Category Archive : Added Value

10 Tips for B2B Sales in the Subscription Economy

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The subscription-based economy is thriving.  Netflix’s well-known model (and subsequent public relations mess in changing it), and the recent announcements from Google and Apple have set it in stone.

The subscription model, like many of the B2B sales models in the SaaS industry, is all about the customers – listen to your customers and have your service to comply and you’re on the right direction!

Here are 10 tips that can assist subscription based companies to get by in the industry:

1. Keep it simple

Ease of use is a key aspect of the subscription economy.  Subscribers want the one-stop shop, and their attention will not be kept easily.  Frustration, which might lead to churn, can be easily ensues if they can’t find what they want or need.

2. Customize to the consumer

Bob’s business is not the same as Mary’s.  Can you offer flexible payment options (weekly, monthly, annually)?  Family versus individual?  Basic versus premium?

3. Curate

More is better, but more can also be overwhelming.  Netflix’s popularity is in part because it offers customized selections based on its subscribers’ viewing history.  If the subscriber never, ever watches foreign language films, they don’t want to have to scroll through them to get to the good stuff.

4. Make it social

Can your subscribers see what others think of this product?  Can they easily share it through social media?  Social media has the power to sweep many others and help in distribute your message – and it’s free, so you might as well use in your business favor.

5. Offer continuing value

Make sure your offers will always consist of an added value. Can some ancillary information help your subscribers?  Partner with other companies that add value.  Also, what new thing can you offer?  Can you surprise them with how good it will be?

6. Keep it open

Remember what we said about the ancillary market?  Is your forum open enough to allow add-ons?  Don’t keep things so proprietary that spontaneous creation is stifled.  Think of Flickr, for example – would it help or hurt their business to team with a photo editing application?  It would help, of course, and they’ve allowed just that.

7. Give it away

If you still haven’t done so, consider  using a free-trial or freemium model for your product. Subscription economy is likely to be ruled by the free-to-join.  For example, you can make your overall platform free and have advertising, add-ons or premium offerings in order to make it profitable.  Think Facebook – free to join, but not likely to go broke anytime soon.

8. Don’t charge for that which was once free

How would you like to have nearly 9000 pages of complaints about your new pricing structure?  That’s what Netflix got for their announcement that they were nearly doubling their prices, removing services their subscribers had gotten used to having included, and offering no additional value in the exchange.  Calling it a great deal just added fuel to the fire.  (If you can’t give it free, keep it as low as possible!)

9. Keep the customer relationship as thy first priority

With the Netflix debacle, it’s not just about the pricing.  Their customers felt personally betrayed.  If you succeed in accomplishing a real relationship with your subscribers, where they recommend your service not for incentives but because they’re real fans, the worst thing you can do is spoil that relationship in a “money grab.”  Nurture your relationship.  Keep customers in mind as you consider changes.  Get feedback on proposed changes.  Don’t sell their information to spammers or let slimy advertisers in.  Business is more personal than ever.

10. Enjoy

Customers in the subscription economy are more savvy than ever.  They can tell if you honestly love your own offerings or if you’re just using sales tactics.  Let you enthusiasm shine through and it would be a win-win situation!

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

 

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