2. Focus on customer success to reduce churn
Posted: Sat Feb 01, 2025 8:49 am
Have you heard of the Cohort Analysis Chart? If not, now is the time!
It's a spreadsheet that has a really useful feature for your SaaS business.
It will show you in which specific months of your customers' relationship with your company there is a higher risk of losing them.
That is, if after 8 months of relationship you have high cancellations, the Cohort graph will allow you to see it clearly.
So what can you do to keep your customer for longer and not lose them?
First, talk to your customers who are entering month 8 and try to understand the problems they are facing or the goals they are not achieving with your product.
The Customer Success analyst can, for example, send an NPS survey regularly to collect customer impressions throughout the journey.
You'll be amazed at the quality of feedback you can receive just by sending a simple question.
Second, you can plan marketing actions for your customer base that is entering those critical months.
Who knows, a promotional discount, a new service offer or a series of exclusive content will be sent to you in your newsletter?
If your CRM tool allows it, set up customer segments and information alerts to inform you when a customer enters a high-risk period for churn.
You can even take it a step further and contact them with an automated message to start a dialogue.
Result:
Focused customer success → lower churn rate during critical periods → higher LTV.
3. Scale your prices to increase account expansion
A great way for a SaaS business to increase LTV is to ensure the pricing model allows for account expansion throughout its lifetime.
Tiered pricing is vital to success in any SaaS business.
The pricing structure should be created to scale up or down, capturing small customers all the way to those willing to pay more.
In other words, this strategy allows to reduce the barrier to czech republic phone data entry for smaller clients and still take advantage of the higher margins found at the corporate level.
SaaS pricing can be scaled based on one of several factors, typically:
number of active clients;
number of "posts" (operational) required;
customer's monthly income;
infrastructure requirements (e.g. cloud storage space ).
Requirements for all of the above elements will likely increase over time as the company grows.
If your pricing increases with your customer growth, that sets the stage for increased LTV due to healthy account expansion.
Result:
Tiered pricing → higher revenue per customer → higher LTV.
It's a spreadsheet that has a really useful feature for your SaaS business.
It will show you in which specific months of your customers' relationship with your company there is a higher risk of losing them.
That is, if after 8 months of relationship you have high cancellations, the Cohort graph will allow you to see it clearly.
So what can you do to keep your customer for longer and not lose them?
First, talk to your customers who are entering month 8 and try to understand the problems they are facing or the goals they are not achieving with your product.
The Customer Success analyst can, for example, send an NPS survey regularly to collect customer impressions throughout the journey.
You'll be amazed at the quality of feedback you can receive just by sending a simple question.
Second, you can plan marketing actions for your customer base that is entering those critical months.
Who knows, a promotional discount, a new service offer or a series of exclusive content will be sent to you in your newsletter?
If your CRM tool allows it, set up customer segments and information alerts to inform you when a customer enters a high-risk period for churn.
You can even take it a step further and contact them with an automated message to start a dialogue.
Result:
Focused customer success → lower churn rate during critical periods → higher LTV.
3. Scale your prices to increase account expansion
A great way for a SaaS business to increase LTV is to ensure the pricing model allows for account expansion throughout its lifetime.
Tiered pricing is vital to success in any SaaS business.
The pricing structure should be created to scale up or down, capturing small customers all the way to those willing to pay more.
In other words, this strategy allows to reduce the barrier to czech republic phone data entry for smaller clients and still take advantage of the higher margins found at the corporate level.
SaaS pricing can be scaled based on one of several factors, typically:
number of active clients;
number of "posts" (operational) required;
customer's monthly income;
infrastructure requirements (e.g. cloud storage space ).
Requirements for all of the above elements will likely increase over time as the company grows.
If your pricing increases with your customer growth, that sets the stage for increased LTV due to healthy account expansion.
Result:
Tiered pricing → higher revenue per customer → higher LTV.