To Win in SaaS, Uncover Customer Problems Before You Get Dumped

degradation, where customers who might have problems or are not satisfied with your product show patterns of "falling out of love." These customers are in the process of giving up trying to make your product or service work for them.

These customer problems are not visible to the naked eye, especially considering that every user is different and that companies can have many thousands of customers. However, they can be uncovered before a customer leaves. Customer analytics using data science can detect when an individual's usage pattern has degraded in a statistically significant way. Companies that detect these problems early are able to effectively prioritize their customer communications based on who is most valuable and most in trouble, resulting in saved customers, reduced churn, and higher subscriber numbers and lifetime revenue.

That's just the first step, and it only addresses the symptoms of the problem, not the cause. The cause is usually with the product or service being offered. Maybe a feature is lacking, or maybe something isn't working as well as the product team thought it would. If a company can determine when a customer "turned" and what the customer was doing at the time, the root cause can usually be exposed and solved.

Customer analytics can also look at the onboarding processes, compare what "healthy customers" and "unhealthy customers" did in their first week or month of usage, and determine which features correlate with good health. Analytics can show which features make the product "sticky" and which drive people away.

In other words, customer analytics can save you from getting dumped, and they can improve a product to better meet the customer's needs. This may sound like just good business sense, and that's because it is. In a subscription-based service environment, it's not just a "customer success" department that is responsible for keeping customers happy. It's the job of everyone in the company—including the product and marketing teams—to ensure that customers succeed with its product. In a hungry SaaS market, there are only places at the table for companies that can retain their customers.

Michael Geller is the CEO of Preact. He has more than 20 years of demonstrated achievement and technology business leadership at start-ups and established enterprises.

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