With the maturity of a SaaS business, SaaS metrics become very important and valuable for SaaS customer success. For most SaaS businesses, the application of Saas metrics begins with tracking recurring revenue and customer acquisition costs (CACs). And with a customer base, churn must be given the priority it deserves. SaaS profit greatly depends on recurring revenue, measured in relation to CACs. However, fighting churn goes beyond the simple financial metrics to include a well-equipped SaaS metrics toolkit to dig deeper to connect day-to-day business activities into financial performance. Predictive analytics enable metrics-driven SaaS business to get rid of churn before it even begins.
Customer success metrics is also applicable to customer acquisition, as success with prospects (future customers) lies in your product purchase. As SaaS best practice, always offer a seamlessly great customer experience – from when the customer visits your site to a free trial to product purchase and ultimately product use. The objective is to ensure successful customers are happy while using your SaaS product.
SaaS Customer Success Strategies
1. Improve Trial Conversions
While marketing automation products concentrate on getting your prospects or potential customers to read your product content, it could be much better trying to get them to use your product. Online trial builds a solid foundation for SaaS best practice. So, improving trial conversion should be a priority for SaaS vendors. Increasing trial conversion while reducing churn will increase customer success.
What is Trial?
This is where a SaaS vendor tries to establish an “always-on” communication channel to potential or existing SaaS customer via the SaaS product. Visitors to the site or potential customers are merely email addresses and cookies before trial login. But after trial login, every click and product usage can easily be associated with individual customers. The work of trial forms is to collect important customer demographics that are key in predictive models and analytics. Your trial form should capture key information by asking the right questions that can be utilized to facilitate product purchase. SaaS product usage data is also useful in creating dependable, predictive purchase models. If done right, successful lead scoring can increase profitability.
2. Reduce Acquisition Costs through Key Metrics
Customer acquisition cost remains a key financial metric that every vendor should pay attention to. Managing CAC is essential for financial success of any SaaS business, otherwise it will eat into your cash. Lower CAC means you will get compensated for your investment much sooner after spending resources in acquiring a new customer. This means that you can also reinvest that cash in acquiring another one as soon as it is available.
By identifying the key metrics for predicting purchase, a SaaS business can greatly increase customer success efficiency. For instance, analyzing product usage data could indicate that a prospect who uses that product on a daily basis during the free trial could easily be converted with just one phone call. On the other hand, those that stop usage before the first week is over are more likely to convert, but only if you can bring them to learn by attending an instructional webinar. Every SaaS account manager loves to have this kind of information.
Every customer success organization knows that the secret to reducing CAC to manageable levels is by embedding predictive models into their daily sales activities. This process need to be adopted by every SaaS business, as predictive models identify the factors that cause some prospects and not others to purchase or ditch their product for competitors’.
The trial account phase requires using predictive models to create critical KPIs that sales reps can utilize to actively guide their day-to-day activities to help to create alerts based on specific trigger events that warrant a rep’s attention (any increase or decrease in product use). Automating communications within the SaaS product itself can also facilitate product purchase.
3. Improve Onboarding
Onboarding a customer is the point of intersection between customer success and customer acquisition. Any SaaS customer success exec knows that an inadequate onboarding strategy at the onset of a SaaS contract is a key driver of churn particularly at the termination of that particular contract. Moreover, onboarding is often expensive and time consuming, especially when the task involves a complex product. Ideally, metrics-driven SaaS business will understand the impact of strategic onboarding and try to apply success metrics that will help streamline the organization’s onboarding process while reducing onboarding costs.
Find out where your new customers are stuck.
This is one onboarding challenge that no indicator is better placed to help solve the problem than product usage. Acquisition and churn key performance indicators focus more on trying to predict future events. However, metrics involved in onboarding try to focus on the present, attempting to find out why the customer is stuck in a certain place or time. Working around this question helps identify root causes or try to find out predictive indicators of failure (during onboarding), which product managers and customer success reps can apply in streamlining the onboarding process.
4. Using Metrics to Drive Viral Growth and Customer Advocacy
The onset of a SaaS customer lifecycle is characterized by the intersection between customer success and acquisition, during onboarding. But this happens again at the end in viral growth, i.e. at the onset of a new life. Customer success metrics have been applied in eliminating problems such as reducing service costs, stopping churn, improving trial conversions, and many others.
The same techniques used to identify those customers that are more likely to churn are the same ones used to identify those who never will, or will even recommend you. Customer success metrics may also be applied in identifying advocates, improving bank of potential references or customer testimonials, user group leaders, and case studies.
Viral growth can be enabled through sharing or encouraging customers to create useful work products – projects, documents, charts, etc. – that are critical in providing a great SaaS product experience. These work products can then be shared with non-customers for collaboration purposes. At the epitome of the ideal capability pyramid, a metrics-driven SaaS business employs SaaS customer success measuring instruments not only to resolve problems, but also to create opportunities.