Why It's Important For SaaS Companies To Know Recurring Signup Trends

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It is well known that purchasing behaviour varies across industries. Retailers tend to get busy on days around the sale periods, like Black Friday and Cyber Monday, and hotels will often be busy around the holiday seasons. The same can be said of your SaaS business.

It is important to determine when and why these periods of recurring signups occur. This can help you create marketing plans and customer retention campaigns that are resource efficient and exude confidence in your product.


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What Booms And Slumps Tell Us

Massive surges in the demand for a product will be noticed by a sudden increase in the signups to your SaaS product. This helps any business by increasing cashflow, which can then be used as investment for either your products or marketing. These booms are not normally coincidental, and unless the company has been extensively marketing recently, an external factor is normally the cause.

However, when there is a massive exodus of customers, usually one of two things are going on:

  • The company has failed on a particular area.
  • There is an external factor that is affecting demand for the service.

Determining the reason why both the booms and slumps happen should be one of the key activities of your sales teams - so they can take advantage of booms and counteract the slumps.

Efficient Resources

One of the major benefits of knowing when your boom and slump periods are is that it allows you to allocate financial and non-financial resources within the company. This helps you to be cost effective, getting the most return on marketing investment and employing seasonal staff on an as-need basis.

The more efficiently you plan and deploy your financial and non-financial resources the greater the impact your resources will have on the business and, in turn, the greater profit you can gain from your activities.

A common practice is to use dashboards to display all financial measures and growth SaaS metrics in one place.

Company Being Proactive Rather Than Reactive

In both scenarios, there are actions that need to be planned and implemented so you can take advantage of opportunities and reduce the impact of bad times. For instance, if you know that during December there is going to be an increase in demand, you can increase marketing spending to gain a significant share of new customers coming to the market.

At the same time, when you know a slump period is coming up, you can increase spending on the customer service team. They can then get on the phone and speak to customers about the services they are paying for. They can then adjust packages, locking customers into long term contracts or reminding them of how great your product is. This can help to reduce customer churn and improve your marketing.

 


 

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Maintaining Confidence

Another important factor is that you need to maintain confidence in your product. This can be difficult to achieve when you have significant customer churn. After these events, some business leaders can feel deflated and just when their staff require them to be motivating, they become withdrawn.

If you know that the churn is as a result of seasonal demand, you can be better prepared for these periods and not feel deflated by the customers leaving your SaaS business. Yet this should not be an excuse to rest. Even though you know there is likely to be a higher number of customers leaving, you should be attempting to reduce the number as much as possible with effective customer service, deals and other incentives.

Conclusion

Your cashflow can be seriously affected by seasonal changes in the demand for your product. By knowing when these seasonal booms and slumps are going to be, you can be more effective in your deployment of financial and non-financial resources – helping you to grow and have better profit margins.

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