Article summary: In this post, we outline tactics SaaS companies can use to create a digital experience that will give them an edge over the competition. All data presented is from FullStory's original research, The State of Digital Experience 2020: Mapping a Path to Digital Experience Maturity.
Software-as-a-Service (SaaS) companies depend heavily on customer retention. For most SaaS businesses, the focus on earning loyalty from existing customers is just as important as bringing in new ones.
It’s been widely noted that acquiring a new customer can be anywhere from five to 25 times more expensive than retaining an existing one. By those numbers, even a small reduction in churn percentage can serve to greatly increase a company’s revenue over time. In fact, research conducted by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by just five percent can increase profits by 25 percent to 95 percent.
Retaining existing customers is even more critical today given many budget shrinkages triggered by the global pandemic. SaaS teams may not have the budget required to invest in new features or products that could attract new clients, making customer retention even more critical.
To help safeguard customer retention, successful SaaS companies are putting more emphasis on the digital customer experience. This experience is about each customer’s perception of a company, brand and product, based on all the digital interactions the customer has with the company across every channel and device.
Today, offering a great digital experience (DX) is nearly synonymous with remaining competitive in your space. PWC found that 32 percent of the people they polled would stop doing business with a brand or company they’d previously loved after just one bad experience. For SaaS companies, a great DX strategy can help pave the way to meeting customers’ needs and expectations, and create a competitive advantage that drives customer retention over time.
So what actions can SaaS DX pros take to achieve greater digital experience maturity? Below, we outline research-backed guidelines to help you drive long-term DX success.
Use technology to proactively surface and reduce DX friction
To make confident digital experience decisions—for example, which product fixes or improvements to prioritize—your organization needs a complete view of the customer’s digital experience.
Our research shows that fewer than half (46 percent) of digital experience professionals have full visibility into causes of user frustration. More mature organizations are much more likely (146 percent) to “agree” or “strongly agree” that they have full visibility into sources of digital user friction and frustration than less mature organizations.
And it’s not only the numbers that are important, but the context behind them–and because SaaS companies can’t rely on face-to-face customer interactions, they have to go the extra mile to gain that context.
As a DX pro, you may have access to oodles of quantitative data, but you need to add qualitative data as well in order to validate your hypotheses and assumptions. This combination gives you the ability to understand both what users are doing on your site or app and why they’re doing it. An effective tech stack will proactively surface where issues lie in the customer journey, the scale of those issues, and what’s causing them. Then, you need to be proactive in addressing those DX challenges.
If your team’s budget has been tightened over the past year, you will also need to find ways to access this data efficiently with fewer resources, which means tools that lower the barrier to entry are key. Leveraging tools like FullStory that can capture and analyze both quantitative and qualitative DX data is a great way to save time and money while creating a better digital experience for your users.
You also want to ensure the tech you’re using can provide deep, actionable insights. It’s one thing to see that there’s an issue, but how do you determine how significant that problem is? How do you decide how many resources to dedicate to it?
Your tech stack should simultaneously highlight where issues happen along the customer’s journey, the impact of those issues at scale, and the root causes of those issues. Source technologies that automatically surface your most important opportunities for improvement and proactively point you toward a course of action.
In short, look for technologies that:
Provide a complete view of the customer’s digital experience
Speak to each other and integrate seamlessly
Innovate and improve constantly to better solve the problem they solve
Are easy to use and access, facilitating the dissemination of key customer insights
Make DX a team effort
To get a clear view of the digital experience, take a step back from traditional product development and consider other areas of the company. Our research revealed that more mature digital experience organizations are 68 percent more likely to report that they structure teams cross-functionally.
When it comes to improving the customer’s digital experience, cross-functional teams can be beneficial for many reasons. Because they are often organized around a specific mission—improving a particular customer journey or product experience, for example—the customer’s experience is more likely to be at the forefront.
And because cross-functional teams bring together individual contributors with a variety of necessary skills sets, they can move quickly from insight to customer value. A team structured in this way can lead to improved decision-making, creative problem-solving, and a de-siloing of relevant information.
Fix DX problems quickly
For SaaS companies, knowing that a digital customer experience issue exists is only half the battle. The next crucial step is creating a process to prioritize fixes for found issues. According to our research, more mature digital experience organizations are more likely to report being able to easily prioritize digital fixes and improvements and quickly ship digital fixes and improvements.
In fact, 78 percent of more mature organizations report that they are currently able to quickly ship fixes and features based on customer learnings, compared to just 35 percent of less mature organizations. That’s important, because the longer it takes to fix a customer’s problem, the more likely they are to turn to one of your competitors for their software needs.
Develop and foster customer empathy
To deliver a more perfect digital experience, you need to develop customer empathy. There are many ways to do this, such as speaking directly with customers, observing customers as they try to use your products, reading customer reviews and feedback, and more.
The key is to achieve customer empathy at scale–to make it an organizational habit to ‘walk a mile in your customers’ shoes. The ability to understand the “why” behind customer frustration is vital to creating customer empathy–and delivering delightful digital experiences.
Because SaaS companies exist online by nature, it’s even more crucial for you to seek out ways to get up close to the customer journey.
The right technologies can support you here as well. Organizations that report being able to “always” or “often” deliver a great digital experience are 47 percent more likely to report that they can easily understand why their users are feeling frustrated within their digital experience.
The closer individuals at your organization can get to the customer experience, the more easily they’ll be able to empathize with customers’ struggles and needs. This is an area where a platform that offers session replay can come in handy–and save time. Watching real users navigate (or struggle to navigate) your site or app is a great way for non-customer facing team members to see and empathize with how users are feeling.
Ultimately, reducing customer churn should be at the top of the agenda for any business, but it’s especially important for SaaS companies. Competition is fierce and just a click away. Prioritizing the digital experience can create loyal customers and, even better, customer advocates. Organizations that stay focused on the person behind the digital interaction are not only able to deliver better digital experiences, they are also more profitable in the long run.
FullStory helps your organization raise the bar on digital experience maturity. Request a demo today.