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SaaS business models are driven primarily by churn - that's the rate at which your customers are bailing out. Here are 10 simple tips on how to generate loyalty and avoid the churn monster.
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#saas series | jeromepineau.com
“CARE & FEEDING OF SAAS CUSTOMERS”
10 tips to drive loyalty
1.churn is bad
if you leave me now...
churn is a critical metric for SaaS
businesses.
churn measures the rate of customers who
bail out every month.
healthy SaaS businesses have low churn.
2.LTV is good
renew, renew, renew
lifetime value is the customer’s total $$
worth from the day he signs on to the day he
stops renewing.
as it happens, churn and LTV are inversely
related such that churn = 1/LTV.
healthy SaaS businesses have high LTV
3.forever yours
we’ll always have Paris…
so what makes SaaS customers loyal?
or how do you minimize churn?
or how do you maximize LTV?
or how do you succeed at SaaS?
4.consumption gap
big deep mouthfuls
customers who do not use your product
wide and deep are more likely to defect.
it means they simply don’t “get” your
product.
which means it has limited value to them.
which means either your product has limited
value, or you’re not communicating the
value hard and often enough.
or both…
5.keep talking
oh, one more thing…
customers you don’t interact with frequently
are more likely to defect.
remember the old saying: out of sight, out of
mind.
any excuse to converse with customers is a
good excuse to feed the relationship and
keep them engaged.
engaged customers are loyal customers.
6.new features
now with 25% more!
new features aren’t just important as a way
to enhance your product. they’re also an
opportunity for communication.
never waste an opportunity to inform and
enchant customers at the same time.
but don’t saturate them with trivial new
feature releases either.
7.make heroes
believe it or not, I can fly!
customers who feel like heroes at their job
from using your software will never leave.
if they succeed, you succeed.
your job is to make heroes.
8.build community
vires in numeris
can you think of any great product that
doesn’t have a rabidly loyal community
supporting it?
I didn’t think so.
design, build, and nurture it – or your
competition will.
9.learn the word ‘no’
saying ‘no’ is ok too
this one can seem counter-intuitive, right?
but saying ‘yes’ to every customer request
indiscriminately lowers quality for a
majority of customers in the long run.
so be crystal clear from the onset about
what saying ‘yes’ means for overall product
experience.
and remember, it’s not the ‘no’ itself, it’s how
you say it.
10.how’m I doin?
#embracethefeedback
survey, email, tweet, post, blog, but whatever
you do…
ask customers how you’re doing as often as
humanly possible.
but don’t ask unless you have the will and
means to adapt and adjust accordingly.
11.bonus tip!
measure, don’t assume
if you don’t instrument your backend, you
won’t have a clue what your customers are
doing, where, when, or why.
so you won’t know how they’re using your
product. or not.
and if you don’t know that on a daily basis,
you’re flying blind.
never assume. always measure.
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