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.
Help customers get
more value
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.
