SaaS products have firmly established their place in the market today…efficiency, scalability, faster upgrades and reduced time to benefit are some of the main reasons that have made these products such a lucrative deal. SaaS products have now become so integrated into our lives that we often forget that the product that we are using isactually, a SaaS product. Think Google Drive, Salesforce, Google Apps, Amazon Web Services, Dropbox, Buffer…the list goes on. However, it has also been noticed that SaaS products are prone to customer churn. It’s almost like having a business that is a bucket with holes. While the water keeps filling from the top, this growth rate is impeded because of the holes in the bottom. A survey conducted by Pacific Crest shows that almost 30% of SaaS companies have extremely high levels of customer churn. To ensure a top line growth it becomes essential to plug this churn since almost 80% of a companies future revenue comes from the 20% of existing, loyal customers. Just a 5% reduction in customer churn can impact profits positively by 25% to 125%! It only makes sense to take these numbers seriously, isn’t it?
While some amount of customer churn is inevitable, identifying why this churn is happening is the first step in the churn plugging process.
Inefficient customer service, poor onboarding experiences, weak relationships, and ignoring the data glaring at you can be considered the primary reasons for customer churn.
Is your Customer Service fit for the 21stcentury?
Often a number of people just leave using a product because they are not clear how to use it. Given the cost of customer acquisition is much higher than customer retention, clearly, a poor onboarding experience can be a costly proposition.
Along with this is the bane of poor customer service. Customer service teams need to be highly responsive and resolve problems, questions, and queries at the speed of light. These teams are great contributors to customer success stories. However, to do so, customer service teams have to be enabled with a priority mechanism that helps them assist the customers to resolve queries faster. Self-help comes of great use here. The simpler problems, like that of ticketing, etc., can be addressed via self-help using a dashboard. With the repetitive and time-consuming work out of the way, customer service teams can focus on solving the more complicated issues that need human intervention such as that of access issues or deeper technical problems. This reduces overall customer turn-around-time and increases customer satisfaction.
Ineffective customer service also happens when you fail to close the feedback loop. A Lee resources survey reveals that while 80% of companies believe that they deliver superior customer service, only 8% of customers believe that the company actually does that. Customer service representatives thus have to have the right set of tools in place to collect, register andimplement the feedback received from the clients.
How’s your relationship focus?
While it might not be staring at us in the face blatantly, it is true that SaaS products also fail owing to weak relationships. Weak relationships happen when the customer cannot connect with the brand. A report from Salesforce states that 81% of customers are more likely to stay loyal to a brand and stay with them if they feel connected to it. It, therefore, becomes essential to stay connected with the customers and keep them updated with relevant information through the right communication channels in a device agnostic manner. In today’s hyper-competitive world, you need to know what your customer preferences are, what customer exit surveys say and discover ways of how you can re-engage with inactive customers.
Data tells a story. But are you listening?
Yes, we all know that data is the new oil. But then, why are we ignoring it? Usually, a customer will not tell you why they are not using your product before jumping ship. They will move even before you conduct a customer satisfaction survey. You clearly need to pay close attention to what the everyday customer data is telling you. Where do they drop off? What are their pain points? Which segment stopped renewals? Where can you be better? How can you re-engage? The answer to these and many other questions can be found in the wealth of data at your disposal. By using the data at hand, you can personalize customer experiences and prioritize features by analyzing their behavioral trails, provide the right information and educational material and plug customer churn.
When it comes to SaaS products, where we are going wrong is that we are looking at these aspects as siloed, individual departments that do not interact with each other. What we have to understand is that all the contributors of customer success…the sales teams, the marketing teams, the support teams, channel partners, product teams have to, without exception, work in a collaborative manner. They all need equal insight into the customer journey and the customer experience so that they can identify proactive means to help the customer achieve speed at scale. Instead of providing disparate sources of information via different teams or different apps, the customer needs all the information that is relevant to them in one place and in an organized manner.
What the customer needs is the enablement of the entire value chain. This means getting the customer-facing teams and extended teams such as marketing and communication, feedback, knowledge, and education teams under a single umbrella. This way they can help the customer in a proactive and intuitive manner, whilethe customer is still using the product simply by extending the product to enable this. This approach makes the customers journey more contextual, and by leveraging deep analytics, the customer can be helped, educated, relevantly informed, and corrective action can be implemented proactively.
Clearly, to plug customer churn, we have to focus on customer success. Connect with us to learn how the Flype widget fits into your existing SaaS products and help you deliver a cohesive, seamless and great product experience.