SaaS companies generate new revenue through their customer’s recurring subscription fees. But how can SaaS owners increase the amount of business they get? Here are 12 proven strategies to boost your company’s revenue.
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The “how to improve saas product” is a blog post that discusses 12 strategies that can be used to boost your SaaS business revenue.
This post is part of our SaaS Business Startup Guide, which is a collection of articles designed to help you plan, launch, and develop your SaaS company.
You must grasp the main parameters that fuel your subscription business’s development if you want to increase it. I’ve already discussed the metrics you should know and measure while operating a subscription company, but there are really just three things you can do to enhance growth: lower cancellations (churn rate), raise average revenue per user (ARPU), and increase the number of individuals who join up.
There are numerous things you may strive to improve in each of these categories, even though there are only three to concentrate on to help expand your subscription company. I’ve compiled a list of 12 of my favorite ideas for growing your SaaS company.
1. Lower churn
Your cancellation rate is referred to as churn. Your churn rate is the proportion of your paying customers who cancel. As a result, the lower your churn rate, and the longer your clients stay with you, the more valuable they become to you. When you minimize churn, you’re improving the lifetime value of your customers (LTV).
While you should constantly strive to improve your product or service in order to keep consumers, there are a few things you can do to assist minimize churn that aren’t directly linked to product development or adding new features.
Launch a marketing effort aimed at increasing engagement or retaining customers.
While your marketing efforts are most likely focused on attracting new clients from the outside, you may concentrate your efforts inside to assist prevent turnover. When you showcase the advantages of your product to current consumers rather than potential buyers, you’re engaging marketing.
You may use tools like Intercom to send personalized messages to your clients inside your app, encouraging them to explore new features or giving assistance if they seem to be having trouble.
Actions that users take (or don’t take) within your subscription service may drive engagement marketing, and messaging can be triggered by actions that users do (or don’t take). Rather of allowing clients to wander away or lose out on essential elements of your service that will lead to a longer subscription, start a discussion with them that encourages them to get the most out of what they are paying for.
Enhance your dunning procedure.
When a customer’s credit card fails to charge, you go through the dunning procedure. A credit card may fail to charge for a variety of reasons, including card expiration, nearing its maximum limit, or simply because the credit card authorization network fails to connect effectively with the bank.
Rather than allowing a failed credit card transaction to result in a lost client, you may improve your dunning process, including how frequently and when you retry the failed credit card, as well as what emails and other notifications you send to your consumer.
Most experts believe that you should try the failing card at least three times, but that you should wait at least a few days before doing so since your initial attempt may have occurred at the conclusion of a billing cycle.
If you know a card is about to expire, send an email to your client a few days before the card expires to remind them to change their billing information. After a card has expired, you may contact your client numerous times to remind them of what they’re losing out on by not having access to your product or service.
Consider launching a “recovery” campaign.
You’ll lose some clients even if you have terrific engagement marketing campaigns and a sound dunning procedure. You may always call out and attempt to reclaim your client after a few months. To entice them to return, you might provide special discounts, additional service, and other incentives.
Customers may just cancel because they are attempting to save money or are simply “taking a break” from your service. Because the consumer already knows your firm, persuading them to come back after they’ve already canceled might be a simple victory for you. You don’t have to promote to existing consumers in the same manner that you do to new ones. Instead, you might concentrate on what your lost client has been missing out on, such as new features or services that you’ve added since they left.
Predictive analytics are useful.
When you analyze your app use stats to search for trends that suggest a client is about to cancel, you’re using predictive analytics. Predictive analytics complements engagement marketing by assisting in the identification of at-risk clients. Instead of waiting to win them back after they’ve canceled, you should reach out to these consumers and discover out how to retain them before they cancel.
Predictive analytics may also be used to figure out which features of your software or service are likely to cause people to abandon it. If you have a bad encounter with a certain aspect of your service, this might direct your product development efforts.
2. Boost the average revenue per user (ARPU)
Increasing the average monthly income each of your customers provides for you is one of the quickest methods to build your subscription company. Moving the needle on ARPU may have a greater and faster effect than lowering churn, so it’s a good place to start.
Encourage others to use it more.
In general, if you charge clients more for greater services, you may simply promote more use. If you have a project management app and charge based on the number of users or the number of projects handled, for example, you may entice your primary account owner to invite more people or manage more projects.
Also, to assist your consumers get the most out of your product, consider giving training classes. The more your consumers integrate your product into their everyday life, the more they will use and rely on it, perhaps leading to the addition of additional paid features down the road.
When you first started your firm, how did you decide on your pricing strategy? Did you compare prices with rivals or speak with prospective consumers to find out what they’d be prepared to pay?
There’s nothing wrong with such ways, but you may be able to charge more than you are right now. You may be able to raise your pricing if your clients love your product and find it really beneficial.
You may look at “value-based pricing,” which involves determining how much time and money your product saves your clients. If you sell to other firms, consider how much your product aids your clients in growing theirs. You may set a pricing that represents the value of the time your product saves or the amount your product helps others develop their company.
You could also just use conventional A/B testing techniques (such as Convert or VWO) to test various pricing and see if you can boost prices by a few bucks. Even if you experience a little drop in conversion rates as a result of a higher pricing, you may end up in a stronger position in the long run.
Upsells inside the app
Another option for increasing ARPU is to use in-app upsells. This entails providing improvements to your product from inside the product.
You don’t want your customers to receive the impression that you lured them in with a cheap pricing just to make them pull out their credit cards to utilize every new feature. However, you may absolutely find the proper occasions to entice consumers to upgrade inside the product, or to add on things like more storage or other specific features that not all users may want.
Cross-selling by third parties
Cross-selling is similar to upselling in that it involves offering other items, sometimes not even your own, from inside your application. Perhaps you have a complementary product that you’d want to promote to your consumers. You may even team up with another firm to sell their goods and earn a percentage on each sale.
Cross-selling, like upsells, should be approached with caution. After all, your customers have paid to utilize your product, and they don’t want to be marketed to at every step. However, the correct deals at the appropriate time may help you deliver value to your clients while also increasing your income.
3. Increase the number of people that join up
Last but not least, increasing the total number of clients in your SaaS company is the most easy way to increase income. This isn’t exactly rocket science.
Of course, you can always raise your marketing budget to attempt to attract more clients or grow into other areas. Those are fantastic concepts, but they may be somewhat dangerous. Additional marketing efforts may or may not be successful, and new markets may or may not be interested in your goods.
Instead, begin by improving your registration procedure. This will increase conversion rates for potential clients who are already visiting your website and looking at what you have to offer. Here are a few ideas to help you enhance your conversion rates.
Consider a better guarantee.
Customers want to know that whatever they’re signing up for is completely risk-free. They want to know that if they test your product and it doesn’t work out, they can quickly cancel or get their money back.
You might provide a satisfaction guarantee in addition to (or instead of) a free trial. Instead of just giving simple cancellation or no long-term contracts, you may guarantee a set number of months of service consumption if a consumer decides they don’t like what you’re selling.
This may seem hazardous, but I believe you’ll discover that you’ll boost your conversion rate and that only a small percentage of buyers will take you up on your promise. It’s like purchasing from REI or L.L. Bean: you have the assurance of a strong guarantee, which lowers your risk as a client, making you more inclined to buy and less likely to use the merchant’s money-back promise.
Your price page should be put through an A/B test.
Your website’s price page is likely one of its most popular pages, and it offers one of the best possibilities to boost conversion rates. This is where your consumers will ask you the most important questions about your company: Is there a contract in place? What is the cost? Is there anything in the fine print? Is it simple to cancel? For what price do I receive these features?
You’ll want to conduct a lot of experimenting in this section. Use a tool like Convert, Optimizely, or VWO to test your page and determine what should be on it and what should be removed. Perhaps you’ll discover that you want a lengthy price page with a lot of details. Alternatively, you may discover that your prospects like a highly simplified design and feel.
Everything from little details like button placement and color to the entire design and structure of the page should be tested. You’ll discover improvements that will increase your consumer base.
Your registration procedure should be tested.
You should test your registration process in the same way that you tested your price page. How can you make it as simple as possible for people to get into your product?
Ideally, you’ll want to keep the quantity of information you gather upon registration to a minimum. The smaller the barrier to completion and the higher your conversion rate, the fewer questions you ask during registration.
During the registration process, try using several sorts of validation and trust-building messages. Customers want to know that their information is safe and that other people like your product. Simple remarks regarding the amount of customers you have may assist promote signups, as can including security badges.
There are numerous tests you can perform on your registration process, so try out as many different ideas as you can. You’ll almost certainly enhance your signup rates.
Allow for various charging choices.
Everyone has a preferred method of payment for you. Although the great majority of consumers still prefer traditional credit cards, many others prefer alternative payment methods such as PayPal.
Providing extra alternatives for your clients will help you attract more customers. We observed a significant boost in signups after we implemented PayPal around a year ago, particularly from our overseas consumers.
We’re currently working on making it possible for clients to pay for our goods in their own currency rather than USD. According to our polls, we predict a significant boost in registration rates as a result of this.
Give your clients the freedom they want, and you’ll almost likely see an increase in foot traffic.
There are undoubtedly hundreds of strategies you may use to expand your subscription company. We’ve just scraped the surface here, but maybe these suggestions will inspire you to consider more things you might do in your company to see if you can increase income.
I’d love to hear about any ideas you tried that truly worked—let me know by sharing this post on Twitter or Facebook and adding your comments.
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