Customer Onboarding: Your Secret Sauce to Reducing SaaS Churn
Acquiring customers is a challenge for some SaaS companies.
That’s why it’s so important to convert new sign ups into active users. The goal is to educate customers about your product’s value and encourage them to continue their recurring service plans.
If not, your business may be at risk.
A study revealed that a “1 percent difference in churn can have a 12 percent impact on company valuation in 5 years.”
It’s essential that SaaS founders, marketers, and customer success employees take measures to reduce churn for growth.
To solve this issue, focus on empowering your team to achieve customer success. And it all starts with the onboarding process.
Let’s dive into how your SaaS can retain more customers.
What Causes Churn
Continuous value is the name of the game. If customers don’t recognize the value of your product, they lose the momentum to renew their subscriptions.
Churn is a reflection of customer satisfaction. Customers may lose interest because they get confused on how to actually use your services.
“If a customer doesn’t understand the context of your app, can’t immediately see its benefits, or has a bad initial experience (slow loading times, clunky interface, etc.), you’ve likely squandered your only chance from the get-go,” says Lesley Park at Framed.
It’s your job to make the transition as easy as possible.
Customers also leave because they don’t understand how the product benefits them. They begin to have buyer’s remorse, and possibly cancel their subscriptions within a week or two.
Ross Beard, a marketer at Client Heartbeat, writes, “To improve customer churn, improve your value. Improving value doesn’t necessarily mean adding new features or services, it can also mean improving your existing product or service offerings.”
Moreover, your customers may depart because your competitors are perceived as better. The competition is offering a money-back guarantee, more value, or lower prices.
Rather than fear the competition, learn how to gain an advantage. Start by creating “smarter copy”. Jeremy Reeves, a sales funnel specialist, suggests the following:
- Conduct surveys: Find out what keeps your customers awake at night. Then, offer a solution around that concern.
- Add personality: Skip the mundane text. Give flavor to your writing by injecting your brand’s attitude.
- Incorporate “lifestyle triggers” into stories: Transform the customer’s everyday experiences into your campaigns. Segue a road trip adventure into a helpful lesson for your audience.
Pinpoint what’s causing your customers to exit. It sets the foundation to solve the problem.
Successful onboarding doesn’t revolve around your company’s goals, instead it focuses on meeting (or exceeding) the user’s expectations.
Len Markidan, head of marketing at Groove, says there are two major milestones in the life of a customer:
- When they sign up for your product, and
- When they achieve their first “success” with your product.
And it’s what you do in-between acquisition and first success that will affect your customer retention rates.
Keep things simple. Streamline the onboarding process by clearly explaining how to use your product and highlighting the value upfront. The customer’s first call-to-action should be quick and painless.
And sometimes, all it takes a basic greeting.
Online test prep company Magoosh A/B tested how welcome messages would affect their onboarding. Their team noticed that users who received the message boosted their conversions by 17%.
Create ways to give your customers that aha moment. This occurs when customers understand your service’s core functionality. That’s when all the pieces of the puzzle make sense to them.
The team at Process Street, a checklist software for businesses, believes that “associating immediate value with your app will help you retain customers. Whether or not what they do first is actually valuable at all is less important at this stage than just that feeling of accomplishment.”
For example, users gain a sense of achievement when they upload their first photo on Instagram or when they send their first tweet on Twitter.
The key is to invest in an interactive, engaging onboarding process. Give your customers the push they need to have a meaningful experience.
Mistakes to Avoid
Customer onboarding is an ongoing process. Tweaking one or two things may not work for your SaaS company.
As you travel down this journey, it’s vital to keep in mind the things you should avoid. Your business won’t retain more customers if you’re stuck in a rut making the same mistakes.
First, recognize that you can’t control everything.
Tommy Walker, former Editor-in-Chief at ConversionXL, says:
“The reality is, you’ll never retain all of your customers & some of those reasons you can’t control:
- Not the right fit for their needs features or price wise
- Customer goes bankrupt
- CMO wants to switch technology
- Customer wants features that were never intended to be a part of the platform”
Next, focus on the issues that your team can fix.
For example, don’t miss the opportunity to build quality relationships with your customers. Send them a personalized message or invite them to talk to a rep via phone. Create a bond that will turn new customers into brand advocates.
Test what’s working and what’s not. A/B test segments of your onboarding process. Do customers prefer live chat or email support? Are customers more willing to use your software after a live demo?
Not too long ago, most major brands required customers to create a username and password to login. Now, users can simply sign up through their Twitter, Facebook, or Google accounts.
And don’t overwhelm your customers with onboarding tasks. Inundating your customers with several notifications, webinars, and tutorials will paralyze their experience. They will feel confused and will slowly stop using your product.
Instead, go for small, progressive wins. Send a message about product features in week one. Then, offer a tutorial in week two. Gradually get them acquainted with your services.
Examples In Action
Effective onboarding takes the customer through a strategic voyage. It ensures that every new member possesses the knowledge and habits to hit specific objectives. Without a clear roadmap, churn will rise and have a negative impact on your revenue.
Asana offers an easy sign up, asking only for your email address. Effortless, right?
Then, the project management company welcomes new users with a short video. This helps customers get acquainted with their recent purchase.
With CoSchedule, customers are presented with tips and updates from their team. It includes the employee’s picture along with text and video.
To make the process efficient, customers are asked to connect their social media profiles to save time when scheduling updates.
Your team also can create an onboarding email campaign.
The messages should be tailored to the user’s actions with your service. This “Hook Cycle” will lead customers through a series of communications that will increase product usage and brand loyalty.
Retain more customers by immediately engaging them with your product. A straightforward approach will make the transition smoother.
Upgrade Your Onboarding
Just because customers buy your software doesn’t mean they will adopt your product successfully. Reduce SaaS churn by focusing on customer satisfaction.
Several factors cause churn, including lack of value and competitors. However, onboarding success can be achieved by meeting your customer’s expectations and avoiding common mistakes.
Invest in onboarding to increase customer retention.
About the Author: Shayla Price lives at the intersection of digital marketing, technology and social responsibility. Connect with her on Twitter @shaylaprice.