The First Sale Is Not The Only Sale.

by Richard

Part of the beauty of running a SaaS app is that you have fairly predictable recurring monthly revenue. It’s an attractive business model, because each month you start from where your revenue left off the previous month, instead of from $0, as you would if you were selling a one-off product. However, don’t let that lull you into complacency. You need to continually show your customer the value of your product.

The majority of SaaS apps are sold on a month-to-month basis. This means that that any customer can cancel at any time, for any reason, with no consequences. This is good for multiple reasons: The customer knows that if anything happens that they don’t like, or they aren’t getting enough value out of the product, they aren’t locked into a contract and they can just cancel their account. It’s good for the SaaS app owner, because it’s easier to make the initial sale to someone who doesn’t have to stop and consider the long-term ramifications of their purchase (as they would if they had to sign a contract that locked them in for some period of time). It’s better for everyone, because it keeps the SaaS app owner incentivized to work on the app and improve it over time. It also encourages SaaS app owners to provide great, timely support.

This also means that the first sale is not the only sale. As someone who runs a SaaS app, you need to be good at attracting customers to the product initially. You need to provide a service that is useful to them. You also need to be good at retaining the customers that you managed to attract, and who are finding your service useful. Essentially, you’re making the sale again every billing period. Every time a customer gets a receipt from you, they run through a mental checklist in their head to figure out if you’re providing value for the amount of money that you’re charging them, and if they’re happy with your service. If you pass, you keep them as a customer. If you fail, they cancel.

To retain more customers over time, you need to show your value to them as much as possible. If you aren’t actually providing any value, or enough value to your customers, fix your product. No matter what else you do, you won’t be able to keep anyone around because no one’s going to keep paying for a service that isn’t providing any value for them. If you are running an app that’s found product-market fit, your app is doing something that’s providing value to your customers. Show them.

If your app saves your customers time, tell them how much time you’ve saved for them. If they’ve used your app to do something useful, tell them what, and how much they’ve used your app. If your app is making them money, tell them how much money you’ve made for them.

Postmark shows customers how much email they’ve sent:

Screen Shot 2014-01-16 04:05:05 +0000

 

In their weekly emails, Freckle shows how many hours their customer has logged in the past week. If I was a customer who was receiving this email every week, it’d be really difficult for me to cancel my Freckle account. Just look at those gorgeous charts!

Freckle hours logged

 

 

If your app is saving them money, tell them how much money you’ve saved for them. The moment that Stunning saves a customer for someone, it starts showing them how much revenue it’s saved for them, right on the top of their dashboard.Screen Shot 2014-01-16 03:56:21 +0000

Don’t be afraid to tell your customers just how much your app is improving their business/life. Give them the information that they need to sell themselves on your app. You’ve made the initial sale, so you just need to consistently show value. If you can manage to put that information into the receipts that you send, you win even harder, because you can frame your the charge with the value that your product provides. If you send someone a receipt for your $100/month app, and at the same time you can tell them that you’ve made $700 for them, it’s a no-brainer for them to keep paying you, isn’t it?

 

Kill your churn. Keep more of your customers. Get an invite to Retained.

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