Churn is death to your SaaS app. Too much churn and suddenly you’re facing the harsh reality of hunting down new users like hungry zombies swarm after fresh blood in The Walking Dead. Good news is you can fix that – and avoid stumbling around searching for fresh meat.
In the early days of SaaS, retention wasn’t a big deal. Why? Competition was scarce. But in today’s flooded market, you could have dozens of apps performing the same service. I hopped on GetApp to find a project management app. My search yielded 120+ results, whew:
When you focus on getting more and more new users, it’s a losing battle, meaning your bucket becomes so leaky, “all you can do is add more customers to the top of the funnel in the hopes that you’ll make up for all those you’re losing,” says Patrick Campbell of Price Intelligently.
Retention is vitally important. Totango found that the best in class SaaS companies have an 80% retention rate of paid customers after 90 days. Clearly, these companies are doing something right.
Think about this: if you reduce your gross churn by 1%, you’ll see a boost in roughly 13% monetization and 7% retention. However, if you improve your acquisition by 1%, you’ll only see a 3% boost in your bottom line.
Retention is clearly the way to go. But how do you keep your users and cut through the fog of competition and millions of other distractions threatening to lure your new user away? One word: Email.
Why Emails Reduce Churn
Emails are the burly underdogs of the digital world. Oftentimes, they’re not pretty and feel rough around the edges. But man oh man, can they hit above their weight-class.
Radicati found that a message is 5x more likely to be seen in email than via Facebook. Instead of taking another tact, like calling your users or sending them an in-app message, send them an email.
Three big reasons why:
- Emails move your user towards a better version of themselves
- Perfect medium for storytelling
- Emails propel your user back to app
Let’s deep dive on each of these 3 reasons below.
Emails Move Your User Towards Their Goal
Quick: what’s your new user’s goal in signing up for your app? Nope, it’s not to become better organized, have more time or money, or be a productivity ninja.
Go a little deeper.
Here’s a hint: Your new user’s goal is a better version of themselves. Which means you’re selling them exactly that — an improved future — with your app. Email is the perfect method for this progression. You’re moving them from point A to point G.
Use each email to move your users step by step towards their goal. Chances are you’re already doing this with your onboarding series, just take it a little further and apply it to your retention emails too.
(You’ve got retention emails, right?)
Pro tip: Retention emails are not just sent towards the end of a free trial or after a user has cancelled. Use retention emails throughout a user’s lifecycle to gently nudge them towards the action you need them to take. Whether that’s completing their onboarding steps or reconsidering their decision to cancel.
Email is the Perfect Medium for Storytelling
Emails are a one-to-one connection. They’re the modern-day form of letter writing (aka one of the oldest forms of communication).
That’s why they’re so powerful. When you use retention emails to tell stories, your user gets sucked in.
Because emails have that baked-in intimate feeling to them. This is me writing to you.
Suddenly, your user begins to imagine what life *could* be like with your app. It engages them, which brings us right to reason #3.
Email Can Be Used to Nudge Your User to Sign Back in
Recently, Totango did a study with over one million prospects and customers of software businesses. They found that over 50% of paying customers aren’t using the service they paid for. Not surprising.
Here’s the kicker: this same study found a near-perfect correlation between non-use and cancellations. A period of non-use almost always preceded a cancellation. This is the behavior you’re fighting against. You’re trying to reprogram your user’s behavior to include a new set of actions: using your app.
First step in changing habits is to create a nudge — or cue — to prompt a new behavior. This simple neurological loop is at the core of every habit, as Charles Duhigg explains in The Power of Habit. This loop consists of three parts: A cue, a routine, and a reward.
An email serves as the perfect cue to start a new routine. Sending a retention email designed to nudge your user back into app — so they start using your app — is your goal.
Think how often you get sidetracked because of an email that pops into your inbox. Pretty often, huh? Your behavior was influenced by that email.
4 Must-Use Retention Emails (You’re Probably Not Sending)
I look forward to getting my weekly writing update email from Grammarly. Here’s that bad boy in all its glory:
All those numbers, percentages, big figures… all showing how AWESOME I am at writing…. ooooh, it gives me chills. Not to mention a huge boost of confidence.
Send a milestone email like this one to make your SaaS user feel like a million bucks. This email is very simple to implement. In fact, chances are you’re already tracking all the data you need to create it.
In the Grammarly example, they show me:
- The number of words I wrote in the last week
- How much bigger my vocabulary is than other users (yeah baby!)
- How accurate I was
- The length of my writing streak
- How close I am to my next writing achievement (aka badge)
Wonder if this email will work for not-very-heavy users? The answer is heck yeah.
Check out this example from Grammarly BEFORE I’d connected Chrome to it:
Susie, a paying user, was hot ‘n’ heavy for your app in the beginning. Her use was sky-high. But lately, you’ve noticed a dramatic dip in her log-in numbers. Or maybe it’s been a slow, sad decline.
In either scenario, it looks like she’s moving towards non-use. Which is a bad sign.
“One simple engagement metric is login regularity. If a customer doesn’t log into their account for a period of three weeks, their usage level may be declining. This is the kind of information that could prove valuable as you analyze churn rate and identify metrics that correlate with reduced engagement.” – Neil Patel
So you send her a nudge email. I hadn’t logged into Airstory for a few weeks, so they sent me this email:
This email is designed to get me to login to Airstory. Your retention nudge email should 100% have that same goal. Measure this email’s success by its click through rate.
“Update Your Card” Email
Roughly 3% of your customers’ cards will expire every month. That means 36% of payments may fail per year just due to expiring cards.
Price Intelligently found that 20-40% of your churn is actually needless. It stems from failed, expired, and delinquent credit cards. That’s huge and totally within your control.
Your easy and quick fix? Send an email prompting your user to update their card. Dropbox does this beautifully:
In this beautiful email, Dropbox tells me:
- When my subscription will expire
- What happens when my paid subscription expires
- The real-life impact of my paid subscription downgrading to free: “you will have much less space”
- Next step to fix this issue
For Former Users Only: The “Why?” Email
A few years back, when I handed in my notice, my boss said, “I wish you’d talked to me about this before. If you’d asked for some feedback, maybe we could’ve solved these issues. Then you wouldn’t have to leave.”
Oh man. It’s taken me years to figure this one out, but feedback is so important. As a SaaS company, you specialize in software as a service.
In order to provide top-notch service, you must ask for feedback. Not only from your current users, but from the ones who pulled the plug on you. I know it’s hard to approach someone after they’ve left you.
“Why do we fall?” Bruce Wayne’s dad asked his young son, lying in the bottom of a well filled with bats. “So we can learn how to pick ourselves back up.”
Your former users are a gold mine of information. They can tell you:
- What part of your app didn’t live up to their expectations
- Why your app didn’t solve their problem
- Specific ways your app failed them
- The real reason why they’re cancelling (hint: probably not the monthly fee)
- What they wanted your app to solve for them
- Who they’re switching to (and why)
How do you extract all this precious gold?
Send them an email. This has two benefits as Lianna Patch points out. The first benefit is to remind your user there’s a living, breathing human behind the words in your email.
The second benefit is threefold:
- It creates gratitude and buy-in
- It gives you super valuable voice-of-customer research to mine for your copy: this is the crazy gold ore that elevates ho-hum copy to OMG-how-do-I-buy emails
- It illuminates unexpected ways people are using your app (these ways could inform future feature developments)
All because you had the guts to ask a simple question.
3 Ways to Use this Email
1. Send a Survey
Send your very-recent former user a quick email with a survey, like Autopilot did. You can create a quick survey using Fieldboom in just a few minutes.
Make your survey very short and easy to answer. If I was optimizing this email, I’d change “60 seconds” as “60 sec” to make it feel faster.
2. Send An Open-Ended Question
When you ask open-ended questions, the answers you’ll get are astonishing. People open up, tell you things you never dreamed and start spilling their real reasons for doing stuff.
Drip sends a customer exit survey email. Because of this email, their retention — and many of their usage metrics — improved.
“Feel free to reply directly with your feedback” is my favorite part of this email. Getting on a phone call with a complete stranger to tell them why you left could be scary as hell for some users. They’d prefer the anonymity of email.
Takeaway? Consider your user’s preferences when you write this email.
3. Rate Us
This email from Active Campaign has the least amount of work and friction involved, meaning the chances of your ex-user taking the action you’re asking them to are super high.
if you’re not sending any “post-breakup” emails, send this one. It’s easy to implement. Then, once your responses start rolling in, you’ll get ideas of other questions to ask former users.
How to Plot Your Retention Emails
1. Segment Your List
The message that a hyper-engaged user needs to hear is vastly different from what a log-in-once-a-week user needs to hear. Sending them the exact same message on the same frequency is a recipe for disaster.
Lianna Patch recommends segmenting your list into three types of users:
- Super-engaged User
- “Eh, kinda engaged” User
- Outta-here User
When you segment and send each type of user a different message, you’re speaking directly to their desires. Persuasion tactics at play, y’all.
Teach your users how to use your app. It sounds simple, but it’s really powerful. When you teach someone, it takes away their fears and anxieties around using your app or screwing up.
How do you educate in your emails?
“Educational content includes everything from a detailed guide to a Snapchat story,” says Shayla Price. “And the best content answers questions from customers on concerns they may have. [Like] how can I use your product more efficiently? What features can accomplish X task?”
3. Ask Yourself Questions Like:
- What started my user on this adventure of signing up for my app?
- What are my most successful users doing? (i.e. my Aha Moment)
- What steps lead to that Aha Moment?
- How can I amplify the value in each email?
The answers will guide your retention emails’ strategy and content. Don’t miss out on that.
Send Retention Emails Your Users Desperately Want to See
Now you’re checking out your app’s retention emails — or lack thereof. But you’re wondering: how can I figure out which emails my users desperately want to read?
Dipping into your data, knowing your Aha Moment, and plotting your onboarding process answers that question.
How often is a user logging in? If they don’t log in for two or three weeks, that’s a warning flag. Remember: cancellation is preceded by a period of inactivity.
Knowing this metric is valuable, especially when you analyze churn rate and identify metrics that signal reduced engagement… and impeding cancellation.
Bring Your User’s Attention Back to App
Lianna Patch sums it up well:
“Retention is about helping your users continue to get value from you or your product. It’s about getting them back INTO your product.”
When a user is heading for inactivity, send them an triggered email to get them to sign back into your app. Remind them of the benefits of your app, how it solves their problem… or guide them towards the first, tiny step they must take to realize life-changing benefits.
Streamline the Onboarding Process
Two of the most important milestones in the life of your customer are:
- When they sign up for your product
- When they achieve their first “success” with your product
“Bad onboarding – the process by which you help a customer go from (1) to (2) – can crush your retention rate and undo all of that hard work you did to get your customers to convert in the first place. It’s your job to make that transition as fast and smooth as possible for your customer, and that’s where great onboarding comes in.” – Len Markidan, Groove
How to Streamline Your Onboarding Process:
- Create progress towards a goal
- Gamify your onboarding process like Fitbit or the Audible App does by awarding badges
- Reduce notifications
- Simplify the user experience and eliminate any user confusion
- Look for ways to reduce user frustration and annoyance
Create a killer onboarding process. Then, woo your users back to your app by sending retention emails at the right time with the right content. Remember: you’re a SaaS business. Service is in your name. And retention emails are a fantastic way to serve your users.
(Note: If you need a simple way to survey your users for feedback, Fieldboom can help. Sign up free and send your first survey in less than 5 minutes.)