3 Big Ideas for Software-as-a-Service Customer Success

big ideas for saas

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:

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Chief Customer Officers Boost Customer Engagement

Chief Customer Officer

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.”

Audrey Manring profiled the Chief Customer Officer in CRM Magazine. She is quoting the research of several analysts: ”All the forces of gravity suggest the chief customer officer (CCO) position needs to exist,” says Stephen Diorio, president of IMT strategies, an e-business strategy consulting firm and META Group affiliate.

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!

Totango Accelerates Revenues for Engine Yard Customers

Engine Yard Logo

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.

Totango also announce 2 new developer tools:

  1. The Appbox.js – which is a free javascript tool to communicate with customers from inside the application. Try it free now!
  2. Totango API for iPad and iPhone applications – which is an app that allow you to easily instrument your iPhone and iPad applications with Totango, making it easier than ever to see how users are engaging and interacting with your mobile apps. In addition to iOS, Totango provides integration packages for all common programming languages including, but not limited to PHP, C#, Java, JQuery, Ruby, Javascript and Python.

6 Sure Fire Tips to Retain and Grow Customers

zendesk-logo-e1291107356736

In the week that we also announced integration with Zendesk (see below), I wanted to remind you of the “6 Sure Fire Tips to Retain and Grow Customers” webinar where Totango will be co-presenting with Zendesk.

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

What is the Connection between Lifecycle Marketing and Automated Nurturing?

Robot and a Human Hand

Reading Fergus Gloster’s post on Marketo’s blog got me thinking how Lifecycle marketing has dramatically evolved lately.

Fergus states that Marketing Qualified Leads (MQL) won’t turn into Sales Qualified Leads (SQL) by themselves – this phase can’t be automated and requires human interaction.

I agree with Fergus about the necessity of an additional role which businesses should consider. This role should help submitting qualified leads for the sales team. Mark Roberge, VP Sales at Hubspot has also talked about this by distinguishing the Hunter’s job from the Farmers.

I also talked in the past about the necessity of the Customer Success role in the SaaS industry new generation model.

But how would this function know which leads are qualified for their sales team? Well, Marketo is offering their scoring system, which based on user behavior on your website, which is a really efficient tool!
However, how would you know what leads are doing inside your APP?
For example, would you react differently if a new signup of yours signed up once and didn’t invite new users for your service rather than a user who logged in 3 times and invite 2 of his colleagues? Of course you would! You would like to invest more on the second user which reflects a higher level of engagement, won’t you?

And what if several users have entered one of your most important pages which suppose to lead for a sale and then signed out and never go back? you would probably want to look at that page again and figure out conversion issues, right?

This is why Totango service also offer the engagement score that would show you in-app engagement involvement.

But why compromise on one of the solutions – why not use them both?

This is why Totango and Marketo have joined forces and now Totango is also offering integration with Marketo’s services – this is how you could both know what’s happening in your application, get analysis on wha’t going on your app and then use Marketo strong nurturing tool to send your users exactly what they need to know by the stage they’re stuck on or need help with – the perfect match – Totango’s Lifecycle Marketing with Marketo’s automated nurturing – can you afford not to have it?

Five Tips to Customer Love

Customer Success

When you’re in the Software-as-a-Service (SaaS) business, you should think of how to attract your users to your application in a way they’d be more successful due to it and therefore happier. If you think about selling, chances are it won’t going to happen… especially when your sales model contains a trial period or freemium, where users check up your app before deciding they need it. Also, you should think of your existing customers – you want them to renew their service, right? They’re all seeking the added value to reach success.

In my last article: 5 Tips for Creating and Maintaining Customer Loyalty, published in Mashable lately, I gave 5 tips for customer success, here is their summary (read the full article here)

1. Make Customers Love Your Product

Make sure your application is adding tremendous value to your users, making them happy and successful with what you offer. Also, your users should go through an enjoyable experience while in your app and receive great support, resources and help.
It’s not easy, but Customer Engagement can help. By listening to your customers, understanding them and engaging to fulfill their needs you will get customer love. It’s really that simple.

2. A Customer Success Team

Assign an executive on your team to be responsible for customer success. That would help you understand the value your users subscribed for, guide new customers through training steps, and monitor for any signs of unhappiness.
Customer success is key to your growth – successful customers stay longer, increasing your revenue.

3. Create a Customer Health Score

To help customers succeed, you need to find out who’s doing well and who’s struggling to get value from your application. The only way to do that systematically is to define a consistent health benchmark for your paying customers, then track each account to see who needs help. Here are some example benchmarks:

  • Good Health: Successfully using the application
  • Average Health: Using the application, but not at the level of a successful customer
  • Poor Health: Not using the application; unsuccessful

What defines a healthy customer depends on your service, but be sure to define, track, and monitor it on an ongoing basis.

4. Nurture Your Paying Customers

Lifecycle marketing is the discipline of marketing to your existing customers, based on the status of the relationship. There are two important lessons here.

  1. Don’t stop selling once customers sign up for the paid service.
  2. Don’t treat all customers equally. That means you should communicate very differently with a customer in poor health than with a customer in good health.

5. Learn From Churn

Consider creating a churn database. This would be a place where you store information about cancelled customers. It should contain the following:

  • Reason: Why did the customer leave?
  • Membership Length: How long were they customers before cancelling?
  • Engagement Trends: How engaged were they throughout their subscription?

See if you can identify and mitigate trends. Your goal should be to improve the experience for current and future customers. Customer success should be a pillar of your business. Happy customers help generate new leads and business. Unsatisfied ones create PR nightmares. In our connected world, customer success is your most important marketing asset.

Read the full version article

View presentation: Tips for Customer Success:

Communicate with your Customers from within your Application

CloudForce Interview DreamSimplicity

Interview to DreamSimplicity.com

I met Matt Childs from DreamSimplicity again at the CloudForce 2012 event and had another opportunity to share what Totango is up to lately. I wanted to share with you the interview I gave him at the show.

Full Customer Engagement Management

Totango is all about helping SaaS companies to increase their users’ customer engagement. With Totango you can listen to your customers within your application and then decide how you’d like to communicate back to them.

Introducing – The Appbox Application

In CloudForce, we chose to introduce one of our new tools that can help you communicating with your users from inside your application.

Appboxjs imageThe Appbox is basically an inbox that you can place within your app and which allows you to send messages to your users at all times – and of course it’s free, built in open source environment, available at your service and you can give it a try today!

View the complete interview to DreamSimplicity here:

How Zendesk and CloudBees Increase their User Engagement

SandHill Logo

Yesterday, the SandHill Magazine have published an article about Managing Challenges of Onboarding SaaS Customers and Converting from Free Software Trials where 2 of the very popular app services providers – Zendesk and CloudBees, were quoted about their success in increasing engagement level and therefore their free to paid conversion rate.

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.

 

What about you – have you tried our service yet?
Signup now for our free trial!


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-CloudBeesSacha 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.

New Customer Health Dashboard to Easily Monitor Customer Success

Success Graph

The Totango team is excited to announce the release of the Customer Health Dashboard which helps cloud application providers and software as a service companies of all kinds track and manage overall user happiness at a glance (Read Press Release).

Customer Health Dashboard

 

The first of its kind, the Customer Health Dashboard is a configurable cloud-based tool that summarizes customer success and engagement using their realtime activity streams, capturing and calculating data like overall time spent, license use, CRM system feeds, and trouble tickets. With it, you can get a clear picture of your customer base’s health, identify customers at risk, and track trends across segments.

Break Down by Success Manager

The Customer Health Dashboard is especially useful to businesses who see value in the growing trend of shifting focus from acquiring new customers to driving usage, adoption, and happiness in existing ones — the hallmarks of customer success.

For providers of software as a service, company revenue depends on having happy customers who keep renewing their subscriptions; the lifetime value of existing customers may end up far exceeding the gains made by simply picking up new ones. Customer success begins with customer acquisition and onboarding, but continues after a customer signs up with you; renewals and expansion sales depend critically on customer happiness.

Totango found in recent customer success research amongst over one million prospects and customers of software businesses that over 50% of paying customers aren’t using the service they paid for.  The same study also found an unsurprisingly near-perfect correlation between non-use and cancelations: cancelations of software subscriptions were almost always preceded by a period of non-use.

The Customer Health Dashboard can show you at a glance how well your success strategies are working and gives customer-facing personnel the tools to help customers be more successful where needed. Not only can you quickly locate your best customers, but you can also identify the ones requiring the most attention and take immediate action, engaging with them before they see a problem.

Interested in learning more about customer success management (CSM)? Totango would be delighted to host you at our free meetup on The Future of Customer Success on Thursday, April 5th, from 7-8:30pm in San Mateo, CA. Mikael Blaisdell, publisher of The HotLine Magazine, will be on hand to give a talk and host a Q&A. Come have a snack, meet your fellow CSM professionals, and stick around for some customer engagement tips from yours truly.

Totango Featured in WSJ …

Steve Jobs at Totango

Totango was quoted today in the Wall Street Journal in an article about Steve Jobs:

“It’s not to that point of being annoying yet, but it might get there,” says Dominique Levin, vice president of marketing at Totango Inc., a software company based in Mountain View, Calif., and Tel Aviv. Her boss, CEO Guy Nirpaz, devoured all 656 pages of the book in three days, then bought copies for his employees—including Hebrew translations for employees in Israel—so they could discuss the book at company meetings.

“When they read it, they’ll see that you can do things differently, be more product focused,” says Mr. Nirpaz, 39 years old, whose company builds software that monitors customer relations. He also hopes employees will take a softer view of their own boss after reading the book, which portrays Mr. Jobs as a brilliant but mercurial leader.

“I’m a good guy, but I’m very demanding,” says Mr. Nirpaz. Once his employees have read the book, he adds, “they’ll see I’m a very nice manager compared to Steve Jobs.”

Ha ha … as I said, we are good guys and don’t take ourselves too seriously.

Check out the article on the WSJ website (at least for the next 7 days).

Come work for me! We are hiring!

Coders, hackers and UI freaks (Israel)
Community manager: aka social media ninja (Mountain View, CA)
Sales development manager: aka front line warrior (Mountain View, CA)

Also hiring a sales manager and customer success manager (Mountain View, CA)

To apply email Jobs[at]TOTANGO[dot]com (pun intended)