If an award-winning Software-as-a-Service (SaaS) product falls in the woods but nobody’s around to hear it, does it make a sound?
This isn’t a silly riddle, but a very real issue that SaaS companies have to deal with on a daily basis: “Are my customers using my product? If not, does this mean that they’re going to stop being my customers soon?”
In this post, we will talk about how SaaS companies should be thinking about engagement, how they can measure it and why increasing their engagement rates could significantly decrease their churn rate.
What does engagement really mean?
There are many different ways to define and describe engagement. For our money, Lincoln Murphy of Sixteen Ventures has the best one:
Engagement – When your customer is realizing value from your SaaS. This value is different at various stages in the customer lifecycle.
That’s it! This is a simple enough definition right? Well, not so fast. Many SaaS companies mistakenly believe that bringing the customer on board means that they’ve proven the value of their SaaS product to the customer, and their job is now done. Just because the customer has your product doesn’t mean they’re using it, using it correctly or deriving real, actual value by using it.
How can I measure engagement?
Surveys, case studies and customer support are all ways of measuring a customer’s engagement with your SaaS product. Many companies send out regular surveys (every 6 months or so) to their customers, asking a series of questions that are designed to suss out a customer’s experience with your product. Of course, such a survey is relatively static and limited, while allowing for the possibility that the customer isn’t being 100% truthful.
Another way of tracking engagement is by talking to your customer support team. They are talking to your customers all day, helping them learn best practices, troubleshoot problems and generally get the most out of your product. This can be extremely helpful, but is also largely anecdotal. You’re also likely only tracking a small handful of your customers through this method.
The best way to track SaaS engagement is by using a sales analytics product like InsightSquared. Our engagement report monitors just how many of your customers are spending time in your product. This report also measures engagement over time, which is helpful in terms of determining the impact that new features, customer marketing campaigns or other variables has in driving engagement in that given time period.
But we don’t stop there in our measurement of your customers’ engagement with your product. After all, companies would love to find out which specific features are the most popular, and which are underserved. According to this example, this product’s dashboard is its most widely used feature. Identifying other less-used features could help the product team make necessary tweaks, the marketing team put out certain educational campaigns and the sales team to avoid pushing that feature on initial calls.
What does this have to do with churn?
If a customer isn’t using your product now, they’ll likely use it even less over time. Eventually, they could get to a point where they’re not using your product at all and instead of paying you the monthly subscription costs, they might cancel altogether. Increasing engagement can ward off this churn risk.
But just how can you increase engagement?
By implementing customer marketing – Many companies think that marketing stops once the customer has been signed. Instead of just using your marketing content and campaigns to acquire customers, consider using it as a powerful retention tool. After all, you’re already writing blogs and eBooks on how the customer stands to benefit from your product – simply shift the tone and target toward existing customers and they might learn some best practices that will derive more value from your product for them.
By improving your product – You can see from the aforementioned engagement reports which specific features are being utilized by your customers, and which ones aren’t. Study both popular and unpopular features to identify areas of strength, weaknesses and room for improvement in your product. Bring this information to the product team.
By emphasizing customer service – Build out your customer support team and make sure they are incredibly well-trained. They should be so well-versed in your product that no error or query could possibly surprise them. Nothing turns off an already-dissatisfied customer quicker than contacting customer support and not getting the answers they need.
Looking for a cure to your churn ails? Look no further than in your product engagement. Once you have identified and analyzed the right engagement metrics – with the help of InsightSquared – you will start to see your churn rates decrease.