Why Customer Retention is the True Measure of SaaS Success
In SaaS (Software as a Service), like in most businesses, sales is king. Sales gets the glory, and while I’d like to say this has never bothered me as a big champion of the sales world (I ended up marrying my sales counterpart from earlier in my career!) you’ll be hard pressed to find any Customer Success leader that hasn’t had that moment of “what about us?”
No amount of sales can sustain a business if you’re losing customers because you have no customer success experience.
Sure, you can keep pouring into the sales bucket over and over again, but if there are holes in that bucket, none of that will matter and your dreams of SaaS success will disappear faster than the good flavored water from the engineering fridge. That’s where I come in, or rather where my team, my people, my tribe come in – Customer Success.
In fact, years ago when my friend and former boss, one of the best leaders I’ve had the privilege of working alongside, told me he was identifying ways to ensure the success of the existing client base at the company that would eventually become my second home, I told him that while there were a lot of things we could talk about – at the end of the day – retention was what really mattered.
It’s About More than Hitting Your Numbers
I’ve built my career on creating best-in-class Customer Success organizations and have had the privilege of working with some of the best leaders across different functions. When asked how you measure the true success of any company, most companies likely begin with revenue and quarterly/annual performance against goals. Yet, if you want to keep the VC funding or the potential acquiring companies interested, hitting those numbers isn’t going to be enough. They want to know of all the people who bought your product/solution/software, how many kept buying it?
In the past, people who hear about ‘Customer Success’ think of call centers filled with transactional conversations between customers with scripted responses on how to handle complaints. Sure, that’s a part of it, but in recent years many SaaS organizations heard the call and have made efforts to grow and scale Customer Success to points where, in many cases, that team is even larger than Sales.
And why? Your sales team tells the story and sells the dream – they bring the brand to light for prospective customers and hit home why your product or solution is essential to the success of their business. But, who is responsible for ensuring that it actually meets, nay exceeds those expectations?
The Essence of Customer Success
That is the essence of Customer Success. Take the dream surfaced by sales and make it a reality. Get to know the customers after the ink is dry and make sure they get their money’s worth in purchasing from your company. They are your insurance policy and they hold the key to your company’s success because they are essential to why your customers keep coming back.
So that brings me to the part that all of you are actually interested in – you get it, retention is crucial, but how do you ensure your business has healthy retention? Let’s start there.
Measure the Customer Success Experience
To start, make sure you’re measuring it. Do you know what your company’s retention rate is? And before you jump into Net Retention, let me stop you. Yes, you can look at net dollars and if one client spends more, in theory they could make up for a client lost. That said, to truly understand the health of your business, I recommend starting with a straightforward way of looking at retention, aka “did the client keep buying the thing they originally bought?” Place your customers into a cohort and measure the performance of that group over time. If you started with 30 clients, did you end with 30 clients? Once you know what your retention rate is, next you want to understand how it measures up.
The best and most successful companies in the world have retention rates of >90%. If you’re already there – fantastic! That doesn’t mean the conversation is over, it just means that somewhere in your company, someone (or many “someones”) is doing something right today. So, make sure to thank your Head of Product and Head of Service immediately. That’s right, do it now.
Next, ensure you have a strategy in place to KEEP it. Do you know why your customers keep buying? What is it about your solution that keeps them hanging on? If you don’t know, find out. There are a ton of great ways to do that, but how about starting with the simplest: Call and ask them. Pick out a handful of your longest running customers and go make a friend. They’ll appreciate your attention and you’ll get just as much out of it, if not more, I can assure you.
If you’re not seeing those 90%+ retention numbers, there’s no need to panic…yet. Now is the time to find out why. Identify the largest and most recent client cancellations and dig in. What worked? What didn’t work? Start with talking to the people that worked on the account and then move on to the next simplest step in the process – call your former customers! Who knows, maybe you’d even get commitment from them to try again. Clients are typically pretty open to collaboration and pretty forgiving on missteps if you’re willing to pivot in order to retain them or win them back.
I’ve spent plenty of time over my career talking to customers, both happy and unhappy, most of the time they just want to be heard and want to know that you’re working to fix whatever went wrong. One of my favorite clients once told me, “I don’t expect perfection, the world is an imperfect place. I do, however, expect that you’re going to hear me and work with me to ensure this gets resolved.” Never once did I feel those conversations weren’t worthy of my time.
Last but not least… Scale the Customer Success Experience
In the retention game, like in most things, knowledge is power. Once you know why a client keeps buying from you, make sure you programmatically institute a way to replicate that over and over and over again. It cannot simply live in the mind and efforts of one kickass service person, brilliant engineer or savvy seller. To keep this thing going, it needs to be operationalized, repeatable and scalable within your organization. That means that if you don’t have someone in place whose job it is to make that happen, go hire them immediately.
Once you know why clients are cancelling, whether your retention rate is 50% or 95%, dig in with your people. Is the service model right? Is the product intuitive enough? Did we set the right expectations out of the gate? Did we fully understand what the client wanted to get out of our solution and, if so, were we able to deliver? Once you know these things, you can move forward with Step 2, which is setting up your customers for success from Day 1.
Callie Reynolds serves as the Vice President of Account Management for Moat measurement solutions within the Oracle Data Cloud, following the acquisition of Moat in 2017. With extensive experience in SaaS, and coupled with deep digital marketing expertise, Callie has built teams focused on driving the success of brand marketers, digital platforms, large-scale publishers and media companies all over the world. In addition to her time helping clients maximize their potential in digital, Callie is also a mom to 6-month old twins, a lover of doughnuts, a dancing enthusiast, and avid appreciator of cinematic adventures.
Customer Experience, Self Service, and the Gift of Time
Time is the most precious gift in life. If you think about it, time is the one thing we all want more of. As we get older and busier, time gets even more valuable to us.
How to Be an Entrepreneur: 5 Things I Learned in 5 Months as an Entrepreneur
The life of an entrepreneur is different every day, but the one thing that remains the same is that we are always learning. These are my lessons in how to…
Airport Experience – Are You Letting Down Your Precious 2021 Travelers?
A month and a half ago, as part of our ongoing conversation about airport experience, we introduced the concept of revenge travel. We pleaded with the public to trust us…
Aviation Industry, Coronavirus Isn’t the Only Thing Killing Us
Eighteen years ago, September 11th caused a three-day halt of the US commercial airlines and resulted in a 31.6% reduction in travel in September 2001 compared to the previous year….
Customer Experience Plan is More Important than Ever
Last week we published eight Customer Experience Trends to look out for in 2021. Today we are diving deeper into the first one: Customer Experience is more important than ever…
Customer Facing Experience: Communication and Hospitality
Today, we are talking about communication as part of the customer facing experience. This is one of the most misused and misinterpreted notions both in our professional lives and our…
Create Your Tribe: How Great CX Makes a Lifestyle Brand
Newcomers to the market realize that their business is only as strong as the growth of their customer base. With that in mind, senior leaders work hard to shorten the distance between them and the customer.
How To Define Your Purpose And Have Unique Culture
If you Google the word “purpose” you get the definition “the reason for which something exists.” This is a challenge if you think about it in the context of organizational…
Customer Experience Audit: Cadillac Scores Millennial Customers with Future-Forward Thinking
Editor’s Note: This post is part of a Customer Experience Audit series. See all the audit stories. The automotive industry is right next to the airline industry in terms of…
Digital Customer Experience Strategy – Top Three Mistakes
How many of you have interacted with financial and insurance institutions who seem to have forgotten the invention of the world wide web and applications design? In 2021, Major players…
Lessons Learned at the Forrester Conference: “Data is the New Sexy”
Once a year I look for an event to attend where I can learn something new and get better at what I do. This year, I attended an event hosted…
3 Ways to Create a Better Employee Experience Strategy
Guest Post by Gabe Smith, CCXP for The Petrova Experience The relationship between employee experience strategy and customer experience has long been discussed. Without engaged employees, we’re told, it’s difficult…
What is the best question for your CX Survey?
As customer experience professionals, we need to factor in this disconnect when we design surveys. And when we react to survey results. Customers have an image of who they want to be. However, their behaviors do not always reflect that image.
Organizational Culture and Access to Information
By and large, people perceive culture as an HR discipline. The most common perception is that culture covers the soft side of performance. Culture is about how you do things, not so much about what you do. This approach to culture could not be more wrong. In fact, organizational culture is about so much more than a few words in a performance review sheet. It is about leaders expressing values, and the action guidance their cultural behaviors provide.
Customer Experience Tips and Best Practices In 2017?
This is Post 2 of Liliana Petrova’s series on customer experience. She shares customer experience tips, lessons learned, and best practices for the new year. And dives into organizational culture…
Customer Experience Technology View of your Call Center
By 2022 the global cloud based contact center market is growing from USD 6.8Bn in 2017 to 20.93Bn in 2022. This makes for CAGR of 25.2%. If you do not…
Would You Pitch In To Save Toys “R” Us For Your Children To Experience? #ToysRUsGoFundMe
Last week we laid out the big moves that the leadership of Toys ‘R’ Us failed to take to evolve with customer needs and thus joins other brands as examples of…
How to Prepare for AI: Dispatches from CR Summit, Charleston
On the eve of the #CRSummit in Charleston, customer experience leaders from various industries held the first AI Committee meeting. AI is a challenging topic to cover because it has…
4 Career Tips to obtain a Customer Experience Role
In honor of the 4th of July, we are rounding up 4 career tips for CX professionals. Set aside some time during the break from work to take stock in your CX career and evaluate the steps you need to get to the next level.
Customer Experience Audit: Uber Bets On Self-Driving Cars With Big Volvo Purchase
The question that remains unanswered is who will be part of the future of transportation. Uber is going for the vertical integration – the whole pie. The future industry of urban transportation will be made of players in three different categories: cars, self-driving software, and ride-sharing network. In contrast, Lyft approaches the future through partnerships.
What is Human-Centered Design and how to Leverage it in 2021?
At its core, design is about value creation. In the world of Customer Experience, value-driven design requires CX professionals to use empathy to imagine a future customer experience that is…
Why You Need Culture Not Call Center Training for Customer-Centric CX
If the organization does not understand what customer experience is, you will not get the funding or organizational support you need to build customer-centric experiences.
Customer Experience Design – How Do You Want Customers To Feel?
Last week, we talked about CX Design in terms of space and function. Today, we continue our customer experience design journey to talk about the design of emotions and feelings. All…
How a Personal Interaction builds Repeat Customers
A customer-centric methodology is key to the successful outcome of my interaction with Hello Spud. It is the reason this story appears here, and not among the CX Big Fails! The company did not send an automated response. It did not deliver a message stating “sorry we couldn’t help you, would you like something else.” Instead, the company co-founder reached out to me personally across multiple channels (a handwritten note, followed by personal emails).
Is Covid19 What We Needed to Build Seamless End-to-End Travel Experience?
On January 10th, we published an article called The Future of Travel We Deserve. In it, we laid out the foundation necessary to implement innovation at scale. Four months later,…
Are You Ready to Go Exclusive with Jane, Your Digital Concierge?
In 2015 JetBlue introduced bag fees. Seven years after the competition. The media exploded. Many publications were negative. They blamed the airline for “selling out.” One headline read “A New…
United CEO does not care about #customers happiness. Really?
Lately, I have been thinking about United Airlines and its organizational culture. Initially, I thought about United Airlines culture because someone asked whether it is possible to build a customer-centric…
Healthcare Whitepaper: Impact of Patient ‘I Wants’ in Healthcare
Rachel Dreyfus joins The Petrova Experience with a guest blog about patient experience. Background A culture of positive patient experience is increasingly important in Healthcare, affecting patient outcomes and satisfaction….
Customer Experience Audit: eBay’s Vibrant Marketplace of the Future
Editor’s Note: This post is part of a series of Customer Experience Audits. They highlight advances in artificial intelligence in retail and other technologies. See all audit stories. Two years…
Let’s Get You Certified as a Customer Experience Professional!
Like all mature professions, customer experience has a certification that is internationally recognized. Adding it to your resume will signal to the business community that you are serious about customer experience and your aspiration to be part of its leadership ranks…
Customer Experience Audit: Mobile Provider Eliminates Remote Workforce
How to balance the efficiency call center metric FCR (first call resolution) with wait and talk time? JetBlue promotes human interactions as a brand promise.
2021 Customer Loyalty Strategy – Relationships over Transactions
According to the Salesforce Connected Customer Report, 90% of consumers expect companies to clearly demonstrate their values and 66% expect brands to demonstrate empathy. In other words, when thinking about…
End to End Customer Experience – How to Get it Right
When we think of travel, we often think of the flight experience. But the end to end customer experience is complex, and includes all modes of transportation that get you…
Top 5 Customer Experience Design Principles in 2021
Customer experience design principles are difficult for organizations to understand and apply. Time and again, we see this in organizations, even though we encounter customer experience design principles in our…
Customer Experience Trends – 8 Actionable Tactics in 2021
As we begin Q4 of an eventful 2020, it’s time to look out for the 2021 customer experience trends and tactics for creating exceptional experiences in increasingly complex environments. We…
WeWork Does Customer Experience Right with a Wow Moment
Used at the right time and place along the customer’s journey, the Wow Moment is an excellent retention technique. When a brand creates personal, relevant experience at exactly the right time, it can build a lifelong, loyal customer relationship.
The One CX Goal You Need to Set for 2019
For 2019, I urge you to make only one CX goal – bring about business success with your customer experience work. Don’t just do work in the general sense. Rather, set a CX goal that has a real impact on your customers and their experiences with your brand.
Poor Integration is Bad for Customer Journey and Worse for Brands
Although we all have bad customer experiences, there is still a big debate about “the CX field” and whether it will survive the test of time. There is no doubt…
Paperless Customer Journey – JetBlue Deviceless Boarding
JetBlue Biometrics – Innovation and Disruption This year, JetBlue entered the ranks of the innovators who disrupt industries by applying customer experience technology. They not only imagine the future. They…
Hospitality Experience and Why We lack Seamless Travel Experiences
Hospitality is taken for granted across government agencies, airlines and hotels. In my line of work, I often hear “I want to have the JetBlue customer experience.” Although many claim…
Why you need a defined culture for customer experience?
When designed and built correctly, customer experience expresses an organization’s brand. Your brand and marketing promises serve as a guiding light to your experience team. Similarly, organizational culture serves as a goalpost for the service side of customer experience.
CX Skills Builders: You May Have a CX Job and Not Know It
Last week we talked about the identity crisis of CX professionals and we urged you to fix any small problem or seam on the customer journey in order to build internal brand equity and buy in.
What Can Casino Consulting Firms Learn from Airlines?
Today we’re talking about casino experience. Casinos and airlines are similar in their operational complexity and sense of wonder. They also are similar in the way they can implement technology…
Leadership During the Pandemic: Guest Post by Rachel Dreyfus
This is a guest post by Rachel Dreyfus, President, Dreyfus Advisors, who researched leadership and organizational culture during the pandemic. How has Covid19 influenced leadership over the past three months?…