Customer retention is important to every business. In the arts, customer loyalty is something we talk a lot about for good reason: the 13% of a theatre’s audience who comes 3 or more times per year, contributes a third of total revenue.
As a Software as a Service (or SaaS) company, it’s a huge sticking point for us too. We don't tie our customers into long term contracts because we know they're best suited to choose the right product for them and should be able to move at the point it is right for their business, not when a long contract expires.
In addition, customer retention is how we know if we’re fulfilling our mission statement. That makes us extra proud of our retention rate of over 98% across our 200+ customers.
We want to share what we’ve learned are important strategies for achieving a high customer retention rate. These are based on our experiences as a SaaS company, but we think any other business can apply these ideas to their own.
Start with passion and knowledge
Customer retention ultimately starts with a brilliant product that addresses what your customers need and makes the life of your customers better and easier. You can’t deliver this kind of product without the right understanding of your customers and real passion. But this doesn’t just happen. It takes work. Here are some ways to make sure that passion and knowledge are at the centre of what you do:
- Hire people with experience in your market, who know your customers and might have even have been a customer themselves.
- Reassess your hiring process, making cultural fit a necessity.
- Go back to the frontlines regularly to listen to what your customers are saying.
- If you can’t put yourself in your customer’s shoes, use your imagination and try Empathy Mapping.
- Make it really easy for your users to give feedback. For example, at Spektrix we allocate time for feedback at our workshops where we ask for opinions on what is and isn’t working for them. Often these days inspire new features, such as the Waiting Lists functionality. We’ve also got a system in place for users to suggest features online.
“The only way to do great work is to love what you do.”
Keep your users using
Lack of engagement with the product is one of the biggest drivers of churn. That means it all comes down to the service and support you provide your customers to keep them using the system well and seeing the value of your product. Here’s how you can do this:
- Provide service on their terms. Be available at the times your customers expect and need you to be available via the channels that they like to use.
- Anticipate their needs. You need to check in with your users before they stop being engaged, not afterwards. Here at Spektrix, that means we provide regular training, hold workshops and proactively visit our users to check in regularly.
- Set high expectations for customer service. We think the best option is to set your customers’ expectations high for the level of support they will receive, so that they feel comfortable with reaching out to you for support. That way, communication lines stay open.
“You must understand and appreciate exactly what your clients need when they do business with you – even if they are unable to articulate that exact result themselves. Once you know what final outcome they need, you lead them to that outcome – you become a trusted advisor who protects them. And they have reason to remain your client for a lifetime.”
- Jay Abraham
Reduce the pain points
Products that solve a common pain point and make life easier will always be in demand, for example Google Maps on a smart phone.
- Break convention. Too many things that stress customers out are the result of a “that’s how it’s always been done” mentality. For example, we know that hidden costs and extra fees make it hard to understand true costs, creating unnecessary stress and confusion. So we wrapped all these hidden fees and unforeseen costs into one single fee to keep things simple.
- Apply User Experience (UX) thinking to everything. UX isn’t just for software design. Think about the user experience of reading a blog post, going live and interacting with your company at every point of contact too.
- Know that some customers won’t be able to articulate what pains them. It’s up to you to know your customers so well that you can uncover that pain point for them.
“Don’t make me think.”
Build a relationship
When you’re choosing a software company to work with, you’re not just choosing the product - you’re choosing the people you want to work with. After all, product and service start with people. For us, long term customer relationships are built on instilling these principles into our team:
- Unparalleled customer service.
- Unexpected acts of kindness. A small gesture makes a big impact - whether that’s buying a round of G&Ts or sending a personalised note.
- Transparency. Sometimes things just don’t go to plan. How your company reacts determines whether you lose a customer or your relationship moves past it. So, be transparent about any issues, take responsibility and do your best to recover from it as quickly as possible. Check out Disney’s HEARD principles for more ideas.
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
So to conclude...
Customer retention is one of the most important activities for any business, not just SaaS businesses. The great thing is that you are completely in control of it. Personalising the whole experience, tailoring to your customers needs, spending your resources on developing a great product, as well as delivering these four crucial elements will keep your customers with your company for a lifetime. A successful SaaS company builds more than a great product. It’s about inspiring confidence in your customers by providing them with an experience they love and need.
For a guide to customer retention in the arts, read our blog here.