How to Sell to Subscription Service Customers

SaaS, pronounced “sass” (as in sassy), is a Silicon Valley acronym for Software as a Service.

Personally, I’m not a fan. Sounds too much like the A-word (a synonym for “donkey”).

But they had to come up with something because the business model didn’t really exist a few years ago. Now, it’s a gazillion-dollar industry full of heavy hitters like Salesforce, Intuit, and Cisco.

The ears of investors perk up when they hear the SaaS word in a pitch. Why? SaaS companies operate on a subscription model. Steady, monthly income.

In theory, monthly cash infusions trump a one-time purchase. Subscriptions provide businesses with an operating cushion. They also make financial projections easier.

Customers appreciate subscription services, too. Why? They’re easy to justify. How so? Most subscription services come with…

  • Guarantees
  • Free trials
  • Low up-front costs
  • Attentive customer support

But that doesn’t mean selling a subscription service is easy. Far from it!

The fact is, landing a customer is only the first step. From there, you have to sell them again and again… Day 1 through Day 28, 30, 31.

And then start over.

Subscription service customers come in all stripes

No matter what it is you sell, there’s infrastructure to maintain and customer problems to resolve. Plus the core product itself — continual improvements.

That is, running a subscription service business is not for the lazy. You can’t “set and forget” it. If you do, retention rates will never climb out of the basement. You’ll be forced to use earnings to acquire new customers, defeating the whole purpose of selling a subscription service in the first place.

You’re smarter than that:)

Of course, a certain percentage of subscription service customers will always leave. Some of those are freebie seekers; those who never intended to go past the trial. In some cases, free trials don’t make sense for subscription services.

Your best bet is to discourage phonies from signing up in the first place… but that’s a topic for another day.

Other customers will leave because of things beyond your control. Maybe they’ve solved their problem for good. That happens with dating sites. Their customers get married and — hopefully — cancel their membership.

Maybe they’ve changed careers. Maybe their department budget was decimated. Maybe they had a baby.

My point is, you want to focus on the things you can control to keep MORE customers LONGER. Think about it. What would it look like if you could extend — by just one month — your retention rate?

All good, right?

So, in order to keep more customers, you have to excel at these three pivot points:

Immediate — however you welcome them (phone call, email series, package), it should be warm, hearty (“you’re awesome!”), and helpful. It’s gotta be helpful. Remind them what they signed up for and what they can expect going forward.

Like dating, first impressions matter. The first month is the toughest because the customer is trying to decide whether they LIKE you or not. Make it easy for them by reinforcing the thinking that led them to sign up with you in the first place.

First week — SaaS companies agonize over the onboarding process. They know that the sooner a customer uses the product, the better chance it’ll stick. The first day, few days, and week is critical. That’s because without immediate usage, any hope for making the sale is lost.

Whatever you sell, make it easy for your customer to use it. That means, no overwhelm. Break steps down into bite-sized pieces.

Check in with them but don’t nag. Push reminders via text, email, or postcard.

First month & after — surprise and delight them. Again, like dating and then marriage, if you’re making them feel special… wooed… with unique rewards, valuable content, and personalized service, they won’t go looking for love elsewhere.

Yes, that applies to anyone… even analytical types like engineers, developers, and programmers.

Remember, the longer you keep a customer, the more you’ll learn about them. The more you learn about them, the better you’ll be able to serve them.

2 thoughts on “How to Sell to Subscription Service Customers”

  1. Never thought about SAAS and it’s similarity to that ‘donkey’ synonym, now I’ll probably always think of that!

    Great set of tips.

    It’s surprising how many SAAS companies focus solely on the product and technology, forgetting about consumer engagement after the purchase. Simple things like newsletters and what not do wonders.

    • Totally! For example, I love Dreamhost b/c of their weird, quirky monthly newsletters. They also throw an annual party for subscribers up here in Seattle, even though they’re a So Cal company.


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