The importance of customer retention is in the definition of SaaS alone. SaaS is software licensed out to users on a subscription basis. The bread and butter of SaaS is recurring monthly revenue or MRR. A strong MRR is what keeps SaaS companies in business and exponentially growing. SaaS companies can dump hundreds of thousands of dollars into marketing and new customer acquisition but without customer retention, it goes to waste and doesn’t contribute to the business model and value of SaaS. This is so important, 55% of SaaS companies say customer retention cost is a key metric they watch, ahead of new customer acquisition. 

saas growth

So how can SaaS companies improve customer retention for long term growth? Here are some key trends and methods:

Ensure your onboarding process is effective.

First impressions are important even in SaaS. The best way to ensure that users end up sticking with you is to make sure that they have a great first experience with your product when signing up. You have to make sure they find value in your product out of the gate. Show users how they can complete an integral task within their processes during the onboarding process. For example, Mailchimp shows you how to create “Welcome” email for a newsletter list in the onboarding process. An effective onboarding process should be manageable, intuitive, and interactive. You’re also most likely to lose customers during the onboarding process and right after they sign up. You want to pull them back in with reminder messaging via email or push notifications so they revisit your product during this crucial stage. Some key little factors that can help improve an onboarding process are progress bars, actionable walk-throughs of key features and functionality, GIFs and videos for visual learning, a help center and educational resources, and a checklist for users to work through to cover all the bases. 

Include “sticky” features in your product.

To keep customers around, naturally, your product has to be “sticky” or include elements that keep customers hooked, engaged, and invested. For SaaS, sticky means providing some sort of unmatched value or functionality that users are invested in. Sticky also means engaging. A strong and pervasive example of a “sticky” element is a social elements like chat or sharing. Relationships are a big reason for people to stick around on a platform or tool. If you create functionality where teams interact, it’s likely that team members will be more invested. Another sticky factor is scarcity. We hate to miss out. Notifications, new messages and updates, an interesting feed all keeps people engaged and looking for more. Another interesting way to keep users engaged is to give them progress reports on their use of your product and help them out with best practices. For example, send weekly emails with highlights of their use (i.e. “you send 3 emails to 5,000 leads this week) and give them some tips from your team on how to do better. 

social elements to increase retention

Keep users updated on latest product changes and improvements.

Your customers are, in a way, along for the ride when they sign up for SaaS. They’re never buying a static product on a subscription basis – or shouldn’t be. Different customers will “sign up” at different stages in the evolution of your product. Your product will be better down the line but you have to keep everyone on board as you get there. Including customers in your product journey keeps them engaged as you go through changes and show them that your team is actively making changes to improve your product for their needs. As customers get used to your product, they may not notice when you make big improvements so it’s important to keep them aware. Feature discovery is an important part of onboarding and customer retention. Feature discovery is when you make highlighting features throughout your product for customers within your product so they don’t miss key features and improvements. Customers who actively see your team working to improve your product and are kept in the loop are more likely to stick with you. 

The best way to include customers in your product journey is Beamer. Beamer is an in-app news feed that acts as a changelog and update center for your users. Beamer opens up within your interface by users clicking on an icon and looks native. When they open Beamer, users can explore a whole feed of updates including announcements for new features, new content and blogs, news from your team, general software updates, etc. You can include engaging visual elements like GIFs, videos, screenshots, etc. to better explain your new features and grab users’ attention. Users can give you feedback via Beamer with comments and reactions like a social feed which is valuable data for your team. You can also bring users back with new updates via Beamer push notifications. It’s a much more effective way to communicate product changes than email.


Listen, learn, and apply feedback from your customers.

SaaS companies have a deeper and more contingent relationship with their customers than other industries. It’s a working relationship. Your team is constantly trying to make sure that your product provides value, fits a need, and is accessible for users to keep them on board for the long run. Customer feedback is important. Luckily, customer feedback is given all the time if you know how to listen and ask. Using tools like Hotjar, SaaS teams can watch where users experience friction and drop out of utilizing features to improve your product so they get more value from it. It’s great to let users know they’ve been heard but the way you end up using this information to improve your product for your users and let them know if equally important for increasing customer retention. Beamer is great for updating users on the changes you’ve made from their requests so they know they’ve been heard. 

feedback for SaaS customer retention

Focus on your best customers and work with them.

If your team sees users lagging and falling off, it may be basic instinct to want to fix all their problems and desperately keep them on board. This may not be best. Sometimes users simply aren’t meant for your product and trying to make your product fit for everyone is not the best move. Focus on your best customers and make them your target niche. Work to serve their needs and interest to where they become advocates and bring more best customers to you. Focus on creating features and updates that keep them onboard rather than becoming mediocrely good for everyone. Mediocre never wins. Be exceptional for a few, focus on growth in your niche, and you will have retention. 

Scan the market, stay competitive.

Your customers don’t just leave. They go somewhere. They go to competitors who are providing something you’re not. To keep customer retention up, you have to stay competitive against other alternatives and always be working to improve your product for your users’ needs to they don’t jump ship for an alternative. You want to watch how competitors are presenting their product, addressing pain points, and communicating their value to the target audience as well. You want to make sure you don’t just stay on the same track as competitors but ahead by talking to customers and leads to make sure you’re building things that solve their problems. You want to stay ahead and make sure that your users know you are doing the same. Communicating effectively with your users about how you’re staying ahead is just as important as staying ahead of the competition. Regular emails, social posts, and Beamer posts using competitive language and letting users know you are updating along with the market is a must. 

Once your team cracks the code of user retention for your niche, the benefits of SaaS kick in. It’s all about communicating and serving the right customers over time effectively. It’s still software as a service. For a great way to improve customer retention and engage your customers, try Beamer free today.