No matter how industry-changing and unique the idea behind your platform might be, you’ll never truly understand its magnitude or value until you understand your SaaS customer engagement. Your platform itself won’t tell you how great it is — that validation comes from your customers. Unless you conduct a survey (which would likely only get a 10–15 percent response rate), your best bet is to start analyzing your SaaS customer engagement from behind the scenes. But there’s greater value to understanding this important metric in your business than just determining whether or not your customers like the platform.
Let’s take a look at some of the reasons why you should be measuring SaaS customer engagement — and how you can leverage that information to improve your business.
1. It Tells You Where to Focus Your Team’s Efforts
At any given time, there is a multitude of directions your company can go in. You likely already have a long-term strategy, but what should your team be focusing on to achieve it? Should they prioritize SaaS retention strategies over new customer acquisition? Should they emphasize new development over the refinement of existing features? Should they be developing more efficient internal processes or focusing on the next big release?
All of these tasks are important for your platform and company, but as you monitor your SaaS customer engagement, you’ll be able to identify the areas that need to take priority. And strategically, those are the ones you and your team need to be focused on.
Say you haven’t released any new features lately or even updated existing features that subscribers may need. Perhaps they’ve been asking for new functionality to make certain processes more efficient, but you and your team have been focused on your next funding round and have been trying to acquire new subscribers to get a higher valuation. This is understandable, but you’ve also left the customer requests unanswered because it wasn’t a top priority.
As a result, you may see SaaS customer engagement begin to decline across the board because your customers aren’t finding your platform as useful as they once were. Some may even be canceling their subscriptions. While you needed to focus on obtaining more funding, attention should have also been allocated to addressing these users’ requests in order to keep customers engaged. That would have prevented subscriptions from being canceled and revenue from being lost. Now, you’ll have to replace those subscribers or try for more funding, both of which will require time and other resources.
Use what you learn from SaaS customer engagement metrics to prioritize your team’s workload. This will ensure you’re always putting what matters most at the top of your list.
2. It Reveals Opportunities for Upselling and Retention
We’ve previously shared some SaaS retention strategies — the importance of which can’t be overstated. Retention is one of the strongest ways to sustainably and cost-effectively grow your business. With high retention rates, you won’t have to invest as much additional time and resources on top of existing overhead and efforts to acquire new subscribers that won’t complete their payback period for a year or more anyway.
Instead, you can increase the subscription level of current subscribers, sell them on new features, and offer additional services or support to grow the relationship. But you can only do this by understanding where your SaaS customer engagement stands. If your customers are engaged and satisfied, it makes sense to try to take things to the next level. And of course, it’s much cheaper to do so — CAC for upsells is almost $0.28 per dollar as opposed to $1.18 per dollar for a new acquisition (hence the longer payback).
Growing revenue isn’t the only reason you should measure SaaS customer engagement, however. It’s also critical to saving failing relationships, too. Maybe subscribers aren’t logging in as much, maybe they’re not using key features as often, or maybe they’ve just fallen off the grid entirely. If this happens, SaaS customer engagement metrics are your alert to take action. What will it take to get subscribers back into the platform?
You can also use these metrics to understand what led past customers to cancel their subscriptions. What were the figures in the months leading up to their cancelation? Were they not logging in as frequently? Were they spending a significant amount of time on one feature, perhaps trying to make it work or do what they needed it to do? Heavy usage in one area could be an indicator of this, so pay particular attention there. Use what you’ve learned from past subscribers as an indicator of a potential cancelation, and take action right away if you start to notice similar behaviors in current subscribers.
An Investment in SaaS Customer Engagement is an Investment in Success
You need to understand your users. Plain and simple. It’s not so much a matter of creating personas or typical buyers, as these are more in the realm of pre-purchase. It’s a matter of understanding engagement once customers have bought your software. Use this data to guide your next steps as a business — both in terms of strategic business decisions and platform development, and regarding sales efforts and retention strategy.
If your company has been looking for additional capital to bolster your SaaS customer engagement, we’d love to hear from you. Our venture debt financing provides you with growth capital that you can use to build a foundation for the future while staying in complete control of your company’s direction, hiring, and marketing strategy. Contact us today by filling out the form below to learn more about our financing and how we can help you succeed.