Attention, SaaS companies: It’s officially time to brace for impact. According to Statista, even the best-case COVID-19 scenarios are expected to leave a $76 billion hole in the U.S. GDP. Worse yet, even after businesses dig themselves out, the Congressional Budget Office (CBO) expects economic damage to be in the trillions throughout the next decade.
Ready for more bad news? SaaS companies are especially vulnerable to churn whenever the economy sours.
However, you don’t need to freak out just yet. There’s plenty of hope on the horizon for SaaS companies. With the right marketing strategies, SaaS companies can retain — and even increase — their customer base during the current recession. Read on to find out how.
Why SaaS Companies Need to Reduce Recession Churn
What’s the big deal with churn? According to a CallMiner study, avoidable customer churn has cost companies a whopping $136 billion in a single year. Unfortunately, SaaS companies are hit even harder. Here’s why:
- SaaS relies on subscriptions: SaaS companies often rely on subscriptions or other payment models that take time to produce profit. That means losing customers early on can directly hurt a SaaS company’s bottom line.
- Profit is growth-centered: SaaS usually requires a steady flow of customers and ongoing growth in order to come out ahead.
- SaaS feeds off of a customer base: For most SaaS companies, success relies on upgrades, upsells, and additional revenue from existing customers. When customers leave, the company misses out on those revenue boosts and is left to build a customer base from scratch.
As grim as all of this sounds, there’s no need to panic if you’re running marketing for a SaaS company. You can recession-proof your company by using the right marketing tactics.
Here’s how to use marketing to minimize customer churn during a recession:
1. Re-Evaluate Your Marketing Strategy
I know it’s easy to panic when people start leaving, but a better strategy is to pause, take a deep breath, and examine your marketing plan. Taking a minute to reflect on your marketing campaigns during a crisis does two things:
- It helps you avoid PR problems: By viewing campaigns in the context of the crisis, you can avoid PR nightmares and tone-deaf moments that turn off customers.
- It puts your strategy in a new context: By taking a minute to review marketing now, you’ll have a chance to realign your strategy with the current climate. Consumers act differently in a recession, so your marketing strategy should meet their shifting needs and preferences.
As you pause and reflect, make sure your current customers aren’t left wondering about your next move. It’s important to reach out to reassure them that you have a plan and they’re a big part of it.
2. Repurpose Your Existing Content
The SaaS marketing teams that do more with less will come out of the recession miles ahead of those who don’t.
Start by running a content audit and evaluating the content you currently have. Once you know what raw materials are on hand, start rebuilding. Repurpose webinars, podcasts, and premium content. Have old interviews in the can? Build Q&A blogs. Have a stash of blogs that touch on a similar topic? Tweak the content to create an informative e-book or pillar page that ups your site’s SEO.
In addition to repurposing content, it’s worth rethinking how you’re using current pieces. For instance, your webinars may have been designed solely to attract new leads. That’s great, but they can accomplish much more.
Consider using webinars to invite customers to upskill on your platform or expand skills to their new team members. In many instances, SaaS customers churn because a single internal champion leaves. By turning your current customers into experts, you create more advanced users and lower the chances of losing crucial customers.
3. Create Content that Focuses on Education
During a recession, people may be indoors sitting on their wallets. That doesn’t mean they’ve disappeared altogether, though; they still want to learn, grow, and prepare for their futures.
Give the people (and employers) what they want.
By creating content that educates visitors, SaaS companies can explain how a complicated product works, show how customers can use a product, and unveil the new possibilities your products create. At the same time, the more you educate them, the more customers will trust your brand and recommend it to others.
4. Give Customers More Value and Attention
Unsurprisingly, you can use that last “S” in SaaS, “service,” to carry your company through an economic downturn. How? Start by getting to know your buyer personas. Conduct interviews and pin down those pain points that make their day difficult. From there, build useful content that answers their questions and makes life easier for them.
But don’t stop there. Before your most loyal customers return to their busy lives, ask them to review your company online. Online reviews are as good as gold for SaaS marketers. In fact, one Podium study found that online reviews impact the purchasing decisions of 93 percent of consumers. That makes positive reviews a powerful way to bring in new customers.
Better yet, beyond providing a public endorsement, the conversations you have with clients about reviews drive all parts of the flywheel. They give you a chance to connect one-on-one with the customer. Interviews show customers their voices are important, and they provide your company with valuable feedback to work with.
5. Hone in on High-ROI Tools
Now’s the time to run through your marketing plan with a fine-toothed comb. And it’s the perfect time to save capital on premium marketing tools. For instance, Statista found Facebook cost per click (CPC) ads fell by three cents in the three months following the initial COVID-19 outbreak in the U.S. That means now could be the perfect time for SaaS marketers to scoop up paid ads and beef up their web presence.
At the same time, make sure you’re using those free social media channels that fit your business. In many cases, these vehicles can carry your content directly to those customers who want your product the most.
6. Adjust Marketing Plans for the Future
Let’s face it: We’re entering uncharted waters. Many SaaS companies will need to roll with the punches and tweak their marketing plans to fit the current situation; that uncertainty will be uncomfortable. Still, there are some solid tactics to help you secure a quality plan going forward. Use these tips to chart your future marketing plans:
- Diversify revenue: The more you’re able to diversify your revenue streams, the more options you’ll have if one of those streams becomes dammed up.
- Let data dictate decisions: Traffic and analytics should be the engines that power your spending decisions. Dig into your analytics and see what’s working and what isn’t. It may be worth cutting back on those channels that aren’t performing and ramping up the ones that are paying off.
- Tap new markets: By focusing on stronger SEO, you can reach global audiences and clients you otherwise would be missing. It’s advantageous to pause and make sure your SEO strategy is allowing your company to meet all of the customers you value. Do keyword research, build content around long-tail searches, and enrich your content. By boosting your site’s SEO, you’ll be able to reach more people where they spend most of their time during a recession: at home on their devices.
Put Your Marketing Plan in Motion
The immediate road ahead for SaaS companies may be a bumpy one, but you don’t have to let the ruts in the path toward success wreck your operation. By embracing the right marketing strategies, you can adjust, focus, and steer your team past this economic recession — and into years of higher profit.