Customer Retention Strategies for SaaS

Customer Retention Strategies for SaaS

The SaaS market is filled with impeccably designed and developed tools that can resolve almost any problem. However, presenting your customers with a great tool and service is not enough to keep them coming back.

In this article, we’ll dive deep into some essential customer retention strategies for SaaS companies, break down their purpose and intended upside, and look at how to implement them as part of your overall customer retention strategy.  

What Is the Customer Retention Rate?

Customer Retention Rate (CRR) Formula
Customer Retention Rate (CRR) Formula

The customer retention rate shows the percentage of customers that a company manages to retain over a certain period of time. The churn rate, on the other hand, is the percentage of customers that have left the company. 

To be able to figure out ways to improve customer retention in SaaS, it is crucial to first learn how to calculate the retention rate. The customers you retain have a higher lifetime value, and loyal customers are more likely to refer additional customers to your business. Therefore, customer loyalty and positive experiences can significantly improve customer retention. 

So, how can you calculate the retention rate? Follow these steps:

  1. Decide on the span you wish to consider — annually, monthly, or any other.
  2. Calculate the number of customers you had at the end of the given period.
  3. Then, subtract the number of new customers for the period.
  4. Now, divide the obtained result by the number of customers your business had at the start of the period.
  5. Finally, multiply the result by 100.

The percentage you get from this calculation is the customer retention rate. What comes next is customer retention analysis, where you get a deep insight into customer behavior. This allows you to understand why some customers churn and when exactly, but most importantly, how to prevent it!

Customer Retention Strategies for SaaS Companies

To ensure stable revenue growth and build long-term customer relationships, companies must combine multiple strategies to create a comprehensive SaaS customer retention plan. Satisfied customers stick with the given company, upgrade their subscriptions, and spread the good word. To create successful strategies, first, you can learn about SaaS retention models and how to perform a retention analysis.

Let’s present you with the most effective B2B SaaS customer retention strategies.

Create an Impeccable Onboarding Experience

To set the stage for an excellent user experience, a SaaS business must implement a well-designed onboarding process. Besides a proper welcome, it is crucial to provide guidance that clearly demonstrates how to navigate the platform and experience its benefits in record time. Include walkthroughs, tutorials, and dedicated support to avoid any friction. Also, make sure to personalize and adjust the process by analyzing the customer data. The quicker the customers comprehend your product’s value, the better chance they will stay engaged and adopt it. This is what makes onboarding one of the most important SaaS customer retention strategies.

Communicate with Customers Regularly

To make sure that your customers stay aware of new features and updates, share relevant content, newsletters, and product updates with them. By analyzing customer data, you can target a specific group that shares a similar interest. Target those who show interest in a new feature and share useful how-to guides and other special content.

Leverage Personalization

Personalization in SaaS goes beyond sending birthday wishes or a first name tag to an email. To do it right, you need to truly understand the customer’s journey and behavior. The key is to help customers achieve each milestone quicker and without any hassle. Avoid sending generic emails and instead create unique content that addresses each customer’s needs and preferences. Use customer retention tools like Akita to segment your customers into groups based on their common interests and traits, track their activities, and get the visualized data. By streamlining all customer data into one platform, you can understand your customers to the core and optimize customer relationships to improve retention.

Deliver Outstanding Customer Support

There is no better way to show your customers that their trust is appreciated than by treating them to outstanding customer support. Help your customers resolve the issues proactively and rapidly to eliminate any friction as soon as possible. Go a step further and provide guidance for those users who are not using a certain feature they should be using (you can get this information from customer data analysis). Also, include self-service solutions like community forums or knowledge bases if the customers want to resolve the issue on their own.

Solicit and Collect Feedback

Don’t hesitate to ask your customers about their experience via surveys. Still, make sure to do so only at key stages to avoid annoying them. The best timing for a survey could be after a recent upsell, conversion, or churn. Knowing which aspects of your product are satisfying and which aren’t allows you to improve it and reduce churn.

Offer Loyalty Programs

Reward your loyal customers by offering loyalty programs. It can be anything from a simple discount or upgrade to a partnership program with exclusive benefits.

Incentivize SaaS Renewals

Late renewals mean delayed billing to the company. On the other hand, super-early renewals increase the number of sales cycles over the customer’s lifetime. To encourage early renewals, provide discounts or a longer subscription.

Include Upselling Options

To bring a long-term relationship to a whole new level where both sides win, upselling is certainly a great option. Customers get more benefits and better service, and you get more revenue!

Can Customer Success Platforms (CSPs) Help Optimize Customer Retention?


CSPs like Akita are specifically designed for this purpose. Built to facilitate the centralization of all of your customer data, CSPs can monitor for changes in your customers’ profile, behavior, or lifecycle stage. You will then receive alerts or trigger playbooks to intervene with your customers if required to maximize your retention rates.

Below, you can see a segment of at-risk customers in the Akita CSP. A combination of filters, specific to the user’s business, identifies any customers that may be in need of attention.

at risk customers and important metrics in Akita
at risk customers and important metrics in Akita


The key points of customer retention strategies for SaaS businesses include understanding your customers and coming up with proactive solutions and strategies that enhance their overall experience. By ensuring that your SaaS product provides long-term value to existing customers, you are building a foundation for a stable and sustainable SaaS business’s growth. Although creating and implementing SaaS customer retention strategies may seem like a daunting task at the beginning, all the hard work and dedication pay off once those metrics start to improve!

Frequently Asked Questions

Why is customer retention important for SaaS?

Customer retention is important for SaaS because it helps companies decrease churn, improve customer loyalty, satisfaction, and lifetime value, and increase revenue.

Is customer retention important for SaaS startups?

Absolutely! Customer retention increases customer lifetime value and is more cost-effective than customer acquisition.

What are the key challenges in customer retention for Saas?

First and foremost: competition. Also, customer needs are constantly changing, and finally, there are concerns about data security.

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