SaaS businesses grow at the intersection of customer acquisition and lifetime value. When customers churn they cut short lifetime value and upend the fundamental driver of healthy growth
While you may not be able overcome fundamental problems with your product or your go-to-market, the good news is there are actually really effective things you can do to help increase customer retention that aren’t going to come at a high cost.
While you may not be able overcome fundamental problems with your product or your go-to-market, the good news is there are actually really effective things you can do to help increase customer retention.
Why is setting the right buyer expectations so important? Because this is what leads to customers who accelerate themselves through onboarding, adopt your product and renew when it comes time. Buyers who know what to expect are far more likely to be retained than those who don’t. Prepared customers are the best customers.
SaaS customer retention is everything. Everything. If you are bootstrapping or running lean, it’s the only way to have a healthy, profitable company. And if you are raising money or want to be acquired, it’s the basis for the entire valuation of your company. While customer retention takes a village, sales is the most on the front line of selling to the right customers and side stepping the wrong ones.
Without a clear definition of what types of customers and contracts are most likely to be retained, it’s hard to avoid the wrong ones. Sales leadership needs to document, and educate the sales team constantly on these four things.
Plenty of ill-fitting customers will buy your solution if you let them. They are a tempting group, often having velocity in the pipeline. Make no mistake, they are also the devil.
Over many years and incarnations, I learned a lot about how to have a happy and healthy SaaS company. Of the health metrics I focused on most, churn was by far the most important as well as the most complex.