There’s a frightening new reality for brands today: Customers have more options than ever before.
With so many companies offering similar products, there’s little stopping consumers from ditching one brand for another at any given time.
For example, one day you could be using Dropbox to store files, and then just as easily switch the next day to Google Drive. Why? Both products offer comparable solutions, are rated well by their customers and are known to be superior in the market for various reasons.
So why the switch?
The answer often lies not with the product, but rather with the experience a customer has with the brand. Many Software-as-a-Service (SaaS) companies focus too much of their marketing efforts in acquiring new customers and fail to treat existing customers with the same fervor. In a market forecasted to reach $157 billion in 2020, SaaS brands have a lot to lose when they consistently have to replace their customer base. The numbers speak for themselves: Improving retention has two to four times the impact as improving acquisition efforts.
Suffice it to say, in our subscription-based world, the name of the game is no longer just acquisition—it’s also retention. And this is where customer marketing comes in.
The customer marketing mindset
A few years ago, I found myself debating the idea that marketing is all about generating demand with one of my colleagues. From the perspective of an acquisition or demand generation marketer, this makes total sense. You do need a demand engine to get people into your funnel. This will never change.
But there’s a problem with treating marketing as solely a means to generate demand. In the SaaS market, customers choose to buy (or not buy) our software. We have to re-earn our customer’s business every month or year, depending on how our subscription model is set up. Existing customers don’t want marketers trying to sell them on a product—they’re already bought in! They want to know how you’re providing value to them when they’re going through a rough sales period or when it’s time for them to expand their operations and grow.
To keep those customers around, marketers need to be generating value at every touchpoint. With this mindset, SaaS marketers can create an empathetic, data-driven journey to ensure customers achieve their goals and stick around for the long run.
Get to know your customers
No…really get to know them.
To understand the unique buying behaviors of our customers, we have to go beyond personas and fictional characters. Instead of assuming customer intent, consider using the Jobs-to-be-Done framework to map out all parts of the buyer journey. At Sprout, we start our customer research with questions like:
- What was going on in your work that pushed you to start looking for a new solution?
- What’s the number one thing you’re able to do with our software you weren’t able to do before?
- If you had a magic wand and could change anything about our software, what would it be?
Not only are we looking to understand what actions our customers take, but also why they take certain actions at each step of their journey. Great customer knowledge is just as valuable as great product knowledge. When businesses can empathize with and demonstrate they understand their customers’ needs, they’ll benefit from an increase in retention and activation within the actual product.
Take the global pandemic we’re currently experiencing. Research might show our customers need help managing their brands’ sudden influx of social messages and are using Listening tools to surface themes relevant to their industry. Knowing this, we can adjust the content we share with our customers to reflect the need for how-tos and best practices for navigating social during a crisis. Show your customers you have their backs and can give them the tools they need to succeed in any situation.
Support is the key to sustainable growth
The more you get to know your customers, the more you’ll learn about what encourages them to keep coming back and what will make them want to jump ship.
One factor contributing to a lack of retention starts with how SaaS businesses support their customers during the onboarding phase and beyond. Consider that, on average, marketing customers only use 61% of their martech’s capabilities. When customers don’t see the full value of your product right away or know how to use your product to its fullest extent, there’s little incentive for them to stick around.
Providing a good first experience, as well as ongoing support, is crucial to combating this customer churn. As marketers, the more we can help our customers get set up properly in the product and find value from the get-go, the more inclined customers will be to stick with us. One of the first things Sprout’s customer marketing team launched was a series of short “getting started” webinars, which we recorded and shared with customers who couldn’t join in real-time or wanted additional support.
We then scaled our efforts further by creating a more formal Learning Portal earlier this year to house all our onboarding and product education materials—and it’s a resource we’re still developing. To support courses found in the Learning Portal, we’ve also created product-specific courses, worksheets, templates and cheat sheets all designed to teach customers how to get the most out of our product, which can be found in the resource center.
Positive customer feedback signalled to us that our initial investment in product education was paying off. Aside from the obvious vanity metrics (such as webinar attendees, engagement and content viewership), we measured our onboarding program by tying product education to product usage. We looked at our daily active users (DAU) or weekly active users (WAU) for our entire customer base and conducted a monthly cohort analysis to determine the impact on churn and retention. With these metrics, our team is better able to understand how our onboarding efforts support our goals for long-term growth and where we should be investing to strengthen customer retention.
Go beyond the first sign-up
In the SaaS industry, your competitive advantage stems from your ability to connect with and empower your customers. As marketers, our job doesn’t end after the first sign-up. It’s crucial for us to be thinking of ways to engage people well after the trial period or risk spending all of your time replacing customers who lose interest after a month.
Talk to your customers and invest in getting to know what makes them tick and why. Always look for ways to continually provide value to every user and ask yourself how you would want to be treated as a customer. When SaaS companies put their customers first and build their marketing strategies around their audiences’ needs, they’ll see the high retention and sustainable growth they hope to achieve.