What Running Can Teach You About Increasing Customer Lifetime Value (SaaS)
There’s something that happens when you get close to the finish line of a race. As an avid cyclist and (wannabe) ultra runner, I know what it’s like to push myself. Usually, what happens is I train myself, slowly adding more miles to my previous record until I’m ready for the big day. When the day comes, you’re pumped full of adrenaline: you can literally run a marathon.
But then… if you’ve been running for a few hours, your pace starts to slow. There’s a point where you’ve crossed the halfway mark and you know you still have half more to go. You start to get sluggish and the thought of crossing the finish line feels impossible.
Yet, you persevere. And then, when you’re a mile or two away from the finish line, you stay dedicated to the course, and there’s no way you’re not finishing.
That process is similar to getting subscribers to stay with you for the whole course – there’s a point where they may want to turn back, but you want to give them something to cheer for, something worth persevering for.
So what is that?
In my last few posts, I talked about lead generation and the biggest SaaS mistakes I’ve seen after working for many SaaS companies over the past ten years. I challenge SaaS companies to think of their customer journey as a race: would your customer be motivated to stay the course until the end?
That special something that doesn’t just allow customers to continue – that drives them to win that race – is your company’s “talk trigger,” as marketer Jay Baer once said – something that makes you different from the competition, that makes you worth talking about. Giving them something to talk about is the first step – it’s what you do with those talk triggers that make a difference.
I’ll explain more.
When I worked with EtsyMarketingTool.com, one of my successes is increasing subscription duration from 91 days to 428 days.
I was able to do that with one of my favorite marketing disciplines to support lead nurturing and customer retention: marketing automation.
Marketing automation takes your “talk trigger” and ensures that your customers are seeing the value they initially saw, but all the time.
The goal here is to convert users that are on a trial version into paying subscribers AND nurture paying subscribers to extend their subscription, using email or marketing automation.
Getting Started – Email Nurturing Program
The scenario begins like this: someone is taking your software for a test drive (or a test run, to continue our analogy). Whether you offer a free lifetime subscription or a seven-day trial, your end goal is to convert the user into a paying subscriber (unless you’re a SaaS philanthropist, which is really nice of you).
Similar to running a race, your goal is that once the excitement of the first few miles is over, your customer is motivated to continue running.
Here are a few ideas you can start with for your email marketing automation:
- Upon sign-up: Send your first welcome email within minutes of their sign-up
- 3 days later – you could:
- Ask the user to complete their profile to gain access to more features
- Provide relevant information to support their decision to subscribe. For example:
- How much money they will save using the software/feature
- How much time they will save
- How easy it is to set up (show it visually with screenshots or animated GIFs)
- 1 week later:
- If your software requires API authorization such as Facebook, Salesforce, Zapier, etc., trigger an automated email if the user did not complete the authorization
- Before trial expiry:
- Provide reminders for trial expiry date
- Provide competitor comparisons
- Plus a few best practices in general:
- Make it easy to register via email (use deep linking for an app, pass field data via query string, etc.)
- Include a clear call-to-action with each email (one CTA per email, and it should drive the next action – the first CTA can be adding profile details, the second can be checking out new features, the third is when you might push to try a paid version)
Keeping Them – Retention Email Program
Now, after you successfully converted your user into a paying subscriber, be sure to continue the relationship building and increase your customer lifetime value. Once I complete one race, I start getting psyched for my next one, especially since I’ve seen what I can do. That’s the feeling you want your customers to walk away with: look how much I can do/save etc.
Here are a few ideas to keep the new subscribers:
- Have dropping cues
- Use data to identify when the majority of your subscribers drop and offer something different (1-on-1 advanced training, a hug, etc.). This can decrease your cancellation rate
- Identify users with no activity and provide 1-on-1 support (via email, chat)
- Celebrate service milestones – Congratulate them on their first action using the software or any other successful action using the software
- Provide information on their performance – you’re our advanced user! You just did this, this and this
- Create a few fun emails to build the relationship. Not all your emails should be about business and the problem that your software solves. It can be a joke, funny video, etc. or even a long analogy about the joy of running marathons
- Build personal relationships by introducing your team
- Ask them to tell their story for an opportunity to be featured on their homepage or another campaign
- Offer how-to videos/articles based on the user interaction
Crossing the Finish Line
Now that you’ve shown your users the value of being a subscriber, and you’ve developed a retention strategy, don’t forget to test and optimize it. Any good runner knows the same pair of shoes won’t last forever, no matter how much you love them. You have to constantly adjust your workout regime and diet – same with marketing automation.
Remember – email automation is a huge opportunity for SaaS companies. By using it to trigger tailored email messages based on user interactions, you make your subscribers feel like you are there for them – and you’re cheering them to the finish line.