Customer renewal is the new currency for growth. It was the software-as-a-service (SaaS) business model, with its dependence on retention for revenue that gave customers control. New, shorter-term agreements shifted the power from the vendor to the customer with a lower cost-of-entry. With that kind of flexibility, simply put—good customer service isn’t enough. Even ‘satisfied’ customers can become former customers.
-Business WeekCustomer satisfaction is yesterday's measurement. Today, your goal should be generating loyal customers, the ones who actively choose you, rather than simply remaining your customer because of inertia, or absence of an alternative. Since drivers of loyalty are different across industries, I suggest you invest the resources to determine which parts of your product service mix are the key drivers of loyalty for your business. You’ll be glad you did. Active Engagement Strategies To succeed at Customer Success, companies must implement structured customer renewal models and adoption programs. Actionable metrics and KPIs are the most critical elements to any such customer retention program. Examples include:
- Adoption. SaaS companies have a distinct advantage here—you can actually measure adoption by reporting on which customers are logging into your applications and their usage patterns. Done correctly, these metrics can provide meaningful insights that can turn into conversations with your customers on how to increase adoption rates.
- Churn. This is a critical measurement for any subscription based business model. How many customers are you losing on an annual basis? A high churn rate is an indicator of a flawed customer service plan. Depending on your business, you need to setup the proper alerts aligned to your customer’s lifecycle. This will ensure having the proper visibility of potential churn events. For example, alerts for delayed implementation projects, lower usage statistics, and low customer satisfaction ratings.
- Early indicators of dissatisfaction. Nip customer defection in the bud. Customer complaints are the leading source for business improvement. Robust solutions solve customer complaints and enable stronger lines of communication.
- Net Promoter Score. Send surveys to customers. How likely are they to recommend your products? More importantly – how likely are they to renew their subscription? Answers to both questions allow for early indicators for the state of the business relationship.
- Constant communication. This is mandatory for success and allows your team to discern non-renewal threats or defectors early on. Picking up the phone today means your customers are less likely to move to your competitor tomorrow.