SaaS Retention Weekly Show
A live show on how to keep software customers and reduce churn rates.
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Episode #10: I'm more than just a pretty dashboard.
Episode #9: Customer Communication for SaaS Retention
Episode #8: Who’s in charge of retention?
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An Intro to SaaS Retention & Churn Rates
As SaaS companies we are often selling our products as monthly or annual subscriptions. Ensuring users renew their subscriptions or don't cancel is the act of retaining them.
This can be one of the most important strategies for a SaaS company as when a lot of users are lost consistently, it makes it very difficult for the SaaS company to be successful.
Think of it this way, there was cost in marketing and sales to acquire the customer and any profit made per month must not only cover the per customer cost but also pay back the acquisition cost. If you are losing customers too quickly, often the acqusition cost can cause a loss or it takes to long to scale your customer base.
For SaaS companies, retention is an important strategy that must be taken seriously and dedicated resources applied on a consistent basis to fight the loss of customers.
The series we have created here on SaaS Retention is all about the strategies and tactics a SaaS company should be using to reduce their churn and increase retention.
In many cases the opposite of retention, churn rate is really the metric of lost customers over a month or year. Most companies track their churn rate and set goals to reduce churn rates to a certain amount.
The trick is that there are different ways to calculate and look at churn, so often industry standards are not something easily determined which is what most SaaS companies want to match.
The strategies and tactics to retain users are how we reduce churn rate.
Yes, churn is inevitable - every customer will abandon your product eventually. But boosting your retention is more fun - and way more valuable - than acquiring more customers.
One of the key metrics we look at when deciding whether or not to provide capital to a SaaS company is retention. It is so important, in fact, it is a standard covenant in our committed credit facilities.