The Best Growth Hack for SaaS Products in 2019
Retention is one of the most important metrics for sustainable growth for SaaS companies. Because the business model of SaaS is on subscription the business model, you have to sell your product every month, not just once. And to make sure that you keep getting payment from your customers each month, you have to make sure that they are using your product and keep getting value from it with every new feature.
As a SaaS marketer myself, I used to read articles a whole day with titles such as “1 Golden Facebook Hack to Increase Your Traffic bt 590%!!” or “This TWO AMAZING SEO HACKS Will Increase Your Organic Traffic by 90% in 20 Days!!” to find some growth hacks. But you know what I’ve learned after years?
Keeping your subscribers have much more effect for your revenue than getting new ones.
Do you want more proof? Alright, don’t mind me, let’s get you some real numbers.
Fact #1 – The top SaaS companies have very high retention rate
Fast-growing companies that are trying to reach product-market fit has 20% 8-week retention rate while the top SaaS companies have around 38%. The difference comes from the well-designed onboarding process in the first week.
(source: Mixpanel’s article What’s A Good Retention Rate | Topics | Mixpanel)
Fact #2 – Increasing retention boosts your revenue more than user acquisition
There is a great article by Price Intelligently that in a nutshell tells that;
- 1% increase in customer acquisition (by increasing lead volume or conversion rate) affects your bottom line by 3%.
- 1% improvement in monetization (increasing your ARPU by 1%) affects your bottom line by 13%.
- 1% improvement in your retention (by lowering your gross churn by 1%) affect your bottom line by 7%.
You see, retention can be twice as powerful as customer acquisition and most of the growth hackers solely working on new channels, new advertising hacks, conversion hacks etc.
Solution: Boost your retention with better user onboarding
With a better onboarding process, you let your users see the core value of your product much quicker. Because the onboarding is a continuous work, you increase product adoption with onboarding every new feature of your SaaS product.
While you are working on your onboarding process, there are a few things you should consider to make it successful. If you need more tips on your onboarding, feel free to check out our blog post: 10 User Onboarding Tips for Ultimate Success – UserGuiding Blog
- Users should be able to reach onboarding guides on-demand
You don’t know when a user needs help. Immediate pop up when a user visit a webpage is generally considered to be a bad thing. Instead, your onboarding should have an option to help users when they need.
- Segmentation & custom attributes
When it comes to user onboarding, one size does not fit all. A user might have a different native language, might have a different traffic source, might be a different type of user in your websites with different permissions.
Your onboarding flows should be different and each should work for the corresponding segment of users.
How can you improve something if you don’t count it? For SaaS products, onboarding guides’ completion rates give you a great insight to see the effect of the onboarding process, and where you still have room to make improvements for your UX.