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SaaS Customer Lifecycle

SaaS customer lifecycle is unique because of the nature of its product. You need to keep your customers engaged and satisfied in order for them to buy your service on a monthly or yearly basis. On top of that, when you add competitiveness and constant shift and changes to which the SaaS market is susceptible you get one perplexed and knotty customer lifecycle.

Saas customer lifecycle stages for growth consist of three major phases: the acquisition, engagement, and retention of your customers. Each of these phases, we can further subdivide into three smaller and specific subphases. All of them represent high-level customer lifecycle touchpoints. They affect the entire customer journey and experience.   

  • SaaS customer lifecycle = acquisition + engagement + retention 

It’s a huge challenge to be better against the high-quality competition, and at the same time to prove your value to customers every month or so. To make this thorny path a little bit more bearable we will quickly review all the stages of the SaaS customer lifecycle.

Acquisition

SaaS subscription customer lifecycle begins with the acquisition. During the first stage, customers are researching and trying to find solutions for their dire problems. So they represent potential customers who need to be persuaded by you that your product is the right fit for them. Don’t go all crazy on them, minimal but helpful insights on how your product works and practical benefits for them is a way to go. Bombarding them with all kinds of information and features you have is only going to confuse them.

As we satiated above, every single phase can be divided into three smaller stages: awareness, consideration, qualification. 

Basically, the very first stage of the SaaS customer lifecycle is their realization that they need help. They become aware of the problem and then they start actively searching for solutions. This is where they first come in contact with your product either through reading posts on blogs or social media or via some articles.

Now that they become aware of different solutions, they will start to consider using them (hopefully you’re among others).

They narrow their focus on only a few options. In the qualification phase, the first communication with your potential customer begins.

  • Acquisition = awareness + consideration + qualification

Engagement

By far, the most important stages for your SaaS business success are engagement stages. This is where the customer is at the final stage of their decision-making process. The job of your customer lifecycle management team here is to convince potential buyers that you are the right solution. Evaluation is the first step in the engagement process. For the last time, the customer is assessing whether or not your product will meet their needs. 

Soon after evaluation comes in the next two stages. The first one would be paying the first step into the customer journey. Then, of course, the first usage of your product.

  • Engagement = evaluation + payment + activision

Retention

The goal in the last major stage is to turn your newly-signed customers into the long-term ones. 

  • Retention = expansion + renewal + referral

Only if customers see concrete improvements in their life can you expect to retain them, and by doing so, you keep your revenue intact and you’re improving your churn rate at the same time. Customer success is an absolute necessity for your SaaS growth. 

If you prove your value to them, not only will they renew, but they may also tell their friends about your product.