This article was written for Startup Mag – http://www.start-up.co.nz. I thought I would republish it on J101 so people could have a read. Make sure you get your print copy of Startup mag as it’s a great read and the guys there are doing an awesome job.
Here’s the article…
Some Thoughts on Customer Retention
- the Unseen Community in Software & SaaS companies.
It’s a hard balance being in the Software/SaaS (Software As A Service) industry. We can put lots of time and focus into systems and development, but sales may suffer… or we focus on sales and then development suffers… or focus on acquiring new customers and current customers start leaving.
When current customers start leaving, we call this churn. Whilst churn is a natural occurrence in all software companies, it is also an indicator that something isn’t right with either the product or the business model. Software companies can be so focused on building online communities to gain traffic and new users that they often forget about the more important community – their user base. These are the ones that pay their bills.
Don’t misunderstand this comment as there are great benefits to building online communities. The point I want to make is that the community strategy surrounding your marketing efforts is very different from the community strategy to increase current customer retention.
Whether or not the current customers collaborate with each other or stand alone, they are still part of your user community, and it’s vital that you know the key factors that keep them using your solution, referring to others and not running to a competitor. Here are some of the main areas to consider when looking ways to increase customer retention.
Train them well!
We’ve noticed a massive difference in customer retention with customers we’d trained. On a 10 user account, training 2 or 3 key users can often make the difference between great product adoption and churn through lack of use.
Create product evangelists!
Selling a 20 user license? Guess what. It’s only as secure as the 1 or 2 product evangelists at the client’s company. If there’s nobody pushing it, often usage will decrease. Also, product evangelists will drive further sales within the client company. So buddy up with key users!
Keep them informed!
Downtime, uptime, features, tips… The more you can keep them in the loop the better. Ie: Our project management software, www.ProWorkflow.com has a built in live ‘ProWorkflow Updates’ feed.
Include them in the design process!
Create an open door policy for customers to make suggestions. Never dismiss customer’s ideas, rather keep an open mind. They are the users and have ‘unrefined’ gold in their suggestions. Make it a point to credit customers for suggestions that make it to the live release. The one change the customer suggested may be enough to keep them for years!
Promote their businesses!
As well as adding testimonials to your website, add their logo, link and contact details. Use the testimonial to promote their business through newsletters and marketing also. Recommend them to other customers. They’ll love you and you’ll make more referral sales from them.
Provide consistent support!
It’s better to provide dependable, consistent 6 hour support times than 1hr support time one day and 24 hrs the next. Keeping in mind that most US software companies have terrible support, anything less than 24hrs is good. Just be consistent and customers will learn what to expect.
Final thoughts on customer retention…
Don’t just sell a product or service. Knit your customers into the very fabric of your business model. Make them feel a part of your growth story rather than simply a ‘sale’ and they’ll come along for the ride!
About The Author:
Julian Stone begin_of_the_skype_highlighting end_of_the_skype_highlighting is the CEO of ProActive Software, developers and creators of the leading web based project management software http://www.proworkflow.com.