A common question that many of our SaaS clients ask is: “What’s more lucrative, retaining a customer or closing a new one?”
Well, there’s really no debate. Studies prove that seventy percent of companies say it’s cheaper to retain an existing customer than gain a new customer.
This is why Forrester has dubbed 2016, the “age of the customer.” They conclude that strong customer relationships represent business value and, ultimately, business growth. For B2B companies in particular, understanding what your most lucrative customers are doing inside your company’s most important digital property – your SaaS website application – is inarguably more critical than cultivating new customers. Here are three reasons why:
1. You can create 360-degree profile views of high-value customers
According to McKinsey & Company, less than 1 percent of customer data is analyzed by businesses today. This means that a large majority of customers are not engaged with companies with which they do business. The more B2B SaaS brands know about their customers, the better they can suggest relevant products, deliver messages that resonate and, ultimately, scale profitable revenue.
Gathering customer data about things like feature adoption, the status of software downloads/upgrades as well as product views all help product marketers better personalize engagement. In addition, recording data such as the time of year specific customer segments are looking to upgrade or purchase a certain type of product, allows SaaS businesses to enhance their products and software applications as well as the level of customer success they can provide.
FACT: 70% of Americans said they would spend 13% more with companies that they believe provide excellent customer service.
Having a complete view of what your customers are doing in application can help customer success teams provide significantly better service to users and, essentially, help scale high-value customers.
2. You can reach customers and leads with information at the moment they need it the most
As most product marketers know, there is a particular moment on the customer journey that will make or break an upsell. When a company sends the right message or information to the customer during this “critical buying moment”, it can turn into an effective upsell.
Imagine sending a call-out message or follow-up email to a user about a particular product or service at the same time they are searching for this product or service online? By identifying customer behaviors, such as product views, recently searched subject matter in your application and click-thru rates, companies can identify what kind of information their customers need, and when they’re most likely to need it. This level of intelligence enables SaaS companies to provide customers not only with optimal value, but it demonstrates that they truly care about solving pain points and making life easier for the end user.
3. You can effectively communicate product value easier
Today, customers demand more personalized experiences – especially in the B2B space. Further, customers remain loyal to companies that provide continuous optimal value.
SaaS businesses that fail to effectively communicate product value and meet unique customer needs tend to experience a higher level of customer churn, which can equate to millions in lost revenue for some companies. Moreover, for SaaS companies with technically ‘heavy’ products, communicating product value is even more complicated.
That’s why knowing your customer’s behaviors are essential to communicating value. For example, users who are struggling with a particular workflow may not know about the newest product feature that can help solve this pain point. The only way for product marketers to understand that this disconnect exists among their users is to analyze the in-app behaviors of customers. Effectively communicating value is also a great way to position your company as a trusted advisor to your target audience.
In sum, as B2B businesses look for new and better ways to grow their company, they must not overlook a critical area of their business – their current customers. Leveraging customer behaviors will put companies on the path towards successful customer retention, and increased revenue for what is hopefully many years to come.
Looking for new and better ways to scale existing customers? Contact us to learn more about how to engage with users in application.