The SaaS Executive Dashboard

Today, the Totango team is excited to announce a brand new “SaaS Executive Dashboard”.
The Totango SaaS Executive Dashboard is an extension of the Totango online platform which allows SaaS teams to gain full visibility into the level of customer engagement in their business.

The SaaS Executive Dashboard allows SaaS executives to track and plan to improve key SaaS performance indicators and contains features such as Cohort Analysis. From the dashboard you can also drill down and instantly see specific account details.

The simplest way to learn about the SaaS Executive Dashboard is to watch this intro movie.

Totango SaaS Executive Dashboard from Totango on Vimeo.

We’ve chosen the metrics included in the SaaS Executive Dashboard based on discussions with many SaaS companies at various maturity levels. Many of these conversations started from our  SaaS Metrics Survey through which we aimed to capture an even wider view of the industry.

We’ve learned that most companies are struggling with homegrown monitoring solutions and still lack the visibility into important metrics needed to make strategic and tactical decisions for their company.

You can download the full survey to learn more. However, bottom line, most SaaS companies start with nothing, then as they grow they realize they need metrics to measure their business and start building home grown solutions which eventually gets out of control in terms of complexity and budget.

Totango SaaS Executive Dashboard captures the current SaaS best practices around monitoring customer engagement and customer success and tracks visitors, signups, activations, conversions and your SaaS churn rate. You can monitor against your business objectives and plans, diagnose problems and identify areas for improvement. The Totango SaaS Executive dashboard is the best way to focus your SaaS organization around customer engagement and customer success.

 

Availability

The Dashboard is available to existing Totango customers and will be available for new registrations within a couple of weeks. You can go ahead and pre-register to get access when it’s released.

The SaaS Exec Dashboard will always have a free tier, so SaaS startups that are just starting their business can take advantage of industry best practices with limited effort.

View our Trial Conversion Webinar!

 

To learn more about how to measure key metrics
view our 40 minute webinar: “Best Practices on Trial Conversion

 

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

 

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Treat Customers Based on Their Values

in Scott Gruher’s blog post on “Go to Market Strategy: How Much are Your Customers Worth?”, his recommendation is to treat customers based on their values.

He suggests measuring two basic metrics: CLTV (Customer Life Time Value) and CAC (Customer Acquisition Cost). Those metrics should both be measured accurately, as based on the outcome, a company should decide how to treat its prospects/customers:
Low CLTV would mean to use a less expensive resource to handle prospects/customers (i.e. non-direct contact such as email).
On the other hand high CLTV would mean considering a one-on-one contact with the prospect/customer.

This principle would increase conversion rates from prospects and maximize penetration rates withing current customers.

As for the CAC, Scott recommends focusing on existing leads as it more profitable to cross-sell and upsell an existing customer than acquiring a new one.

I agree it is much more effective to reach out customers from a dedicated list.
I also agree, as posted in my previous post, that CLTV and CAC are crucial metrics which should be measured accurately in order to spot potential buyers.
However, CTLV and CAC are not the only metrics a company should measure – there are other metrics (such as churn rates, account activation rate, account usage statistics, etc.), that should be taken under account in order to perceive a business whole picture.

In addition, in order to reach the right conclusions out of those metrics and know where to focus on, it is essential to wisely choose tools that would help a business to both measure and analyze its data correctly.

 

 

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

 

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Customer Engagement is Key for SaaS

Customer Engagement is key for software-as-a-Service business. A recent post by David Skok explains how and why to measure customer engagement. If you are a SaaS executive and haven’t read it yet, read this first.

In this post I’d like to elaborate in what areas customer engagement is critical for SaaS business success.

Balancing Customer Acquisition Costs and Lifetime Value

The baseline metrics that govern SaaS business success are Customer Acquisition Costs (CAC) and Customer Lifetime Value (CLTV).   The larger the margin between CAC and CLTV, the more poised the business is for sustainable growth and profitability.

So lowering CAC while increasing CLTV is key and customer engagement has a dramatic impact on both.

The most effective way to lower CAC is to increase conversion rates from free to paying customers. We’ve learned that when customer engagement is high during evaluation period it has direct link on conversion rates.

Same in CLTV. The key metric here is churn. Higher CLTV means lower churn.
Customer engagement (or lack of) is very good indication for churn.

The dynamics of “Land & Expand”

The SaaS model lends itself to gradual adoption by customers. It could be inherit in the business model (e.g. freemium), or just by nature of subscription model itself:  Most customers start off as short term pilots by one team in an organization. Success results in renewed subscriptions and further adoption within the organization.

This means that SaaS companies have users/clients who actively evaluate the service (paid or free evaluation), and at the end reaches a decision to continue or not as a customer.

As David describes in his post, times have changed with a much higher percentage of business transactions transpiring online with much less interaction.

This new reality places customer engagement at the center. So what does it take to strengthen customer engagement in your service?

 

Cultivating Customer Engagement

Cultivating customer engagement requires an organizational culture that focuses on customers and their needs.

1. Know your customers

It’s easy to fall into the trap of treating your customers as unknown, faceless people. After all, chances are no-one in your organization ever met them. They probably live far away and may even speak a different language. But you can’t afford to do that.

A company must develop or achieve tools that will help them measure customer behaviour on their service. These tools must be capable of presenting the users behaviour once in your application and answer relevant questions such as:

  • Have the users tried the service more than once?
  • How much time are users investing in your service?
  • Which features have they used?
  • Have they been exposed to your core features and do they fully understand the value-propositon of  your offerings?
  • Is momentum growing or declining within the organization?
  • Are they potential buyers?
  • Etc.

Knowing what your users choose to do in your application is crucial for you to be able to interpret their actions correctly and use it as a basis for running a successful SaaS business.

2. Learn how to be proactive

Being attentive to your customers also means knowing when to intervene.
You need tools to wisely call-out users who need help and are at risk of churn or, conversely, those that are reaching the limits of their current plan and are prime for “upsell”.

Being able to identify these users and conditions is critical because:

  • Your sales and success teams have finite resources and need to be laser focused on accounts that matter
  • Users nowadays prefer self-serve and self-paced work. You need to know it’s a good time to contact them, or run the risk of doing more damage than good.

Contacting users at the right time increases their satisfaction and loyalty. It shows you understand their needs and respect their time. And it will increase conversion, reduce churn and maximize upsell opportunities for your business.

3. Evolve your service

The same tools that help you measure and understanding customer behaviour, should help you draw conclusions of how your service and product needs to improve.

  • Do the new features add value or complexity?
  • Is the new design helping convert more trials but causing added friction to existing customers?
  • Are the new tutorials and guides helping new users or are they still getting lost?
  • Are users from the basic plan not engaged enough to “push through” to the premium packages?

Customer engagement can shed a light to some of these tough product and marketing questions. Not only by directly showing you what parts of your product different users engage with, but by surfacing the users you should be talking to directly for primary market research.

 

Summary

In the long run, Customer Engagement is all about value – customers have needs and they’re seeking for an efficient, ready and easy solution that fulfills those needs. Now.

If you are able to understand your customer’s behavior, interpret their needs and act accordingly, customers will choose to use and reuse your service!

SaaS Executive Dashboard

Do you know how to measure your Customer Engagement?
Our SaaS Dashboard can easily do that for you!
Try it now for FREE

 

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

 

Improve customer engagement now!
Try TOTANGO free for 30 days
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Customer Lifetime Value and Customer Experience

Lately, I’ve started building a SaaS Dashboard for my own usage (which I’ll be happy to share with others as well) and I have put together a short survey in order to learn what are the key metrics to measure SaaS business success. As I posted in our previous post, every metric matters when trying to see the whole picture, however, according to Chris Zane’s interview in Christoper Brown latest post, if he could only have one measure to manage his business, he would have chosen “lifetime value of customers”.

This metric, in Zane’s opinion is not a static number but a dynamic one that can grow with the customer, so that customers will first purchase their bike when they’re 4 years old, then when they’re 6, again when they’re 12 and they might come by to buy their own kids their first bikes. That’s the power of a happy customer.

This classic example could be taken to any sort of business, as in all businesses, it is critical to understand customers behaviour.

What is ‘customer lifetime value’ translated to the terms of a SaaS company? It’s when your service is valuable and highly appreciated by your users who chose to repeatedly and constantly use your service.

Most customers will encounter SaaS online services when signing-up to their free trial period / freemium. As the funnel goes on, the amount of users converting to paid customers naturally goes down, however, user’s usage pattern in crucial to understand what’s behind those numbers and also to reflect the users behaviour and needs.
Therefore, even though measuring many other metrics should be taken under account, I agree that customer lifetime value should be standing in front of our eyes when thinking of our business plan.

To run a successful SaaS business and increase the chances to gain lifetime users and revenue, a business must make the right conclusions and adjust its service according to customer / user experience.

Tell us how you adjusted your service to fit your user’s needs!

 

 

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

 

Increase you customer lifetime value!
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Lean Startups are Not About Learning

Lean startups are not about learning — or at least not just about it. Learning is not enough because translating what you’ve learned into value is just as important and often no less difficult.

Measure–Learn–Act is a key tenet of lean startups. We are big believers in lean. We run Lean startup Israel and frequently blog and talk about our experiences of running a lean company.

Measure-Learn-Act is also a core part of our company vision. We believe measuring, learning and acting on usage-data is the right way to build, scale and operate any SaaS and web-business — and we’re building Totango to help companies do just that.

In this post, we’ll talk about how we “eat our own dogfood” and use this principle, and the Totango product, to drive our own product’s evolution.

How we measure progress?

In his remarkable work on lean-startups, Eric Reis uses the following definition for measuring progress at a startup:

Definition of progress for a startup: validated learning about customers (read more)

We found that to be a limiting concept.

We discovered that when we defined learning as our core objective, we ended up spending too much energy on our own learning (running A/B tests, minimum viable versions to learn about market interest, etc.) and not enough on leveraging our learning to deliver value to end-users and customers.

In other words, learning is not enough and is not the end goal. The real test of a startup is whether it builds a service of value — one that people want to use and can’t live without.

So our definition of progress is:

Definition of progress for a startup: validated value delivered to customers

‘Value’ means we released a product or service enhancement that helps customers accomplish something better or faster. ‘Validated’ is that we have a way to quantify the value delivered, usually through a positive change to one of the key usage metrics we track.

If, and only if, we reach that point do we declare progress. All the rest are considered internal milestones along the way.

How we measure validated value to customers?

Here is a set of product-level metrics we monitor on an ongoing basis:

Each product or service improvement we undertake needs to ultimately manifest itself with an improvement to one of these metrics. For example, changes to our signup process need to yield an improvement in signup numbers; a better customer onboarding process should result in a higher and faster rate of activations.

Our most interesting metric is ‘Engaged Organizations’. Our goal here is to have a quantifiable way to determine if accounts that went through the signup and activation process are actually deriving value from the solution. We measure this by counting the number of days each user performed meaningful interactions with our solution.

‘Meaningful interactions’ are not generic: each service naturally has a different set (in our case it can be usage of our inbox capabilities or interacting with an activity stream).

They also change over time when new functionality is added or product pivots are made. The point is that they provide a solid way to validate if users are seeing value in our solution, which in turns helps us determine if changes we make have a positive impact.

Learning as a means to delivering value

Validated-value-delivered is the way we measure progress, but that doesn’t mean we don’t spend a lot of time trying to learn what customers want. In fact, we’ve found that is the only way to consistently be able to add value. Otherwise, you spend too much time on bad ideas and get overly invested in product directions that ultimately prove incorrect.

We try to build an MVP (minimum viable product) as the first step for every product idea or feature request we handle. If we get good validation on the need, we know it’s a good place to spend more time.

Summary

Forcing ourselves to scientifically validate our assumptions about customer needs not only helps us reach results faster, it frees us from the need to argue to death over the merits of certain product directions.Rather than argue about it, we find a quick way to validate things as a precursor to spending more time on them.

But we don’t stop there, and neither should you.Measure value delivered.

It’s the best way to keep yourself true to the core mission of creating value, and make sure your product is on track.

 

 

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

 

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Building Minimum Viable Product for B2B

On this week’s meetup of Lean Startup Israel, Oren Raboy had a great presentation on MVP for a product in the B2B space. Oren shared our experience at Totango, while others shared their experiences.

It seems that everyone is struggling with MVP, and the below presentation made front page at SlideShare within few hours.

I’ve enclosed it here, enjoy…


SaaS on the House. A Dialog About Value

Who doesn’t like it when the bar tender pours an extra glass of fine wine ‘on the house’?
Every time it happens to me, my emotional attachment to the establishment grows, and it makes it that much more likely that I’ll visit again.

I tend to have the same feelings when I receive monthly emails from amazon AWS about new features and cost reductions, and a recent email I got from Beanstalk announcing a bunch of new services all included within the same package I’m already paying for. It’s a great way to create loyalty for subscription services.

Constant increment to value and service level improvement without additional costs is probably one of the biggest benefits for SaaS customers. It is inherent to the subscription/pay-as-you-go business models. The power is in the hands of the customers who can always decide to cancel their subscription. SaaS vendors must constantly innovate and create additional value to keep their customers happy.

SaaS vendors, frequently monitor a metric called Customer Life Time Value (CLTV). How much revenue does my average customer generates over it’s life-time. However, this metric can also be seen from the reverse perspective, how many months does my average customer continue to see value from my service such that they are willing to continue paying for the service.
It is also a key benefit for software vendors. Success comes from focus on the customer-lifetime value, which can only come when you truly understand customers and their changing needs. Anyone who developed software products knows how easier, more productive and more enjoyable it is when you have than organizational knowledge. With SaaS you have no choice but to develop it.

These type of customer/vendor relationships are healthier and thus last longer. As long as customers are getting real value they will pay for the services they are consuming. In the old, on-premise applications world, customers had to pay in advance for a service/product they didn’t really use yet. This up-front payment created a dynamic where application vendors where focused on the initial sales, and decision makers where focused on making the first initial buying decision. You can clearly understand why the new model is better for both sides. The new conversation between vendors and customers is about constant value creation, delivery and consumption.

Another great benefit which comes from both SaaS business models and the web based delivery model is a much faster value creation cycle. The motivation of the SaaS vendor to create value faster, combined with the opportunity to manage a single version of the service enables rapid cycle times. Customers are getting new features and functions which create value much faster.

Shorter customer commitments and business model flexibility presented by SaaS promotes healthy relationship between vendors and customers which revolves around value – simply win win!

Get your FREE copy of our latest RESEARCH:

The 2012 SaaS Free Trial, Freemium and Pricing Benchmark

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About Totango:

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

 

Increase your SaaS revenue!
Try Totango free for 30 days
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3 Essential Tips for Sales in a SaaS Model

SaaS forever changes how software is developed and delivered to customers. This shift is well understood, frequently discussed and represents a major shift in the way software is built by vendors of all sizes.

Often less discussed is the impact the service model has on the way software is sold.

In our discussions with SaaS providers, big and small, we see a growing understanding of the need to define sales strategy and processes while taking into account the full life-cycle of a customer. It’s not about making a sale, it’s about making your customer successful.

It’s useful to compare SaaS and enterprise sales to appreciate this:

Enterprise software sales are a high-touch activity.  Opportunities are identified, tracked, and closed by a direct sales force or resellers. This cycle is what makes a good enterprise software company tick.  And it’s why successful enterprise software vendors like HP and IBM are so sales-driven.  Their culture must be very sales-oriented in order for them to succeed.

Selling SaaS is different.  SaaS solutions are fundamentally ‘self-service’, relying on a large quantity of (hopefully qualified) leads funneled to the web-service through inbound marketing activities. In an ideal world, these leads pick up the solution and turn into happy customers by themselves. But in practice, for all but the most simple and commodity software, cultivating customers and growing the business requires direct interactions with the customer.

We call this model medium-touch. It is a sales model that puts more onus on marketing and the product’s self-service to move large quantities of prospects through the sales funnel, but also assumes a level of direct engagement of a sales and support team. The trick is to identify the right touch points to make the system work.

Here are some tips we’ve learned from  SaaS vendors on how they build their sales process differently than traditional enterprise sales:

  • Successful customer onboarding is critical: in a SaaS model, because switching costs are low, “closing the sale” is not nearly as important as it used to. The vendor must ensure he’s doing everything possible to help customers adopt the solution rapidly and with ease. Otherwise, customers are likely to churn shortly after they subscribe, resulting in loss of revenue and reputation.
  • Don’t bother top-selling:  in SaaS product-usage and its sales are always intermixed. Customers first look at your site, then they try the software, then they decide to buy it. In enterprise sales, the same process may be reversed, and a sale can occur before even one user tried the product. That’s why “top-down” selling isn’t a useful strategy for SaaS and investment must be made in reducing usage-friction at every junction.
  • Focus on up-sell :  In traditional enterprise sales, customers often pre-budget and pay for what they (think) they will need in a few years. With SaaS, customers tend to buy what they need and buy more when they feel they need to. Therefore SaaS is as much about up-sell than the initial sale. For a SaaS salesperson, a large chunk of  energy need to go to cultivating existing customers and identifying up-sell opportunities.

The reality is that implementing these sorts of practices isn’t as straightforward as it looks. It often spans different organizations such as sales, customer-support, product development and operations — and it involves aligning goals and pulling in expertise from many disciplines. More than anything, it involves getting a very good understanding of what customers are doing so you can properly prioritize and streamline the process.

More and more SaaS providers are building “Customer Success” teams  that focus on just that: making the customer successful.  We’re building software to make it possible for them.

 

 

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
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