When people think customer retention, they think about the first few days after a signup. It's all about pointing users to value while their interest is still high. Few focus on what happens after.
In the SaaS environment, you are constantly under pressure to prove your value. Every unengaged customer, regardless of how long he's been using your app, is in danger of churning.
That means paying attention to late-stage retention—as we discussed in our 360° View of User Retention webinar— is paramount. Since the excitement of the new app has worn off, you have to concentrate on three things:
- Acknowledging small achievements
- Reminding users of the app's impact
- Deepening your relationship with your customers
All three of these are ways of celebrating users' progress, effectively reminding them about the long-term value in your app. Here are seven ways to achieve these objectives and incentivize users to stick around.
1. Celebrate milestones
Use milestones as a way to bring the success and usefulness of your app to front of mind. After customers get used to using your product, it’s easy for them to forget what it was like before they had it. They fall into a rhythm of complacency and stop thinking about the value.
You can set any kind of milestone, whether it's using a feature for the first time, the anniversary of them signing up, or their 500th login. Regardless, it's an opportunity to offer them something special in recognition of their continued patronage.
Take a look at how the productivity app Evernote celebrates a first email sent.
By sending these emails, Evernote is rewarding engagement, positively reinforcing that behavior. To celebrate milestones, you have to make sure that you offer a reward that's valuable. This can come in the form of:
- A discounted offer
- An overview of usage
- A nudge towards similar features
- Affirmation that they're on the right track
Milestones serve as reminders to the customer that you’re thinking about them and you care about their engagement, even months or years down the line.
2. Offer (helpful) suggestions
Look at how customers are using your app, and send them helpful tips on how to use it even better. That means analyzing your customers' behavior and offering relevant suggestions.
Too many tools and apps clutter users’ inboxes with irrelevant spam emails, recommending features that users have no interest in. Not only is this not helpful, but it can come across as annoying and self-promotional.
To send tips and suggestions that will be well-received, they should have the following criteria:
- Non-intrusive. Either make suggestions right when they’re logged in, or send them via email. Don’t have pop-ups interrupt your users’ workflow every time they go to use the app. They might appreciate the tip, but not when it distracts them.
- Based on customer behavior. If the suggestions don’t apply to the customer, they’ll get annoyed at even the least intrusive suggestions.
- Specific and actionable. Don't say something generic like, “check out more features.” You want to show the customer immediately that the CTA applies to their needs.
Take a look at how social media tool Buffer offers a concrete suggestion, based on an action performed by the customer:
Buffer sends out this email after customers access Twitter for the first time from their platform. They suggest keeping track of those tweets from their analytics platform, with a nice call-to-action button that makes the new feature super accessible.
3. Give them VIP treatment
Create a VIP program for your best customers, to make them feel as valuable as they are to your business. This might mean special privileges, quicker support, or better deals. Show that their loyalty to you is something that isn’t taken lightly.
According to a study conducted by Stanford and Harvard researchers, people react positively when they are given a label of importance. The study took two groups of people, one that they labeled “politically active” and one that didn’t receive a title at all. As a result, those that had the label were 15% more likely to vote.
Uber does a great job with this with their VIP program. If you’ve taken 100 trips with Uber, you get VIP privileges, which means that you only get connected to the best-rated drivers and high-quality cars.
This is different than a rewards program, because the customer doesn't expect it. This carefully-crafted program serves to surprise customers and thank them by giving them these exclusive privileges.
After all, the most exclusive VIP club is the one that nobody knows about.
4. Make features for your customers
There's no one who knows where your app is lacking than your existing customers. You can reward your customers engagement, by building features that they've requested.
In the constantly evolving tech landscape, you want to prove to your customers that your product is getting better and more useful to them. Because if you’re not improving, you’re plateauing and becoming less interesting to your customers.
Help desk software Groove has switched to a customer-centric method of production. They started conducting surveys and logging feature requests in Trello cards. When a certain feature had enough requests, they would just build it. So here's what their feature announcements would end up looking like.
Instead of throwing irrelevant feature updates at customers, Groove sent out personal messages to each of the customers who submitted requests. Not only did they get a high email open-rate, but the response rate from the customers was 68%—mostly saying thank you!
By announcing customer-requested features, you're not only showing your customers how to work better and faster, but you're proving that you take their input seriously. They are even happier with your product, and you increase their LTV. It’s a win-win.
5. Ask your customers’ opinions
Once your customers have been around for a while, you can make them your most trusted advisors. That way, not only are you showing your customers that their opinion matters, but you're asking for them to conjure one up in the first place.
However, getting feedback from your customers does more than just incite them to engage more— it gives you clear insight into their satisfaction with your product. You'll get a sense of how loyal your customers are and how long they'll stick around.
But getting reliable data is easier said than done. Surveys that aren't thought-out or carefully presented can make for unreliable data that will skew your perception of what your users think. Here are a few things to keep in mind when putting together your survey:
- Target the right audience. Don't ask customers about features they don't know about.
- Ask behavior-related questions. Ask customers to rate features they often engage with.
- Gather data every few months. See if customers' perception changes over time.
And if you don't want to risk putting together an unreliable survey, there are some handy tools around that can help. Companies like Qualaroo specialize in helping companies collect useful data through in-app surveys.
6. Give exclusive beta-testing privileges
Don’t take your old, loyal customers for granted—they’re your shining stars! Instead, reward them by letting them beta-test new features.
Not only do beta-tests let you gauge how popular your new feature will be, but they open up another channel of communication with customers. These customers will feel like they have a voice and that their opinion matters.
Here are all the necessary components of the invitation:
- Basic description of feature
- The reason it's useful
- A clear call-to-action
Giving loyal customers exclusive privileges to have an impact on your app will increase their stake in the app—they’ll feel emotionally invested, and like they're much more than just a customer. This will help you keep their loyalty and turn them into advocates for your brand.
7. Throw a party!
Holding an event for your customers is a great way to connect with them and show your appreciation for their loyalty.
Whether you’re a company of four people in a shared office or a company of over 50, interacting with your customers face-to-face will help you build a bond that isn’t possible through the computer screen.
Thanking someone is the surest way to get them engaged, especially during the later customer retention period. According to a study in the Journal of Personality and Social Psychology, gratitude is a huge driver of action. In the experiment, they tested the willingness of participants to help a student in his job search. A simple thank you increased the number of people willing to engage with the student by 34%.
Yesware, a startup that works on a sales analytics platform, doesn’t even need a reason to throw a party for its customers. A few years back, they threw a party for 3000 customers, partners, and prospects. The party was a huge success and enabled the clients to tell the team and each other why they loved the product so much in a casual and fun atmosphere.
Your customers’ success is your success
After you’ve done so much heavy lifting to acquire your customers and get them engaged, you don’t want to throw all that away by assuming they're a sure thing after just a few weeks. It's crucial to have a late-stage retention strategy to keep customers excited and interested in your product, so they don't leave the second a newer, shinier app hits the market.
If you focus on celebrating your customers' successful use of your product, you’ll be aligning their success with your own success. And it is only in pursuit of this unified vision that you will be able to get great traction and significantly reduce your churn rate.