5 tips to boost your renewal rate
I wish I could give you a silver bullet that will fix all your churn problems, but unfortunately, it just doesn’t exist. Poor renewal rates are the outcome of dozens of possible problems, ranging from poor pricing strategy to shoddy user experience.
I do tend to see a few common problems crop up again and again, though, most of which can be solved with just a little effort. Follow these best practices to keep customers coming back for more, and you’ll be well on your way to a healthy and profitable subscription business.
1. Maintain product stickiness
According to Lincoln Murphy, customers churn for one of two reasons:
- Something happened to or with the customer; or
- The customer did not achieve their desired outcome.
The second reason tends to be far more common. If your product does what the customer needs and helps them achieve their goals, they’re far more likely to stay, and stay longer. On the other hand, if your product is missing critical functionality the customer needs, they’ll leave in search of a competitor that provides what they need.
It sounds simple, but making sure your product is adequately “sticky”—meaning it includes key features that customers simply can't live without—is one of the best ways to improve renewals.
2. Focus on customer success
Spending time and energy improving the success of your customers is one of the best investments you can make in your SaaS company. Customer success elevates every part of your SaaS, helping to reduce churn, improve renewals, and increase expansion revenue. In fact, companies with some sort of customer success function see at least a 10% boost in net dollar retention compared to their non-customer success peers.