We’re a two-and-a-half-year-old SaaS startup.
The good: We’re signing up a lot of users.
The bad: They’re not staying active for very long. And our retention curve isn’t flattening out.
1. How do we push the retention curve up? By building new features, or optimizing what we already have?
2. How long should we focus on these new initiatives before we have to move on to something else and see if that works?
This is a common challenge for businesses that rely on subscriptions. Some of the biggest challenge comes from the assumptions that we haven't fully fleshed out that goes beyond Beyond acquiring customers.
I'm going to simply type out of you brainstorming tactics and strategies you and your team can use to begin pulling apart these challenges.
You may have customers who are the ones who stay longer. You need to learn what about the product makes them stay month over month and what value are they finding in that. Often, you may be surprised at customers who simply forgot their subscription and is simply getting billed. Another could be that that's the quality of that platform that they really value. One of the challenges is to communicate that value to other customers to increase your retention.
Another stone to uncover is figuring if the price is too high for a long engagement with the subscription plan. Another could be that the service value for those customers is only several months, they become subscribers, get their value and then leave.
another thing would be how often do you and your marketing automation contact current customers and have conversations about the product features, evolution and direction? There are many sass products who put a lot of effort into giving their product a very compelling advocacy voice that builds the deeper relationship after customer subscribe.
Have you tried asking your customers, both current and past, to find out where you can make the most impactful improvement?
Interview customers. In person if you can; if not via phone; if not, via email. Find out what they like and don't like about your product. What do they want more of? What frustrates them? If they're former customers, why did they stop using it?
What are your key metrics? When you say retention, are you referring to the typical Web/mobile app metric, as in, of given users who start on day 0, how many of them are still active on day 1, day 7, day n? Or are you referring to how many paying users you have left at the start of each new billing period? Is your service something that people pay a monthly or yearly fee for? Or is it something you pay per use?
With the combo of customer feedback and a framework for optimizing metrics and user behavior, you can think about how to make improvements. It could be that your app/service frustrates people; it could be missing features; it could be priced wrong. The answers will direct you how to go from there.