Why Relationship Management is Critical to Subscription and SaaS Businesses
The SaaS and subscription marketplace is becoming increasingly crowded, with startups and competitors appearing on a regular basis. Although there are several areas you can focus on to stand out from the crowd and boost customer engagement, one of the most powerful is customer relationship management.
We’ll explore what customer relationship management is, why it matters to your subscription business, and how you can use it as a competitive advantage.
What is Customer Relationship Management?
Customer relationship management (CRM) is the process of communicating and engaging with your customers. This can be on a one-to-one or one-to-many basis. CRM should happen throughout the lifecycle of a customer’s involvement with your business: from initial interest, throughout their use of your products and services, to the renewal at the end of their term as a customer, and to expansion of use and cross-sell to other products and business units.
CRM is a cross-functional activity that happens across marketing, sales, customer service, and any other department that interacts with customers. Examples of customer interaction include:
- Publication of content designed to inform, influence, or engage with customers.
- Initial contact with a customer once they’ve shown interest in your products or services.
- Engagement throughout the sales funnel and sales pipeline.
- Post-sales interactions, normally through your customer success team.
- Managing incidents and communications through customer service.
CRM can be proactively driven by your business or a reactive response to a customer inquiry or issue. You would normally manage and track all of these interactions through a CRM tool.
Why Does Customer Relationship Management Matter?
CRM provides a number of advantages to your SaaS or subscription business.
Customer Relationship Management Builds Trust with Customers
If there’s one thing in short supply for many businesses, it’s trust. You need to build up loyalty in your customer base by not only listening, but by providing regular communications. When you share content, use it to ask customers about their needs, communicate new features, or simply keep in touch. By doing so, you’re letting them know you’re accessible, reliable, communicative, and caring.
Customer Relationship Management Reminds Customers About Your Business
Your customers have so many things to do, it’s easy for them to forget the existence of your business, even when they’re actively using your tools. You can remedy that through proactive communication, which includes picking up the phone or connecting in a personal way. Reminding your customers of who you are and what you do, is another way to build trust. They may even come back to you for cross-selling or upselling opportunities.
Customer Relationship Management Can Share the Features and Benefits Your Product Provides
Most customers probably don’t use the full potential of your tools and services. Proactive communication is a great way to highlight new features and benefits.
Customer Relationship Management Can Reduce the Pain of Incidents
Every product or service will fail—or fall short—at some point. You can reduce the negative consequences of lack of functionality, downtime, or other incidents through good communications with your clients. Keeping them notified of timescales and fixes, and follow-ups after the fact, can all help reduce the impact of unavoidable issues.
How Does Customer Relationship Management Influence SaaS Customer Success?
One area that we’ve talked about before is “Customer Success”—the proactive things you can do to ensure your products and services meet the needs of your clients. CRM is central to customer success. Asking your clients what they need, providing guides and tutorials, and following up with useful features, are things you can do to enhance customer success.
As customer success is a key factor in increasing lifetime value, enhancing customer retention, and reducing churn rate, we believe it should be a top priority for every SaaS business. You can use it to promote customer advocacy, build long-term value for customers, and to help prevent subscription lapses.
How to Enhance Customer Relationship Management in Your Subscription Business
Now you know all of the great reasons to enhance relationship management in your business, the key question is, “How?” Fortunately, we have the answers.
Get an Effective CRM System in Place
When it comes to relationship management, technology is your friend. The right CRM system is critical to getting all of your touchpoints and interactions right. In particular, you’ll want an easy-to-use CRM system that’s built for subscription and SaaS businesses, with features aimed at normal contact, customer success, and customer service.
Use the Same CRM System Across the Whole Business
Every time you interact with clients, you want a complete picture of all their experiences with your business. That means you need to use the same CRM system across every function—or at least have one that integrates with other function-specific systems and can provide a copy of notes and communications. The most critical areas to link together in your CRM are:
- Marketing to show how you’re reaching out to customers.
- Sales and onboarding to bring customers into the business.
- Customer success to highlight how your product can solve customer problems.
- Customer service to deal with incidents and problems.
- Customer retention to stop people from abandoning their subscriptions.
Develop a Communications Strategy and Schedule
CRM depends on proactive communications. That means you should create a schedule of interactions with customers together with appropriate messaging. For example, you can:
- Ask marketing to report the successes of promotional activities into the tool, so you can track acquisition and ROI.
- Get your sales team to schedule a demo within X days of a customer’s initial interest in your subscription product.
- Require your customer success team to contact the client at certain points, together with the media and messages they can share.
- Increase customer interaction at a certain period before subscriptions lapse, to ensure your clients have a positive view of your products and services.
You’ll also want to think about the right communications channels for each interaction. Do your customers prefer email, direct message, a phone call, or something else?
Invest in Customer Relationship Management Training and Resources
Although a certain amount of relationship management depends on an innate attitude and approach, other skills can be taught. Invest in good relationship management training for all of your customer-facing staff. You should also provide easily accessible resources so there’s a relationship management knowledge base of best practices that employees can use at every touchpoint.
Ask Customers What They Need
Every client is different and will have diverse requirements from your products. That’s why you should build up a complete picture of individual or business challenges and needs. This should then feed into your customer success team with product-specific priorities being captured in a product roadmap. You should also find out who the key stakeholders are in their business, and how people want to be communicated with.
These are just starting points for customer interactions. The right CRM tool, supported by people skilled in relationship management, will help you stand out from your competitors, win more customers, and grow your subscription business.