As you grow your subscription business, you must understand the metrics that drive that business. To move the needle, there are three things you need to pay attention to; reduce the churn rate (cancellations), increase revenue per user, and increase the number of sign-ups.
This article goes into detail on the three by giving you ideas that will help prosper your SaaS business to the next level of growth.
1. Reducing cancellations/ churn rate
The cancellation rate is, in other words, called the churn rate. The churn rate is that percentage of your paying customers that cancel. Thus, the priority of every SaaS business owner should be to reduce this rate. The longer the customer stays on your subscription list, the more revenues you earn from them. Thus reducing churn is increasing lifetime value.
How, then, do you reduce the churn rate?
An engagement campaign
Most businesses focus on getting new customers but do you know that the internal customer is more valuable? Thus you should turn efforts on the existing customer to reduce churn. With an engagement campaign, you give information on your products' benefits to the existing customer rather than a new one.
There're apps out there that will help you make this a reality, and therefore you should think of getting one with features that will deliver customized messages to your customers and offer help when struggling.
Improve the dunning process
The dunning process is the measures you take when the customer's credit card fails to charge successfully. Maybe the card has expired, or he/she has reached the limit, or even due to low network leading to failed communication with the bank. Here, you must have sufficient information on the billing cycle of the customers' cards. Send them messages on the expiry of their cards and support messages when it fails. That keeps the customer knowing that your mind about them, and you're ready to walk with them all times.
Give a shot to "win back campaign
You may have some robust engagement campaign and a perfect dunning process, but you're going to lose customers even with all that. However, you can still win the customer back by offering discounts, incentives, extra service, and encouraging their return.
Some of the customers that leave you to do so due to some constraints, and it's easier to win them back instead of going for new ones.
2. Increasing average revenue per user
Every customer has some revenue that they generate each month. The fastest way to grow your subscription business is by increasing the revenue. Increasing the revenue per customer has a more significant impact than reducing churn and, therefore, a perfect place to focus.
Encourage them to use more.
Your customer may be using a particular feature of your product. You can earn more from them by encouraging them to use other related features. That will increase the revenue you get from them.
3. Improving sign-up rates
The last but fundamental method of growing revenue in saas marketing is through the sign-up rates. You may want to try those additional marketing efforts or increase your marketing spends to bring in more customers, but that may not guarantee success. Thus the first thing that you need to do is to improve your sign up process.
One of the things your prospects would want to be sure of is a money-back guarantee. That if they sign up and are not satisfied, they can easily opt-out and get back their money. It may feel risky, but it increases the customer's confidence in your product.