Archives for October 2012

SaaS Customer Retention is the key to Long-term Profitability

Profitability is one goal that most of the SaaS CEOs who ask me for help all share, and SaaS customer retention is the key to achieving that goal.

Though, while they’re all focused on achieving profitability, how that is measured varies from company to company, for the sake of this post we’ll consider profitability to be achieved once the Customer Acquisition Costs (CAC) have been paid back and the ongoing contribution margin is positive.

So the reality around Customer Churn is that for every customer you lose through attrition, cancellations, or non-renewals – you have to acquire one new customer just to break even… and that’s a tough way to grow!

[Read more…]

SaaS Churn kills Growth; Customer Retention is a Growth Accelerator

SaaS Churn Kills Growth, Profit, and ultimately your SaaS Business… together we can end Retention Deficit Disorder today!

Very often when I’m asked to help grow a Software-as-a-Service (SaaS) business, the CEO is often focused on Customer Acquisition strategies… the “how can we get more people into the top of the funnel?” issue.

But when I start to help a CEO get their SaaS company to profitable growth, I always dig a little deeper to see what’s REALLY going on… beyond what they THINK is happening.

Very often I find that – while ramping customer acquisition is most likely PART of the solution – the company isn’t hitting their proposed growth numbers because they aren’t keeping enough customers.

This means that a lot of their current Customer Acquisition effort (and spend) is being used to simply replace churned-out customers… making it VERY hard to grow at the rate they’d like.

Which is why I say that Customer Churn is the vile enemy of Growth while Customer Retention is a Growth Accelerator. [Read more…]

SaaS Customer Retention Requires Ongoing Realization of Value

Improve SaaS Customer Retention by helping your customers Continually Realize Value

When we buy something without trying it first, this is based on what I call “Perception of Value.”

When we buy something after trying it, this purchase is based on our “Realization of Value” during the trial.

Makes sense, right? But what about Customer Retention?

Well, as it turns out… real, long-term Customer Retention – the kind we’re looking for – is based on the CONTINUAL Realization of Value by your customer.
[Read more…]