling opportunities will increase. Constant communication is important to retain customers.
- Build trust with social proof
Trust is important in any relationship. A business relationship needs trust on the higher end. Through the right data, it is important to keep customers invested in the product or service. With customer stories, case studies, testimonials and more, it is easier for clients to know new ways the product can help them. When customers talk to each other (directly or indirectly), the chances of customer retention are higher. Having social media demonstrate how effective customers feel when they are associated with your company can also help improve chances of customer retention.
- Leverage personalisation
For every brand, the success depends on the unique, personalised journey the customer undergoes. As per Salesforce, nearly 80 percent of customers will share information which is relevant in exchange of personalised interactions. Making customers create an account will offer a personalized experience. By tapping the right buyer personas, it is possible to make sure customers get the right products they want. If your customers find products or services targeted to suit their personas, they will feel more connected and happier.
- Keep track of Customer’s Pulse
Customer churn may not always come as a surprise. Before you find any red flags, there might be several issues plaguing customers. Some issues that need to be looked out for include-
- Customers have searched for your cancellation info
- They are less engaged
- They do not ask enough questions
- Customers have not checked into your platform
- Customers have not used their new features as yet
- There is a gap in communication
In these cases, a follow-up call or email can greatly help bring them back into the groove.
- Offer ease of functioning
When it comes to SaaS companies, customers look for an ease and transparency in functioning. If they are bound to face multiple roadblocks in access, they will simply churn. Managing last mile deliveries can help you retain customers and stand out from competition. Simplifying returns and replacements will make customers come back again and again. This will delight customers to stick around. If the ease of access is available for customers, they will not look at competition. The right channels are important for businesses to function well. Live chat is a great way many companies talk to their customers.
Bottom Line: Customer Retention is the key to business success
Customer retention strategies work for stabilizing any business. It is a balancing act. There are no shortcuts in the process of retaining customers. Business relationships are based on fresh ideas, great experience, and good customer service. These retention strategies will help you keep your B2B SaaS customers loyal for the long haul. The better you address the problems of your customers, the more they get connected to you. Having a customer-centric strategy is impossible to ignore.
By having these strategies in place, companies need to improve customer retention, race against churn, and lay the bricks for long-term growth. Customer retention is something any business needs to succeed in the long run. It is crucial for sustainability, popularity, and making sure customers stick with your company. By learning from customers through feedback forms, customer retention strategies can be amplified to boost loyalty. Elevating customer experiences will create the best customer retention strategy in the long run.
