Two core metrics for SaaS growth and profitability are Annual Recurring Revenue (ARR) and Customer Lifetime Value (LTV). Customer Success, therefore, is all about retaining customers (i.e. reducing churn) and maximizing the average revenue that each customer generates.
As we highlighted in our previous blog, it’s well understood that the cost of acquiring new customers is much higher than the cost of retaining existing ones. Studies have shown that reducing monthly churn by 5% can result in 50% more revenue over five years.
So, how do you retain customers?
When customers subscribe to a SaaS product, they do so because they have expectations around the value it will bring to their business. The goal of Customer Success, therefore, is to help your customers realize that expected value, and the most tangible way to help them is to promote, monitor and track their engagement, both in and around the product.
Higher engagement leads directly to deeper, broader product adoption and realized value.
In other words, engaged customers are more likely to remain paying customers and offer more up-sell and cross-sell opportunities.
But there’s a caveat.
It’s human nature for customers to prefer to help themselves and they tend to trust their peers more than any vendor. A Zendesk survey found that over 50% of customers think it’s important to solve product issues themselves—clearly proving the need for companies to offer their customers effective self-service.
At the same time, seasoned customers are the ones using your products every day. They are the real experts.
That’s the overarching benefit of an online community.
By giving your users a platform to share knowledge, best practices and inspiration with each other, they feel like they are continuously receiving the value they expected from your product. Our B2B communities see an average of 70% peer-to-peer (P2P) support and 60-90% of our clients' customers are active on their community—proof that users want to, and will, engage.
For the SaaS provider, the immediate benefit of an online community is self-serve support.
By enabling a safe, proactive environment for anyone to ask questions and quickly find answers and advice they can trust, our customers see up to a 50% reduction in support tickets. Nearly all of our clients have super-users that are active on their communities and answer anything between 30 and 50% of all community questions. Of course, their community managers and Customer Support/Success teams are also on hand on the community to resolve any queries too.
Also, monitoring customer health and engagement behavior delivers leading indicators that help prioritize service for customers who need their attention the most—another critical factor in the customer success equation. inSided's integration with Salesforce is ideal for unlocking community engagement metrics that arm your Customer Success team with solid, actionable data. Here’s what our engagement dashboard looks like:
For providers with freemium options, this low touch, low-cost approach to support via an online community—along with enabling those users to interact with their peers—drives early successes and increases the likelihood of converting users to (higher) paying customers, ultimately boosting future revenue streams. Our customers report a 23% conversion rate from freemium/trial users to paid customers, compared to the industry average of 15%.
One often overlooked aspect of customer success—especially In B2B companies—is the benefit of engaging your users in product ideation. To put this in perspective, our customers find that between 30% and 40% of all user content posted on communities can be found in the ideation section. This presents three immediate benefits:
1. You’ll simply build better products based on user feedback—products that, by default, meet your customers’ needs, so they not only remain customers but will advocate on your behalf.
2. Letting the voice of the customer help shape your roadmap is not only advantageous for your product team, and your product, it makes your customers feel appreciated and empowered.
3. When it comes to rolling out specific new features, you can involve specific users in beta programs on the community where they, together with a selected group of customers, can help develop and test these innovations. This also means you can iron out any bugs before a full roll out!
Oh and as a few added benefits of all of the above—this saves time for your Customer Success team that usually handles feature request on a 1-1 basis. By centralizing product ideation requests, you create a more efficient workflow, greater transparency for your customers, and ultimately boost satisfaction scores! Hello increase in Customer Retention! 😉 Here are just some of the benefits of online community engagement:
As users add community answers to your own company content, the cost savings and effectiveness only get better over time. In our experience, more than 50% of the content in B2B Communities is created by users within 6 months and, over time, an average of 59% of content is created by community members.
Put simply inSided’s customer success community platform measurably increases engagement, which positively impacts customer success and leads to higher customer retention, ARR and LTV.
What customer success leader wouldn’t want to deliver that story to their CEO? 🤷♂️
For more information on how to keep and grow your customers in B2B SaaS, be sure to download our free eBook now!
By Adrian Scholes
B2B SaaS Marketing leader and mentor in Boston USA. Firm believer that taking Customer Success seriously is a prerequisite for taking Marketing seriously. Connect on Linkedin