Customer turnover is the kryptonite and misery of SaaS leaders’ lives. That is why they are continually seeking for new ways to retain clients and reduce churn.

If you’re seeking for the most effective client retention tactics to reduce churn in 2024, you’ve come to the correct spot. In this post, we will look at customer retention, why it is important, and what the greatest customer retention techniques are.

If your SaaS revenue is a bucket, customer churn is the drill that punctures the bottom, allowing your recurring revenue to flow out. While finding new ways to fill the bucket (client acquisition) makes sense, sealing the leaking holes is far more successful – and this is customer retention.

In more formal terms, customer retention is the process of keeping a customer engaged with your service until they become committed long-term clients. As they become long-term clients, you will have more possibilities to upsell, boosting their lifetime value (LTV). Long-term consumers are also more likely to promote your product, resulting in more users through word-of-mouth recommendations.

Overall, client retention is not only easier and less expensive than customer acquisition, but it also results in a higher customer value over time. In turn, increasing client retention by only 5% can improve revenue by 25% to 95%.

But how exactly do you put it into action?

For this article, we’ve prepared a list of customer retention techniques that fall into three categories: boosting customer engagement, creating customer delight, and engaging in proactive listening.

Customer Retention Strategies for SaaS Business

1. Set Clear Expectations for Your Customers

Unmet user expectations are one of the leading causes of client churn. This occurs when the user is promised something that the product is unable to give.

It is critical to be very explicit in your messaging about how you provide value to your users. Tell them exactly what they’ll get when they join up. Aside from that, it’s a good idea to slightly underpromise on perceived value provided and overdeliver, which leads to customer delight.

Even if you don’t practice it, understand that overpromising value and failing to deliver on it is a formula for disaster.

2. Give Your Customers Their “Wow” Moment

The “wow” moment is when the customer realizes the genuine worth of your service. It is when they receive a response to the fundamental question: “What’s in it for me?”. From the moment a user signs up, the user experience should be designed to get them to this point as quickly and smoothly as feasible.

Focus on maximizing your onboarding. Send out instructional content early on to help users become acquainted with the service and its features.

If your service is more complex, it becomes appropriate to provide free training to users. People who are interested in your product will want to know how it works, and by training them, you may lead them to that “wow” moment.

3. Emphasize Your Unique Value Proposition (UVP)

Your value proposition is what makes your product unique. A good value proposition is simple, tells the users exactly what they will get, and can be read and understood in about 5 seconds. It also avoids hype words and business jargon. Clarity is the key.

Constant delivery of the value proposition is a must. It is what your users signed up for and it is what will get them to stay.

It is also a good practice to remind them about your value proposition from time to time. Showing them what they’re gaining will encourage them to continue their subscription.

4. Don’t Hesitate to Upsell Your Customers

Forming long-term relationships with your customers is one of the best customer retention strategies.

Users turn into long-term customers as they see the value you provide. As a result, upselling is a win-win: users get better services, and you get more revenue. For example, here’s how Slack upsells its Pro subscription — the messaging on the landing page is very clear, followed by a lengthy list of benefits that the users will get from a paid plan:

Upselling has a two-fold effect. You are now tackling multiple pain points for the user, so your relationship deepens. With higher billing amounts, the user commitment increases, making them more likely to stick around longer.

5. Send Targeted Tips For Increased Engagement

You can set up automated emails which get triggered when the user performs a specific action to engage them further.

For example, if the user completes designing a sales page, you can email them saying, “Congratulations on setting up your first page. Here is how to get the best out of your sales pages”, and direct them to a blog or an informative video.

Read Also: Building a Winning SaaS Product: From Idea to Launch

You can also engage them with additional functionality. In this case, you could tell them how pairing your sales page with an exit pop-up can help, and direct them to the pop-up designer in your app. Tips like this add value to the customers’ efforts and make them stick around.

6. Maintain A Regular Interaction Schedule

Imagine subscribing to a service and only hearing from them after money is removed from your bank account. Not very pleasant, is it? You must make the user aware of the value you provide so that they do not associate you with a sense of losing money for nothing.

This is why consistent customer interaction is critical for retention. Even if you don’t, if you don’t send content-heavy emails on a regular basis, call them every now and then to say “hi” or check in on how they’re doing with the product.

It demonstrates to people that you care about more than just money; you want to assist them reach their goals.

7. Keep Updating & Upgrading Your Product

This is another way to let users know that you’re working to help them achieve their goals. Invite constructive feedback on your product (more on this later), and keep improving your product via upgrades and new features. As users see more value over time, customer retention rates will keep increasing.

Churn also sometimes occurs due to boredom — as users interact with a stale platform over time, it may result in decreased perceived value and lesser engagement consequently. Releasing new versions will help fight that.

Finally, don’t forget to keep your customer up to speed on all the updates and upgrades you make, even after the fact.

8. Offer Exceptional Customer Service

We’ve said before, and we’ll say it again – customer service can make or break an organization. Users may put up with a bug in your UI if you can solve their problem immediately, but a bad customer service experience will turn off most of them.

In fact, 67% of users cite bad customer service experience as the primary reason for churn. Customer service issues are the experiences that speak to users about your attitude toward solving their problems.

When solving these issues, practice delighting users. Always go overboard with your efforts — even if you make a mistake, 78% of customers will refrain from churning as long as your customer service is good.

Think of any issue a user faces as a bump in the road to the perfect customer experience. Not only do you remove the bump, but you also give the users something extra for their troubles.

Also, keep in mind that an excellent customer service approach also includes providing self-service solutions to your customers — a must-have in 2024. Self-service offerings may include a knowledge base, a resource hub for developers, or a community forum.

9. Reward Your Customers

When users stick with you for a long time, you should thank them. Tell them how much you appreciate their remaining around. If done correctly, loyalty programs benefit both the user and your company, resulting in a win-win situation. In fact, 79% of customers prefer to do business with companies who provide loyalty rewards.

Loyalty awards do not have to be complicated. A simple discount, upgrade, or freebie (such as a free month of membership or plan upgrade) can go a long way toward increasing loyalty.

Alternatively, you may launch a comprehensive partnership program with particular awards and benefits for your most loyal consumers.

10. Avoid Surveys on Service Tickets

Feedback on the customer care resolution experience can be an excellent method to improve your process, but it can also irritate the user in unintended ways.

Consider the users’ point of view. You encountered a problem and went to the trouble of resolving it. Thankfully, the resolution procedure went smoothly. But now the staff is pushing you to provide input on your experience.

It’s the same as the obnoxious reporter who immediately queries an accident victim about their rescue. The key to getting them to talk is timing and location — and the same goes for your consumers.

11. Offer Exit Surveys

Let’s be clear: if someone wants to leave, never make it difficult for them to do so. This strategy, which works in real life, applies to SaaS as well.

Make your cancellation policy as straightforward as possible to avoid disgruntled users causing social media meltdowns. Customers often depart for a valid cause, allowing you to use exit surveys to acquire valuable information into what you’re doing incorrectly. This will help you enhance user retention in the future.

Strategies for Maximum B2B SaaS Customer Retention

1. Meet Customer’s Expectations

Customers enter into a business relationship with certain expectations. Some examples of customer expectations include:

• Timely delivery of services
• Quality customer support
• Consistent products and services
• Solved challenges

Companies that don’t meet these expectations after a purchase can cause customers not to renew that subscription. For instance, if a business claims the software speeds up a business process, but the customer still takes the same time to complete that task, the customer won’t be willing to continue paying for the service.

Businesses can retain SaaS customers by ensuring the business’ products meet and surpass customer expectations through exemplary customer support, regular upgrades, and open communication channels.

2. Monitor Customer Feedback

While mindreading could assist identify when consumers are becoming dissatisfied, it is not an option. Businesses, on the other hand, have another means of seeing inside the thoughts of their customers.

Social listening is monitoring comments, mentions, and reviews to learn what customers are saying about the company. These sources provide insights on a company’s strengths and problems. Addressing these issues and publicizing the benefits of your B2B SaaS company boosts customer loyalty.

If a company is losing clients but does not have any online reviews to explain why, surveys and exit interviews may provide the insights needed to determine how satisfied customers are.

3. Address Issues Quickly

Surprisingly, 20% of B2B purchasers have had service concerns, but only 40% believe that the B2B organization has ever handled their problems. Furthermore, only 5% of B2B consumers reported being really satisfied with a brand.

B2B buyers that are dissatisfied will leave if the problem persists. 71% of B2B consumers are not emotionally attached to their vendors, making it easy to switch if problems arise.

B2B SaaS companies can boost client loyalty by promptly addressing issues and providing solutions. Furthermore, open contact and support channels offer the client with the necessary means to express problems and seek assistance.

4. Use Data to Boost the Customer Experience

A data-driven approach to customer experience enables organizations to personalize customer care based on consumer behavior and previous involvement. 82% of clients report that personalized material increases their loyalty.

While 73% of customers think a favorable experience influences their purchasing habit, 71% will terminate a relationship with a company if they have a negative experience.

Data enables organizations to improve the customer experience by guiding the experience so that each encounter, recommendation, and update is tailored to the client’s needs. One method for gathering data is through webinar lead generation. These webinars track attendees’ behavior throughout the session, including questions answered and resources downloaded. That information enables webinar presenters to better identify potential clients and provide better experiences.

5. Monitor a Lack of Data

While data provides valuable insights into customers, a lack of data reveals a customer’s degree of contentment. For example, if a B2B buyer hasn’t entered into a business software account in more than a month, hasn’t used any updates, or hasn’t made any new purchases in several months, those aren’t encouraging signals.

The lack of data and activity frequently indicates rising discontent with a product. Unfortunately, not every client will notify firms when they become unsatisfied. Instead, the customer will leave silently and without warning.

If a business does not actively communicate with its clients, more than half of them will quit. Measuring customer engagement and re-engaging customers with low engagement identifies clients who may be dissatisfied before they depart.