5 Strategies to Increase SaaS Customer Lifetime Value

Geri Mileva on SaaS Marketing

Customers are the core of any successful business, and no business wants to lose them. However, keeping customers requires a bit of effort.

Software-as-a-Service (SaaS) businesses thrive on customer subscriptions. Once the SaaS product stops offering any help or value to consumers, they will stop using it.

SaaS business analytics call it churn rate, or the number of subscribers that you lose within a set time period.

To offset churn rates, SaaS businesses must improve their Customer Lifetime Value (CLV). This is the prediction of the brand's relationship with a particular customer.

To put it objectively, it is the monetary value of a customer relationship. Here are five strategies to help you improve your CLV and reduce your churn rates in the process.

1. Keep Engaging Customers

There are different types of customer engagement. One example is featuring your most loyal customers.

For example, you can tag one of your most loyal customers in a Facebook update, say, for winning a contest you recently ran. Featuring customers makes them feel special. It introduces a unique and memorable experience in the process.

Customers appreciate SaaS businesses because of the convenient benefits and solutions their products provide. When they see the brand reciprocating, customers feel that their long-term loyalty has paid off.

However, there's more to customer engagement than just promotions and customer appreciation.

Engagement is when customers use your SaaS product and gain value from it. This means if they keep using it for more than a week or month, they have a better CLV compared to other customers.

If the product keeps solving the customer's problem, then they will keep using it. Activity and a continuous positive experience will increase their CLV. Here is a simple analogy: you wouldn't get an Internet subscription if no one’s going to use it.

In the same vein, customers won't use a SaaS product if it doesn’t benefit them. How do you increase product usage to increase CLV? Make it a goal to earn your customer's time and attention.

Additionally, consider taking the following steps:

  • Make a list of customers with low engagement metrics.
  • Send an email informing customers of your SaaS product's new updates and features.
  • In your emails, provide engaging content that will help them maximize your products and services.
  • Keep providing information about your product and highlighting its benefits. Use case studies and media features.
  • When your customer engagement increases, product usage increases.

2. Be Proactive in Improving Customer Success

Customer success departments are not the same as customer support departments. They're not there to receive a customer's complaint and resolve it within a given time period.

Customer success departments work with customer support and the brand's other departments to provide a holistic and positive experience.

Many successful SaaS companies have capable and proactive customer success departments. For example, Unbounce is one of the world's most successful and youngest hybrid SaaS and digital marketing companies.

The SaaS brand's customer success team pays attention to usage metrics. When they identify poor usage through data, they reach out to other departments to help improve the product experience.

As Unbounce VP of Customer Success Ryan Engley says, everyone in the company should be a customer success advocate. When customers see success in using your product to solve their problems, the SaaS business succeeds too. When customers succeed, your CLV increases as well.

3. Send Memorable Gifts and Rewards

Earlier, we talked about how featuring customers is a form of reciprocity. This suggests that you’re returning an equal amount of appreciation to customers. Now, what will happen if you take reciprocity to the next level? You can get something of equal value or even more out of it.

While banks aren't SaaS companies, they follow the same principle of customer success.

In 2014, TD Bank created the #TDThanksYou campaign. During the campaign, the bank took note of their long-term clients' interests and sent gifts of appreciation.

These gifts ranged from Disneyland tickets to airline tickets for a mom who couldn’t afford to visit her sick daughter.

SaaS companies can choose to be as generous as TD Bank with tangible gifts. However, in-app credits such as time-limited free VIP access for longtime subscribers are also a great option.

Keep in mind: the main objective of sending gifts is to encourage customers to use your SaaS product again. If you're sending them a gift just because, it will grab their attention.

While this strategy doesn’t reduce churn rates, it will certainly contribute to improving your CLV.

4. Take Note of Product-Improving Customer Feedback

Customers love getting recognition for their involvement with your brand. However, they love it more when they know you are listening. Many companies today, including SaaS businesses, want to improve customer experience at every turn.

In fact, some brands chase after canceling customers not just to try and win them back, but also to find out exactly why these customers have canceled their subscriptions. In doing so, SaaS brands can use this information to improve their business in the future.

If you're looking to improve your SaaS products and framework, take the time to listen to your customer's complaints. In fact, encourage them to send their comments and suggestions.

Customer complaints and feedback are never a negative thing. They only indicate that your SaaS product has room to improve. By introducing improvements, you will increase your brand's CLV because of the increase in customer usage.

Also remember that people read customer reviews, which will guide their decision to try your product. This qualifies your customers as a reliable source of product-improving information. If potential new customers listen to their opinion, you should listen too.

5. Offer Complete Transparency in All Areas

Customers understand that your SaaS brand spends less than other non-SaaS companies. It would be quite suspicious if you raised prices without properly explaining why.

Kickstarter campaigns see success when they show their investors where the money goes. In fact, many established businesses succeed by showing investors their projected growth and spending activities.

The same is true for SaaS companies. Customers will place their trust in transparent brands and support them. If your customers trust and support you, you increase your CLV too.

For example, if you're raising prices, create a dedicated page that explains the reasons behind the added cost. Explain to customers in detail the brand's challenges, and then explain how the extra funding helps.

The majority of loyal customers who will see the logic in your reasons will not mind paying a higher price. This is especially true if they see your brand as the most convenient solution to their present problems.

In addition, it also makes it easy for customers who aren’t happy with the price increase to cancel their subscription hassle-free. This demonstrates that your brand shows fairness and respects its customers’ choice to invest in other solutions.


  • Increasing customer engagement increases product usage.
  • Ensuring customer success leads to the company’s success.
  • Rewarding your most loyal customers has its own rewards.
  • Customers listen to other customers’ feedback. You should listen too.
  • Earn your customers’ trust and support. Be transparent.