Offer a powerful, innovative product at the best possible price and the customers will sign up and stick around.
Or will they?
Because if customers have to go through a long, tedious registration and onboarding process, they might not even bother. Alternately, even if they sign up and get into your product, they might not stay for long if they find it overly complicated and difficult to use—even worse is if there’s no one around to help them out.
A customer’s experience with your SaaS subscription business can make or break your relationship with them and even prevent the relationship from getting off the ground. And at the end of the day, leads and sales that don’t stick around are pretty useless to recurring revenue companies.
Customer experience as a concept isn’t new, but the term has recently been shortened to a sexy-sounding buzzword, “CX”, and hailed as a lever of growth.
That said, almost two-thirds of B2B businesses are at the lowest stage of CX maturity. These businesses also haven’t focused on CX as a strategic opportunity, according to a report by experience management firm Walker.
What this means is if your business model includes exceptional CX, you’ll be well-placed to scale your business—and grow your recurring revenue—faster than your rivals.
But what caused the rise of CX in the first place, and how can you elevate your CX before others start to play catch-up?
Let’s take a look.
What brought CX to the forefront of the conversation?
Two words: the Internet.
A simple Google search is all it takes for you to find dozens of SaaS solutions for any and every need. With a few more clicks, you can also browse beautifully designed websites by each vendor, all vying for your business.
And that’s not all. You can read independent reviews of others’ experiences with a product before making a purchase decision.
“With increased access to online price information and reviews, and informal public opinion on social media, many businesses have recognized that building a better customer experience is essential for sustaining competitive differentiation,” writes Rob Daleman, Senior Vice President of Corporate Marketing at CX solutions provider Quadient.
And the numbers don’t lie.
As a 2021 survey by professional services network Deloitte revealed, B2B respondents were 34% more likely to buy from a vendor that has mastered CX compared to a vendor with low CX maturity. They’re also 32% more likely to renew their contracts—a crucial action that helps keep your recurring revenue figures up.
The customer should be king—not your product
For sure, having an innovative product is important in the SaaS world. However, adopting a product-centric mindset can take you only so far as you look to scale your recurring revenue business.
That’s because providing sophisticated products doesn’t equate to providing outstanding CX if customers have a challenging or unsatisfying time using your product.
Instead, more enlightened SaaS businesses have realized the need to put their customers at the forefront of what they do.
This customer-centric mindset places them in a good position to:
- develop outstanding products that address customer pain points
- delight customers during all interactions with them, and
- enhance their monthly recurring revenue streams as a result.
Just take it from enterprise software solutions provider Axway. Despite the business’s reputation for developing quality products, its customer satisfaction scores were lower than ideal. This spurred Axway to switch to a more customer-centric way of doing business.
Through reviewing customer feedback and applying smart data analytics, the company discovered its enhancement request process wasn’t as transparent as customers wanted it to be.
It redesigned the process to address the issue, which ultimately led to a 27-point increase in its overall relational Net Promoter Score (NPS).
Delivering a phenomenal CX starts with...
Building cross-functional CX teams
Be it onboarding, hitting valuable milestones, or even managing ongoing customer lifecycles, your business has to provide stellar CX and service at every customer touchpoint.
However, the presence of organizational silos can cause your business to overlook opportunities for holistic CX improvements. Miss out on too many of these, and your recurring revenue can take a serious hit as customers dissatisfied with their experience start to churn out.
The solution is to build cross-functional teams to facilitate information flow among your business’s departments. This helps ensure a seamless CX throughout the entire customer journey.
When creative services marketplace Voices.com realized its customer acquisition rate needed work, CEO and co-founder David Ciccarelli pulled together a cross-functional management team comprising reps from the business's:
- customer support, and
- product development teams.
After analyzing the business’s customer journey and interviewing customers, the management team discovered the problem: its sign-up form was too long.
Of all the reasons Voices.com had come up with to explain its low customer acquisition rate, this hadn’t popped up on its radar at all!
So of course, the business took action to shorten its sign-up form. And the result? The company was able to increase its new customer acquisition annual target by 35%.
Using data to inform your CX decisions
In the course of operations, your SaaS business will accumulate data on how customers use—or don’t use—your product.
Use this data to ensure your CX efforts are consistent with what’s actually happening on the ground. After all, you wouldn’t rely on a gut feeling to make key decisions that affect your recurring revenue, would you?
In a Product-Led Summit talk, Arpit Choudhury of the Data-led Academy gave an example of how businesses could use data to improve their onboarding email campaigns.
- While these types of campaigns are intended to educate new customers on the product, Choudhury shared that generically designed drip campaigns can turn out to be “really annoying for many.”
- This is because when a user receives an email about a certain product feature, they may have already known about it.
- Consequently, these emails provide “zero value” and may only nudge the user into unsubscribing from future emails.
The better way of doing things is to “trigger highly personalized contextual emails based on a user's in-app activity,” says Choudhury.
So the level of personalization can be fine-tuned to an extent that a user actually feels that there's someone always around to help them succeed with the product.”
Digitally transforming your CX processes for more meaningful data and outcomes
While conducting surveys is a common way of getting CX feedback, it has many drawbacks.
For one, the quantity of feedback you get is limited by the number of users who complete your survey.
McKinsey and Company finds the typical response rate to be only 7% of a customer base.
You’re also at the mercy of your users when it comes to the quality of the feedback received.
If your users are feeling particularly helpful—or particularly irate because of a poor experience—they might provide lengthy, detailed survey responses. But if they just want to finish your survey ASAP, you might get not-so-helpful, one-word answers such as “Good” or “OK.”
Given the limited usefulness of surveys, McKinsey and Company proposes businesses invest in predictive CX.
By digitally transforming their CX processes with analytics, businesses can:
- better forecast customer satisfaction and revenue outcomes, and
- use these predictions to drive CX improvements
As a result, businesses can work on their CX proactively, instead of only reacting after issues crop up. They can also better tie enhancements to tangible business results, such as recurring revenue growth.
Unlock recurring revenue growth with exceptional CX
While some SaaS leaders founded their businesses after having an idea for a really innovative product, the reality is customers don’t decide to pay for something simply based on how novel or cutting-edge it is.
Instead, what gets them parting with their money on a recurring basis is if the product meets their needs, provides value, and—you guessed it—gives them a memorable experience.
The advent of the Internet has also only made the competition stiffer. Customers can and do conduct extensive research until they find 'The One Perfect Solution'.
What all this means is if you want to grow your recurring revenue, taking care of your customers has to be your top priority. To this end, break down any silos that may be causing shortsightedness in your CX efforts, and create efficient, effective processes that can scale along with your business.
Because if you do customer experience right, along with having a powerful, innovative product, your business will grow.
And happy customers are customers that don't just grow with you, but also send their friends your way—giving you that desired boost in recurring revenue!