Totango was recognized yesterday as a finalist for a 2012 Revenue Performance Management Excellence Award by Marketo!
We are super excited! See an excerpt from and link to the announcement below. Also remember to check out our session at the upcoming Marketo User Summit. I am very excited to be presenting on lifecycle marketing together with Jeff Wiss, VP Demand Generation from our friends at Zendesk!
Our session will be on May 24th at 11:20 AM in Imperial A of the Hilton San Francisco Union Square. Register here.
Customers are using Marketo’s technology for much more than closing new deals. They are also using it to nurture their current customer base to score and nurture clients for upsell opportunities and renewals. Find out their secrets for success in turning the customer lifecycle into a revenue machine. Dominique Levin, CMO at Totango will present a three-step program to revenue acceleration using existing customer marketing. In addition, Jeff Wiss, Vice President Demand Generation from Zendesk will present mind-blowing customer marketing campaigns that are boosting revenues for Zendesk.
American Public University Systems, Podio, Totango
“We are thrilled by the tremendous volume of submissions for our second annual Revvie Awards,” said Paul Albright, Marketo’s chief revenue officer. “The finalists are truly game-changing companies with leaders delivering amazing results across marketing and sales. It’s an honor to help provide the dramatic business impact evidenced by the stories submitted. Congratulations to each of the finalists for their achievements in driving revenue growth.”
Finalists were selected based on the following criteria: Innovation, leadership, success metrics and business impact and winners will be celebrated on May 24th, 2012 at the 2012 Marketo User Summit.
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.
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?
Congratulations, as a marketing professional you’ve successfully recruited a qualified customer base: people who audited your product and ultimately chose you above the competition. It’s no small feat, but there’s no time to rest on your laurels – you’re only halfway there.
As your prospects cross the threshold and transform into customers, they continue to demand a certain level of nurturing, attention and engagement, dictated by need and identified through usage. With an understanding of your customer’s lifecycle profile, product consumption and usage, you can launch the right Lifecycle Marketing programs to reach out and expand customer value across your entire customer base.
What is Lifecycle Marketing?
Lifecycle Marketing refers to marketing and sales campaigns that address your customer’s needs and requirements as they evolve over time.
These programs offer great rewards because of two simple marketing principles:
You can often generate more revenues from existing customers (as compared to prospective customers); and,
The revenues you generate come at a much lower investment cost (so you enjoy much more profitable revenues).
With these two principles at play, activating Lifecycle Marketing campaigns to an existing and continually growing customer base significantly increases your chances for generating more revenues, over time.
How to be successful with LIfecycle Marketing?
Your customers’ needs run the gamut: newbies have different needs than veterans; small businesses require different attention than enterprise. By using the knowledge you have about your customer’s profile you can launch Lifecycle Marketing campaigns that serve each client’s individual needs. If you engage a broad spectrum of client needs with generic emails, at best your success rate will be hit-and-miss, at worst, just miss. Directing marketing campaigns to specific users based on who they are (their profile) and where they are in the customer lifecycle (their actual usage of your product) will transform your marketing campaigns into meaningful and engaging initiatives. Whomever the customer may be – timely, topical and encouraging emails will help your clients use your product successfully, as needs and requirements change over time.
3 Steps to Lifecycle Marketing Success
Lifecycle Marketing relates to marketing programs that are anchored to your customer’s needs and usage. Here are some basic steps for conducting Lifecycle Marketing programs with your customers. The first two steps can be implemented immediately with your existing e-mail marketing or marketing automation system, whereas usage-based campaigns can be configured with Totango’s capabilities.
Step 1: Value Communication
First and foremost, communicate with your customers regularly about the value you are generating on their behalf. This form of communication not only acts as a testament to your company’s and product’s ongoing improvement, it also expresses your dedication to continually deliver value to your customers.
Value-based Lifecycle Marketing Campaigns could include:
New features you have added, improved or bugs you have fixed
New content you have generated such as presentations, videos, white papers
Events that you are organizing or attending where customers might meet you
Many companies roll-up all of this information in a weekly or monthly newsletter on behalf of the customer.
Step 2: Product-based Upselling
Upselling works best when you offer additional products that speak to your customer’s needs and usage. You can learn a lot about your clients, based on which product they have purchased and how long they have been paying customers.
Product-based Lifecycle Marketing Campaigns:
Focus upselling campaigns on customers who have already purchased at least one product; customers who have already purchased a product from you are more likely to purchase another.
Offer a special purchasing opportunity based on seniority to customers using a paid product for a prolonged period of time
Generate a special complimentary bundling offer for a purchased product with a product not yet purchased.
Step 3: Usage-based Programs
If you know exactly how customers are using your product in relation to their usage cycle, you know exactly when to send them what message in regards to content, events, features or other offers. Totango monitors this type of product and feature usage and can trigger e-mail marketing campaigns to optimize your Lifecycle Marketing.
Usage-based Lifecycle Marketing campaigns:
Trials phase: customers who registered for a free trial but never logged in should receive a different value e-mail than those who are actively engaged during the trial. Those that started a trial and abruptly left should receive yet another message. By seeing exactly where a trial user gets stuck you can send helpful tips to move the prospect along. Very active trial users could receive content related to pricing or purchasing of paid licenses.
Onboarding: Regardless of how user friendly your product is, every user feels like “the new guy” when they start using your product. Some of your users may have trouble getting acquainted with your feature set, while others may not understand the best ways to the get the most value from your product. You can always stay one step ahead and recommend the next best action for your customer. If you pickup where new users are getting stuck you can e-mail helpful tips and assistance before distress signals are sent out.
Land & Expand: upselling campaigns are more successful if you can send the right offer at the right time. If you monitor how actively a customer is using particular features or the product as a whole you could identify the best time to initiate the conversation about additional purchases.
Customer success: identify a decline in usage as a preemptive measure for alerting you of customers at risk of abandoning your product. Use this knowledge to reach out and proactively retain your customer base.
Rallying in your customers and generating a customer base is more than half the battle. Once they’re in your domain, Lifecycle Marketing programs help you optimize revenue potential by engaging customers as their relationship with your product builds over time. Start with the basics of value communication and build up your programs to product and usage-based initiatives. Your customers will feel that you’re catering to their needs, and your business will reap the rewards.
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.
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.
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.
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
How well are SaaS businesses seeing their conversion metrics?
By definition, SaaS companies should be able to see their critical usage metrics clearly and easily – in real time.
However, in practice many companies are experiencing blurry metrics that don’t provide a clear picture for their trial and conversion performance. Use our infographic to learn how SaaS businesses are (or aren’t) using metrics to see the “Big Picture”.
This infographics is based on the SaaS Metrics Survey conducted a few months ago. The survey helped me understand the SaaS industry’s best practices in regards to key business metrics (download full survey results).
Feel free to right-click to copy use this info in your website/post!
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.
Social Selling Will Go Mainstream – Sales executives will substitute the cold calls with nibbling into the social media networks follow by conducting warm introductions
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
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
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
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
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
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
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
I’ve conducted an interview with Chris Yeh, VP Marketing from PBWorks and thought it would be interesting to share.
As you know, I declared more than once that the customers are kings which means companies should be able to understand their customers behavior and trends and interpret it correctly into customer engagement level in order to know which customers to focus on later at the funnel.
Chris explains why customer engagement is so important when using the land and expand strategy – for example once a large company is starting to use their services their goal is to have that company to use them more and more and eventually to spread into an enterprise wide deployment.
So tracking and enhancing the customer engagement level is very important. The metrics to know that could be i.e. how much a user is using the products, how many usage days they have per week, the total volume of transactions, etc.
I agree with using those metrics in measuring customer engagement and every company should pick the right metrics for its business. At the same time, there are acceptable metrics that every SaaS company should use which are elaborated in our SaaS Business Metrics Survey Results. Using those metrics will not only show the engagement level but the whole business overview which every successful SaaS business should act upon.
Tomorrow I will post another tip by Chris about Freemium Sales Models for B2B and SaaS.
To read the full transcription of the video, click here
I’m Chris Yeh. I’m the VP of Marketing for PB Works, which is a SaaS company that does collaboration software for various markets, like advertising agencies, law firms, and of course general business. Customer engagement is super important to us because a lot of times we have, what we call, a land and expand strategy.
So often times a large company will start to use us in just a small group, maybe just one team that’s using PB Works to be more effective. And what we want to do is to have them use us more and more to bring in more and more people and eventually to spread into an enterprise wide deployment. So what’s very important for us is to be able to track and enhance the level of customer engagement, how much they’re using the product.
We look at things like how many days per week are they using it. We look at things like what’s the total volume of transactions and things that they’re doing and all this is really important for our marketing and for business in general.