Putting the “Service” Back in SaaS: 6 Tips for Maximizing Retention & ARR

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In the B2B subscription-based/SaaS software space, annual recurring revenue (ARR) is king – the primary KPI for measuring business performance and success. But, in order to achieve their ARR goals, many companies get caught up in prioritizing sales and new customer acquisition rather than retention.

Yet, data shows that it’s five to 25-times easier and less expensive to retain a customer than it is to acquire a new one and, in some industries, just a small increase in customer retention can drive up to 25% higher profits.

As cliché as it sounds, service after the sale is absolutely critical for retention, especially in the uber-competitive B2B SaaS market. Companies who ignore or lose focus on meeting customers’ expectations after onboarding put their relationships, reputation and ARR at risk.

Poor service drives good customers away, along with any up-sell and ARR. And in the age of social media, it can also destroy acquisition efforts. People talk and business thrives on referrals and recommendations. Failure to deliver to one customer can have a ripple effect on your brand. The collateral damage can be hard to quantify, but the loss of valuable advocates combined with a plummeting Net Promoter Score can erode growth with devastating speed.

To protect and grow ARR while keeping your customers from looking elsewhere, here are six strategies that can help you focus on the “service” in your SaaS offering.

1) Build a customer success program around customers’ needs at each step in the journey. Rather than focusing on your priorities throughout the process, think about what your customers need. What are their concerns? What challenges might they face at each stage? How can we help to overcome them? Structure your teams, resources and processes for acquisition, support and retention around serving the needs of customers, rather than your own.

2) Make your customers’ metrics your metrics. Too many organizations establish service metrics around internal, transactional KPIs, such as reducing the number of support calls or time spent on each customer interaction or emphasizing self-service to reduce resource utilization. Instead, focus on being responsive to customers’ needs and measure and incentivize your team’s performance based on those metrics. For example: How fast can you respond to customers? How quickly can you resolve their issues and to the highest degree of satisfaction? How can you maximize adoption and ROI for your platform?

3) Align the entire organization around those priorities. Focusing on your customers’ success must become a part of your culture and the fabric of your operations, from service and sales to HR and dev ops. Define common performance goals across the business based on your customers’ priorities. This helps to drive decision making by making “what best serves the customer?” the central consideration in every decision, from features development to hiring and other personnel changes.

4) Provide ample self-service resources. While a hands-on approach to service after the sale might be desirable for some customers, others want the convenience and flexibility to find answers and resolve issues on their own. To that end, provide ample educational resources like on-demand videos that provide a how-to for features, a regular “Did You Know” e-newsletter series that hones in on a particular tool or resources for onboarding new users.

5) Deliver white-glove service at scale with AI. There’s a fear among some companies that using automated service options like chatbots and other AI tools can actually detract from service quality. But in fact, when done properly, it can allow you to deliver outstanding service at a massive scale to make each customer feel like they’re your only customer. The goal of any AI service solution should be to help your team spend less time on frivolous tasks and more time on direct customer-focused needs. You don’t want CSRs filling in redundant data in Salesforce — you want them on the phone, talking with customers. Using AI in your service model can eliminate the manual and repetitive processes that tie up too much time. Chatbots, for example, allow customers to get answers to the low-hanging, easy questions, freeing up skilled agents to spend meaningful time on real problems. AI can also help strengthen the connection with the customer on each interaction. With the right application, when CSRs type in a customer’s name, they can instantly see the entire history of engagement — previous call notes, knowledgebase articles they’ve used, etc. Having this data to reference shows that you know the customer and care about their needs.

6) Include service as part of the sale. A common thread through most SaaS sales pitches is to focus on features, capabilities and specifics of the platform. Very few sales processes cover what happens after you buy. Customers are increasingly influenced by who you are as a company — your brand, your culture and your reputation. Bringing unique elements of your customer success and service programs into the sales process can be a huge differentiator that shows your priorities go beyond closing the deal.

While there’s absolutely nothing wrong with using ARR as a key success and growth metric, it must be done with an eye toward retention, in addition to acquisition. The single biggest contributor to customer retention is how you take care of the customer and help them maximize the value from your solution. By putting the focus back on the “service” in SaaS, B2B software companies can drive higher ARR, customer satisfaction and new customer acquisition by building a reputation that emphasizes long-term success.

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