Sorry, I have some bad news.
If you thought that once you’ve won a deal and brought a new customer on-board your software-as-a-service (SaaS) solution, and you’re all done...sorry.
You’re not done yet.
Winning a new customer is just the start; now you need to keep that customer.
Depending on what it costs you to acquire a customer (CAC), it may take several months – maybe even years – for subscription revenues to recover that cost (LTV/CAC). If a customer quits before you’ve reached that point, you lose money. That’s how the SaaS model works. (See “Nothing simple about SaaS benchmark metrics.”)
A new job for marketers
This requirement to hold on to customers gives marketers a new job, one they didn’t have before SaaS: marketing to existing customers.
True confession: When I worked for companies marketing traditional licensed software, I only thought about existing customers on two occasions: when I needed a customer reference or when I saw them at the annual user conference.
But for SaaS companies, things are different. It’s essential to remind existing customers why they’re paying for your solution. Show them how much they’re using it to hire new employees, deliver training courses, handle expense reports, send out email newsletters, or whatever it is you do for your customers.
I get a regular reminder from Carbonite about how many files they’ve backed up. That is definitely not something I would pay attention to otherwise.
Even better if you take an extra step and help your customers get more value from the solution. Show them how to do what they’re doing better. Share tips & tricks, expert advice, and best practices. Let them know about enhancements you’ve made to the solution and show them how to use them.
Watch for low activity
If your solution is used primarily by one person in the organization, for example an HR professional, a project manager, or an accounts payable manager, be on the lookout for a sharp drop in activity. If nobody’s logging in, there’s a problem. It’s worthwhile finding out if perhaps there’s a new person in the role that might need training.
Stay in touch
One last bit of advice. Stay in contact regularly with your customers. Nothing quite says “I really don’t care about you” than reaching out to them for the first time two days before the subscription expires.