The hard truth is that your SaaS company is unsustainable albania telemarketing without a good customer renewal rate. Poor customer renewal rates can come from various problems, such as an ineffective pricing strategy and unsatisfactory customer experience. But keep in mind that in financial services, a 5% increase in customer retention produces more than a 25% increase in profit. It’s time to admit the truth. Customers renews matter. Successful SaaS businesses know very well that because customer acquisition costs are high, instead of focusing on boosting the customer growth rate, the solution is to ensure customer satisfaction and increase contract value. This means tracking the gross renewal rate and improving the SaaS renewal process.
A healthy SaaS renewal rate is considered above 80%, with successful SaaS companies averaging a renewal rate of 90%, or even over 100%, typically because their existing customers are buying upgrades, upsells, and cross-sells.
To better understand what we are talking about, we’ve put together some simple techniques to boost your SaaS renewal rates and your recurring revenue.
So what exactly is a Customer Renewal Rate?
Customer renewal rate comes from a part of the greater category of customer retention. SaaS renewal measures the percentage of customers who renew their subscriptions at the end of a subscription period rather than leaving. These customers are choosing, manually or automatically, to continue paying and receiving value from your product. Customer renewal rates, therefore, demonstrate the success of the customer experience, your product, and your business. If the rate is high, the company will more likely to retain customers over the long term and bring long-term revenue.
