Strategies for increasing SaaS and ISV user engagement
Last time we looked at SaaS and ISV business growth we examined user growth – the core element for success in these businesses. But there is another element to growth that can be just as important – increasing user engagement. If your customers use your platform more frequently that in turn drives up overall usage and in the end, revenue. Plus you pick up all kinds of secondary benefits around brand and brand image that will help with other aspects of growth.
Driving user engagement is a more complex topic and not one that typically lends itself to instant results because it is also intimately connected to your product and product development. But that doesn’t mean you should shy away from it. We’ve dug up a series of the best evergreen articles on user engagement and how to grow it.
The first step to increasing user engagement is understanding who your users are and how they are acting. The Amplitude Blog has a great piece on best practices for understanding who your active users are – the ones actually using your platform – and they do that by showing you how to find your DAU (Daily Active Users) and then looking at what they are doing. “The key to successful analysis of active users is to be clear on what DAU means to you. Different companies define it in different ways.”
The next step is to break these active users into different groups based on their demographics and behavior – since it is unlikely that your users all think and act alike. This is a process called cohort analysis. The Nickelled blog takes a thorough look at cohort analysis for a range of business types. This piece is a chapter specifically on SaaS cohort analysis but it has links to their other articles on cohort analysis. “Calculating the activity of groups of users over time is the most common application you’ll see for cohort analysis in the SaaS world, because it’s much, much more accurate than any other way you might do it.”
Before you take action on what you have discovered about your users and their activity it makes sense to also look at what the standards and benchmarks are for user engagement for a SaaS or ISV business. Hackernoon has an article from Mixpanel, the data analysis company, about what they learned for SaaS businesses from analyzing the aggregate data from billions of user events across all their customers. The following is a typical insight: “As such, product managers should consider launching features on Monday or Tuesday when overall engagement peaks.”
One area for improving engagement is to specifically look at increasing usage by existing customers. Quora (a surprisingly consistent good source of information and answers for SaaS businesses) has several answers to the question here. Of course, an alternative approach is to dive right in and try to increase engagement right away with new customers. Pressfarm takes a look at this scenario and offers some practical suggestions. “Higher signup rates and lower numbers of daily users continue to press even some of the most accomplished startups in the market.”
In addition to specialized approaches, specific advice on engagement growth tactics can be invaluable. Deborah Preston from 2Checkout has some advice on three tactics to communicate value to users in order to increase engagement. “Potential customers will always believe their peers more than your top-down messages, which brings us full-circle: to communicate your software’s value and engage your customers, you need to leverage your existing customers.”
The SevenAtoms blog takes a look at seven specific strategies to improve engagement, things like triggered messaging or offering free training. “In the end, it’s important to remember that engagement = retention. If people aren’t using your platform, it could be because they are not engaged. It’s essential that SaaS marketers try out different user engagement strategies to find the most effective tactics for improving customer retention.”
The pickSaaS blog takes a look at ten basic strategies to improve customer engagement. Several of these are pretty obvious and you should already be doing them but pretty much any SaaS business should find at least one thing to work on here. “Nothing is more engaging than contact in person – organize meetups, networking events and conferences to show your customers you’re approachable and let them take an active part in joining your mission.”
For some even more specific advice, including sample customer scripts, the Founder Institute has a guest post from NinjaOutreach on four approaches to take to increase customer engagement. “Retention is best achieved proactively as opposed to reactively, that is, don’t wait until the customer churns off to engage with them. We use our usage data to identify when a customer hasn’t used the software in a while as an opportunity to re-engage them.”
For some very modern approaches, the Appcues blog wrote about its ten best customer engagement strategies for 2018. It’s got some great ideas covering the gamut from support to product. “No matter what stage your company is in, you should have a well practiced process for customer development. Because no matter how large you get, there are always feature requests that need to be scoped and customer pain points that need to be addressed.”
Neil Patel, recognized as a top digital marketer, has a piece on the Crazy Egg blog on 27 different customer retention strategies that SaaS businesses should be using. “Existing customers are where the big spending happens. According to Groove, there’s a 5-20% chance of selling to a new prospect. What about your existing customers? You have a 60-70% chance of a successful sale.”
Finally, let’s take a look at engagement from the opposite direction. The Evergage blog has a look at the top five barriers to customer retention. “Acquisition costs, customer churn rates and the profitability of your organization depend on how well you can provide value to the relationship and tear down the barriers to SaaS customer engagement.”