For SaaS companies especially, it’s all about customer relationships. These businesses want to know how you can engage with a customer over time so they feel a sense of commitment and loyalty to your brand. SaaS companies want to turn one-time buyers into long-term subscribers. You want your customers to not only feel satisfied and loyal but also be willing to recommend your brand to others.
It’s no easy task to build meaningful, lifelong customer relationships. It’s a constant challenge to prevent your customers being lured away by competitors or churning for other reasons because they didn’t think your software provided value. You need to continually invest in customer relationships for long-term business growth and success.
The Importance of Building Customer Relationships
We’ve got three reasons that explain why building customer relationships is so important.
Increases customer lifetime value
The longer you can hold onto a relationship with a customer, the higher the customer lifetime value (CLV). Happier and more satisfied customers will spend more with your business because they will open to cross-sells and upsells. Building customer relationships means that each customer will bring in more revenue for your company.
Reduces churn
It is more likely to lead to customer churn when you fail to build a solid relationship with the customer. If a customer feels no loyalty to a commitment to your business, they are easily attracted by rival companies who might seem to offer a better service. Building relationships with your customers means showing them, day-by-day, why your company is right for them.
Earns you brand advocates
Customers who have a loyal relationship with your brand are much more likely to recommend you to family, friends, or colleagues. Customers in relationships with your brand want to share the love and make sure people they know have the same experience they have enjoyed.
10 Ways to Build Customer Relationships
1. Deliver outstanding customer support
93% of customers are likely to make repeat purchases with companies that offer great customer service. When a customer contacts your company with an issue, your support team should be ready to spring into action. Competent, friendly and efficient support agents are key to providing a great level of service that customers won’t forget in a hurry.
When you’re always there for customers, they’re more willing to stay loyal to your business because they know you’ll go the extra mile to solve their problems. If a customer encounters an issue, it’s your business’s obligation to help them overcome it so they can keep using your software for its intended purpose.
2. Personalize the customer experience
Customers hate being treated like just another number. If you want to build effective relationships you’ll need to personalize your strategy so you’re communicating with customers on their level.
For personalization to work, you’ll need to collect data about your customers to find out how they prefer to communicate, when and how they use your product, and the types of information they might be interested in.
80% of customers are more likely to buy from companies that offer a tailored experience. Showing your customers you know them is one of the best ways to build strong relationships with them.
3. Show your customers you appreciate them
There’s nothing like appreciation for customers to help strengthen your relationship with them. 91% of customers say they are more likely to do business with a company that appreciates them. The best way to show customers you appreciate them is to offer discounts to loyal customers, instead of only using them to attract new customers.
For example, you might want to send customers timely and relevant offers that correspond with their buying habits. If a customer’s subscription is up for renewal, you could incentivize them to renew with a discount that shows you value their custom. Or, you could say you’ve noticed that they’ve almost reached their usage limit on their tier, and offer them a discount to upgrade.
4. Focus on customer retention
Did you know a 5% increase in customer retention can boost profits by between 25% and 95%? And yet many companies over-emphasize customer acquisition at the cost of paying attention to their existing customers. When you develop effective customer retention strategies, you are much more able to build long-term customer relationships.
Focusing on customer retention means investing in those activities that keep customers coming back for more. For example, improving the onboarding process is one way to ensure that customer retention remains high. Another way might be making it as easy as possible to access support, ranging from self-service resources to live chat.
5. Keep offering value to your customers
Since building customer relationships is all about retaining your subscription customers, you need to give them a reason to keep renewing. For example, if you need to raise your prices but have neglected to keep developing your products for the better, many customers might see this as a reason to cancel their subscription.
Delivering value means consistently releasing new features that encourage customers to keep paying for your software. Customers who feel like they’re getting value are much less likely to churn. They’ll view your software as an indispensable part of their workflow and log into your platform regularly.
6. Solicit customer feedback and take action
Building a relationship with your customers is a two-way street. If you’re always talking at your customers without inviting them to submit their feedback, your communication style becomes a monologue rather than a conversation. Customer relationships that last will be with businesses that proactively invite customer feedback and take action.
Soliciting customer feedback doesn’t always have to be in the form of a long survey. You could conduct social media polls with your customers to get a quick answer to a question. Short surveys like the Net Promoter Score or Customer Satisfaction Score are also good ways to gather feedback in context.
7. Make sure your customers are successful
Developing a strong customer success team is a good way to foster positive customer relationships. If you just ignore your customers and don’t care about whether they are successful, this is the fastest way to lose customers. Your customer success managers (CSMs) should keep their finger on the pulse of every customer and track whether they are at risk of churn.
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Customer success contrasts the reactive model of customer support. If a customer is submitting an issue, this means your product has already failed them. Customer success anticipates potential problems and prevents them, leading to happier customers who are more likely to keep using your software product.
8. Foster a sense of empathy
No relationship can thrive without a sense of empathy for your customers. Constantly blasting them with marketing messages will drive them away because it seems like your business only cares about one thing: money. Empathy means being sensitive to the needs of customers and knowing what they want to get out of their relationship with your business.
Empathy is also important during customer support interactions where customers might be frustrated or angry. If your business treats them with empathy then you are more likely to be able to resolve the issue and make up for any inconvenience your customer has experienced at the hands of your product, resulting in happy lifelong customers.
9. Exceed customer expectations, every time
If you exceed expectations with your customers this gives them much less of a reason to go looking for an alternative. Providing customers with more than they expect is one of the surest ways to earn loyalty and give them a reason to keep purchasing from you.
For example, you can say to your customers that you respond to all emails within four hours, but if you can do it in two then you have exceeded expectations. You can promise your customers that your software has 99.99% uptime, but if you can hit 100% that’s even better.
10. Invest in the right customer success tool
One of the best ways to manage your customer relationships is through the right customer success tool. With the tool, you have a 360-degree overview of every customer that alerts your CSMs when customers are about to churn. You can track your customers’ progress with learning your software and figure out when to intervene if customers get stuck.
Customer success software means you don’t have to rely on guesswork in your customer relationships. You know exactly what customers need, when they need it, and CSMs are empowered to provide the appropriate help.
Wrapping up
SaaS companies must learn how to build lifelong relationships with their customers if they are to continue to experience true business growth. Investing in customers over the long-term has a measurable impact on churn and customer lifetime value, driving increased revenue and lowering customer acquisition costs.
Strengthening your relationship with customers means they are more likely to keep renewing their subscriptions and recommending your product to others. It’s important to remember that relationships are between people, and it will be largely up to your customer-facing teams to drive customer relationships forward.
