How to increase the lifetime value of a customer in SaaS

Last updated on June 13th, 2023

Pardeep Kullar
Pardeep Kullar

A summary of Neil Patel’s video on life time value. Optimise on-boarding, analyse usage, communicate and survey your users but under it all, make sure it’s a good product.


Transcript edit by [Upscope]( “See your user’s screen from live chat”

Key points mentioned

  1. Optimise the on-boarding flow
  2. Analyse usage
  3. Survey your users
  4. Have a good product.

You have a SaaS product. The hardest part is getting people to subscribe. But once they subscribe, wouldn’t you love to keep them forever?


The first step is optimizing the onboarding experience. Anytime someone buys your SaaS product or more so subscribes to it, you need to optimize the onboarding. Whether it’s a free trial or you’re going right directly into the paid version, you need to optimize the onboarding. The onboarding is right when they get started.

If they get onboard and they start using it right away, you’re off to the races and you’re doing an amazing job. On the flip side, when someone buys your product and they’re subscribing right away but they don’t use it for the first week, what’s going to happen? They’re probably going to cancel after a few months and your lifetime value of your customers are going to start decreasing.

You need to make sure they’re onboarded right away and they’re using it. You could follow up by email, you could track your onboarding experience, you could add chat, you can look at what people are doing and **do more of the things that make people happy and do less of the things that are confusing **people on the onboarding experiences.

Tools that help

You can use tools like Crazy Egg to watch your on-boarding experience and see how people are navigating it, so you can optimise it, right? In other words, what you need to do is look to see what people are doing, who are getting all the way through and look at all the people who aren’t getting all the way through and see where they’re getting stuck. Based on that, you can fix it.

Analyse usage. Are they logging in?

The second thing you need to look at is how often are people logging in. If they’re not logging in often, they’re not using your SaaS subscription product, that means they’re probably going to churn. Usage causes a higher LTV, non-usage causes a lower LTV.

Survey your users, send email reminders, reports and fixes.

Send email reminders, send reports, send text messages, get them engaged. A good way to get them engaged other than sending reminders is by continually fixing your product. The way you fix it, which gets into the third way, is by surveying people. Survey your users.** Find out what they love, what they hate, and what you can improve upon**. Don’t just take their word for it, look at what they’re using within your application that’s getting them results.

Talk to them on the phone, don’t be shy. Words only tell you a limited amount of stuff. Talking to people, watching them, seeing that whole interaction will really help you create a better product.

Yes, it comes down to the product.

The true way to optimise for a higher LTV, it really does come down to the product. A shit product is going to have a shit LTV. A great product is going to have amazing LTV. Look at Slack. My team loves Slack. I am not a big slack user. I know so many things wrong with a Slack website, but yet they have amazing LTV because people love their product.

Sure, you still want to do the first two methods that I talked about, but in reality, you also mainly want to focus on creating an amazing product. That’s how you create a higher LTV.


See why you should sign up to your own product every 2 weeks

The Intercom co-founder explains why churn and retention are the new conversion and his thoughts on continually adjusting your on-boarding. Churn and retention are the new conversion

Why is on-boarding is so important?

Lincoln Murphy covers the reasons that customers churn and lists 3 key results of good on-boarding. Why onboarding is so important and why customers churn

Pardeep Kullar
Pardeep Kullar

Pardeep overlooks growth at Upscope and loves writing about SaaS companies, customer success and customer experience.