The continuing COVID-19 health crisis may well produce a recession that has a significant impact on the Software-as-a-Service (SaaS) industry. No one is certain how this will change the long and short-term behaviors of customers, lenders, and enterprises in a SaaS world.
As their customers are presented with changing markets and deal with the uncertainty that comes with current events, SaaS companies must be prepared for a potential wave of churn. When the driver of uncertainty is a macro-scale force beyond our influence, it is not clear what the best method is for dealing with these circumstances. What we do know is that in times of crisis, people cling to things of value. Perhaps the most important thing you can do to reduce customer churn in the SaaS market is to prove the value of the time and resources your customer has invested with you.
You can do this in five ways:
One of the most important places to start is by making sure you have a digital engagement strategy and that it reflects the needs and concerns of customers right now.
1. Re-tune Your Digital Engagement Strategy
Be a frequent and proactive point of contact for your customer. Stay in touch with them and make sure each of those touches supports the customer in a practical way. You should segment your customers by the challenges they face and provide them with unique solutions. That means increasing the frequency of your engagement and expanding your campaigns. This might also include increasing and promoting digital training and resources that have taken on special importance due to the nature of current events.
2. Be Proactive and Deliver Value
In times of financial stress, we all place greater emphasis on the value of each dollar. Smart businesses will seek to be lean and agile during this time and to trim expenses they perceive as unnecessary. They will re-evaluate the software they use, deciding which products they need and which are simply “nice to have.”
To ensure that your product is on the “need to have” list, identify which customers are struggling and which are growing. Think about ways to proactively offer value to both of these groups of customers and reach out to them with solutions—don’t wait for them to come to you. Uncertainty can lead to paralysis, but once the world around you changes it is crucial you take action to deal with the new conditions. By measuring product usage behavior against proven business metrics you should be able to understand the customer experience at all times and be ready to act at the first sign of change.
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You can help your customer extend their business dollar further by reducing renewal and contract fees or offering flexible payment terms. You may also add value by offering free access to key features for a period of time or extending the length of a free trial period.
3. Collaborate With the Rest of Your Organization
Your Customer Success team should be working with those in other areas of your company in order to effectively identify customer needs and the best solutions to those needs. Every department in your company has a role to play in ensuring customer success:
When every team pitches in with their unique expertise and ideas, your Customer Success team will be ideally equipped to bring the right solution to the customer every time.
4. Do More with Less
Leverage the expertise of all your team members through dynamic assignment, which allows you to do more more with less. Dynamic Assignment enables enterprises to automate the matching of the right team members with the right customers at the right time and to deliver a more positive, personalized experience to their customers at scale, which translates into increased value and adoption.
Instead of drawing from a fixed pool of Customer Service Managers (CSMs), dynamic assignment pairs each customer with a specialist who has attributes that suit the customer’s needs, such as the exact expertise or availability required, specific certifications, the ability to speak a particular language, a location close to the customer’s site, or other criteria. The dynamic assignment system ensures customers receive personalized, relevant attention.
5. Create a Community for Sharing Best Practices
Great business strategies become great survival strategies when a recession hits. Be generous with your wisdom, your best practices, and your digital and remote communication strategies and share them with your customers. Create community environments that allow your business to collaborate and share best practices with others, whether through a virtual event or a community discussion board. Given the dynamics of recurring revenue, SaaS enterprises are only as successful as their customers.
Be Lean and Agile to Reduce Customer Churn in SaaS
During the COVID-19 challenge, your strategies, like those of your customers, may look a little different than they usually do, but their goal should always be to drive growth and success. To deliver value to your customers right now, you will need to be agile in communicating with customers, identifying trends, and working with different teams to develop solutions to pain points as they arise.
The right Customer Success technology can help by allowing you to segment your customer base to deliver the right message at the right time to the right customer. It is also an early-warning system that automatically prompts you to take action when customers are at risk of churn or when there is an opportunity for growth. All of these features can help reduce customer churn in the SaaS industry and ensure a mutually valuable relationship.
Totango’s customer success software helps you help your customers through any challenge. Get started for free and access the COVID-19 toolkit today.