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But in SaaS, everything compounds. If you’re losing 10% of your customers each month, that becomes a massive 71.8% over the year. Put another way: If you started the year with 100 customers, you’d only have 28 of them left by the end of the year, meaning you’d have to acquire 72 new customers in the year just to break even.
That’s where having a SaaS customer success strategy comes in. If sales and marketing drive customer acquisition, then customer success drives retention and reduces churn.
What is SaaS customer success?
Lincoln Murphy defines customer success as “when your customers achieve their Desired Outcome through their interactions with your company.” Customer success is a defined strategy for helping your customers be successful when using your product.
SaaS is built on the recurring revenue model: To grow a SaaS business quickly and sustainably, you need to acquire customers and retain them.
This means customer success plays a role across the entire customer life cycle:
- Onboarding and activation: Successful onboarding gets your customers into your product, set up, and getting value from using it.
- Renewal and retention: Customer success works in partnership with your customers, helping them get value from your SaaS throughout their contract. This should improve customer retention and lower customer churn rates.
- Customer advocacy and referral: Customer success focuses on meeting your customers’ individual needs and making them successful with your product. A successful customer is a happy customer, and only happy, successful customers will recommend your product to other people.
SaaS customer success best practices
Below, we break down seven customer success best practices for growing SaaS companies. These are actionable ideas you can put into practice to improve customer retention and satisfaction, turning one-time customers into long-term advocates.
- Make customer success an early priority for your SaaS business
The earlier you start focusing on customer success, the easier it’s going to be. Jason Lemkin believes customer success should be a “single-digit hire” — one of the first 10 employees in your business.
Hiring a dedicated customer success manager early will help you build a customer-centric company. This makes it clear that your customers are your priority: You’re investing valuable time, energy, and money in helping them be successful with your product and your company.
But if you’re looking to build a customer-centric SaaS company, it can’t just be the responsibility of your customer success team. Customer centricity needs to be a mindset that’s shared across the company. - Keep an eye on your customer data
Usage data is a customer success manager’s best friend. At its simplest, you need to know whether customers are actually using your product. A customer can’t be successful with your SaaS if they never use it.
Customer relationship management software (generally referred to as a CRM) is generally marketed as a sales tool. A CRM houses customer details and can even be used to enroll people in different email campaigns and other things of the sort. You can think of it as your HQ for current, previous, and potentially new customer data.
A foundation for a successful future
A solid customer success program is foundational to creating a healthy business. Of course you need to attract new customers, but if none of them stick around, neither will you. Be intentional about building a team, look for tools that can help lighten the load, and cover all your bases.
As the cliche goes, what you put in is what you’ll get out. Remember, your customers made an investment in you — it’s only right you do the same for them.
Keep an eye on your customer data
The earlier you start focusing on customer success, the easier it’s going to be. Jason Lemkin believes customer success should be a “single-digit hire” — one of the first 10 employees in your business.
Hiring a dedicated customer success manager early will help you build a customer-centric company. This makes it clear that your customers are your priority: You’re investing valuable time, energy, and money in helping them be successful with your product and your company.
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But if you’re looking to build a customer-centric SaaS company, it can’t just be the responsibility of your customer success team. Customer centricity needs to be a mindset that’s shared across the company.
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