Technological advancements have changed the way businesses operate. In the digital age, businesses that can adapt to meet their customers’ demands are more likely to thrive. A Software as a Service (SaaS) company is one that provides its customers with software remotely. There are many benefits to having your business operate in this manner, but there are also unique challenges that come along with it. The life span of a typical SaaS customer is very short. It is not uncommon for customers to churn after just two or three months of usage; usually because they don’t get enough value from the software in that time frame. That’s why it’s essential for any SaaS company to implement strategies that help improve LTV and reduce churn rate. Here are some ideas on how you can do so in the coming years:
Provide transparency to increase LTV
Customers who feel confident in their decision to purchase a product or service will be less likely to churn. Transparency, in regards to SaaS, means that customers are aware of everything that is included in a package, pricing, and how the product works. If a customer doesn’t know what to expect, they will likely be less willing to sign on. For an SaaS company to increase transparency, they should make sure their website is easy to navigate and provides information on their offerings and the features they include. The site should also provide information on the customer service team and make it easy to contact them with any questions or concerns.
Build a brand that customers trust
In the age of technology, customers are more likely to choose a brand that they trust over one that they do not. An SaaS company can build trust by offering their products for free for a certain amount of time and/or providing a money-back guarantee. A brand that customers trust will result in less churn and more customers purchasing from your company. Customers who feel assured in their decision to invest will be less likely to churn and more likely to recommend your brand to others. Building a brand involves more than just offering a free trial or money-back guarantee. Your brand is the way your customers perceive your company. Even if you offer everything your customers could want, if your brand isn’t trustworthy, you’ll have a hard time retaining customers.
Turn churned customers into influencers
Customers who churn often have a specific reason for doing so. It’s important to find out what that reason is so you can avoid making the same mistakes in the future. Taking the time to poll churned customers and asking them why they decided to leave will give you insights into how your product and/or service could be improved. If you follow up with these customers a few months later and they have had time to evaluate other SaaS options, you can ask them which services they decided to go with. This will give you feedback on how your product stacks up against your competitors’ and help you improve your product and services even further. Turning churned customers into influencers will help you build your brand and earn more trust from potential customers.
Implement interactive capability
As your company grows, it can be easy for communication to break down between departments. An SaaS company that has employees in different locations may not be able to communicate with one another face-to-face as often. For a SaaS company to succeed, communication between departments, such as marketing and customer service, needs to be strong. An SaaS company should implement a system that allows all employees to communicate with each other and their customers. Interactive capabilities, like the ones offered by Vdoo, make it easier for departments to collaborate on projects and communicate with one another. If your company currently isn’t equipped with a system that offers these capabilities, you should start looking into one now.
Conclusion
The SaaS industry is expected to grow by $20 billion by 2023, and companies in this industry are eager to find ways to increase the life time value of their customers. However, not all customers will pay their bills at the end of the month if their product didn’t meet their expectations. To avoid churn, SaaS companies need to learn how to provide value quickly and efficiently. One way to do this is by providing transparency. By making it clear what customers are paying for, they’ll be less likely to churn because they feel like they didn’t get their money’s worth. A brand that customers trust will also help to reduce churn and increase LTV. Customers who trust a brand will be more likely to purchase from it again in the future, making it more likely that they’ll pay their bills on time.
