Posts Tagged ‘customer retention’

How to Use Email Remarketing to Boost Your Sales

Monday, April 3rd, 2017

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You’ve got a great product. You’ve built a website to showcase your product. And you’ve even paid for ads to build awareness for your product on Facebook and Google.

However, you have two major problems:

  1. Your product isn’t selling.
  2. Most consumers don’t buy immediately.

But don’t let that get you down because you’re about to use the powerful tool of email remarketing to change your luck.

Email remarketing improves sales. And it works for a wide variety of consumers — from cart abandoners to just browsers. Use email remarketing to convert the uncommitted.

Ready to learn what it is and how it works? Let’s get started.

What Is Email Remarketing?

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Email remarketing is the strategy of using email to target prospects and get them to buy. You’re probably familiar with it, even if you didn’t know it by name.

Have you ever looked at a product and even added it to your online shopping cart with intentions to buy it? But then you hesitate. You think, Maybe I can find this at a better price somewhere else. Or, Maybe I don’t need this product after all — what if it doesn’t work for me? So, you close the tab and move on. But then, as if by magic, an email pop-ups in your inbox: It says “Hey! You left something in your cart” or “Here’s why you should purchase this product now”.

Sound familiar? That’s an example of email remarketing.

Email remarketing is all about nurturing prospects and motivating them from interest to purchase.

But, although they may sound alike, email remarketing is not the same as email marketing.

In email marketing, you initiate contact. You send automated emails based on your desired schedule. Examples of email marketing include:

  • Weekly scheduled newsletters
  • A pop-up or flash sale
  • Blog post update

In email remarketing, your prospect’s behavior initiates, or triggers, contact. Examples of behavioral triggers include:

  • Cart abandonment (the prospect leaves your website before they can finalize payment)
  • Anniversary (the customer signed up / made a purchase one year ago, and you’re celebrating that milestone)
  • Upcoming renewal needed (your product needs to be renewed)
  • Subscriber hasn’t opened emails in the last 30 days

As you can see, behavioral triggers include both action and inaction.

By sending emails based on the prospect’s behavior, you can create a more compelling invitation to engage. People are more likely to respond when you send out a personalized email based on their activity than if you send out a generic one. For example, sending out an email that says, “hey, you looked at this product, now there’s a sale for it” is much more effective than sending out a generic “hey, we’re having a sale” email.

Email remarketing is wildly effective, but it’s also wildly underused. Only 1 in 5 email marketers use behavioral triggers email remarketing. And that’s why it’s going to be so effective in your marketing efforts.

5 Ways to Use Email Remarketing

Let’s take a closer look at how to use email to remarket to all those otherwise lost sales.

1. Convert Just Browsers

As I mentioned earlier, most people who come to your site won’t buy at first. That’s the bad news. The good news is you can start nurturing those people so that they will eventually buy from you.

The very first step is to get their email. Once you get their email and permission to market to them, you can put them in your nurturing funnel. And not just for generic marketing (i.e. newsletters), you can also use it for super-targeted marketing (we’ll discuss more in the Google section below).

But how do you get their email? Ask, of course, but with an offer that they can’t refuse. One of my favorite suggestions is to offer an instantly delivered promo or coupon code that they can use immediately (not within 24-48 hours).

Once they’ve signed up for your mailing list to get the coupon, automatically enroll them on a nurturing track.

Play up urgency. (Offer a juicy, high value coupon that expires within a few hours.)

Build trust. (This is where traditional email marketing comes in. Use email to share case studies and testimonials to show social proof.)

Here are 10 ways to get a site visitor’s email address.

2. Rescue Cart Abandoners

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By some estimates, cart abandonment is as high as 70%. That means that 7 out of 10 prospects have made it all the way to payment but then decided to leave without completing the purchase. Ouch.

There are a lot of reasons why people abandon carts. Among them are:

  • Unexpected costs (shipping, handling, etc.)
  • Just browsing (window shopping)
  • Technical error (browser, computer crash)
  • Long, complicated checkout process (too many questions)
  • Limited payment options (preferred payment method not available)

But another big reason people abandon carts is to get coupon codes. Some savvy shoppers know that cart abandonment triggers an automated coupon offer.

Why not give the people what they want? And most everyone wants a discount. If you can rescue sales by discounting the price, why not do so? If you discount by 25% to rescue the sale, you’ll at least get 75%. And that’s a whole lot better than 100% of zero.

Use email to remarket to cart abandoners. Send out an email immediately (within the first 60 minutes of a suspected abandonment) that woos the prospect back to complete the sale. Test the offers. Don’t default to 50% if you’ve tested and 25% works just as well.

3. Use Google

Google has a cool feature called Adwords Customer Match. It allows you to target ads to people on your email list. This is how it works:

Upload your subscriber email list. Then, Google will match the email addresses against their user database. If the email you have matches one of their users, you can then set up a campaign to market to them.

But, you’ll need at least 1000 email address matches to start a campaign. That means, if you have 1000 email addresses, but only 800 of them match a Google user, you won’t be able to start the campaign. This is done for privacy concerns.

If you’re able to use this marketing strategy, don’t be afraid to segment your list for the most effective remarketing. I like the idea of segmenting based on who’s already purchased your products. To those who’ve purchased, you can show them ads with a targeted upgrade to boost your sales. And for those who’ve browsed but not purchased, you can show them ads for a free webinar or product demo.

4. Get Them to Open Emails

Email marketing is sending out emails. Email remarketing is sending out those emails again, but this time with more of an incentive for the subscriber to actually read it.

When you send out emails again, you won’t be sending it to your entire list. You’ll only send it out to those who didn’t open the email the first time. Their inaction is a behavioral trigger. But of course, when you send out this time, you want to opt for a different subject line to pique their interest.

Then, there are those who open your emails but didn’t click on the call to action within the email. Target those people, too. Use a different call to action. Make the benefits of clicking obvious. Improve the incentive to click.

As a note, I’d recommend this type of email remarketing when you’re trying to sell a product, but it can also work for promoting your blog posts, webinars, and other causes, too. Just keep in mind that the more you saturate your audience, the less effective it becomes. So, use this technique sparingly for max benefit.

5. Upsell

We can’t talk about boosting sales without talking about upselling. Upselling helps you to make more from a transaction.

When a customer makes a purchase, send out an email offering a complementary or upgraded product at a reduced fee. Explain how this product can benefit the customer, but be careful not to downplay the product that they’ve already purchased from you. If you decide not to upgrade, you don’t want them to feel bad about what they’ve actually purchased.

Best Practices for Email Remarketing

Make sure to do the following when remarketing to your prospects through email:

Do it sooner rather than later.

Send your emails (or ads) as soon as possible in response to the trigger. For example, don’t wait days before you attempt to rescue an abandoned cart. The sooner you respond, the better your results.

Personalize your email (or ad) as much as possible.

If you know their first name, use it. If you know what product they were interested in, include it. Tailor your content to their behavior.

Incentivize action.

Use a promo code where applicable to motivate them to complete the call to action.

Make the call to action obvious.

Your prospect should know exactly what to do next.

Commit to A/B testing.

A/B testing helps you figure out what’s working and what’s not working in your remarketing efforts.

Get an Invite

Before you go, be sure to get an invite to Retained. With Retained, you’ll get special insight into your customers. We’ll identify your most successful customers, and predict those who are likely to churn so you can rescue them in time. Get your invitation here.

Don’t forget to download this list of 10 ways to get your site visitor’s email address.

What is Lead Nurturing and How Does It Work?

Monday, March 20th, 2017

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You’ve probably heard a lot about lead nurturing, and you’re thinking to yourself, Should I use lead nurturing? And exactly what is it?

Lead nurturing is perhaps the most effective tool for building a stronger relationship with your potential customer. If you’ve ever struggled to close the sale, you need to develop a lead nurturing strategy.

In this post, we’re discussing the “what is” and “how to” of lead nurturing, so that you can turn your leads into customers. Let’s get started.

Here are 6 lead nurturing emails you should send:

What Is Lead Nurturing?

Lead nurturing is all about building a relationship with your audience, and then moving that lead in the right direction.

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How Is Lead Nurturing Different From Lead Generation?

As a business, you’re no doubt familiar with the notion of generating leads. Leads mean customers, and the only way to grow your business is to get customers for your business.

But lead generation is different from lead nurturing. It’s one thing to attract people who are interested in your services, but quite another to convert the curious into customers. It takes a different strategy to get customers than it does to get leads.

That strategy is called lead nurturing, and it’s where you’ll spend the majority of your pre-onboarding time.

During lead nurturing, you’ll build a relationship with your audience so they learn to trust you, and eventually take the lead into trying your services.

It’s a shocking statistic that 79% of leads never become customers. The reason? These leads were never nurtured by the brand, and thus, fell through the cracks.

It’s important to generate leads, whether you do so through aggressive outbound marketing techniques or through a somewhat friendlier inbound marketing strategy. However, it’s also important to have a plan for what to do with your leads once you have them on the hook. What’s the next step after they arrive on your website?

What Are the Benefits of Lead Nurturing?

Let’s take a look at why lead nurturing is so effective.

You’re utilizing buyer psychology. Most of the people who arrive on your website aren’t ready to buy from you immediately. They may want to learn more about what you offer, and they want to compare your prices. They’re simply not ready to “show you the money” just yet. So, the best plan of action is to offer something valuable for free (i.e. a trial, a digital download, a consultation), and then nurture until they’re finally convinced and ready to buy from you.

You’re respecting your audience’s space. Hard sells scare away would-be customers. No one likes to feel rushed into making a decision. And rushing your audience can often backfire because they may end up getting something that they don’t want.

You have an opportunity to build the audience’s confidence in your brand. Your leads are suspicious. They’re not sure your product fits their needs. They don’t know if you’re going to scam them. With lead nurturing, you’re able to give the audience a chance to learn more about you, your values, and your products.

You can develop long-lasting engagement with your audience. By investing in your leads, you’ll create more of connection with them.

How Does Lead Nurturing Work?

You may be tempted to think of lead nurturing as the middle step process between lead generation and sale. But it’s actually easier to think of lead nurturing as a series of steps, and not just one. Here’s a very basic lead nurturing model:

Lead Generation:

To generate leads, you create a Facebook ad and promote a free resource guide.

First Contact:

George signs up for your mailing list to download your free resource guide. Now that you have his email address and permission to market to him, you send him a welcome email.

Continued Education:

You send emails to help George learn more about your product. You may also send case studies, testimonials, webinar invitations, and more to educate George.

How to Create a Lead Nurturing Program

Now, let’s get into the nuts and bolts of how to create a nurturing program that works for your leads.

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Understand Your Customer’s Lifecycle

The first step to a successful lead nurturing program is to understand your customer’s lifecycle.

With your previous customers’ data in hand, see if you can pinpoint your average lifecycle. If you offer multiple products, lifecycles may vary. Ask questions like:

  • From initial introduction, how long is it before most people buy?
  • What prompts leads to become customers?
  • What are our most effective lead generating tools, and why?

Create a Nurturing Pathway for Each Customer Persona

Do you offer multiple products?

Do you have multiple customer personas?

Do you have multiple lead generating techniques?

If the answer is “yes” to any of the above, you should develop multiple nurturing pathways.

For example, if you attracted a lead with a free eBook, your nurturing pathway may include an email series where you offer a case study of your theories in action, or a checklist to accompany the eBook.

In another example, let’s say you attracted a lead who signed up for a trial of your product. In an effort to nurture the lead, you’ll send them a series of automated emails during their trial to boost their success with your product.

And, in a final example, suppose you offer multiple products — but your lead is only interested in one of those products. Instead of sending generalized, untargeted content that promotes all of your products, you’ll automatically enroll the lead into a track for that specific product which takes him or her from vague interest to purchase.

Create a Series of Emails to Nurture the Customer

The bulk of your nurturing will be in the inbox. While you can also use SMS and social media for nurturing, your best one-to-one relationship building will be via email.

Create emails that do the following:

Educate your leads. Provide them with so much information about your product that you answer all of their questions and topple their doubts.

Activate your leads. It shouldn’t just be a one-way communication where you’re doing all the speaking. The best way to nurture leads is to get them involved with your brand. This way, you’ll establish a relationship. To activate, simply invite them into a dialogue. Ask for feedback. Solicit questions. Be open.

The best emails are:

Short, sweet, and to the point. Don’t ramble.

Informative. The subscriber should always be empowered by your email.

Actionable. End each email with a call to action so that the lead knows what to do next.

Other Ways to Nurture Leads

Although email is effective, it isn’t the only way to nurture leads. You can also do the following:

Use Your Blog

Your blog will be a great resource for your lead nurturing efforts. You can create blog topics that answer questions and concerns, and present it to your leads in an ongoing attempt to market your brand.

Use Social Media

Social media is another avenue for marketing leads. For example, you can use Facebook to remarket to people who’ve visited your page in the past 90 days but didn’t buy. It’s a great strategy for capitalizing off of a lead’s demonstrated interest in your brand/ products.

Over to You

What is your favorite lead nurturing strategy?

Don’t forget to download this list of lead nurturing emails you should send:

The Value of Checking in With Your SaaS Clients

Monday, December 26th, 2016

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What if we told you your SaaS is potentially missing huge opportunities to grow revenue?

Most SaaS aim to grow revenue and customer retention, but many seem to be missing an obvious link there improved customer retention can be the key to growing revenue. Annual recurring revenue is a measure we should all look to improve, yet a McKinsey study (outlined here by Kissmetrics) showed that 80% of companies are growing ARR at less than 10% per year.

That’s a lot of missed opportunities.

As we’ve discussed previously, focusing on customer success should be a priority for companies who want to improve retention rates, so what are SaaS doing to check in and involve clients in the process?

How do you segment customers? Get our quick ideas here:

Segment Customers

Customer segmentation is important for more than just targeted marketing; it’s a good way to ensure that you are genuinely gathering feedback from different groups of people.

Create some kind of matrix detailing your customer population and make the effort to include each different group when gathering feedback. The temptation can be to focus on customers who are outspoken about how happy they are and look for ways to pat yourselves on the back, but truthfully, you need the neutral, average or negative feedback too if you really want to make improvements.

You should value your vocally annoyed customers just as much they can be a source of valuable insight, though beware of putting too much stock in anything a serial moaner has to say. It may be that they’re just unusually negative and are the types to nitpick over anything. First be sure to understand whether your SaaS is really suited to their purpose in the first place.

“Vocal customers can be an absolute wealth of knowledge. These vocal customers tend to analyze and nit pick every encounter or product error they have with your company. This information is gold! How many surveys, beta testers, phone calls, and customer panels would it take to uncover all of the nuances they bring to the surface without you having to ask?” ( Client Success)

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Photo credit: ccPixs.com via VisualHunt

Worry about the silent ones

As Teresa Becker points out for Client Success, you should worry more about those customers you don’t hear a word from, whether good or bad. “When your customers are silent, you have no idea what problems they’re encountering, what frustrations they have, or even if they’re using your product in the first place. Silent customers may be pleasant to have throughout the year, but what about when renewal time comes?”

This means that it’s always a good idea to deliberately seek those customers out for feedback. You don’t want to be caught by surprise come renewal time. Take steps early to make contact and ask them how things are going “silent cancellations” can be a real problem so you’re much better off making an early move.

Identify Red Flags

Have you figured out what customer success milestones should look like for your SaaS? These are the events, actions or achievements a customer should have made with your app in order to see success from it. You should be tracking whether each customer is meeting those milestones and flagging any who are not this is a possible red flag that the customer might be heading toward cancellation.

This is a premise behind tools such as Retained you need to be able to identify customers who are in danger of canceling as soon as possible before they reach that point. Tools like this make it easier for you to analyse the possibility without having to manually go through piles of data.

What might a red flag look like? Here are a few examples SaaS are using:

  • Customer hasn’t logged into the app for a certain period of time.
  • Customer usage pattern is decreasing.
  • Customer hasn’t met key milestones.
  • Customer has not been opening emails.
  • The account is overdue and the customer isn’t opening emails.
  • The account could save money if they upgrade (particularly if overages are involved).

How Will You Check In?

It’s all very well to talk about the importance of checking in, but most SaaS are busy just keeping up. How can you ensure that your communications with clients are effective? Here are some of our thoughts on checking in effectively:

#1. Make it part of your culture

It’s up to you to set the desired culture in your SaaS from the beginning. Make seeking and acting on customer feedback a priority that is engrained into how things are done. Of course not all feedback will be useful and neither can you act on everything, so develop a system for managing and assessing feedback as it pertains to the overall goals and purpose of your SaaS. Customers will appreciate it when they recognize that you are prepared to act on feedback.

#2. Actually talk to people

We live in a digital world where it can be tempting to rely on electronic forms of messaging for everything we do. The thing is, people are so bombarded with emails and other messages that they’re often going to ignore or put off responding to them. On the other hand, people who are willing to pick up the phone or meet in person will often get a better response.

Susan Payton wrote a post for Mashable a while back where she described different forms of feedback-gathering and their relative effectiveness for companies. While methods such as in-person panels or one-on-one calls may be the least cost-effective means, they tend to be the most effective for gathering raw, actionable feedback.  The more you understand about your customers through direct means, the better you will find your ability to produce meaningful results.

#3. Require churn feedback

Obviously, if you’ve really lost the customer and can’t salvage them before their access expires, you’re already at the point of “too late” with them. This doesn’t mean you shouldn’t do everything possible to get their feedback, no matter how much it has you wincing to do so.

Many SaaS still operate with churn feedback being optional, but others such as Cashboard opted to make churn feedback compulsory. It’s a bit of a double-edged sword of course you can get some less-than constructive feedback when people are forced, but overall, they felt that the feedback they got made it worthwhile. It’s possible that by requiring the feedback, you may even be able to do something to retain the customer before it’s too late.

#4. Gather in-app feedback

There’s nothing like getting feedback from a customer while the experience is still very fresh in their minds. Prompting users in-app to provide feedback can generate some excellent contextual ideas or iterations.
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How do you segment your clients? Here are some quick ideas:

Final Thoughts

Is your annual recurring revenue figure growing? This measure shows how well you are doing with retaining customers and represents a huge opportunity.

Churn is costly to SaaS and is often preventable with the right structures in place, including checking in regularly with customers and developing a culture of valuing customer feedback.

What can your SaaS implement today to improve feedback frequency and quality?

How to Hire for Customer Success

Monday, November 28th, 2016

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Are you looking at expanding your team to include dedicated customer success people?

Many SaaS are acknowledging the importance of customer success and are moving to hire teams dedicated to it. As we’ve written about previously, these are not teams who provide a customer support role, there is a big difference:

“The answer lies in the timing of the interaction with the customer; customer support exists in reactive mode where they are taking action because the customer has contacted them with a problem. Their job is to resolve these problems as quickly as possible.

Customer success teams have a more proactive role. Their role is about fostering engagement between themselves and the client, and the client and the product. They want to ensure that the customer derives meaningful value from the product. This means there is more longevity in the relationship between customer success and the customers.”

In any kind of customer-facing role, you don’t want just anyone filling in. For a start, anyone who deals with customers should be of a “built to serve” kind of mentality. Secondly, if we look specifically at customer success, you need people who are suited to the proactive nature of the role.

Here’s how we think SaaS should hire for customer success:

What does “built to serve” mean?

What should you look for in a customer success person? Get our checklist here:

As we mentioned, one of the number one traits for anyone who deals directly with customers should be that they are “built to serve.”

You’ve probably noticed that there are large numbers of people employed in some kind of customer service role who tend to be fairly light on the “service” aspect, and this is exactly what we mean. Your customer success people need to have a heart for serving others, an innate drive to get the best results for their customers.

As Glide Consulting state: “Being built to serve means caring about the customer’s journey. Each customer will have their own journey, but they usually follow a similar path. At any point, the CSM’s role is to anticipate problems, solve them, and make the customer experience the product’s value.”

The fact is, we’re all made up differently and you’ll find that that person on your team who is excellent at bringing in new business will probably struggle with customer success, and vice versa. Glide Consulting also point out that “built to sell” people are on the opposite end of the spectrum with a completely different set of skills. They enjoy conquering numbers and thrive on deal-closing, but would probably struggle if asked to take on the “servant” role.

Here are some other traits of “built to serve” people:

Empathy

Your customer success people need to be genuinely interested in people and getting to the root of any issues they may have. They need to anticipate needs and be good readers of customers’ feelings.

They “give a damn”

Amanda Saunders of Totango points out that good customer success people have a strong desire to win, both for their customers and their company. They probably have a history of excellence and will take on customers with no less enthusiasm than what any founders before them displayed (possibly even better!).

Hire someone who is truly invested in the success of your business, who wants to see your clients, and therefore your business, do well.

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Choose people who DO give a damn – Image source: The Guardian

They are problem-solvers

People who stick firmly by-the-book are not usually the best-suited to a customer success role. Good customer success people need to think creatively and look for ways to work with the customer which don’t necessarily follow a rigid set of rules. They are agile and prepared to quickly change direction if need be.

Communication skills

Good communication lies at the heart of any excellent customer experience. Your customer success team need to be active listeners, ask thoughtful questions and be clear communicators in all they do.

Language also plays an important role here; the best customer success people instinctively know how to use language appropriately which can engage the customer, foster their loyalty or de-escalate any kind of issues.

Well-organized

Your customer success people need to be highly proactive as well as responsive if the need arises. Every customer should feel like they are a high priority and not languishing somewhere far down a to-do list. This means you need people who are very organized.

They love to teach

A core role of customer success team members is to help guide customers through their journey with your company so that they can realise success with your product. This means you need people who enjoy teaching and are able to present things to customers clearly. Lots of patience is also a plus!

Critical and strategic thinkers

Your team members need to have good skills when it comes to thinking things through when interacting with customers. They need to form the bridge between what the customer’s needs are and what the overall company goals are.

Supporting Customer Success

If you’ve found the right people who are “built to serve”, then next it’s your job to make sure you’ve got the right support in place to ensure they can successfully come into the job.

A surefire way to inhibit the success of your customer success team is to be vague about what you need them to deliver or where they fit in your company. Here’s what you need to support customer success:

Know exactly why you need them

As we’ve mentioned, customer success is a role very distinct from customer support. Make sure you have clear deliverables drawn up for each so that there is no blurring of the lines. For most SaaS, customer success is going to have goals revolving around engagement and retention make sure their deliverables are specifically things they have control over.

Make sure you have a clear understanding and description of the role you need. This will not only help your team to succeed, but it will help you to identify the most appropriate people with the traits we outlined above.

Know where they fit

In SaaS startups, you may not have large departments for each function just yet, but once you do, you’ll need customer success people who are capable of communicating and collaborating across all of them and presenting a case in the interests of the customer. Technical aptitude and passion for the product can be useful here too.

Make it clear to customer success team members where they fit, who they need to be communicating with and what they should expect from them.

Support Wellness

Wellness is important for employees in any role, but you do need to be mindful of people in those customer-facing roles, particularly as they may spend a lot of time dealing with issues or assuaging unhappy people. This can be draining work, so it’s important to recognize that and provide a safe space for work/life balance and simply taking breaks.

As Ryan Engley talked about in an interview with HelpScout: “We need to challenge ourselves to help nurture and grow individuals in those roles, or they’ll wear down and look for careers elsewhere.”

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Who should you hire for customer success? Get our checklist here:

Final Thoughts

Hiring for customer success means not hiring just anyone to fill a role, it means identifying those who are “built to serve” and have the kinds of proactive traits required of the job.

Your customer success people should be invested in the success of the customer and the company. They should be top communicators and savvy problem-solvers. They should also have a knack for identifying needs, often even before the customer has identified them themselves.

For SaaS owners, supporting customer success in the company is key. Have clear goals for the customer success roles and know exactly where they fit in your company. Provide them with the space to achieve a healthy balance.

How to Deal With Negative Feedback in Your SaaS

Monday, November 14th, 2016

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You can’t be friends with everyone.

Some people aren’t going to like you. Some customers will walk away disappointed.

These are the realities of running a business. It doesn’t matter how strongly you prioritize customer service and customer success, some customers are going to complain.

Young startups feel this the most. They only have a handful of customers, so a few complaints are a blow to their egos. They can’t turn to a user base of thousands for assurances. Plus, resources are tight. They can’t provide as much of their attention as they would like.

But that doesn’t mean that negative feedback should be ignored.

Your customer service policy should be a carefully designed plan. Download our free guide to learn how to create yours.

All Feedback Is Useful

Anytime a customer or user takes the time to send you feedback, you should rejoice.

Sure, sometimes the customer will be upset. They might even be angry or use unconstructive language.

Just keep in mind that the customer is giving you an opportunity to learn; an opportunity to improve your product. If you can set your ego aside and critically look at your product and business, any bit of feedback can be used to strengthen your SaaS.  

Positive feedback is encouraging, but it rarely helps. You already know what you’re good at. Negative feedback, however, points you at the areas you can improve. A complaint is a big neon sign that says “FIX THIS TO MAKE MORE MONEY.”

You’re likely familiar with the Lean Startup methodology. The build-measure-learn feedback is an exercise most SaaS businesses use to improve their product. User feedback is a big part of the “learn” phase of product iteration.

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Source: theleanstartup.com

The beauty of software is that you can change the product in response to complaints. So unlike physical products where negative feedback is best minimized and handled quietly, SaaS complaints are a chance to make your product and service better.

Understand the Complaint

Before you can take steps to respond to negative feedback, you have to understand why the customer is complaining. Something made them upset. What triggered the behavior?

In many cases, the original complaint will tell you everything you need.

Let’s say a customer signed up for your payroll software, but didn’t realize that you specialize in helping small businesses. His company is too large and requires elaborate features that you don’t provide. He may label you “ineffective” and “unfinished.”

It’s obvious from his complaint that his challenges are real. He is frustrated because he purchased a product that doesn’t help him. You could dismiss the customer as a poor fit, but that doesn’t help anyone. Instead, use his feedback to improve your marketing (perhaps your website copy) to make your product’s intended use more clear.

In other cases, customers won’t be as clear. They’ll fail to provide details and use general words like “disappointed,” “unprofessional,” and “dissatisfied.” These complaints don’t help you solve the customer’s problem or improve your product.

If you don’t feel that the customer has provided enough information, ask for more. Don’t be condescending or overly suspicious, but don’t admit fault or apologize until you know the full story.

Respond Respectfully

When we’re emotionally investing in something, we have a tendency to take negative feedback to heart. Resist this urge at all costs. Respond to the feedback quickly, but not immediately. Give yourself and the complainer at least two hours to cool off. (Exceptions apply here. If the customer is experiencing severe hardships – like revenue loss – get on the phone.)

Always respond in an intelligent, thoughtful manner. You care what they have to say, so make sure the sentiment comes across.

If you are replying publicly, be especially cautious (email is considered public; it’s easy to forward around). Speak in terms of solutions, not problems. Make sure to thank the customer for the feedback, no matter how much that sentence hurts to write/say. All feedback is a gift.

Sometimes a customer will be wrong. They’ll misremember, misread, or insist that you help them in a ludicrous manner. If you assessed the situation objectively, it’s alright to correct the customer. Don’t feel the need to apologize for everything, but recognize that sometimes it’s smart to rectify a problem that isn’t your fault. In many cases, solving unrelated problems is a big part of customer success.

A few days after you have proposed a solution, follow up with the dissatisfied customer so they understand that you genuinely want to solve their problem. Ask if they have taken your advice or used your solution. Offer further help. If they don’t reply, don’t harass them.

Even if you can’t provide a solution, respond anyway. The service recovery paradox is when a customer thinks better of a company after the company has apologized for a mistake than if the company had never made the mistake in the first place. It doesn’t work for big failures and it doesn’t work repeatedly for the same customer, but a failure on your end does not instantly end a relationship.

service-recovery-paradox

A Harris Poll survey found that responding to negative feedback online is a smart tactic. 33% of people who leave negative reviews online will post a positive review if a company responds, and 34% will delete their original review. The key is to respond quickly, accurately, thoughtfully, and address their complaints.

Improve Your Business

Once you have handled a complaint, your work isn’t finished. You need to catalog them so you can identify patterns.

Complaints will rarely be uniform, but they can often be solved with similar solutions. Let’s return to our example from before – the customer who wasn’t a fit for your payroll software. Perhaps you had another customer who misunderstood your product for accounting software, or a customer who wasn’t aware she could only list 15 employees.

In our example, each complaint is different, but they share a commonality: The customers purchased your software without understanding it. You should adjust your marketing to better educate your customers. This solution won’t help the complainants, but you’ll prevent future problems.

Keep in mind that anytime a customer sends negative feedback, there are several more who choose to say nothing. According to Help Scout, “a typical business hears from 4% of its dissatisfied customers.” They’ll think it. They’ll tell their friends. But they won’t come to you. The smart solution is to fix whatever triggered the poor feedback so it stops happening.

Create a Feedback Process

Smart businesses use processes so they don’t solve the same problems over and over.

Create, document and implement a system to deal with negative feedback, especially if you have a large team. The process should tackle negative feedback immediately in a consistent manner.

As CSM Wire suggests, this feedback process should integrate with your customer success team. “The customer success team should also develop a library of standard messaging that can be quickly accessed during an urgent situation. Standard update and maintenance communications can be customized as necessary.”

Feedback is so important, in fact, that seeking feedback should be a part of your process. Social media is a good tool for this, but it’s also smart to build features into your app for immediate communication, like live chat, review prompts, and popup surveys.

You can build a customer service policy that deftly handles negative feedback and turns those customers into loyal fans. Download our guide to learn how.

The Takeaway

The key to handling negative feedback is to not sit idle.

If you receive feedback and fail to address it, the likelihood of churn skyrockets. Even if the problem wasn’t a big deal to the customer, your unwillingness to address it exacerbates the problem. Suddenly the customer feels unappreciated and unvalued. Instead of a polite “I need help” email, the customer publically criticizes your company on social media. Not good.

If you respond to your upset users and continually refine your process for handling feedback, you’ll retain users and squash your churn.