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10 user and customer engagement strategies for leveling up

Engagement strategies are constantly evolving. Here are 10 tried-and-true ways to increase retention and delight users.
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If this article didn’t grab your attention immediately and provide you with engaging, helpful content throughout, you’d leave to find a better article. (And who could blame you?)

The same could be said for your product. Your product is meant to capture the attention of your customers and keep them engaged for the long haul. If you fail to do that, they’ll jump ship to a company that better understands their needs and provides a better overall experience.

Successful companies engage customers across touchpoints in ways going beyond specific teams and channels. These companies know engaged customers stay longer and bring in more money than inactive ones. They also know their hopes of scaling their product and increasing profitability are pinned to customer engagement strategies.

Your product’s growth and continued success are tied directly to your company’s ability to engage its customers—so you’ll need a customer engagement strategy that delivers an experience worth their attention.

What is a customer engagement strategy?

A customer engagement strategy is a blueprint for improving interactions with customers as a means of building better overall relationships with them. Decision-makers from every team across a company come together to decide upon a company-wide strategy for engaging customers. Each team will have their own focus and tactics, but those individual efforts should always align with the greater overarching strategy. 

Users who find that your app solves their pain points quickly and easily will continue to use it, boosting your product’s retention rate. SaaS product customers interact with both the product and the company itself throughout the account’s life cycle, which gives brands ample opportunity to build positive, proactive experiences.

Companies devising a comprehensive customer engagement strategy try to identify and remove potential points of frustration. This starts with mapping out the customer journey and identifying when customers interact with the brand and product and where they may require assistance. Most engagement strategies focus specifically on:

  • The marketing funnel
  • The onboarding experience
  • The in-product user experience (UX)
  • Customer service interactions

Why is customer engagement important?

Widespread customer engagement is the key to a product’s long-term success. Many companies address frustrations once a customer cancels their subscription but often find it too late to stop the user from churning. 

A customer engagement strategy aims instead to identify and eliminate potential friction points before they give users a reason to churn. This allows companies to attack churn from both a proactive and reactive position to achieve the highest possible retention rate.

A proactive customer engagement strategy:

Improves customer loyalty

Companies use engagement strategies to create more loyal customers with healthy long-term usage habits. Your marketing and sales teams make promises about how your product will solve a customer’s problems—and products that deliver on those promises build a more loyal customer base. 

A survey found that 36.5% of consumers would spend more on a product from a brand the customer was loyal to. A disengaged customer might rely more on casual cost comparisons to determine whether they continue their subscription with your product or choose an alternative. Anyone looking to trim their expenses will inevitably wind up evaluating whether it’s worth paying for something they don’t really use. That’s all the more reason to make sure they actually engage with your product!

Fuels growth

Ah, yes, the old leaky bucket conundrum. You need to sign up more customers than you lose over a specific timeframe to achieve growth. A customer engagement strategy works to make the proverbial hole in your bucket smaller, as your efforts to satisfy customers will result in the loss of fewer clients over time. The better you get at retaining existing users, the fewer new customers you’ll need to bring in to grow your base.

Boosts revenue

A better retention rate will also result in more revenue as a result of increased user volume. You’ll have more customers, so you’ll bring in more money. And the longer customers stay, the more chances you have to upgrade and renew them. 

You’re also likely to find that these upsell opportunities increase in quality as well as quantity. A recent survey found that 58% of respondents would pay more for a better customer experience. 

Those who really want to see the impact of their customer engagement strategy over time need a tool that helps track user behavior. Appcues allows you to easily measure how your changes are impacting product adoption, so get started with a free trial.

Customer engagement vs. user engagement

Customer engagement is sometimes referred to as user engagement. While the 2 are often used interchangeably, they technically refer to separate concepts. It all starts with the difference between a user and a customer:

  • A user is a person who uses your product, including those who use it at no charge—i.e., people on SaaS free trials and “freemium services.” It also includes social media, email, and search tools.
  • A customer is a person or company who pays to use your product. They’re still a user, but they’ve become a customer because they saw and understood the value of your product and decided to pay for it.

User and customer needs can be different during the onboarding process, which is why you shouldn’t onboard your users like customers. But engagement extends beyond onboarding and occurs throughout the user/customer lifetime. 

User and customer engagement strategies often overlap, so it can be hard and even counterproductive to separate them when talking about SaaS companies. That’s why the onboarding strategies below cover both user- and customer-focused engagement efforts.

12 customer engagement strategies

Customer engagement is essential to your retention efforts, but it can be difficult to know where to start. Your marketing, product, IT, and customer success teams all interact with customers throughout their life cycles, so the possible engagement strategies your business could implement are endless. 

Luckily, you don’t need to spend your days devising never-ending lists of strategies. These 12 customer engagement strategies will help you get started on improving your product’s retention rate and boosting your revenue:

  1. Empower customer service teams to build great in-product experiences
  2. Break down walls between product and marketing to deliver a truly omnichannel experience
  3. Personalize the user experience
  4. Invest in better analytics
  5. Move your customer surveys in-app
  6. Involve your power users
  7. Enable all-hands support
  8. Have a practiced customer development process
  9. Focus on improving expansion revenue
  10. Celebrate customer milestones
  11. Become a resource
  12. Ditch the funnel

1. Empower customer service teams to build great in-product experiences

In-product or in-app messaging is a highly effective way to onboard new users or to train them on a new feature. In-app messages in the form of tooltips, modals, hotspots, slideouts, NPS surveys, and checklists are so effective because they’re contextual. It’s a way to communicate with your users when and where it matters most. 

appcues webinar slideout announcement made with appcues

Appcues makes it easy (like, really easy) for companies to create in-app customer experiences and improve user engagement. Non-technical team members can build, iterate on, and modify in-app experiences. That means customer-facing teams can use their firsthand knowledge of customer needs to build better onboarding, offer self-service support, and collect customer feedback—without having to rely on dev cycles.

Learn how the Appcues CS team created 4 new customer touch points using Appcues.

LEARN BY BUILDING

Try Appcues to see just how easy it is to create stunning in-app experiences

  • No dev resources needed
  • Boost your activation overnight
  • Integrate easily with other analytics tools
Charts and graphs

2. Break down walls between product and marketing to deliver a truly omnichannel experience

Omnichannel ≠ multi-channel. You can engage your customers in every channel under the sun. But if these experiences aren’t cohesive and don’t work together seamlessly, they don’t add up to an omnichannel experience.

HubSpot explains:

[An] omni-channel experience is a multi-channel approach to marketing, selling, and serving customers in a way that creates an integrated and cohesive customer experience no matter how or where a customer reaches out.

So, how do you ensure that your customers get the same story across marketing and product channels? Break down the barriers between product and marketing. 

Of course, this is easier said than done, especially in large organizations. A strong product marketing function helps facilitate better communication between the 2 teams. It also creates a more unified, cohesive vision for what the end-user experience should look like from start to finish.

Involving the product marketing team in the creation and execution of the product roadmap helps to keep the customer-facing messaging aligned with what ultimately gets delivered to the customer. It also helps the marketing team create and maintain realistic timetables for campaigns.

3. Personalize the user experience

Personalized onboarding is an amazing growth hack. There are 2 main types: dynamic content (like adding a user’s first name to their dashboard) and event-driven automation (like choose-your-own-adventure self-segmentation).

But truly engaging personalized experiences go beyond just the first name tag. The best apps use personalization to tailor user experiences to the specific needs of their users. 

Duolingo is frequently cited as an example of personalized onboarding for a reason. The company directs new users through personalized onboarding funnels that are tailored to different levels of experience. This removes the friction of learning a new language and ultimately makes the app a great fit for a wider range of users.

duolingo mobile app screen why are you learning a language

Duolingo uses personalization to deliver more meaningful experiences to users.

Of course, personalization shouldn’t stop after onboarding. The choices users make at one stage should inform their experiences at the next. 

Personalized UX = more relevant, useful, and delightful UX.

4. Invest in better analytics

Affordable and out-of-the-box analytics tools like Mixpanel, Amplitude, and Heap have made it easy to measure product engagement by customer. These tools help you gain visibility into customer engagement through product usage. Run reports and build dashboards on all kinds of metrics, including:

  • Which features are being used by which personas
  • What cohorts are likely to churn and when
  • How far a new user gets before dropping off

These metrics can give you valuable insight into where your product is succeeding—and where it might be falling short. This data can also help you identify where you need to experiment or run a customer development process so users can get the most value out of your app. 

Take it beyond quantitative analytics, too. Marry this data with qualitative analytics to create a flywheel of continuous product improvement. First, use quantitative information like the reports above to focus attention on the biggest problems (and opportunities). Then “zoom in” to the user’s level through qualitative research by using tools like FullStory to round out your understanding and solve the problem.

5. Move your customer surveys in-app

Customer surveys like CES, CSAT, and NPS can be great temperature gauges for understanding the happiness of your customers. And moving these questionnaires into your app allows you to target exactly the right person at the right moment in time.

patientsky healthcare nps customer satisfaction csat survey
PatientSky used Appcues to gather customer feedback

Try asking for feedback right after a user achieves a certain workflow or target it to a specific persona. This sort of targeting and segmentation means you’re not sending email blasts asking the same people the same question repeatedly. In-app customer surveys give you better insights into the when and why behind each response because they’re more contextual.

6. Involve your power users

You have a base of highly engaged users that want to align themselves with your company to become your product champions. These are some of the most mutually beneficial relationships a company can have. Nurture them, and you’ll both gain.

It helps to involve power users during product launches. Give your product champions a sneak peek at your new product and ask them to help you spread the word with tweets, quotes, or re-blogs when you go live.

You should also engage your power users by asking them to participate in user tests. Get them involved early and incorporate feedback that you hear repeatedly. This is often done via a beta group, but why not pull a few out of the pile and spend a half hour on the phone watching them click around?

7. All hands support

Many SaaS companies implement a novel approach to customer support. They take turns to make sure everyone from developers to product managers have a hand in supporting customers.

All-hands support drives growth in many SaaS companies by keeping their entire team in touch with the personalities, pains, and wishes of their customers and free-trial users.

Zapier says:

Effective all hands support focuses on making life better for your customers. But it can also cause a shift in how you and your team think about and build your company.

To be clear: this doesn’t mean companies toss out their customer success department. Some companies find it advantageous to have a full-time support team that owns the process and use the broader team to contribute on a regular schedule.

Here at Appcues, we’ve baked a full week of support into our new employee onboarding. We call it “support week” and regularly hear from new teammates that the experience fast-tracked an understanding and empathy for our customers that would have normally taken months to acquire.

8. Have a practiced customer development process

No matter what stage your company is in, you should have a well-practiced process for customer development. There are always feature requests that need to be scoped and customer pain points that need to be addressed regardless of how large your business gets.

Steve Blank lays out the process in his book, “The Four Steps to the Epiphany.” It can be loosely summarized in this illustration:

This is an image of a customer development process illustration. It shows customer discovery and customer validation, with an arrow pointing from one to the other, showing that they are linked.

A customer development process helps you hypothesize and test which products will further engage your customers, so you can spend your time on the ideas that are going to work. 

9. Focus on improving expansion revenue 

It’s a lot easier to get more money from happy, paying customers than it is to close a new account. It’s more cost-effective as well, as it’s roughly twice as cheap to upsell an existing customer than to gain a fresh one. 

Expansion revenue can also help combat the inevitable effects of churn and actually push your effective churn rate into the negatives.

That’s why expansion revenue is easily one of the most important levers for sustainable SaaS growth. For years now, ProfitWell has recommended that, for healthy SaaS business growth, at least 30% of your revenue should be expansion revenue. Make 2022 the year that you finally shift your goals from a model that narrowly focuses on net-new acquisition to one that prioritizes expansion revenue.

Your bottom line will thank you:

While it takes most companies over a year to earn back the costs associated with acquiring new customers, it takes most companies around one quarter to earn back the costs associated with up-selling and expanding.

10. Celebrate customer milestones

Engagement in the early days of a customer’s life cycle plants the seeds for long-term retention, but you need to nurture those seeds to make them grow. A quick marketing email shows more tenured customers that you care just as much about them on Day 100 as you did on Day 1.

Use both in-app and out-of-app channels to acknowledge your customers’ major milestones. In-app messages can congratulate avid users on their one-year sign-up anniversary. Meanwhile, marketing emails can acknowledge a user’s birthday or celebrate a specific product-oriented accomplishment. Spotify’s famous “Spotify Wrapped” emails recap a user’s listening habits from the past year. This serves both as a fun way to engage with customers and a reminder to each user of exactly how much they use the app throughout the year.

Spotify wrapped recap on 3 mobile phone screens
Source: Spotify

11. Become a resource

Don’t limit your ability to help your customers to what they can do within your product. Build an entire library of content for your customers that contextualizes your product and shows customers how to use it to its maximum potential.

Also: don’t write about your product. Your customers don’t live to use your app. A post that’s a glorified ad for your product is about as engaging as reading a technical manual. Imagine if you’d come to this article wanting to read about customer engagement, but all you found was 10,000 words of “Use Appcues!” (Although in-app messages are great tools for boosting retention.)

Instead, provide content that helps your customers grapple with the high-level problems they experience and position yourself as a trusted resource in a niche field. Feel free to name-drop your product when the moment is right, but providing guidance and information to your customers builds another layer of trust and loyalty for your brand.

Consider building an online library of:

  • Blogs
  • Ebooks
  • Tutorials
  • Use cases
  • Industry reports

12. Ditch the funnel

Companies in every vertical have doubled down on their efforts to engage users through their products. That’s led to some big changes in the way we all think about our users and customers.

A product-led approach shifts the balance of power in favor of the user and upsets traditional ideas about what the customer life cycle looks like. Leading with the product (versus sales or marketing outreach) means that the product experience begins earlier and plays a much larger role in the user journey as a whole. 

And this is changing the way we visualize the user journey itself and the strategies teams use to affect it at every stage. Much more so than a traditional funnel model, a flywheel encourages companies to consider the user experience in its entirety and understand its potential for compounding growth.

the appcues product led growth flywheel diagram shows the 4 stages of the user journey

The Product-Led Growth Flywheel focuses growth and retention efforts on what matters most: the user.

The Product-Led Growth Flywheel is a framework for growing your business by investing in a product-led user experience. The goal of the flywheel is to focus company- and team-level strategy on optimizing the user experience to move users from one stage to the next. As more users become advocates, they drive more acquisition, and growth increases exponentially.

TL;DR: it’s a way to grow your business faster by making your customers happier than ever.

Sounds a little too good to be true? Check out the interactive Product-Led Growth Flywheel here to learn more about how it works.

Author's picture
Jackson Noel
Co-Founder and CEO at Appcues
Skip to section:

Skip to section:

If this article didn’t grab your attention immediately and provide you with engaging, helpful content throughout, you’d leave to find a better article. (And who could blame you?)

The same could be said for your product. Your product is meant to capture the attention of your customers and keep them engaged for the long haul. If you fail to do that, they’ll jump ship to a company that better understands their needs and provides a better overall experience.

Successful companies engage customers across touchpoints in ways going beyond specific teams and channels. These companies know engaged customers stay longer and bring in more money than inactive ones. They also know their hopes of scaling their product and increasing profitability are pinned to customer engagement strategies.

Your product’s growth and continued success are tied directly to your company’s ability to engage its customers—so you’ll need a customer engagement strategy that delivers an experience worth their attention.

What is a customer engagement strategy?

A customer engagement strategy is a blueprint for improving interactions with customers as a means of building better overall relationships with them. Decision-makers from every team across a company come together to decide upon a company-wide strategy for engaging customers. Each team will have their own focus and tactics, but those individual efforts should always align with the greater overarching strategy. 

Users who find that your app solves their pain points quickly and easily will continue to use it, boosting your product’s retention rate. SaaS product customers interact with both the product and the company itself throughout the account’s life cycle, which gives brands ample opportunity to build positive, proactive experiences.

Companies devising a comprehensive customer engagement strategy try to identify and remove potential points of frustration. This starts with mapping out the customer journey and identifying when customers interact with the brand and product and where they may require assistance. Most engagement strategies focus specifically on:

  • The marketing funnel
  • The onboarding experience
  • The in-product user experience (UX)
  • Customer service interactions

Why is customer engagement important?

Widespread customer engagement is the key to a product’s long-term success. Many companies address frustrations once a customer cancels their subscription but often find it too late to stop the user from churning. 

A customer engagement strategy aims instead to identify and eliminate potential friction points before they give users a reason to churn. This allows companies to attack churn from both a proactive and reactive position to achieve the highest possible retention rate.

A proactive customer engagement strategy:

Improves customer loyalty

Companies use engagement strategies to create more loyal customers with healthy long-term usage habits. Your marketing and sales teams make promises about how your product will solve a customer’s problems—and products that deliver on those promises build a more loyal customer base. 

A survey found that 36.5% of consumers would spend more on a product from a brand the customer was loyal to. A disengaged customer might rely more on casual cost comparisons to determine whether they continue their subscription with your product or choose an alternative. Anyone looking to trim their expenses will inevitably wind up evaluating whether it’s worth paying for something they don’t really use. That’s all the more reason to make sure they actually engage with your product!

Fuels growth

Ah, yes, the old leaky bucket conundrum. You need to sign up more customers than you lose over a specific timeframe to achieve growth. A customer engagement strategy works to make the proverbial hole in your bucket smaller, as your efforts to satisfy customers will result in the loss of fewer clients over time. The better you get at retaining existing users, the fewer new customers you’ll need to bring in to grow your base.

Boosts revenue

A better retention rate will also result in more revenue as a result of increased user volume. You’ll have more customers, so you’ll bring in more money. And the longer customers stay, the more chances you have to upgrade and renew them. 

You’re also likely to find that these upsell opportunities increase in quality as well as quantity. A recent survey found that 58% of respondents would pay more for a better customer experience. 

Those who really want to see the impact of their customer engagement strategy over time need a tool that helps track user behavior. Appcues allows you to easily measure how your changes are impacting product adoption, so get started with a free trial.

Customer engagement vs. user engagement

Customer engagement is sometimes referred to as user engagement. While the 2 are often used interchangeably, they technically refer to separate concepts. It all starts with the difference between a user and a customer:

  • A user is a person who uses your product, including those who use it at no charge—i.e., people on SaaS free trials and “freemium services.” It also includes social media, email, and search tools.
  • A customer is a person or company who pays to use your product. They’re still a user, but they’ve become a customer because they saw and understood the value of your product and decided to pay for it.

User and customer needs can be different during the onboarding process, which is why you shouldn’t onboard your users like customers. But engagement extends beyond onboarding and occurs throughout the user/customer lifetime. 

User and customer engagement strategies often overlap, so it can be hard and even counterproductive to separate them when talking about SaaS companies. That’s why the onboarding strategies below cover both user- and customer-focused engagement efforts.

12 customer engagement strategies

Customer engagement is essential to your retention efforts, but it can be difficult to know where to start. Your marketing, product, IT, and customer success teams all interact with customers throughout their life cycles, so the possible engagement strategies your business could implement are endless. 

Luckily, you don’t need to spend your days devising never-ending lists of strategies. These 12 customer engagement strategies will help you get started on improving your product’s retention rate and boosting your revenue:

  1. Empower customer service teams to build great in-product experiences
  2. Break down walls between product and marketing to deliver a truly omnichannel experience
  3. Personalize the user experience
  4. Invest in better analytics
  5. Move your customer surveys in-app
  6. Involve your power users
  7. Enable all-hands support
  8. Have a practiced customer development process
  9. Focus on improving expansion revenue
  10. Celebrate customer milestones
  11. Become a resource
  12. Ditch the funnel

1. Empower customer service teams to build great in-product experiences

In-product or in-app messaging is a highly effective way to onboard new users or to train them on a new feature. In-app messages in the form of tooltips, modals, hotspots, slideouts, NPS surveys, and checklists are so effective because they’re contextual. It’s a way to communicate with your users when and where it matters most. 

appcues webinar slideout announcement made with appcues

Appcues makes it easy (like, really easy) for companies to create in-app customer experiences and improve user engagement. Non-technical team members can build, iterate on, and modify in-app experiences. That means customer-facing teams can use their firsthand knowledge of customer needs to build better onboarding, offer self-service support, and collect customer feedback—without having to rely on dev cycles.

Learn how the Appcues CS team created 4 new customer touch points using Appcues.

LEARN BY BUILDING

Try Appcues to see just how easy it is to create stunning in-app experiences

  • No dev resources needed
  • Boost your activation overnight
  • Integrate easily with other analytics tools
Charts and graphs

2. Break down walls between product and marketing to deliver a truly omnichannel experience

Omnichannel ≠ multi-channel. You can engage your customers in every channel under the sun. But if these experiences aren’t cohesive and don’t work together seamlessly, they don’t add up to an omnichannel experience.

HubSpot explains:

[An] omni-channel experience is a multi-channel approach to marketing, selling, and serving customers in a way that creates an integrated and cohesive customer experience no matter how or where a customer reaches out.

So, how do you ensure that your customers get the same story across marketing and product channels? Break down the barriers between product and marketing. 

Of course, this is easier said than done, especially in large organizations. A strong product marketing function helps facilitate better communication between the 2 teams. It also creates a more unified, cohesive vision for what the end-user experience should look like from start to finish.

Involving the product marketing team in the creation and execution of the product roadmap helps to keep the customer-facing messaging aligned with what ultimately gets delivered to the customer. It also helps the marketing team create and maintain realistic timetables for campaigns.

3. Personalize the user experience

Personalized onboarding is an amazing growth hack. There are 2 main types: dynamic content (like adding a user’s first name to their dashboard) and event-driven automation (like choose-your-own-adventure self-segmentation).

But truly engaging personalized experiences go beyond just the first name tag. The best apps use personalization to tailor user experiences to the specific needs of their users. 

Duolingo is frequently cited as an example of personalized onboarding for a reason. The company directs new users through personalized onboarding funnels that are tailored to different levels of experience. This removes the friction of learning a new language and ultimately makes the app a great fit for a wider range of users.

duolingo mobile app screen why are you learning a language

Duolingo uses personalization to deliver more meaningful experiences to users.

Of course, personalization shouldn’t stop after onboarding. The choices users make at one stage should inform their experiences at the next. 

Personalized UX = more relevant, useful, and delightful UX.

4. Invest in better analytics

Affordable and out-of-the-box analytics tools like Mixpanel, Amplitude, and Heap have made it easy to measure product engagement by customer. These tools help you gain visibility into customer engagement through product usage. Run reports and build dashboards on all kinds of metrics, including:

  • Which features are being used by which personas
  • What cohorts are likely to churn and when
  • How far a new user gets before dropping off

These metrics can give you valuable insight into where your product is succeeding—and where it might be falling short. This data can also help you identify where you need to experiment or run a customer development process so users can get the most value out of your app. 

Take it beyond quantitative analytics, too. Marry this data with qualitative analytics to create a flywheel of continuous product improvement. First, use quantitative information like the reports above to focus attention on the biggest problems (and opportunities). Then “zoom in” to the user’s level through qualitative research by using tools like FullStory to round out your understanding and solve the problem.

5. Move your customer surveys in-app

Customer surveys like CES, CSAT, and NPS can be great temperature gauges for understanding the happiness of your customers. And moving these questionnaires into your app allows you to target exactly the right person at the right moment in time.

patientsky healthcare nps customer satisfaction csat survey
PatientSky used Appcues to gather customer feedback

Try asking for feedback right after a user achieves a certain workflow or target it to a specific persona. This sort of targeting and segmentation means you’re not sending email blasts asking the same people the same question repeatedly. In-app customer surveys give you better insights into the when and why behind each response because they’re more contextual.

6. Involve your power users

You have a base of highly engaged users that want to align themselves with your company to become your product champions. These are some of the most mutually beneficial relationships a company can have. Nurture them, and you’ll both gain.

It helps to involve power users during product launches. Give your product champions a sneak peek at your new product and ask them to help you spread the word with tweets, quotes, or re-blogs when you go live.

You should also engage your power users by asking them to participate in user tests. Get them involved early and incorporate feedback that you hear repeatedly. This is often done via a beta group, but why not pull a few out of the pile and spend a half hour on the phone watching them click around?

7. All hands support

Many SaaS companies implement a novel approach to customer support. They take turns to make sure everyone from developers to product managers have a hand in supporting customers.

All-hands support drives growth in many SaaS companies by keeping their entire team in touch with the personalities, pains, and wishes of their customers and free-trial users.

Zapier says:

Effective all hands support focuses on making life better for your customers. But it can also cause a shift in how you and your team think about and build your company.

To be clear: this doesn’t mean companies toss out their customer success department. Some companies find it advantageous to have a full-time support team that owns the process and use the broader team to contribute on a regular schedule.

Here at Appcues, we’ve baked a full week of support into our new employee onboarding. We call it “support week” and regularly hear from new teammates that the experience fast-tracked an understanding and empathy for our customers that would have normally taken months to acquire.

8. Have a practiced customer development process

No matter what stage your company is in, you should have a well-practiced process for customer development. There are always feature requests that need to be scoped and customer pain points that need to be addressed regardless of how large your business gets.

Steve Blank lays out the process in his book, “The Four Steps to the Epiphany.” It can be loosely summarized in this illustration:

This is an image of a customer development process illustration. It shows customer discovery and customer validation, with an arrow pointing from one to the other, showing that they are linked.

A customer development process helps you hypothesize and test which products will further engage your customers, so you can spend your time on the ideas that are going to work. 

9. Focus on improving expansion revenue 

It’s a lot easier to get more money from happy, paying customers than it is to close a new account. It’s more cost-effective as well, as it’s roughly twice as cheap to upsell an existing customer than to gain a fresh one. 

Expansion revenue can also help combat the inevitable effects of churn and actually push your effective churn rate into the negatives.

That’s why expansion revenue is easily one of the most important levers for sustainable SaaS growth. For years now, ProfitWell has recommended that, for healthy SaaS business growth, at least 30% of your revenue should be expansion revenue. Make 2022 the year that you finally shift your goals from a model that narrowly focuses on net-new acquisition to one that prioritizes expansion revenue.

Your bottom line will thank you:

While it takes most companies over a year to earn back the costs associated with acquiring new customers, it takes most companies around one quarter to earn back the costs associated with up-selling and expanding.

10. Celebrate customer milestones

Engagement in the early days of a customer’s life cycle plants the seeds for long-term retention, but you need to nurture those seeds to make them grow. A quick marketing email shows more tenured customers that you care just as much about them on Day 100 as you did on Day 1.

Use both in-app and out-of-app channels to acknowledge your customers’ major milestones. In-app messages can congratulate avid users on their one-year sign-up anniversary. Meanwhile, marketing emails can acknowledge a user’s birthday or celebrate a specific product-oriented accomplishment. Spotify’s famous “Spotify Wrapped” emails recap a user’s listening habits from the past year. This serves both as a fun way to engage with customers and a reminder to each user of exactly how much they use the app throughout the year.

Spotify wrapped recap on 3 mobile phone screens
Source: Spotify

11. Become a resource

Don’t limit your ability to help your customers to what they can do within your product. Build an entire library of content for your customers that contextualizes your product and shows customers how to use it to its maximum potential.

Also: don’t write about your product. Your customers don’t live to use your app. A post that’s a glorified ad for your product is about as engaging as reading a technical manual. Imagine if you’d come to this article wanting to read about customer engagement, but all you found was 10,000 words of “Use Appcues!” (Although in-app messages are great tools for boosting retention.)

Instead, provide content that helps your customers grapple with the high-level problems they experience and position yourself as a trusted resource in a niche field. Feel free to name-drop your product when the moment is right, but providing guidance and information to your customers builds another layer of trust and loyalty for your brand.

Consider building an online library of:

  • Blogs
  • Ebooks
  • Tutorials
  • Use cases
  • Industry reports

12. Ditch the funnel

Companies in every vertical have doubled down on their efforts to engage users through their products. That’s led to some big changes in the way we all think about our users and customers.

A product-led approach shifts the balance of power in favor of the user and upsets traditional ideas about what the customer life cycle looks like. Leading with the product (versus sales or marketing outreach) means that the product experience begins earlier and plays a much larger role in the user journey as a whole. 

And this is changing the way we visualize the user journey itself and the strategies teams use to affect it at every stage. Much more so than a traditional funnel model, a flywheel encourages companies to consider the user experience in its entirety and understand its potential for compounding growth.

the appcues product led growth flywheel diagram shows the 4 stages of the user journey

The Product-Led Growth Flywheel focuses growth and retention efforts on what matters most: the user.

The Product-Led Growth Flywheel is a framework for growing your business by investing in a product-led user experience. The goal of the flywheel is to focus company- and team-level strategy on optimizing the user experience to move users from one stage to the next. As more users become advocates, they drive more acquisition, and growth increases exponentially.

TL;DR: it’s a way to grow your business faster by making your customers happier than ever.

Sounds a little too good to be true? Check out the interactive Product-Led Growth Flywheel here to learn more about how it works.

Author's picture
Jackson Noel
Co-Founder and CEO at Appcues
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