We’ve all heard the stats, it is typically three to five times more cost-effective to retain a customer than to acquire a new one.
Let’s look at that scenario in a SaaS (Software as a Service) world.
Do you have customers who subscribe and then never really get started with your service? Or, do you see peaks in usage? Or the customer started using your service quite a bit and has reduced usage or simply not renewed?
Selling SaaS does not stop with the customer ‘activation’. Monitoring ongoing usage – or consumption – may provide insight into preferred plans, features and functions and early warning of a potential customer deactivation.
To baseline on the definition, consumption is how much of a service a customer is using. Consumption is not the same as usage—a customer can use a service once but sustained and growing usage must be continued to truly be consuming. Driving deployment and usage of your offer is of the highest importance to sustaining the growth and success of your business
Here few ideas for ensuring your customers renew their subscription with confidence.
- Be Clear about Renewal Options & Keep the Process Simple
Make it as easy as possible for your customers to automatically renew. Focus on minimizing both the total number of steps required as well as the complexity of each step. Every business is different and their billing periods vary. Ensure you make it easy for them if they need to renew every 3 months, every 6 or every year. Be accommodating and ensure they fully understand the renewal process to avoid any confusion or resentment.
- The Subscription Renewal Letter
This is a very crucial time and a great opportunity to connect with your customer. As they consider renewal, you must alleviate any concerns or questions they might have at this time and remind them of the benefits they have received and the additional benefits to come. Take the necessary time to craft a letter that is inviting and informative.
- Hyper-Targeting with Early Renewal Offers
Offering a discount or additional value with an early renewal is another great way to demonstrate to your customers, you are thinking of them and value their business. However, this offer should be targeted specifically to those you feel may not renew. It is not a good tactic to mass mail discount offers to those that renew regularly as it will show on your books as a needless loss of revenue.
- Elicit Call to Action Messages
Reminders are not a bad thing. Be certain to remind your customers they should be renewing… “Your Subscription will Expire in 30 Days” “Renew with 15 Days left and receive a 20% Discount” “Renew today and receive 25% discount”. You must give a thorough evaluation to determine the set of offers that best impacts your renewals with the least amount of impact on the finances.
- Define Customer Indicators
Once a process is in place and tested to ensure a clean customer experience, the next step is to define the customer indicators that signal which customers are good candidates for cross-sell and upsell. In other words, these are the indicators sales or call center representatives can look for and identify in order to understand whether this particular customer qualifies for a specific upsell or cross-sell pathway. By providing an additional service that is beneficial to a customer, it promotes a sense of customer satisfaction that will encourage renewal.
You must ensure quality of ongoing delivery, cultivate customer relationships proactively over time, and build trust that will guarantee a long relationship that reap the reward of continual renewals.
We hope these tips are useful.
Contact us here for more: Customer.Experience@Alinea-Partners.com