We’ve held yet another very interesting lean-startup meetup on Thursday to discuss free to paid conversion best practices for cloud applications.
First, please find within the presentation I’ve used. It’s a collection of many ideas we’ve been working on at Totango collected into idea presented by this presentation.
I emphasized during the talk the need to focus on the ‘evaluating’ users – the ones that their actions indicate genuine intent to come up with a buying decision.
Many people still wanted to understand what to do with the other group. The short out of the sleeve answer would be: “It depends ”. Seriously, this question deserves a blog post on it’s own which I’m going to write later this week.
In the mean time, please feel free to enjoy the presentation. You will be able to learn a lot also by starting a ‘free trial’ for the Totango trial conversion product. So here’s the link for that as well.
If you enjoy this content, please be kind and share it with your friend. The links are above and below.
Another tip from VP sales at Hubspot Mark Roberge at the Sales 2.0 convention re top-of-funnel strategy.
Mark recommends on keeping the top-of-funnel as wide as possible and worry about the filtering and the quality further down at the funnel.
Most companies don’t know what type of a customer will convert and this will allow tracking a whole bunch of data that can be analyzed later.
However, the danger in that strategy is when passing all those customers to your sales team, it could lead to ineffectiveness and waste of their time so it is recommended to use filtering at this stage so that the most quality stuff is being transferred.
I highly recommend at the top of the funnel keeping it as wide as possible and worry about the the filtering and the quality further down to the funnel, and the reason being is especially when you are stunning out and most people are starting out with inbound. You actually have no idea who’s going to work out, what type of marketing tactics are going to work, what types of buyers are going to actually work well in your funnel, so keeping it why it is, possible allows you to capture a whole bunch of data to see what actually progresses through.
The danger in that strategy comes when you pass everything to the sales team, because that can lead to a lot of ineffectiveness in recent time by that sales team so with that process you want to have a lot of filtering to make sure that the most quality staff is actually getting down to the sales team.
And as you gather data and gather more and more leads, you will continue to optimize that process.
Darren is also claiming that even in a self service model (low-touch model) like HootSuite, once they find out who are their active users in their service, they proactively reaching them and by that they reduce churn.
Tomorrow I will publish a tip by Mark Roberge, VP Sales at HubSpot who will explain the difference between the hunters and the farmers skill sets.
To read the full transcription of the video, click here
I’m talking to Darren Suomi, VP of Sales from HootSuite.
Bring me a model which where we play, it is a self-service model. So, we’re really trying to look at it from turning down the churn. I guess I’m looking at what people are trying to play instead of going from just a self-service. We’re actually just playing with the model in terms of a little bit of more of a high touch point. So, we are really taking a look at our customer who are quite active on social media. We are actually proactively reaching out of them and seeing where we might be able to help them versus just letting them fend for themselves.
Following Lincoln Murphy’spost on SixteenVentures.com (talking about conversion average rate for free trials, pricing pages or Freemium for SaaS or Web Apps), conversion rate average figures will do no good, as it doesn’t reflect the whole picture and usually lacking context.
It’s hard to know what metrics are being used for the “average conversion rate” and Lincoln claims that looking on average numbers to plan businesses around might make us average ourselves – and who want to be considered average?
Every company aspires to increase their conversion rate figures but Murphy’s suggestion is to figure out where you are today and then figure out how to make it better.
Meaning, if you’re at 1% conversion rate, reaching 2% is achievable, even though it’s 100% increase over what you have now.
I agree that context is crucial and also explained about this in “Measure trial conversion rate” webinar. Furthermore, in order for each SaaS business to understand where they stand, a lot of other metrics need to be taken under account besides conversion rate from free to paying customers. For example – do you also review unique visitors to your website? Social media mentions? signups, churn rates, customer lifetime value, account activation rate, account usage statistics, etc.?
All of these are metrics that should be taken under consideration in order to reflect the whole picture for a SaaS company and to allow it to set its goals.
Which metrics do you use to make your goals setting?
If you’re part of all the excitement around Dreamforce 2011 be sure to come and meet us. You’ll recognize us right by the Tango dancers (what can we do, rhymes with Totango…).
We also thought that this would be a great opportunity to introduce Totango to a wide audience of SaaS sales and executive teams. For that end we’ve started a twitter campaign at www.totango.com/win-ipad2. People who help us spread the word may win a new iPad2 and more importantly will be able to use Totango to get meet their quota.
If you’d like to schedule sometime to discuss Totango in more details please write me at email@example.com
Managing a Software-as-a-Service (SaaS) business isn’t trivial. Successful SaaS companies are able to deal with a high volume of leads and turn those into a high volume of loyal customers with fast response and turnaround time.
This is often referred to as the ‘sales and marketing machine’ – a highly optimized, massively scalable and controlled business operation that is capable of:
Continuously increasing the service value, differentiation and offerings.
In order to build a ‘sales and marketing machine,’ companies need to invest in the tools that will get them the business scalability that is required and reduce the learning curve.
Many startups begin with homegrown solutions using spreadsheets and databases (with a bit of integration glue in between). This is sufficient for small scale, but quickly becomes unwieldy as the organization grows. Luckily, there are excellent tools available for SaaS companies to leverage.
Many vendors have a “starter” package, so there is really no excuse not to start building your tool-chest sooner rather than later.
The Customer Life-Cycle
To best understand where the different categories of tools fit, it’s best to look at the various stages of the customer life-cycle, as they evolve from early prospects to mature customers.
At Totango, we use the following customer life-cycle terms:
Visitor – Anonymous user on the website
Lead – Person who has expressed some interest in the service. This can be anything from downloading a white paper to signing-up to a trial
Evaluating – A user (or company) who’s actively evaluating the service usually during a trial period or fermium
Onboarding – A paying customer in the initial usage period
Mature – A paying customer who has been loyal to the service beyond the initial usage period
With those definitions in mind, it’s easier to associate solutions and tools to help carry customers through every phase of their life-cycle.
CRM (Customer Relationship Management)
CRM is a common way to keep a reference of all customers’ life-cycle stages. CRM organizes all contacts’ information and account details in a single database, so it’s vital you select a tool that fits your needs and can grow with you.
Specifically, your CRM software will be the main working software of your inside sales teams as they organize account work mainly during the sales life-cycle phases.
Web analytics tools keep track of visitor activity on your website and various other marketing properties; this is where you keep track of your top-tier leads funnel, measure the initial success of marketing and advertising programs, and work to improve visitors’ experience with your products’ properties.
Mainly the marketing team, though other users in the organization (product team, IT) will need to use it as well.
Select list of Web Analytics solutions Google Analytics is the most commonly used tool. It’s immensely powerful, feature-rich and free. But there are other good tools your marketing team should look at, such as Clicky, WebTrends that provide additional useful views into vistiors’ actions.
Marketing automation takes you beyond basic web-properties and aims to help you interact, build, and cultivate a relationship with leads, so they can ultimately be passed on to your sales team and “convert” to happy customers.
This is your marketing team’s main toy!
A post marketing (sales & customer success) solution stack for SaaS companies does not exist yet. Enabling the buying process (converting leads), ensuring customer success, and increasing service value, is something that I feel is needed and missing in the market, and this is what we’re building in Totango.
Having all the above tools in place enables marketing, sales and customer success teams to effectively do their jobs and be an integral part of the ‘sales and marketing machine’.
Having said that, it’s crucial to have a single business dashboard available to the executive teams that allows them monitor the business end-to-end.
The SaaS dashboard should include operational metrics, trends and key business performance indicators (KPI’s), which allow the business owners, get ‘the full picture’ of the business, identify bottlenecks and allow to teams to take appropriate actions.
The SaaS model presents an opportunity to run a predictable and high-volume business. The first step is to put the required business infrastructure in place in order to monitor, analyze and optimize the sales and marketing machine operation continuously.
In coming posts, I’ll discuss in further detail the actual attributes of the SaaS dashboard.