Why Is Customer Retention Management Crucial for Your SaaS Business and How Can You Do it?


Retaining customers is what everyone wants to achieve for making their business successful so that I can reach the heights of scalability. Customer Retention takes a challenging turn if there are no proper strategies and tools used for achieving this goal. As a matter of fact, the research shows that retaining customers is much harder than acquiring customers.

The main role in retaining customers is directly linked to two factors i.e., a customer success manager and a robust customer success platform that provides services for churn reduction and applies optimized strategies that can increase the customer retention rate (CRR). Before we get into the nuts and bolts of customer retention management and why is it important for SaaS business, it is necessary to know what does customer retention management engulf in it?

What does customer retention management entail?

Customer retention management refers to the actions you take to encourage your customers to stay loyal to your brand over time.

Customer retention is fundamental to Customer Success. When a customer does not actively cancel when they could, this is referred to as retention. These actions can take many different forms, such as improving the product in response to customer feedback or holding a customer meeting to focus on the goals a customer believes they are or are not achieving with your product. An effective customer retention management strategy will base its actions on customer data to have the greatest impact.

Churn Reduction

There are two types of churn i.e., voluntary and involuntary churn. Whatever the type of churn might be so, the end goal of any merchant is to reduce churn by employing strategies that can help control the churn rate by retaining the customers successfully. When customer retention is done strategically, merchants and businesses have the chance to maintain user engagement and keep them in the customer loop so that they do not leave the subscription of the service or product.

Executing Customer Retention Management Through Customer Success Platform

The Customer Success platform is designed to help you with your retention efforts. It aggregates data such as product usage and support tickets to create a customer health score that gives account owners the confidence to say, “This person is not at risk of churning; let’s use this data to prevent that.”

You can use the customer success platform to:

  • Customer Scorecards provide a multidimensional view of customer health.
  • Receive notifications when there are unusual patterns of customer engagement, such as usage drops, sponsor departures, low survey scores, or an increase in support tickets.
  • Creates best-practice playbooks for account owners to use in resolving risks.
  • With Net Promoter Score (NPS) surveys and other tools, you can stay on top of customer sentiment.

Understanding customer health scores for customer retention management

Customer health scores that are constantly updated: Customer health scoring is critical for determining how a customer feels about a product in real-time. A customer health score, which combines various factors such as product usage, engagement, adoption, and more, can help CSMs immediately identify and address retention issues with customers.

Predictive modeling and renewal insights

Negotiating a renewal agreement with a customer takes time. Innovative Customer Retention Management platforms include intuitive modeling features and insights to assist CSMs and account managers in understanding the factors influencing an upcoming renewal and overcoming roadblocks early in the process.

Why Does Your Company Need Customer Retention?

While it still takes work to keep customers returning, it is nothing compared to the cost of bringing in new customers. In fact, acquiring new leads can be up to 25 times more expensive than retaining existing customers. Losing customers is just as bad—it is estimated that companies in the United States alone have lost up to $1.6 trillion as a result of customers leaving them for competitors offering better service.

That is not to say that attracting new customers is without value. Every new customer is a potential long-term customer. Even if a customer does not return, you should make every effort to leave a positive impression.

Although you may not be a perfect fit, if you provide excellent service, they may still recommend your company to others, potentially boosting your reputation and increasing sales. As a result, both the sales and customer service teams are critical components of your business.

Remember that cultivating long-term customer relationships can be extremely beneficial to both parties. Your customers will appreciate the convenience and peace of mind that comes with not having to shop around, and you will be able to grow your business alongside them.

Repeat customers are also much more likely to refer your service to others because they understand better than anyone how your company delivers on its promises—saving your team valuable time, energy, and money while also enhancing your company’s reputation. Bonus: repeat customers typically spend more, demonstrating the importance of retention.

Take Action

If you are looking for a customer success platform that provides its services for customer retention management or churn reduction then head over to SubscriptionFlow and schedule a demo with them to achieve the best results for your business.