Zendesk, which is one of Totango customers, is using Totango to find out how people who are trying their product or already existing customers are actually using it and how engaged are they with their product.
J.D. from Zendesk, was covering the other 3 steps, to complete the process of building customers loyally, form the customer-service and support angle.
Here are Totango slides from the webinar – please feel free to share or embed them in your website/blog:
I was on a super exciting panel at the All About The Cloud conference in San Francisco this week: “the Power of the Customer”.
Here are 3 predictions for the future that were discussed on the panel:
1. All SaaS companies will use predictive customer analytics. Measuring and optimizing customer lifetime value was a big topic. You can’t manage what you can’t measure so expect SaaS companies to invest big in customer analytics and predictive analytics. These are technologies coming from the consumer marketing space. However, in software you can go one step further because all customer interactions, including interaction with the product itself are digital. So while Victoria’s Secret may analyze customer transactions to predict whether customers will buy again (and whether it’s worth sending you another expensive catalogue) imagine that you could actually know how often your customer wore that swim suit. That would be a pretty good indicator of how much you liked the swim suit and how likely you are to buy again from the catalogue. With software this is possible! And indeed software usage turns out to be the most reliable buy signal (or churn signal whatever the case may be).
2. There will be many SaaS companies with no sales teams. Think about Atlassian: a $100 million+ revenue B2B software companies with ZERO sales personnel. Their sales model is 100x or more cheaper than that of their competitors with field based sales teams. And their velocity is so much higher. I bet you their customer satisfaction is higher too. At no-sales companies, marketing is responsible for demand generation and initial signups. For more complicated products a customer success function is emerging to coach customers post sign-up and to grow usage, users and use cases over time. There was common agreement on the importance of building out customer success teams regardless of the sales model. Customer success managers have responsibility over renewal revenues as well as upselling and carry a quota rather than being a glorified support team.
3. Products are becoming social. The product itself will be the primary sales tool. Much of customer engagement will happen from within the application itself. Customer actions speak loudest: usage is the most important buy or churn signal. Also customers will communicate with other users and with the vendor using in-application communities and communications. The panel agreed that the new Social Buyer demands self-service. It started some years ago with self-service information (‘inbound marketing‘) and these days the ‘must have’ is a free trial or freemium version of your product. The panel agreed that freebies were essential in creating trust. Also think about this: if your competitor offers free trial of some version of your product and you don’t, then customers will be already half-way down the sales process with your competitor before they ever talk to you.
Thanks to the All About Cloud team for having us, thanks to Shubber Ali from Accenture for moderating and thanks to my fellow panelists Jon Miller (Marketo), Todd Bursey (FinancialForce) and Jeff Yoshimura (Zuora) for fun times! See you next year
If you are interested to analyze and predict your customers’ actions, or if you want to make your product social:
I am excited to see so many talk about the importance of the Chief Customer Officer. Dedicating an executive on your team to customer success can significantly boost customer engagement, increase customer retention and ultimately grow customer lifetime value.
We have given the Jeanne Bliss book to several of our clients. We have also written about the rise of the VP Customer Success, a different name for the same animal.
In the last months there is a lot of momentum around the new position of the Chief Customer Officer:
Jeanne Bliss launched a forum for Chief Customer Officers: ”Chief Customer Officer 2.0 is a resource center built for practitioners by a practitioner “, says Jeanne Bliss, head of CustomerBliss. “Chief Customer Officers wrestle with customer leadership across entrenched silos. They must create a connection between customer experience and profitability, while exquisitely listening to the lives of customers. It’s a tough job and they crave resources and an opportunity to share ideas, challenges and solutions.” The new site includes tools, content and real-world materials, including the inaugural series on the Top Ten Aptitudes for Successful Customer Executives.
Desk.com blogged about the importance of a Chief Customer Officer: According to Jeffrey Henning, founder of the Vovici blog, ”Without a CCO, customer advocacy and action is dispersed and diluted. Marketing worries about the customer as a lead; Sales worries about the customer as a prospect; Service worries about the customer as a problem; but there is nobody to think about the customer holistically as they experience and engage with your brands, your products, and the legions of employees who represent your business on the front lines every day.”
While still only a small percentage of companies have a Chief Customer Officer, we believe this will change rapidly in the future, especially as the role will increasingly morph into the “Sales Team of the Future”. Once Customer Success and Customer Officers carry a quote for customer renewals and expansion sales, they will have found their true place in the C-Suite. Especially for subscription based businesses this is happening rather quickly as revenues from existing customers typically dramatically exceeds that of new users (the traditional realm of sales). A customer success team with more power than sales: now that is a world I would like to live in!
The Totango team is excited to announce its participating in the Engine Yard’s add-ons program.
Engine Yard is the leading Platform-as-a-Service (PaaS) provider. Totango provides Engine Yard’s clients a way to better monetize their applications by driving customer engagement and boosting conversion, retention and customer lifetime value (Read Press Release).
Once Engine Yard’s customers have developed an application, attention rapidly shifts to monetization. Totango can accelerate revenues for new and existing applications by providing real time visibility into customer behavior and automating personalized sales and marketing campaigns based on these behaviors.
Talking about Customer Engagement, there are many metrics that could show a user engagement level, i.e. user are considered to be higher engaged if they refer your app to other potential user. Another example would be for returning users – users are more committed to your app if they keep coming back and use your app.
Talking to Mark Kofman, CEO and Co-Founder of 300.mg, these 2 metrics are what’s on his company’s schedule these days and using tools like Totango, help them calculate them correctly and exempt them from developing their own solution in-house.
My name is Mark, and I am CEO. and cofounder of 300.mg.
We’ve built an education center for all your collaboration activities. so we like consolidate all the indications which comes from Dropbox and Google Docs and other things at work with the team. I’d say a couple of months we are in beta right now and doing lots of tweaks and lots of experiments with the application right now.
Since we are coming from 500 start-ups. So, as you might have guessed if you know about Dave McClure’s activation acquisition of AARRR metrics. So, this is probably one of the core things what we do and in addition to the beta we also use a lot of metrics called Virility to understand how our current users actually referring the product to other users.
So, these are the two core things which we do. I think right now one of the most important ones is returning users. Basically, in this we track it simply, if user has been signed up last week like before last week, and if he is still coming back to the applications, so, this what we call a returning user in our system.
Just basically the only thing we are doing, and yeah its like lots of experiments we try out different positioning, ideas, different products, feature improvements. I would say everything what we do is to actually to increase that part, to measure the things which we are trying to achieve, have less metrics probably, not more, and focus on two or three things which we are trying to once and not more.
We try to use the tools and Totango is one of them but clearly something with other people who has built in that, and ideally we would not like to do any calculations or full metrics for this part and overall but there are some components which neither of the tools do, so we to need to do that ourselves.
The webinar will take place Tomorrow, Thursday, April 26th @ 10am PT.
If you still haven’t registered, please go ahead and do so in this URL
Here are some more details about the event:
6 Sure Fire Tips to Retain and Grow Customers
Customer success starts with understanding how your customers are using your product and what problems they might experience. It ends with more relevant and efficient information delivered at the right time, via the right channel.
During this webinar, you will learn the six things you can do today to retain and grow your customers. Zendesk is joining forces with Totango to share with you the insider secrets to transforming your customer support organization into a revenue center and turn prospects into life-long fans of your brand and services. Register here.
I am looking forward to see you there!
Regarding the integration with Zendesk which we accidentally omitted from our news update yesterday:
Integrate Totango with your Zendesk Help Desk
If you use Zendesk to manage your help desk, you can easily create a feed of ticketing activity into your Totango account, expanding your engagement database. You will then be able to tell which accounts are opening support tickets, how this influences their use of the application and their likelihood to subscribe to premium plans or to cancel their account. Read more…
Both companies, who are using the Totango technology, managed to increase their visibility on what their users are doing in their application and therefore optimize communication with them to make sure they’re gaining value out of their product.
Many app services in the SaaS industry lack that visibility. This problem is especially in onboarding new customers and in converting free trial users into paying customers.
“Understanding user behavior is critical to success in the XaaS model”, states Sacha Labouray, founder and CEO of CloudBees.
Zack Urlocker, COO of Zendesk is happy that this solution exists and therefore saves the time on self development: “Rather than trying to build the technology to do this in house, we love the fact that Totango has already figured this out, giving us tremendous insight into what is going on with our users during that trial period.”
Zendesk’s goal was to increase customer engagement for their 30 days trial users and increase the free to paid conversion that way:
“We changed how people experience sending and receiving customer service tickets during the trial. Totango helped us figure out ways to try different approaches to highlight key features which and see ones got the most usage” says Urlocker.
Since Zendesk has massive amount of daily downloads and thousands of customers, they needed visibility into who to focus on in order to gain the most success and Totango is helping them to achieve that and thus increase their conversion rates.
Similarly, CloudBees needed to understand, in real time, how developers in its freemium model use their platform. “We need to see where they start using specific services and using multiple services,” says Labouray. “Before implementing Totango, we tried using analytics to track user behaviors. It gave us overall trends but no insight into what specific teams or specific users within a team or group are doing on our platform. You don’t know what you don’t know. Totango showed us what we didn’t know. We’re using those insights in working a lot of services and reaching out to our users.”
He says they had a big “aha” moment when Totango revealed an unexpected spike in usage all of a sudden. They then realized there is often a lag between when customers sign up for the freemium model and when they actually get ready to use it.
Creating value for customers is the most important activity for retaining customers longer, so all customer-facing teams need to align around that objective. With the right data, you can get real insights into which customers are likely to convert from free to the paid model as well as where those customers come from, their overall lifetime value and the customer acquisition cost and with all of that information, you can build an effective marketing/sales model!
We want to help ensure our customers not only improve their communications with their users but also gain the ability to drive to monetization and unified value-creating goals for acquiring and retaining customers.
Zack Urlocker is chief operating officer at Zendesk and heads up Sales, Marketing, Business Development and Support. Zack came to Zendesk from MySQL, where he was Executive VP of Products. Besides building the business model for MySQL, he helped grow revenues to more than $100 million annually. He has more than 20 years of experience in the software industry and has held executive management positions at Active Software, webMethods and Borland.
Sacha Labourey is founder and CEO of CloudBees. In 2001, Sacha joined Marc Fleury’s JBoss project as a core contributor and implemented JBoss’ original clustering features. In 2003, Sacha founded the European headquarters for JBoss and in 2005 he was appointed CTO. After the acquisition of JBoss by Red Hat, Sacha became co-General Manager of Red Hat’s middleware division until leaving in 2009 to eventually start CloudBees.
This week we’ve added a section into our website which I believe would add value to the SaaS Community – I present our SaaS Resource Center!
The Resource Center is a place where we update the most important/informative/valuable articles on 7 of the hot categories that are most current these days in the SaaS industry and I believe this knowledge base would assist many beginners as well as veterans in this industry to learn on new trends in their fields.
Here are the categories the Resource Center approaches:
SaaS Best Practices – Will consist our latest SaaS business models and SaaS best practices and is updated with the hottest topics facing SaaS software and Cloud app vendors today.
SaaS Sales Tips – B2B sales tips on different sales models such as low touch or zero touch, sales metrics and the best practices to build the ultimate sales machine.
Lifecycle Marketing – Drive the usage and adoption of your application and maximize customer lifetime value. Nurture existing customers based on their specific needs and wants and their use of your application.
Customer Analytics – Perform customer, conversion, cohort, funnel, usage or churn analysis. Discover how big data and customer intelligence can increase SaaS revenues.
Nobody likes it when a customer cancels their subscription. In SaaS companies where the bottom-line is so heavily dependent on Customer Lifetime Value (CLTV), churn is particularly troubling. As Joel York explained in SaaS Churn kills SaaS Growth, unless you know and control churn, your chances of building long-term success for your business are slim.
Now the fact nobody likes churn doesn’t mean it wont happen. It will. The bigger question is, “What will you learn from each customer that churns?”, so you can build upon that for the future. We recommend the following:
The Churn Database
The most important thing to start off with is keeping a record of why customers cancel. It’s amazing how many businesses don’t do that systematically. If your business is of low velocity, this can easily be captured in a spreadsheet. If not, you may want to have something a little more robust. The point is to keep it simple and establish a practice where the data is captured and consulted on an ongoing basis.
We recommend keeping the following 3 data-points on each canceled account:
Reason: as stated by the customer – The best is to add a step to the cancellation process, but you can also get to this by email, calls etc. Most customers will happily give you candid feedback at this stage. Make it a point to ask each one.
Time from subscription to cancellation: How many months from the time they started till termination
Level of engagement the customer had throughout their subscription: At a minimum, did they ever get productive with your offering before cancellation, but you can and should get much more refined than that.
Analyze the data
When it comes to churn analysis, there are two major categories of causes you need to handle very differently:
No more need for the service offering
Ran out of business, was a tactical problem you helped solve and it no longer exists.
If this is the main reason for churn, you may want to consider finding a customer-base that is less volatile, structuring your pricing differently and so forth.
The point is that, if this is the core reason, the corrective actions you can take span beyond the realm of your product and customer-success practices. They may be the realities of your business which you need to factor for in your overall business plan.
Disappointment from the quality service offering
The other case relates to customers that still need the product – they just don’t want to use yours anymore.
If that’s what your churn analysis is telling you, focus should be on figuring out where the failure is and fixing it within your product and service.
Time to cancellation (2) will usually tell you if you have an onboarding problem (people leave because they can’t get established) or if people cancel because they outgrow your solution and move on. Here again, you need to invest in different areas depending on where the majority is.
Engagement level of customers with your application is another key thing to measure because it, almost always, gives an early sign of churn. Knowing that ‘customers typically churn after 3 months of inactivity’ is crucial for building a proactive churn prevention discipline and reaching out to them before it’s too late.
Is Churn really bad?
Finally, consider that churn isn’t by definition a bad thing. Some businesses even have a strategy accepting certain types of churn and compensate for that (see the case of 37signals).
But you must know why customers are canceling for this sort of business planning.
2011 was a busy year! We’ve discussed a lot of important themes which are the hottest topics for any SaaS business such as Customer Engagement, Customer Success, Customer Lifetime Value, SaaS Best Practices, Low Touch and Zero Touch Sales Models, Free Trial and Freemium, Customer Analytics, SaaS Churn, Customer Retention Strategies and more.
With such a vast range, it’s easy to get lost and so I’ve decided to bind the best of blogs and videos related to each topic.
Today I’m going to review the best of Customer Engagement, Customer Lifetime Value, Churn and Customer Retention Strategies.
As you already know by now, Totango’s goal is to help other SaaS companies to optimize their free to paid conversion/on-boarding/up-sell opportunities, or in other words – increase customer engagement opportunities and by that reduce churn whereas our customer success is actually our own success and customer success will naturally increase Customer Lifetime Value (CLTV).
Below are our top posts on these topics to help you get oriented in the Customer Engagement, CLTV and Churn areas: