What do you think the response would be if the question "What variables mean the most to you" were posed to a SaaS company?

Well, it would surely be Success and Revenue.

Everyone wants to grow their business, but what might not be obvious here is that you need consumers to raise your revenue and succeed more.

Additionally, this doesn't always entail growing your clientele but providing long-term value to keep them as customers.

In this guide on retention strategies, we'll emphasize developing a customer retention model for your company and outlining the effective measures to take to lower customer churn.

But before that, let's get to know what customer churn is. Shall we start?

What Is Customer Churn?

In simpler terms, customer churn is when customers decide to cancel their subscriptions or cease utilizing your services or products at any time frame and for any reason.

Customer churn, sometimes referred to as customer attrition, is a measure of customers leaving or canceling their subscriptions and reflects the company's success rate.

Lower the customer churn, the higher the success rate, and vice versa. Regardless of how uncomplicated it may seem, the complex word is typically measured in % on a monthly basis.

Customer churn = Customers lost ÷ Total customers over a given period of time) x 100

Thus, the higher rate of this metric turns out to be a headache for businesses at times in light of the fact that acquiring new customers is both expensive and time-consuming. This is why retaining customers is far more significant than gaining new ones to fuel the revenue generator.

Why Include Customer Retention Strategy In Operations?

Retaining customers should be a business goal; however, doing so requires a lot of work.

So, what does customer or subscriber retention actually mean?

Well, customer retention is a process that involves multiple steps to be taken to stop customers from leaving. It is about building relationships with existing customers, increasing customer satisfaction, providing unforgettable and not-matchable experiences, reducing customer turnover, and providing valuable interaction.

It all comes down to going above and beyond to keep clients happy and devoted to your company while enticing them to continue doing business with you over and over.

Therefore, building a positive relationship between customers and the business increases the customer's lifetime value (CLV) and reduces customer churn to increase profitability, as repeat customers are more likely to make massive purchases than new ones.

Here's how you can do that - Customer Retention Model.

The subscription retention strategies to include in your business model are -

1. Identify subscribers on the verge of cancellation - One great way to attract and retain customers is to determine the subscribers most likely to break their relationship with your SaaS business.

Only when you identify these people can you intervene and proactively reach out to them to understand their grievances and find ways to resolve them.

Identifying their behavior pattern and strategizing while traveling down the lane is one of the best strategies for preventing churn and retaining existing clients.

It sheds light on the areas -

• The subscribers who do not engage with your content

• The subscribers who do not engage with your product and platform

These are the behavior pattern and the potential threat factors, either of which could be a reason for worry for businesses and leads to customer churn.

With these insights, your SaaS business can better understand customer needs and provide tailored solutions to address them, thereby increasing revenue.

2. Get hold on Involuntary churn - The next step to involve in your SaaS business's subscription retention strategy is limiting even the slightest scope of involuntary churn to promote customer retention by preserving customer relationships and maintaining a healthy customer base.

You can try to persuade a consumer who has already decided to stop using your services to reconsider, but you are powerless to stop them if they have already made that choice.

However, a good proportion of lost subscribers are the ones who wanted to continue using the services but ran into one of the following factors, such as payment issues, failure of automated payment, technical issues, or simply forgetting to renew their subscription.

Sending emails to customers asking them to update their credit card information, using automated software to incorporate automatic renewal procedures, enhancing customer service, or improving the product are all ways to prevent this from transpiring and provide customers with a positive and consistent experience.

Encourage renewal of existing subscribers - Your subscription retention strategy must include actively investing in building and strengthening your relationship with existing customers to promote customer retention and maintain a healthy customer base to keep your revenue ship sailing.

Renewal of current subscribers allows you to establish your reputation through word-of-mouth advertising. It lowers the cost of customer acquisition because it costs less on the pocket to keep current customers than to acquire new ones.

That means a win-win situation for you.

It gives you an advantage over the competition because clients are more inclined to pick and stick with a business they already know.

Winning customers back with marketing campaigns targeted at recent cancellations, sending emails to existing subscribers reminding them about the value your service adds, training customer service representatives to "save" a subscriber at the time of cancellation request, and more can save you many dollars.

3. Acknowledge and thank your customers - Making your customer feel valued and fostering a sense of personal connection is a significant step in your subscription retention strategy. And What could be better than thanking and recognizing your customers for their valuable presence?

After each purchase, a simple "Thank You" can go a long way toward retaining and attracting customers by enabling them to feel valued and appreciated.

Hence, wherever feasible, remember to express gratitude to your clients to build a pleasant client experience and encourage them to keep interacting with your business. Although the entire procedure might be automated, too much attention can be annoying. This tactic can do wonders for subscribers who are signing up for your services and products for a short time.

4. Make them a part of your success story - Involving customers in your business success story and sharing your achievements and milestones with them make them feel like being a part of something bigger while serving as proof that your firm is succeeding. This strategy piques their interest in your company and motivates them to stick around for the long haul.

Consider sharing your vision, advice, and wisdom with them to let them know you care about them and encourage them to share their valuable feedback, so your business continues growing and innovating.

As a successful subscription company, you must be certain to communicate your aims to your customers clearly, letting them know that you are always looking to meet their needs and will continue to do so in the long run and therefore encouraging client retention.

5. Understand the KPIs of your business - The Key Performance Indicators (KPIs) of your organization is an aspect that is frequently overlooked in efforts to increase subscriber retention. The irony of the issue is that the key to keeping clients on board is already hidden in the data already on hand at your company's location. You just need to track, analyze, and take results-oriented actions.

By taking into account usage and engagement rates, support requests, and customer feedback, which reflect customer satisfaction with your brand, SaaS businesses can assess the impact of their strategies, measure progress, make better decisions, and concentrate on the areas where they can make improvements.

It is only after the understanding of KPIs can businesses gain insights into customer preferences and develop better marketing strategies to provide personalized experiences.

6. Upgrade your customer services - After performing every step in your subscription retention strategy, if nothing turns out well, try taking a closer look at your subscription service/product operations to test whether it clarifies the satisfaction level.

According to a recent report, customers are likelier to stay with a company when companies satisfy their requirements to the fullest and address their issues in no time.

To climb the stairs of being a successful subscription business, you should always strive to improve and create a positive customer experience. This requires looking out for various parameters of your customer services to enhance the retention rate.

7. Evaluate churn using metrics - Not keeping track of the crucial metrics that provide a quantifiable and objective measure of the successes and failures of customer retention strategies is an irresponsible thing you can do to halt your business's growth.

Then why miss on some wisdom?

To keep churn under control, making the most of this knowledge to create better strategies and services helps businesses understand what customers want, what drives their decisions, and what customer segments are more likely to be retained.

Think Bigger

A high churn rate can be intimidating, but the only way to beat these numbers precisely is to build a subscription retention strategy that eliminates the chance of customers trying to part ways with your business. To start on your path to success, all you need to do is be aware of the potential threat elements that still exist in your industry and those already discussed above.

Get your collaboration started with Billsby and take advantage of our retention strategy to establish a long-lasting, mutually beneficial bond with your customers.