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5 Tips On How to Build SaaS Customer Loyalty with Email Marketing

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Experts agree, and the numbers show that profitability is all about creating loyal customers and driving repeat business. Especially for the SaaS industry, repeat business is the primary driver of revenue, as a single sale has a finite lifetime, whereas renewed subscriptions to the software are indefinite.

In fact, according to a recent article it is five times less expensive to sell to an existing customer than it is to acquire a new one, and the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20% (according to the same source, Invespcro). The value of customer loyalty and repeat business is impossible to ignore.

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Building customer loyalty in the SaaS world is all about the right communication. You need to nurture your customers over time by communicating with them through content that matches their needs and interests. It is without a question that the brand should always keep in touch with their customers to make sure that the particular SaaS company remains at the forefront of the customer’s professional life – that they cannot work as well without it.

Statistics show that it takes about six to seven contact efforts before you can turn a prospect into a customer. This contact process can be expensive and time-consuming, so this is where email marketing becomes a critical part of your SaaS marketing efforts.

Why is email marketing the answer?

Email marketing is one of the most powerful marketing tools available nowadays. It is easy, affordable, effective and actionable. With email marketing, you spend less time, money and resources than with other traditional marketing methods (for example, direct mail or printed advertising). Here are some quick facts you should know about email marketing:

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Here are the main reasons why email marketing is the best way to build SaaS customer loyalty:

 

  • Voluntary subscriptions

You spend time on and plan strategies for those who have willingly provided their personal information and have agreed to receive emails according to their preferences. You have initial background about this or that customer which means you have probably separated your subscribers into more specific groups. They save time, you save time and your communication process becomes much more effective  and targeted.

  • Communicating more information

Email marketing is an excellent way of stretching a tight marketing budget. With a response rate five times greater than direct mail and 25 times the response rate of banner ads, email marketing is the most effective way to increase sales and develop loyalty.

Unlike direct mail, there are no production, material or postage expenses. So, with email marketing, your SaaS company will be able to easily create more communications that will be valued by your customers. Your communications can include newsletters, customer promotions, special offers, sale notifications, new service announcements, event invitations and so on.

  • Educating customers

Information and customer-relevant content can make your customers and prospects much more valuable, as they are more likely to make purchases when they are informed. Instead of letting them look elsewhere for the answers to their questions, use email marketing to lead prospects through the sales process by providing them with the most important data and links that will drive them to your website. For example, an email newsletter is the best way to accomplish the long-term goals of customer retention and loyalty, while it can still contain a CTA that provides short-term benefits as well.

  • Analyzing customer reactions 

When you send your special email to your special audience, it is the not the end, but the beginning of detailed analytical efforts. Your digital tool will show you exactly who opened the email, who clicked the link/visited your website and which of the recipients have been converted (sign up, download, registration). The great thing is that all this process is automated. You and your team have the necessary data which will help you in your further email marketing campaigns. If you see that, for example, “Interested in our software? How about a free eBook and 10% discount?” subject line performs better than “Download our free eBook and get 10% discount“, then you already know how to formulate your sentences.

What kinds of emails can build customer loyalty?

To use email marketing as effectively as possible and build customer loyalty, of course you need to send the right emails. Not all emails are equally effective at increasing customer loyalty. For generating customer loyalty one needs to understand the time and place that the customer is at. Here are some examples of loyalty-inducing emails:

  • Emails to disappeared customers: if you have a list of customers who once showed interest and were ready to buy from you, but then disappeared, sending them a quick reminder about the value of your SaaS software is a great way to bring them back into the sales funnel and renew their interest in your product.
  • Loyalty member newsletters: sending monthly newsletters to your loyalty club members is another great way to encourage them spread a word about your company and become even more loyal to your brand. People like to be reminded that they made a smart purchasing decision, that they are part of a winning team of customers taking advantage of how great your product is.
  • Special offers, promotions, etc.: use emails to inform your existing customers about the special offers, promotions, even the events that you have at your company or that you will be participating in. By being informed about your ongoing activities, they get much involved which, in turn, increases their brand loyalty. Customers like to purchase products from dynamic companies, so emailing your customers to inform them on what’s “new” about your company or product is rather enticing and fosters greater loyalty.

No matter whatever the content is, email marketing messages aimed at customer loyalty need to be interesting and compelling for the readers. An important thing to remember is that you need to personalize the emails for each customer. That does not mean that you need to generate a brand new email for each individual customer. Something as simple as addressing the recipient by their first name name is a great way to easily connect with your customers and build loyalty.

Tips to build SaaS customer loyalty with email marketing

1. Build a clear profile of loyal customers

In order to talk effectively, engage with and nurture existing customers and prospects, you need to first of all have a crystal clear picture of what a loyal customer of your business looks like. In other words, you need to clearly understand who are your buyer personas.

To send them tailored emails, you need not only to know their demographic details, like generation and profession, but you also need to gather information about their purchasing patterns, level of engagement with email marketing, social media, their browsing patterns, their preferences and much more. The more you can learn about your loyal customers, the better. In this case the cliche rings particularly loudly – knowledge is power.

2. Create memorable experiences

When you are using email marketing for building SaaS customer loyalty, it is important to take into account that the ultimate goal is turning customers into advocates, and the best way to achieve this is by giving them a high-value experience across your products and services. In fact, according to Gartner Group, companies that prioritize the customer experience generate 60% higher profits than their competitors.

To provide your customers with a great experience, you need to treat them in the right way. Loyal customers expect preferential treatment, such as:

  • VIP service/bonus features
  • Invitations to competitions, special events
  • Exclusive offers and promotions
  • Loyalty-building additional content
  • Exclusive previews of new product/service features
  • Renewal programs
  • Refer-a-friend programs, etc.

3. Research carefully before creating content

An email loyalty-building strategy is a journey, not a destination. We would be lying if we made it sound like it does not take time and effort to plan and execute. The further along that journey your SaaS company goes, the greater the database of your contacts will become and the greater your requirements to send the right message to the right person at the right time will become.

To send targeted emails, you need to perform thoughtful research before creating content. This means that you need to divide your email contact list into segments, examine the needs of each segment and their buying preferences. Then, you can send specific content to each of these segments based on their buying lifecycle stage, needs, pain points, problems, etc.

4. Optimize for mobile

The consistent proliferation of smartphones and mobile browsing is an excellent opportunity for SaaS companies to build loyalty with targeted relevant email marketing.

It is estimated that by 2020, the number of smartphone users will reach 2.87 billion. And this is not the only statistics pointing to the fact that smartphones and tablets eventually will become the primary channel for digital interactions between customers and companies.

This means that your emails should not only be obviously compatible with mobile devices, but they should be optimized for mobile. Customers like to check mobile devices, but they do not like to read tomes of information on them. Thus, your email marketing should be short and sweet. Get to the point as soon as possible, demonstrating your value to your customer.

5. Drive referrals

It’s every marketer’s goal to convert happy customers into advocates. Email marketing is a powerful tool for building referral programs and social sharing from both marketers’ and customers’ perspectives. Online “word of mouth marketing” is one of the most effective ways to increase customer loyalty.

In fact, Nielsen reports that about 80% of online consumers’ purchase decisions are influenced by their friends’ social media posts and online reviews. Email marketing is an excellent way to drive happy customer to make referrals on your behalf.

All you need to do is understand what drives your customers to refer your SaaS company, and make that sharing and referral process as easy and as positive as possible.

In conclusion, email marketing offers SaaS companies the opportunity to reach out to customers and prospects and increase customer retention/loyalty in ways that were simply not possible a few decades ago. If your company is not taking advantage of email marketing you are missing out on a huge opportunity to build customer loyalty.

 

If you have other email marketing tips, or techniques you have used to success, please share them with us in the comments below.

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