When it comes to revenue over time, you’re not looking for a one-time sale of your SaaS products; you’re looking for a lifetime customer.
Over time, customer retention really adds up. Studies have shown that a 5% increase in customer retention rates can increase profits by 25% to 95%.
When it comes to revenue over time, you’re not looking for a one-time sale of your SaaS product; you’re looking for a lifetime customer. By increasing the “stickiness” of your solution, you’ll ensure that your customer won’t eventually downgrade or worse, leave all together.
Steps to Improve the Stickiness of Your SaaS
To improve the stickiness of your SaaS, think about what your customers really want: solutions tailored to their needs that are quick to implement, easy to use, and provide internal value. Let’s take a closer look:
1. Sticky SaaS is easy to customize
From an emotional standpoint, a product that offers a one-size-fits-all approach is not nearly as enticing as a product that can be customized for a client’s needs. Obviously, consumers in a product-flooded market can quickly be distracted by the next shiny product that comes their way. This is where an emotional connection comes in. If your customers and prospects feel like the product has been adapted to suit their needs, they’re going to have more of a personal connection with that product. Once it’s customized to meet their needs, it will become part of their identity as a company.
And from a practical standpoint, why would customers downgrade or stop their subscription if you (or they) have customized your solution to meet their needs? If their needs are being met and can continue to be met as they scale their business, there’s no impetus to go through the hassle of transitioning to and implementing a competitive product.
2. Sticky SaaS empowers Customers
Many SaaS products can be customized for specific needs, but how many SaaS products allow customers the autonomy to customize on their own? If customers have to go running for help every time they need to tailor your SaaS, the software is going to present more of a difficulty than a solution. They’ll become frustrated and feel powerless, which won’t bode well for subscription renewal.
By empowering your customers to add to, customize, and integrate your SaaS, you can enable an easy solution. Customers want to be able to integrate all of their development, communication, storage, and platform solutions into one tailored service that works for their company. Allowing customers to simply and easily add their own features or logic takes a SaaS to the next level. Your customers shouldn’t have to change their way of doing business to match your software. Your software should be able to easily adapt to your customers.
3. Sticky SaaS Encourages Users to Generate Value
Though you don’t want consumers to feel trapped within your product, it’s important to strike a balance between product stickiness and (happy) customer loyalty. You do this by generating value for the customer inside the product so that they don’t want to change services.
Let’s say your SaaS has enabled a client to create a new custom rewards program for their users. And that client has successfully customized your SaaS to not only reward existing customers but to optimize leads for prospective customers. Once they’ve created this unique offering, it’s already generating value for them that a new product simply can’t provide. If they switch now, they’ll lose everything they’ve just cultivated. It’s not a matter of locking people in; it’s a matter of proving that your product is irreplaceable once customized to meet their needs.
4. Sticky SaaS Reduces Time to Value (TTV)
One study showed that 31.4% of customers downgraded from a SaaS product because it was under-utilized in their company. When you only have a short amount of time to prove to a customer that your solution is exactly what they need, you need to emphasize quick TTV, not only in terms of implementation speed but also in terms of how quickly users of the SaaS will be able to generate business value. Is your SaaS making customers more efficient? Is it saving them money? Is it allowing them to allocate resources in a more cost-effective manner? If not, they may easily become part of that 31.4% who decide they can’t continue to use the product.
You’ve heard the old adage: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” When it comes to developing a sticky SaaS product, these are words to live by. Don’t just give customers a one-size-fits-all product that they’ll easily outgrow or become frustrated with. Provide your customers a SaaS that can be tailored to their needs and allows them to achieve autonomy. This way, your SaaS becomes a fully integrated and irreplaceable asset.