Pricey SaaStr: What Are The Finest Methods to Retain Your Clients in SaaS?
Just a few issues that at all times work to drive down churn within the early days — and later:
- Ensure you have a robust Head of Buyer Success … whose #1 purpose is lowering churn. Too many early-stage VPs of Gross sales don’t have a robust “wing individual” working buyer success. And importantly — resist the urge to have this Head of CS personal upsells as their #1 KPI. That will appear to assist short-term income, however it’s going to result in a de-focusing on driving down churn. Extra right here.
- Go go to all of your prime prospects in individual, even as soon as 1 / 4 per prime buyer if you happen to can. Far fewer prospects churn if you happen to go to them in individual. We’ve been saying this on SaaStr for 10+ years (!), and but I see fewer and fewer gross sales execs flying to fulfill prospects. Zooms are nice, and attempt to do 5-10 Zooms every week with prospects, too. However they aren’t sufficient. Extra right here.
- Learn your staff’s emails and hearken to their calls. If you happen to don’t, they’ll typically say issues which can be simply plain mistaken. And result in pointless churn. You may not wish to do that, however you must. Extra right here.
- Put collectively a robust onboarding staff. And drive up your activation charges and time-to-value. Attempt to get each single buyer to totally be on-board inside 30 days typically — or a lot sooner for a lot of apps. No less than 90% at a base case onboarding in 30 days, ideally a lot sooner if you happen to promote to SMBs. Klaviyo for instance hits 90% activation in 30 days even with 100,000+ SMB prospects and $600m in ARR. If prospects are sluggish to make use of you, they might by no means actually use you. They usually’ll be more likely to churn. Extra right here.
- Do pilots, if prospects need them. Don’t resist them. Too many gross sales execs resist pilots, since they seemingly add threat to the deal, and sometimes pressure you to resell the deal only a few months later because the pilot ends, in essence. However a pilot additionally aligns everybody to worth and will get them on the identical web page. And it in essence roots churn out and identifies it early, through the pilot — when there’s nonetheless an opportunity to do one thing about it. Simply bear in mind to do Paid Pilots solely. Nobody values a Free Pilot or Tremendous Low-cost Pilot, so nobody places within the work on the prospect / buyer aspect. Extra right here.
And some issues to concentrate on:
-> QBRs Don’t Actually Work. Sure, it is best to do “Quarterly Enterprise Opinions” with all of your prospects, or a minimum of your greater ones. However the actuality is, this overly formal course of, whereas good to attempt to do, doesn’t actually work in follow. Most CS leaders I speak to say lower than 15%-20% of consumers even present as much as QBRs. They usually’ve change into so formalized, all they actually do is report the “excellent news” — or act as an upsell car. Nonetheless do them, however don’t depend on them to maneuver the needle.
-> Be Cautious About Too A lot Upsell in Buyer Success. This has change into method too widespread, and method too agressive the previous 12-18 months as SaaS firms have appeared to extra income from the bottom vs new logos. Do that inorganically, and nobody needs to speak to Buyer Success. Extra right here.
-> Perhaps Don’t Rent Anybody in Buyer Success That Gained’t Journey. This will likely not must be a strict rule, however if you happen to push right here within the interview course of, I discover it exhibits who actually goes the additional yard, and who doesn’t. Work from Residence could be nice, however you gotta meet the shoppers. Particularly, don’t rent a VP of CS that doesn’t elevate their hand on their very own and say how vital it’s to go to prospects.
-> Small Buyer Occasions Actually Work. They don’t magically clear up retention points. However if you happen to do even a fundamental meet-up or steak dinner in main cities 6-7 instances a yr, and produce all of your prospects and prospects in that geo collectively, magic occurs.
-> Having CS Report back to Gross sales Is Often Suboptimal. The most effective VPs of Gross sales are closers. Allow them to shut. They don’t have the time or the appropriate expertise to handle CS. Higher 9 instances out of 10, that it reviews to you.
A Key to Startup Success: Getting Out and Really Visiting Clients pic.twitter.com/8stW3MIMfA
— Jason ✨Be Type✨ Lemkin (@jasonlk) July 24, 2023
(it’s me picture from here)