How to Increase The Lifetime Value (LTV) of Your SaaS Customers

You have a SaaS product. The hardest part is getting people to subscribe. But once they subscribe, wouldn’t you love
to keep them forever? Hey, everyone, I’m Neil Patel. Today, I’m going to teach you how to increase
the lifetime value of your customers. The first step is optimizing the onboarding
experience. Anytime someone buys your SaaS product or
more so subscribes to it, you need to optimize the onboarding. Whether it’s a free trial or you’re going
right directly into the paid version, you need to optimize the onboarding. The onboarding is right when they get started. If they get onboard and they start using it
right away, you’re off to the races and you’re doing an amazing job. On the flip side, when someone buys your product
and they’re subscribing right away but they don’t use it for the first week, what’s going
to happen? They’re probably going to cancel after a few
months and your lifetime value of your customers are going to start decreasing. You need to make sure they’re onboarded right
away and they’re using it. You could follow up by email, you could track
your onboarding experience, you could add chat, you can look at what people are doing
and do more of the things that make people happy and do less of the things that are confusing
people on the onboarding experiences. You can use tools like Crazy Egg to watch
your onboarding experience and see how people are navigating it, so you can optimize it,
right? In other words, what you need to do is look
to see what people are doing, who are getting all the way through and look at all the people
who aren’t getting all the way through and see where they’re getting stuck. Based on that, you can fix it. The second thing you need to look at is how
often are people logging in. If they’re not logging in often, they’re not
using your SaaS subscription product, that means they’re probably going to churn. Usage causes a higher LTV, non-usage causes
a lower LTV. Send email reminders, send reports, send text
messages, get them engaged. A good way to get them engaged other than
sending reminders is by continually fixing your product. The way you fix it, which gets into the third
way, is by surveying people. Survey your users. Find out what they love, what they hate, and
what you can improve upon. Don’t just take their word for it, look at
what they’re using within your application that’s getting them results. Talk to them on the phone, don’t be shy. Words only tell you a limited amount of stuff. Talking to people, watching them, seeing that
whole interaction will really help you create a better product. The true way to optimize for a higher LTV,
it really does come down to the product. A shit product is going to have a shit LTV. A great product is going to have amazing LTV. Look at Slack. My team loves Slack. I am not a big slack user. I know so many things wrong with a Slack website,
but yet they have amazing LTV because people love their product. Sure, you still want to do the first two methods
that I talked about, but in reality, you also mainly want to focus on creating an amazing
product. That’s how you create a higher LTV.


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