SaaS Customer Retention: 11 Game Changing Retention Strategies

This is the ultimate guide to SaaS Customer Retention strategies. In this guide, you will find 11 clever strategies to retain customers and reduce churn.

As competition in the tech world intensifies, SaaS customer retention has become the metric of envy. It is not enough to have a product that customers enjoy. You also need to make sure that you keep them happy and engaged throughout the customer journey.

Even if your product has a high initial conversion rate but if you don’t have a strategy to retain those customers, your revenue will eventually dwindle. To succeed, companies need to develop a customer retention strategy that is agile and effective.

Let us understand it better with some deeper insights.

According to data, it is up to 25 times cheaper to retain an existing customer than acquire a new one.

Also, just retaining 5% of your customers can amount to up to 95% of the revenue.

These are significant numbers and highlight the importance of SaaS customer retention.

So how can SaaS companies optimize for customer retention?

The challenge is that customer retention is not easy. It needs tactical thinking and a deep understanding of your customers’ needs.

It is worth all the effort as it can lead to a long-term, profitable relationship and increased revenue opportunities.

Based on that, I have compiled 11 game-changing SaaS customer retention strategies that you can apply today to reduce churn. Though these tips can be used for other industries, they are best applicable for SaaS customer retention efforts.

Swipe them and see your MRR grow.

1. Offer discounts/promotions with an element of surprise

A smart strategy for increasing retention is to have a built-in element of surprise in your product value.

What kind of surprises can you offer your customers? You can select something of value to your customers and relevant to your product.

Here are a few examples:
1. Extra pro-level features
2. Extension of usage limits
3. A free month of service

You get the drift. Offer something of value that incentivizes customers to continue their subscription to redeem it.

Pro tip: Organize monthly competitions where you reward customers with the best use cases related to your product. This creates a gamified experience leading to higher retention while also giving you valuable case studies that you can use to market your SaaS product.

2. Optimize the customer experience

When you are in the SaaS business, you are not just selling the tech but also the experience.

No one likes a product that feels jarring and has a tacky customer experience. To fix this, review your product functionality, usability, speed, customer support, and other elements that come in the way of using your product.

You can narrow down the problems by launching a customer experience survey. You can ask your customers specific open-ended questions about their experience while using your product. You can incentivize the survey responses by offering them a free month of service or extended storage.

Once you get the replies, you can study and analyze the fault lines in your customer experience and work out a focused approach toward fixing them.

3. The bonus follow up

Customer support moves the needle in terms of customer retention. But I am not talking about the generic customer support that any AI chatbot can do. Instead, I am talking about going the extra mile with personalized bonus follow-ups with your customer.

A bonus follow-up can be set anywhere between 3 days to a week after the initial query. Customer support can send a message inquiring if the customer was able to solve the problem.

You can add some value to the message by sending some more resources or a personalized video message where you discuss the solutions in more detail.

Very few companies are doing this, and guess what – Your customers will love it and keep coming back for the experience.

4. Smart Onboarding with gamification

Use gamification tactics to engage and motivate users in the onboarding process. It helps make the onboarding process enjoyable rather than something tedious.

When users sign up for your product, you can provide them with the option to choose a profile avatar to create an element of personalization. Next, use progress bars to indicate how close they are to completing the tasks required for unlocking the next level in your product. Finally, provide a checklist of these tasks so that users know what needs to be done and don’t feel overwhelmed when signing up for your product.

You can also double down on gamification by giving badges and ranks to users for completing certain milestones. You can spice it up further by offering extended limits and features for those who finish certain milestones.

5. Sending a benefit + progress report

Your app features may not communicate your value as much as the actual results. You can apply an interesting retention hack by sending progress reports to your users. The report lists the user activities and the results achieved from them.

For example, if it is proposal-based software, you can list the money earned from all the successful proposals. If it is a text editing software, you can list the number of errors corrected (similar to what Grammarly does).

Doing so communicates the tangible real-world value of the app and makes customers continue to use the service.

6. Publishing research-rich white papers and content pieces

A SaaS business should continuously produce high-value content pieces rich with insights and actionable data. These content pieces should primarily aim at solving your customer’s pain points definitively, with lots of actionable growth strategies.

When you commit to such an ongoing content strategy, you show your users that you’ll always be there for them. You help them overcome their challenges by providing valuable content. Your users will become loyal to you and stick with your product.

7. Relatable case studies

Talking about product features is one thing, but sharing actual case studies of how your product helped different customer archetypes is at another level altogether.

Sharing relatable case studies that directly pertain to product use cases can have a powerful effect on customer retention. This way, customers can look beyond features and get inspired by actual use cases that have moved the needle for similar businesses. All this builds a lot of trust and tangible value around the product leading to customers sticking with the product longer.

8. Build a value-based community around your product

People come for the product but stay for the community. A good community surrounding your product creates a lot of value addition that makes customers stay with the product longer.

Customers can find other like-minded individuals and network with each other apart from sharing valuable resources and use cases.

Also, an active community changes the perception of a SaaS product from mere clicks on a screen to actual real faces who are actively using the product and talking about it. This adds a lot of trust to the product.

You can double down on your community by organizing community-exclusive webinars, tutorials, and events. This way, the membership to the community will feel like a VIP ticket for active customers who can now access additional resources due to being subscribed to the product.

9. Interview star users

Do a video or a written interview of star users who have greatly benefited from the product. Feature them on a podcast and share it via your newsletter and social channels. Showcasing 2-3 interviews per month full of user-generated tactics will lead to a results-focused narrative around your product. This positive messaging will lead to higher trust and retention.

10. Offer alternatives to cancellation

When the user is hell-bound to cancel, you can offer some last ditch creative alternatives like pausing their subscription for a month without a charge or offering a lighter version of your product as a cheaper alternative.

These finance-sensitive solutions can lead to lowering your churn dramatically.

11. Use customer retention tools.

You can use a number of customer retention tools to engage your customers and make them stick with your product.

Here are a few options you can try:

KingSumo: For organizing contests and giveaways.

Woorise: Another alternative for creating contests.

Circle: For hosting engaging communities (where people can ask questions, earn badges, etc.).

Proof: Collect,manage, and showcase reviews from various social media sources.

Endorsal: Collect and display testimonials while syncing with review platforms like Facebook, Yelp, and Google My Business.

VideoPeel: Collect and showcase video testimonials.

The Next Step

These were my top tactics for B2B SaaS customer retention. What do you think about these tactics? Any tactic that I missed? Please comment and let me know.

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Want to go more advanced and have a growth call with me to discuss your specific customer retention pain points? Connect with me via LinkedIn here.



Abhik Shome

Abhik helps entrepreneurs shorten their path to online growth with conversion marketing. He is a leading conversion marketing expert and online marketing thought leader. As CEO of Brand Bridge Solutions, an online marketing agency, Abhik's content has been featured in mainstream media outlets like Inc Magazine, Business Insider, Inc ASEAN, YourStory, and Influencive among others. Abhik is the Founder of The Starting Idea, a business growth magazine focused on giving fast-paced actionable marketing strategies to the modern day entrepreneur. He is also the founder of Product Know, an exclusive library of business software and resources. He has recently authored the book The Growth Toolbox covering 210+ tools to grow every aspect of a modern day business. Get it for FREE here. His blogs and articles have been shared and appreciated by top industry experts including Larry Kim, Founder of Wordstream & Mobile Monkey.