Customer Success – Finally Drinking like Sales People Do

Sharing Customer Success Customer Success is maturing! How do I know?

My first indication is the amount of drinks we’ve had together last night at Norwood. Reminds of some other crazy times ten years ago with a bunch of tech sales people in NYC.

For the first time, when asking a room full of people (over 100!), how many of them actually practice customer success daily – all hands went up.

We’ve spent some time talking about models. The business model of customer success and how the business metrics of maximizing customer lifetime value are should be the goal.

We’ve had a lively conversation about Farming vs. Hunting and the metaphor of running a Grove of customers, as the title of the book “Farm Don’t Hunt – The Definitive Guide to Customer Success” suggests.

And lastly, we’ve shared operational tips on portfolio management, prioritization and measurement at the customer success, director and VP level. This is exciting!

For your convenience, here’s the presentation I’ve used below. Looking forward to seeing you again – the good customer success people of New York!

Are You Engaging New Trials in Their Evaluation?

Evaluating Trials

We recently published a study that proves through big-data analysis what many people already know:

Users that are actively engaged a few days into their trial are much more likely to convert to paying customers.

4x times more likely, to be exact. (more details)

This is a great signal for SaaS sales teams that want to identify the accounts that are most likely to convert, but it is also very helpful for marketing and product teams.

Marketing: Relevant, qualified and nurtured new trials are more likely to be engaged once they begin their trial.

Product: A better, clearer and smoother first user experience, increases the amount of trial accounts that actually go through the evaluation.

The question so far has been how to systematically measure the ratio of engaged trials with your offering?

We are pleased to release a new Totango Executive Report which does just that:

Engaged Evaluation (Totango users: View here for your customer base)

A month by month analysis of the percentage of trial accounts that are engaged in their evaluation. Engaged accounts are those that have at least 3 days of active usage during their first two weeks of trial.

Engaged Evaluation Chart in Totango
What you can learn from this report?

The percentage of engaged evaluations is simultaneously an indicator of the quality of the incoming leads and of the first-user-experience your application delivers. For an established business, you should expect at least 20% engaged evaluation, ideally reaching 50% or more.

Monitor this metric on a month by month basis and take actions in marketing, sales or product onboarding to maintain a high ratio of engaged  evaluations.  To assess leads, you can also break down this information by Source Campaign, in order to identify which marketing campaign are generating the most engaged leads.


Totango User: See this live for your customer base

Not a Totango customer yet?: Signup for a free trial or contact us to talk.

Top 6 Quotes on Software-as-a-Service Sales and Marketing

SaaS University

I was at the SaaS University conference in Austin this week organized by Rick Chapman from Softletter. This is really one of the only conferences in the United States that focuses on the business side of running Software-as-a-Service and cloud application companies.

These are my six favorite quotes on the sales and marketing of cloud applications and what I learnt from them:

1. “Software-as-a-Service is about Service (not Product)”

In the cloud you are selling a service, not a product. What does this mean? It’s often the best practices and business process around the code that matter most to clients. Chuck DeVita from the Growth Process Group shared how adding a design review methodology and implementation with conventional software products allowed one vendor to lift pricing from $15,000 to $100,000 per customer. The best practices and business processes were worth more than 5x the code itself.

2. “Products are evaluated, services are experienced”

Moving from a product to a service has implications for your marketing strategy as well. Ken Rutsky, an independent marketing consultant who used to run Marketing at Netscape and Secure Computing, pointed out that: “products are evaluated, services are experienced”. So for your marketing, forget about white papers and instead focus on creating experiences such as self-service demos and a self-service trial which give prospects a taste of your service experience.

3. “The CRM system of the future is your website (CRM is dead)”

Zach Nelson, CEO of NetSuite CEO said in his keynote: “the CRM system of the future is your website”. I would like the quote even better if it wasn’t so self-serving but there is still a lot of truth in his statement. The SaaS service itself is becoming the primary platform for communications with the customer. Rick Chapman added that a SaaS service should also embed community elements and become the primary channel for communications for customers amongst themselves.

4. “Product management is dead”

A surprisingly large percentage (about half according to an upcoming study by Softletter) of SaaS companies have integrated requirements management into their service: this means that customers can submit feature requests from within the application. Patrick Fetterman shared that Plex Systems has taken this one step further: they give customers a “budget” which can be used to “buy features”. Beyond the assigned budget, customers can also pay extra to get even more features. There are no product managers at Plex, just developers and community managers.

5. “Your customers know more about your solution than your sales guys”

This is another quote from Ken Rutsky. With so much information available on the web, propsects now have more knowledge and expertise about your product (and your competitor’s) than your sales guys. So why not get out of the way and create a friction less sales model? Most SaaS companies are moving towards a self-service discovery and self-service delivery model. In Softletter’s 2012 SaaS Report 51% of SaaS companies report to use a direct sales force. It is still high but down from 60% last year. Indirect (zero touch) selling on the other hand jumped to 25%.

6. “Don’t get people to buy, get them to use your app”

It is much easier to sell if prospects already love your service. The imperative to drive usage and adoption doesn’t stop after the initial sale. Most SaaS companies now use a “land and expand” sales strategy. In Softletter’s survey, the dollar-based renewal rate for SaaS companies ranges from 70% to 140%. Larry Cates from KeyStone On Demand, an online training application, analyzed the main reasons why customers cancel: low organization adoption, not enough customer stakeholders or the app is not utilized properly to gain full potential. These all relate to “lack of usage”. App reliability, competition or budget were reported much less frequently.

More than one million businesses optimized and analyzed

Today, I’m happy to announce that Totango has analyzed the customer engagement and optimized the sales and customer success interaction with more than one million prospects!

We sure learned a lot from our beta stage and this is the place to thank all our wonderful customers who were taking part of our beta stage.

Out of the massive data we’ve gathered, here are 4 main conclusions that could help sales and customer success teams to understand where to focus in order to increase revenues: from new sales, expansion sales and renewals.

  • Free trial users who are still active during day 3 of their trial were 4 times more likely to convert into paying users than the average customer

What can I do with that information?
SaaS sales teams could use this insight by focusing their time and close more deals

  • Active trial users who were contacted by a sales rep were 70% more likely to buy the paid service than those who weren’t

What can I do with that information?
This proves that timely and contextual engagement with prospects results in more sales

  • A full half of paid SaaS customers log in less than once a month or do not use their paid service at all. Another 19% is using their paid service less than once a week. Only 14% of paid customers use their service weekly and only 17% use it daily


What can I do with that information?
Have customer success team focus on the non-active paid users and the sales teams to focus on the frequent users to increase upsell

  • Most cancellations were preceded by a period of non-use

What can I do with that information?
SaaS customer success teams could use this insight to configure alerts for inactive users and to pro actively reach out to these customers and offer help



Embed this infographic on your site

Customer Engagement WebinarLearn How to Convert Free Users into Paying Customers in a 30 minute webinar
Register here!



About Totango:
Totango analyzes in real time customer engagement and intention within SaaS applications to help you grow your business


Increase your sales revenue!
Try Totango free for 30 days

B2B Sales Predictions for 2012

Computer Mouse Shopping Cart

Lately there is an obvious increasing demand for user friendly cloud based apps and a tendency to prefer low touch and zero touch sales approaches, where there are as little sales involvement as possible.

In my latest article: 8 ways digital will improve b2b sales in 2012, published in Mashable lately, I tried to predict what would be the customizations that B2B sales would need to embrace in order to survive in this competitive and evolving market:

  1. Social Selling Will Go Mainstream – Sales executives will substitute the cold calls with nibbling into the social media networks follow by conducting warm introductions
  2. Companies Will use Facebook as a Sales Channel – Facebook ceased to be perceived as a personal communication channel only and more and more sales people will start using it as a sales tool
  3. Sales Executives Will Adopt Big Data – Wide funnel could increase leads volume, allowing your researches on users behavior and performance during the trial period in order to later focus on the most profitable ones
  4. Customer Engagement Becomes a Top Priority – Since customers nowadays can choose their service on a subscription basis, customer engagement and customer success become a key player in this game
  5. Outside Sales Rep Will Use iPads – Tablets will become a vital working tool as outside sales reps can start using them for shipping, product documentation, demonstration, capture leads at trade shows and quickly research a prospect before a meeting
  6. Most Sales Tools Will Move to the Cloud – The average sales organization is using more than 24 software tools to complete a sales process – most of these services will be available in the cloud in 2012 and that will increase the sales process fluency
  7. Sales and Marketing Will Converge – The boundaries between those roles is becoming obscure as outside sales are becoming inside sales and inside sales is being replaced with self serving website resources
  8. More Companies Will Offer Free Trials – this way the customers could evaluate the service before they decide to purchase and that will also produce more word-of-mouth referrals which are much cheaper than live touch points

Is there a Pattern for the Free to Paid User?

Charles Hudson Bionic Panda

This week, I’ve interviewed Charles Hudson, CEO and Co-Founder of Bionic Panda Games about how he uses analytics system to increase free to paid conversion.
Charles indicates that they’re trying to find a pattern of the paying customer and try to build a profile around the way users behave and try to predict what they’d like to see in the game they’re going to pay for.

I like the way of finding a winning card and then replicate it and this is why it is very important to know what have caused to that engagement. Measuring the right metrics here are crucial to understand your customer behavior and a comprehensive research should be done on the route which caused the free user to convert into a paying customer.

Charles also talks about the advantages of the freemium model versus the enterprise – what can a freemium offer that Enterprises can’t? for the complete interview see below:

Is there a Pattern for the Free to Paid User? from Totango on Vimeo.


To read the full transcription of the video, click here


Video Transcription:
This is Charles Hudson from Bionic Panda Games. We use our analytic system internally to identify that subset of customers that converts and spends money in the game, and to better understand their behavior and we take that information and then go try to acquire more customers who look, behave like the ones we find that monetize well.

If you look at some of the really big freemium consumer success stories, part of what makes them work is that it allows customers who have a problem, to use your service without having to pick up the phone, without having to have a salesman so i think what enterprise companies can learn is that making your service free and available to consumers who have a defined need is a great way for customers to self-select.

Then you can always go back and follow up directly with the people who are using your service.