aaS businesses live in fear of customer churn because it can cripple their company. However, customer retention is a cost-effective way to combat it.

Your SaaS company's recurring revenue is like a bucket with holes in it. Customer churn causes those holes, and while acquiring more customers (to fill up the bucket) makes sense, so does plugging the leaks (i.e., retaining customers).

If you're not retaining your customers, it will cause a loss as you acquire more customers. The SaaS model gets profitability over time, and if users churn before completing enough payment cycles to break even on acquisition costs, all growth strategies will be ineffective.

Your customers might be the most dedicated people in the world, but there will always come a time when they stop using your product. In SaaS especially, it is way easier and cheaper to keep an existing customer than try to bring in new ones – which means that you should make retention rates your number one priority if you want to beat the churn cycle.

Your current customers hold a lot of value to your business. They not only pay you, but they've also gone through the effort of onboarding onto your site or product. If you're not deliberate about making sure these users stick around, it'll be a detriment to your company's growth.

In other words, customer retention means keeping your customer interested in your product until it becomes a habit or part of their daily routine. The longer they stay with your product, the more chances you have to upsell them and increase their lifetime value. Users who stick with your product for the long haul are more likely to become promoters and advertise your product to others through word-of-mouth referrals. Maintaining customers results in increasing customer value over time.

If you want your customers to remain with your company for the long haul, then you need to give them an unforgettable experience each time they interact with your business. Outlined below are six simple methods that will help you do just that:

6 Methods to Improve your SaaS Customer Retention

1. Give Free Trial without Commitment

SaaS businesses that offer free trials with no commitment let customers try the software before they buy, which we all love. What we don't like are free trials with strings attached.

Considerations Before Implementing a Free Trial

While free trials can be beneficial, you need to ensure that it is the right option for your business by asking yourself these questions:

  • Does your product need white-gloved assistance?

If it isn't easy to use, then the user won't be able to get the full benefit from your free trial. Your product should be simple and straightforward. If it's complex, the user should have access to helpful tutorials, guides, and sales support so they can fully understand and utilize your product.

  • Does your business have the capacity to handle a sudden influx of users?

If you plan on offering a free trial for your product, ensure that you have the instant support availability to match it. As more people become interested in your product, the need for capable support only intensifies. Having a self-service option or an excellent sales/support team are both ideal solutions to meet customer demands; if neither of these is feasible for your business, then maybe a free trial isn't the best idea after all.

  • Are your users finding value in your product during the trial period?

The most crucial question is how to turn your free trial users into paying customers, which is the whole point of having a free trial in the first place. You must keep them engaged from the get-go with an excellent onboarding experience and thorough product overview, followed by timely follow-ups and end-of-trial emails. 

It's important to be helpful to prospective customers during the free trial phase. To give their customers the best experience possible, some of the largest SaaS companies like Salesforce provide more than just a free trial. Salesforce offers free trials and live webinars to help customers make purchasing decisions. With these features, customers can try out the product before making a final decision.

2. Understand Your Customers to Serve Them Better

Customers crave getting a good deal and to be respected. However, plenty of businesses are lagging behind in meeting these demands, which means they're not satisfying customers' needs. As such, it's critical for companies to know what their target market wants or doesn't want.

Understanding your customers is the key to providing them with outstanding service. This, in turn, builds strong customer relationships and generates new sales through positive word-of-mouth recommendations. However, understanding customer psyches is not easy and often requires careful analysis to identify their preferences or purchase patterns. By doing this you can anticipate their needs and exceed their expectations.

If you want to have higher customer satisfaction and retention metrics for your enterprise SaaS business, try building an authentic relationship with your customers from the beginning of their journey. Even though it may be difficult, the rewards are definitely worth it. Show them that you care, and be genuine in your interactions if you want improve those numbers.

3. Improve Customer Onboarding

It's not only enough for your product or service to fixes your customers' problems; they also want to know if it'll save them time, money, and energy.

The best SaaS companies provide solutions to common customer problems so that they can be happy with their purchase.

Onboarding customers can seem like a daunting task, but it doesn't have to be! There are multiple elements that you can deploy in order to make the process more efficient and easy for your customers. These tactics include a sign-up form, welcome email, notifications, and check-in calls. 

By implementing these simple changes, you will enhance your customer's experience with your company overall. Too much information at once can be daunting and push customers away. The goal is to ease them into using your product little by little.

To sum up, SaaS customer onboarding is a complex process that requires careful planning and consideration. The best way to create a positive experience for your customers is to take an inbound marketing approach that focus on providing them with value and delightful experiences from the very beginning.

The objective of onboarding is to make the process individualized and smooth from the very beginning of the customer's journey. Also, it's crucial that your customers always feel supported-- no matter what phase they are in their life cycle with regard to your product. Furthermore, keep things easy by ensuring your messaging can be understood easily so users understand how to optimize utilization of your product.

4. Offer Outstanding Service to Help Customers Achieve Success

Fostering positive customer relationships is key to reducing the number of customers who discontinue using your product or service. Rather than reacting after something goes wrong, it's more effective to focus on gathering feedback and staying in communication with your clients from beginning to end.

If you want your software to be valuable to your clients, you need to strengthen it at different stages of the client experience. This way, your clients can get the most out of it. You may also notice and fix issues before they cause customer attrition by regularly communicating with them.

Automating your customer management using the right CRM solution will help you foster better relationships with your clients.

5. Eliminate Involuntary Churn

Many times, customers unsubscribe or are forced to discontinue your service because of failed payments--and not always by choice. These individuals may still want to use your product but were unaware of the problem until it was too late.

There are a few reasons why payments can fail, which include insufficient funds, incorrect payment details, or fraud. By accepting various methods of payment, billing in your customers’ desired currency, or using card updates if you can help reduce failed payments and involuntary churn.

6. Deliver a Seamless Billing Experience

The subscription billing model is a great way for businesses to receive recurring revenue, and it's also convenient for clients who choose to pay small amounts regularly, according to Younium.

In order to attain success, your billing experience must meet the demands of both you and your clients. Thus, establish recurring payments that fit with your pricing structure.

Before you create a subscription service, think about how your clients want to pay and use it. For example, are they the type of people who would rather pay monthly? Quarterly? Or annually?


Since every customer is unique, certain retention tactics work for some but not others. You can maintain customers satisfied in the future by thinking carefully about retention now.

Customer retention doesn't happen overnight. It starts with your product and extends to every aspect of how it's used, maintained, upgraded, and supported.

Always remember that with the right retention strategies, you will encourage customers to come back and engage with your product or service, driving revenue sustainably. 

Read here how you can overcome your SaaS startup sales struggles.

Dec 1, 2022

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