The Value of Checking in With Your SaaS Clients

by Trevor

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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?

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

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