The Definitive Guide to Improving Customer Retention for Your Business

If you are a SaaS company using a subscription business model then you must be familiar with the struggles of retaining customers and acquiring new ones. While it might sound logical to focus on customer acquisition, retaining the existing customer base is just as important. If this claim seems alarming then we will explain why your business should be focusing on customer retention. When it comes to the subscription-based business models, recurring revenue makes a huge contribution to the business revenue as compared to revenue brought in by new customers. This is the main reason why customer retention is more important than ever. Moreover, it has been proven that less investment is needed to spend on enhancing the customer’s experience and convenience as compared to acquiring more leads.

A loyal and satisfied customer base will be more interested in any new products you launch in the future. Satisfied customers are also more likely to promote your brand through word of mouth. Overall customer retention contributes to revenue generation and supports business expansion. Nonetheless, retaining customers is not rocket science no matter how intimidating it might seem. If you are using a subscription management software then achieving retention is considerably easy.

Reasons For Increased Churn Rate

Before focusing on strategies and techniques to increase customer retention, you should identify the underlying reasons why customers are canceling their subscriptions. As a company, you might be familiar with the churn rate. Churn rate is the antithesis of retention and directly impacts your recurring revenue. This can be detrimental for subscription businesses that rely on steady cash flow. For those who don’t know, churn happens when customers cancel their subscriptions. This is the main cause of why companies struggle with customer retention. There are many contributing factors to this issue:

• Poor customer service is one of the leading causes which negatively contribute to customer retention. Voluntary churn might take place when your customer issues are not addressed right away.
• Lack of customer engagement and personalized relationships outside the use of the product are also harmful. This includes customer’s experience with your company i.e. complicated onboarding process, poor interface, payment processing issues, and lack of transparency about your services.
• Involuntary churn has a huge impact on the customer lifecycle. This type of churn takes place because of credit/debit card declines and failed payments. Usually, companies using subscription management software tackle this issue easily through dunning management.
• Lack of tools to gather customer feedback or monitoring customer’s usage is a bad business practice. Your company cannot employ customer retention strategies unless it utilizes the gaps in your communication to address issues and improve customer service.

Now that we have identified the reasons why customers might be canceling subscriptions, let’s have a look at how these issues can be resolved with SubscriptionFlow churn reduction software.

• Increase Focus on Customer Relationship Management

Issues regarding bad customer service or delayed response are usually because of faulty customer relationship management. With suitable subscription management software, supporting automated renewals, accurate billing, flexible payment options, and gateways raises the quality of your service. However, customer relationship management goes beyond the recurring billing. This is where customer service comes in which is a guaranteed way to secure loyalty. This involves supporting self service portals and easy to use interface to avoid confusion or discomfort for your customers. Your customers should feel like they are in control of their accounts and management software is a good way to guarantee that.

Your relationship with customers should be proactive. This means that customer service issues, queries, and complaints must be handled in a timely manner. For this purpose, tools like conversational bots, proper ticketing management, ample resources on your website, and use of email and social media can be helpful. If you are concerned about involuntary churn and termination which might go unnoticed by customers then sending email alerts can maintain a consistent flow of communication.

• Establish Personalized Engagement

To increase customer retention it is important that companies avoid situations where they might feel like they are not being taken care of. This can be done by using email marketing. This tool should be introduced once the customers have subscribed to your service. This will make their onboarding process more seamless and easy. Valuable communication is done through emails about personalized recommendations, helpful suggestions, and updates on your business milestones. Moreover, personalized emails or newsletters can also be used to send customers who have not visited the website for a long time or sending video tutorials or material to enhance their experience. Another valuable way to communicate is by sending email alerts about new products, offers, and discounts. Offering discounts is a good way to communicate in a valuable manner.

• Utilize Customer-Centric Data and Feedback

All of the aforementioned tools and strategies to tackle retention are not possible without utilizing analytic reports on customer behavior and usage. Even customer inactivity is a sign that they are unsatisfied with your services. With subscription management software, using performance metrics like recurring revenue, sales, site visits, customer feedback, customer lifetime value and even churn is easier and accessible to your marketing and sales team. The subscription lifecycle and meticulous tracking allow you to analyze how customers are interacting with your brand. Such data can also help you understand any fluctuations in sales. This might be due to the availability of better service or affordable prices.

When it comes to churning, the most important way to tackle it is to offer exit surveys for your customers. Your goal should be to learn about their experience and understand your shortcomings. Increasing retention can be achieved by upgrading your services but until reasons behind cancellations are addressed, your customers would not feel heard. Only a robust subscription management software can optimize your business to increase customer retention. With SubscriptionFlow, you can also get started on strategies to build a strong customer base by addressing churn.