What’s the secret to growing your SaaS company? According to a recent survey, the average SaaS company spends between 34% and 80% of its revenue on sales and marketing to fuel growth. But the secret to growth doesn’t lie in customer acquisition. It lies in user retention.
It’s no secret that it’s easier to keep a customer than acquire a new one. When your users stick around, they pay you month after month, year after year, and it’s this predictable revenue that fuels faster growth. In fact, a study by Bain & Company found that a 5% increase in customer retention can boost profits by 25% to 95%.
In this post, we’ll cover 12 proven tips to boost user retention in SaaS.
1. Start with a great product
This might seem obvious, but it needs to be said: the foundation of any successful SaaS business is a great product and great product marketing. And I don’t just mean a product that works.
A great product solves a real problem for your customers. It’s intuitive and easy to use. It’s reliable and fast. And it makes your customers’ lives better in some way.
If you don’t have a great product, no amount of retention work will save your business. But if you do have a great product, then you’re off to a good start.
Retention is all about keeping your existing customers happy and engaged. And the best way to do that is to give them a great product to use.
If you’re not sure whether you have a great product, ask your customers. Get their feedback on what they love about your product, and what they wish you would change. Then, use that feedback to make your product even better.
2. Know your users
If you want to retain users, you have to know who they are. This seems simple, but it’s a step that many companies overlook.
If you don’t know who your users are, you won’t be able to create a product that meets their needs. This is a surefire way to increase churn.
On the other hand, if you know who your users are, you can create a product that they love and continue to use. This will help you increase your retention rate and grow your business.
3. Make your software easy to use
This one might seem like a no-brainer, but you’d be surprised how many companies get this wrong.
Your software has to be easy to use.
That means that everything from the onboarding process to the user interface should be as intuitive as possible.
If you want to get a sense of how user-friendly your software is, ask your customers.
You can also use tools like Hotjar and FullStory to record user sessions and see where people might be getting stuck.
If you find that your software is too complicated, don’t worry. There are plenty of things you can do to simplify it.
You can start by creating a user-friendly onboarding process.
This is the first experience that your customers will have with your software, so it’s crucial that you get it right.
Make sure that you guide your customers through the onboarding process step-by-step, and give them the tools that they need to be successful.
You can also use in-app messages and tooltips to help guide your customers through your software.
This way, you can provide them with the information that they need, when they need it.
4. Offer excellent customer support
Customer support is a critical part of the customer experience. It’s what happens when things go wrong, and it can make or break your relationship with your customers.
In the SaaS world, customer support is even more important. Your customers are using your software to run their businesses, so when they have a problem, they need it resolved quickly and effectively.
Offering excellent customer support is a great way to increase user retention. When your customers know that they can count on you to help them when they need it, they’re more likely to stick around.
5. Educate your users
Educating your users is a great way to keep them engaged with your product.
This can be done in a number of ways, such as creating a knowledge base, hosting webinars, or sending out email courses (which can be created with AI email prompts).
However you choose to do it, the key is to make sure that the information you’re providing is valuable and relevant to your users.
If you’re sending out the same old generic content, your users will quickly get bored and stop paying attention to you.
6. Use in-app messaging to your advantage
In-app messaging is the practice of sending messages to your users while they’re actively using your app.
This is a great way to communicate with your users because it feels more personal than email or push notifications. Plus, you can reach your users at the exact right time, when they’re most likely to take action.
There are a few different types of in-app messages you can use to improve user retention. Here are a few examples:
• Welcome messages: Use these to greet new users and give them a quick tour of your app.
• Onboarding messages: Use these to show users how to use new features or tools within your app.
• Engagement messages: Use these to encourage users to take specific actions, like completing their profile or sharing your app with their friends.
• Retention messages: Use these to reach out to users who haven’t been active in your app for a while and encourage them to come back.
Of course, you don’t want to overdo it with in-app messages. If you send too many, your users may start to get annoyed and your efforts could backfire. You can also use AI softwares like Clay to enrich data about your users and personalize even more your messages/emails.
7. Personalize the experience
Users want to feel like your SaaS was built just for them. They want to feel special and unique.
The best way to do this is by personalizing the user experience. The more you can tailor your product to each individual user, the more likely they are to stick around.
One of the simplest ways to do this is by using a user’s name in your app. It’s a small thing, but it can make a big difference in how they perceive your product.
Another way to personalize the experience is by using data to show users content that’s relevant to them. This could be anything from recommended articles to suggested products.
The key is to make sure that every interaction a user has with your product is as relevant and personalized as possible. Many SaaS companies implement an affiliate tracking platform to better understand user behavior and deliver more personalized experiences.
8. Create a customer loyalty program
Loyalty programs are a great way to incentivize your customers to stick around and continue using your product. They can also help you increase customer lifetime value.
There are many different types of loyalty programs, but the most common in SaaS is a points-based program. With this type of program, customers earn points for taking certain actions, such as making a purchase or referring a friend. They can then redeem those points for rewards, such as discounts on their subscription or free upgrades.
Loyalty programs are a great way to show your customers that you appreciate them and to keep them engaged with your brand. They can also help you increase customer retention and reduce churn.
9. Use feedback to improve your software
Feedback is a critical part of the customer experience. It helps you understand what you’re doing well and where you can improve. It also helps you identify potential problems before they become major issues.
There are a number of ways you can collect feedback from your users. You can use surveys, interviews, focus groups, and more. You can also use software tools to collect feedback automatically.
Many companies also implement Employee Feedback Tools alongside customer-focused solutions to create a continuous loop of improvement across both internal teams and user-facing experiences.
Once you have feedback, it’s important to act on it. If your users take the time to provide feedback, they expect you to do something with it. If you don’t, they may be less likely to continue using your software.
Feedback can also help you identify areas where you can improve your software. This can help you retain users and attract new ones.
10. Be transparent
Transparency is a key factor in building trust with your customers. And, when it comes to retention, trust is everything.
One of the best ways to build trust with your customers is to be transparent about your pricing, your features, and even your business model. This means being upfront about what you offer, how much it costs, and what your customers can expect from your service.
It’s also important to be transparent about any changes that you make to your product or your pricing. If you do decide to make changes, make sure to communicate them clearly to your customers and be prepared to answer any questions that they may have.
11. Get users to use your software more often
The more your users engage with your software, the more valuable it becomes to them. And the more valuable your software is to your users, the less likely they are to churn.
One of the best ways to get users to engage with your software more often is by getting them to use it for more things. For example, if you run a SaaS project management tool, you might want to get your users to start using your software to manage their tasks, communicate with their team, and plan their projects.
Not only will this help you increase user retention, but it will also help you increase your average revenue per user (ARPU). After all, the more features your users are using, the more likely they are to upgrade to a higher-tier plan.
12. Offer a free trial
Who doesn’t love a free trial?
If you want to get potential customers in the door and using your app, give them the opportunity to do it for free.
Free trials are a great way to build trust with potential customers. It shows them that you believe in your product and that you’re willing to let them try it before they commit.
It also gives them a chance to see how your app can help them. If they like what they see, they’ll be more likely to stick around.
13. Launch an affiliate program
One of the most effective ways to retain users—and attract new ones—is to launch an affiliate program. When your customers actively promote your product in exchange for a reward, they’re not only more likely to stay engaged, but also become brand advocates who bring in other high-quality users.
Affiliate programs work especially well for SaaS companies with a strong value proposition and satisfied customer base. By turning your happy users into affiliates, you create a win-win loop: they earn rewards, and you gain loyal, invested customers who help you grow.
Platforms like ReferralCandy make it easy to set up and manage affiliate and referral programs tailored to your audience. With built-in automation and tracking, you can incentivize referrals, monitor performance, and ensure your top advocates feel recognized and rewarded.
Conclusion
User retention is the lifeblood of your SaaS business. It helps you to grow sustainably and maintain a solid reputation. By keeping your customers happy and engaged, you’ll be well on your way to reducing churn and increasing your MRR.