As a SaaS manager, no one needs to tell you how important renewals are to your business’s growth. You know it’s critical. However, knowing you need to reduce churn and putting in place an effective strategy to accomplish it are two completely different things. The fact is, decreasing SaaS churn is a goal that eludes many of us, which isn’t good as a high churn rate is almost certainly a recipe for failure.
With renewals being so important, the Internet is awash with tips of how to increase retention and reduce churn. Most renewal tips and hacks, however, center on providing a great product and excellent customer service. While those factors are certainly important, there are other pieces of the puzzle that are often overlooked. Here are six simple-to-implement but commonly overlooked SaaS growth hacks for customer renewals to help you get on the road to success.
- Get your CRM involved. Your customer relationship management software is key to tracking the renewal process. However, many aren’t designed to hold that data. Be sure your CRM does and add the capability if it does not. Create custom mandatory fields that tell you: 1) if the product is renewable 2) renewal date and 3) renewal stage. The renewal stage is important to identify who needs to be contacted when.
- Rethink using your sales team. No doubt you value your sales team. They are a special breed of people who are great at closing the sale and bringing in revenue. While there are exceptions, salespeople are typically not great at nurturing existing customers and managing the renewal process. In fact, Forbes identified using your sales team for renewals as one of the most common mistakes in SaaS sales strategies. The article explained, “focusing your best salespeople on new account growth and your customer success team on existing customers aligns the best resources on your team with two very different types of prospect/customer activity.” Your customer success team will be more familiar with your user base, and therefore better equipped to assuage any lingering doubts among current customers that might keep them from renewing.
- Offer incentives. Just because you’re not using your sales team for renewals doesn’t mean you shouldn’t offer incentives, such as commissions. Renewals aren’t automatic. They take attention and nurturing. Your “customer success team” deserves a commission, especially if they are able to upsell the renewal.
- Measure engagement. If a customer isn’t using the product they signed up for, they are going to cancel. It’s that simple. On the other hand, if they’re getting genuine value from your product, it will be much easier to keep their business. Measuring their use is critical to keeping the customer. Don’t wait until renewal time. Build in a trigger to alert you when a customer’s usage level drops off, or if they simply aren’t logging in as often. Make usage-monitoring part of the renewal process. Reach out to these customers. Ask how you can help them get more out of the product.
- Focus on popular features. SaaS companies are always striving to improve their product, for good reason. Just make sure you’re not working on improving something that very few customers are using. Use analytics to identify the most popular features and focus on improving those. Tools that are used daily by the majority of users should be a priority. Make their favorite feature even better. The more dependent they are on a particular functionality, the less likely they will be to cancel the account.
- Build trust through transparency. Many customers are skeptical of any online company. They question whether they are really getting their money’s worth. They worry about security. A CMS article hit on the importance of transparency to build trust in our digital world. Be sure to notify customers of downtime and give them advance notice about pricing changes. CMS suggested publishing a ‘trust site,’ a place customers can go to get information on new developments, estimated release dates, scheduled downtime, information on security and historical data on system performance. Be sure they know where their money is going, and build trust that it’s being used wisely. Instill confidence that they will continue to see a return on their investment.
Focus your efforts on ensuring that your current customers are seeing the value in your product and proactively responding to their needs. If you prioritize your customers’ success, getting them to renew shouldn’t be a big hurdle on the road to your own continued growth.
For more strategies to boost renewals and improve retention, make sure to read this dedicated eBook. Download your Free copy right now!