- 1 How to increase your conversion rates
- 2 How to retain customers for higher LTV
- 3 Here are some tactics that will aid you in making this possible.
Software as a Service or SaaS as it is more formally known as is a way of providing centrally hosted applications over the internet. Software that is delivered through the SaaS method allows data to be accessed from any device as long as it is linked to the web. These applications, which are also called on-demand software, web-based software or hosted software differ from typical, on-premise software because they don’t just organize and maintain servers, databases, and codes, but also has a more flexible pricing model. While traditional software buyers have to purchase the license to own the software but pay 15%-20% per year in maintenance and support fees (anti-viruses), SaaS buyers can pay an annual or monthly subscription fee for all the benefits that include support and other costs (mobile apps).
However, much like other e-commerce or regular service businesses, you need to make sure that you’re inviting customers and keeping them interested in what you have to offer. With stats showing that it’s 4x cheaper to upsell an existing customer than to acquire a new one, it is crucial that you convert clients into loyal customers. The Life Time Value or LTV of a customer matters most to SaaS businesses because while traditional industries do get affected if customers decide to leave, they don’t lose a lot. Unfortunately, this is not the case with Software as a Service company because LTV acts as the bread and butter for these organizations.
When it comes to managing your company, you must know that sign-ups hold the most value for your organization’s success. With more than 70% of SaaS businesses offering free trial sign-ups, it is imperative that you become a part of this group as well. However, signups will only be beneficial if you can convert customers and the results reflect on the ROI.
This is why we’ve made it our mission to tell you all about what you can do to increase conversion rates and retain customers for a higher LTV.
How to increase your conversion rates
So, without further delay, let’s find out about some of the tried and tested elements that are guaranteed to bring you results.
Don’t push the signup
One mistake that could end up making you lose customers is forcing free trials every step of the way. You have to bear in mind that though subscriptions are your #1 goal, visitors will turn away if they feel that you’re trying to push too hard and force your product or service on them. Instead of linking the signup form to every blog post or page, you must integrate it, so it’s easy to find by customers that are willing to explore your website a little more. Link the free trial to the ‘About Us’ or ‘Contact Us’ pages where customers can take a step whenever they want to, without feeling rushed. Also, remember that potential customers won’t sign up only because they landed on your website and that you need to bring them to the signup by running email campaigns and other such strategies.
Have a clear and concise message
Before you start inviting visitors to signup, you need to know how to create a killer value proposition. In a nutshell, the value proposition of your software is what defines your service and makes the product stand out. If nothing else, the message you’re conveying must be clear, concise and memorable. In today’s fast-paced world, your website visitors or target audience don’t have the time to read 2-3 sentences so they can understand what you have to offer. Instead, potential customers are looking for propositions that catch their glance and instantly tell them what you’re all about. Instead of confusing the reader with complex terminologies, keep it straightforward, organized and convincing.
Post engaging and informative content
You’ve got visitors to your page and are now trying to turn them into your free trials so they can test your product. However, if you want even the slightest chance of converting visitors to customers, you need to invest time, resources and energy in producing and posting quality content that brings value to the reader. Though content has always been crucial for your business’s online success, it’s position has risen even further because it is now considered as a staple for SEO, PPC, SEM and other sorts of optimizations as well. So, create blogs, vlogs, and other such content and integrate them in such a way that they are immediately recognizable by the audience. Also, with 90% consumers saying that they like reading custom contents that explicitly target their pain points, you need to be sure that you’re addressing issues that the audience cares about. So, if you want your customers to convert once they have signed up for the trial, you need to ensure that you’re providing them with quality content before, during and after they have agreed to give your product a shot.
Make the signup simple and explain what happens later
Just like you need to make sure that you have a clear message and value proposition, you also need to ensure that you develop a simple signup process. Instead of asking the visitor to fill out optional fields, make it worth their while by offering a short form that doesn’t take more than a minute or two to fill out. Other than this, you also need to make sure that you tell the customer what will happen once they have signed up. For instance, will they get a call from your sales rep or an email that walks them through the features you’re offering? Whatever it is, you need to ensure that you ease all their anxiety by letting them know what they can expect. These tactics won’t only make the user more engaged with your service and product but will also increase the conversion rate.
Plan out your trial period carefully
Finally, though there are a lot of other things that you can do to increase conversion, one of the most critical features you should consider is the trial period. Though a 30-day trial period is the industry standard, it may be too long for your SaaS business depending on your services and the complexity of what you offer. Unnecessarily long trial periods won’t only make the customer lose his/her interest but will also increase your cost per acquisition. For entry-level applications, it is recommended that you offer a 7-day trial so the customer’s engagement level increases. On the other hand, if you have a complex solution that has many features, you should stick to a 30-day trial. However, remember that it is only beneficial for you to have an extended trial period if your product is design to increase the level of engagement over a lengthy period. According to a credible source, 99% SaaS businesses offer a 14-day trial period, so it is neither too short nor too long.
Bear in mind, that to generate quality leads, you need professional help like the sales pipeline template provided by Salesmate. So, if you want to convert your audience into loyal customers, you need to make sure you consult the experts.
How to retain customers for higher LTV
Once you’ve finally been able to convert a customer past the trial period, you need to make sure that you maintain that customer so you can benefit from the higher LTV. You need to do all that you can to reduce the churn rate and ensure that customers stick with your service.
Here are some tactics that will aid you in making this possible.
Accounts with scalable pricing
If you’re an avid player of mobile games, you must have come across apps that have pricing models which allow for account expansion throughout its lifetime. Offering scalable pricing is an excellent way for your business to increase its ARPA and LTV and helps you in reducing the churn rate. Through scalable pricing, you can not only use customers who aren’t willing to get ahead while leveraging those who are interested in crossing over to the enterprise level. Factors such as the number of the active customer, number of seats available and infrastructure requirements will be a few of the deciding factors on how you plan out the pricing and how your LTV increases with time.
Entice customers with premium features
One way to entice customers to ‘upgrade’ their account is to tell them about premium features. Tell them what they’re missing out on and everything that these special features offer. The benefit of using this tactic is that instead of irritating them to a forced higher plan, you’ll be convincing them to signup voluntarily. The ones who choose to upgrade will do so according to their own will and because they wanted to use the features.
Re-engage inactive customers
Users that haven’t engaged with your product for a long time are more or less churn for your business. However, reengaging this portion of customers with a strategy is a great way to get them to participate and become a part of your LTV. Though you may experience a sudden rise in churn because users realize that they are still your customers, you have to remember that all these inactive members are doing is inflating your Monthly Recurring Revenue (MRR) and not bringing you anything monetary. On the other hand, sending emails to customers who forget to use your service to remind them will make them engaged once more and drive your LTV.
Optimizing a SaaS business in this competitive industry can be tough. However, if you’re careful about planning and execution, you can make your company stand out.