7 SaaS Retention Strategies You Can Implement Today

  • Written by Cheryl Regan

In my previous article, How to Grow your SaaS Business, I focused on customer acquisition, so in this post, I wanted to talk about customer retention and how vital it is to the healthy growth of your SaaS.

Because welcoming new customers onto your platform or service will only help you grow if your previous customers aren’t trickling away. Unfortunately, customer churn is the weak spot of many new SaaS companies.

In this post, I’ll highlight 7 SaaS customer retention strategies that you can implement today. I’ll also include some simple formulas to help you calculate and observe key SaaS metrics.

In this article, we’ll take a look at the following:

  • Customer Churn
  • Customer Retention
  • 7 Customer Retention Strategies
  • How to Calculate Retention Rate

Customer Churn Rate

Customer churn is the rate at which customers are cancelling their subscriptions (both voluntarily and involuntarily) over a set time period, usually monthly, quarterly, or annually.

According to froged, losing up to 5.9% of your customers annually is acceptable, while any more than that, and you’ll start to feel the negative effects, especially if you aren’t keeping on top of acquisition. It is normal for small to medium-sized businesses to experience higher customer churn rates, especially when they’re still optimising their product or service to be the best it can be.

But if your user churn is outpacing your customer acquisition, or in other words if customers are cancelling their subscriptions and leaving your platform at a faster rate than you can gain new customers, you’ll begin to run into serious problems. Things get worse if your customer acquisition cost (CAC) is higher than your customer lifetime value (LTV).

Churn represents a hole in your funnel, and no matter how quick you push new customers through, if you don’t control the flow of customers leaving, you won’t be able to grow.

Customer Retention Rate

Retention rate is the opposite of churn in that it measures the number of customers who renewed their subscription over a set period. By retaining customers, you increase their LTV.

And here’s the good news: customer retention efforts can cost up to 5% less than customer acquisition. In fact, according to a study by Bain & Company, a 5% increase in retention can result in boosting your profits by up to 95%.

Your current customers have already signed up – they’re already sold. You just need to keep them coming back. Furthermore, it’s proven that current customers are willing to spend more money on your products, so putting more effort into retention is only logical.

So, how do you increase your customer retention? I’m glad you asked!

7 Customer Retention Strategies You Can Implement Today

There’s no secret formula for success when it comes to reducing churn because every company will have its own strengths and weaknesses. One of the most powerful ways to increase customer retention is to gather as much feedback from existing users and use that feedback to implement meaningful changes to your product.

That said, here are some universal tried and tested strategies that you can implement today.

  • Continuous Onboarding
  • Guided User Experience
  • Build Brand Loyalty
  • Create A Community
  • Regular Updates & Improved Security
  • Offer Excellent Customer Support
  • Utilise Exit Surveys

1. Continuous Onboarding

Customer onboarding is essential for getting new users up to speed with what your product can offer them. But it shouldn’t stop when the customer reaches the activation stage of their journey or even the following week.

Make use of continuous onboarding to help your users discover new features and foster habits that’ll lead to their success, and don’t forget to make the journey fun with gamification features like badges, progress bars, and more.

Create new onboarding goals for your customers to reach, eventually leading them to upgrade and become brand advocates and ambassadors.

2. Guided User Experience

Early churn happens when new users of a piece of software are not familiar with how to use it end up feeling overwhelmed. By not receiving enough support in order to experience the core product values, they end up leaving because they perceive it as too complicated, and costly (timewise).

Using hints, tips, and checklists, you can avoid this early churn by guiding your customers through their journey until they’ve discovered its value for themselves.

But don’t stop there! Guided user experiences are an important part of onboarding, and once your users have reached one goal, you can introduce new ones.

3. Build Brand Loyalty

Consider starting a loyalty program and rewarding repeat customers. They could be discounts, free products, or temporary upgrades – whatever works for your SaaS. Make sure your customers value the rewards you give.

By building brand loyalty, not only will your customers be less likely to leave, but they’ll also sing your praises through channels such as social media, and likely convert new users to your service.

4. Create A Community

Create a subscriber-only community where your users can interact with company employees and other users to ask for support, share feedback, and even share all the progress they’ve made using your SaaS.

Fostering the growth of a helpful community will further build brand loyalty, reducing the chances of churn.

Help your users feel appreciated and heard by communicating with them directly through an exclusive forum, keeping them updated, and helping them feel heard. Remember to show some of your personality to keep your customers engaged, and don’t forget to ask for their opinions, maybe even use polls.

5. Regular Updates & Improved Security

Updating your software regularly will show your current users that they are investing in a service that has not been abandoned. Security is increasingly important to anyone who uses the internet, and by reassuring customers that their data and work are secure, you’re more likely to keep them.

6. Offer Excellent Customer Support

If you’ve ever been in a situation where a product that you’ve paid for stops working, you’ll know how important it is to provide excellent customer support. Create multiple channels for your users to be able to reach out with their problems and try to acknowledge them with a reference number automatically so that they know their ticket has been received.

Get back to your users with helpful answers as quickly as you can, and if you haven’t got an answer for them yet, communicate and let them know you’re still working on it.

7. Utilise Exit Surveys

I briefly touched on the importance of gathering feedback from exiting users earlier, and exit surveys are one of the best ways to make it happen. Aside from showing the customers who are leaving that their opinion matters, you can also use the opportunity to remind them of features that they’d stop having access to, or other features they may not have realised existed.

You can also offer the option for your users to downgrade instead of cancelling or even give them the chance to pause their account, making their return to your SaaS frictionless and therefore more likely.

Formula For Calculating Customer Retention

To calculate customer retention, decide on the period you want to measure the statistics for, then:

  1. Determine the number of existing users at the start of the period.
  2. Determine the number of new users who joined during the period.
  3. Determine the number of users at the end of the period.

Once you have these figures, you just need to divide the number of users at the end of the period (minus the number of new users) by the number of users at the start of the period and multiply the result by 100.

The formula for Retention rate:

\[{e – n \over s} * 100\]

e : Number of users at the end of the period.
n : Number of new users during the period.
s : Number of users at the start of the period.


Customer retention is vital to growing your SaaS, and the key to successful retention is understanding the strengths and weaknesses of your service, whether it’s the product itself, or the onboarding process. By implementing the above strategies, you can ensure that your users get to grips with your SaaS in an engaging way that does not frustrate, and thereby decrease the chance of cancellations.

Be it a guided user experience, community interaction, or a perfectly worded exit survey, if you find yourself staring at a blank screen, unsure of what to write, you’ve come to the right place! As an experienced copywriter, finding the right words for each scenario is not only my job, it’s my passion. Get in touch today for a free consultation!