I just had the pleasure of lunch with Jacco vanderKooij who published an awesome video clip and a Prezi on the future of sales in SaaS that gathered over 100,000 views in the first month. Pretty good for a B2B topic!
Here are some memorably quotes from our inspiring lunch:
1. “From Hunters to Peace Makers”
It is as if we have educated a generation of sales people to be hunters whereas what we need right now are peace makers that help build trust. Peace makers are focused on making a prospect or customer successful and are more akin to consultants than traditional sales managers.
2. “From Screaming to Whispering”
Using tools like Eloqua and Marketo we constantly bombard our prospects with our sales messages: it is like screaming. Now we need to move from screaming (to all customers) to whispering (to the right customers at the right time using social tools).
3. “Images and Emotions, not Arguments”
The message that resonates with the Instagram and Pinterest generation is images and emotions, not arguments. So more video and images, and less white papers and blogs.
4. “Relationships Matter”
Relationships really Matter. On Facebook relationships are fun, but on a business social business network like LinkedIn relationships really matter.
5. “Wow’m, Excite’m, Entertain’m”
When asked how his Prezi got so popular to quickly Jacco recalled that he often starts one of his talks on social selling by showing the cover of ESPN Magazine or Vogue. This is what we are competing with: to be heard you need very compelling content. Personally he is looking to Hollywood for inspiration on how to do this.
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.
I plan to post every Friday on interesting developments and articles on Freemium in B2B land, but we will see how long I actually keep this up
This week is a good week to start as we just signed up to participate in the first-ever Freemium meetup in San Francisco. Three B2B Freemium gurus will be presenting:
Drew Banks, our host and head of marketing at Prezi, a cloud-based presentation software service that opens up a new world between whiteboards and slides. Drew will speak about Prezi’s rapid growth (1M users/month!) and profitability success with a Freemium business model.
Chad Heinrich a.k.a. “Freemium Fighter” is the Marketing Consultant for Avira. He has successfully marketed the Freemium business model in a wide variety of technology companies including his current gig at Avira (with 100M+ users), and previously at Dropbox and Box.net.
Todd Wilkinson is the Co-founder & CEO at WordWatch, a cloud-based app for small businesses that manages AdWords, automatically delivering optimal ROI for Google AdWords PPC advertising.
A Forbes article on Box.net Freemium model: it doesn’t go into much depth, but quotes Box’s initial Freemium conversion at 8% with little sales effort. However also mentions that now Box is hiring up to 200 sales reps: apparently enterprise sales needs a push and a shove even if you are Box.
SAP owned SuccessFactors announced a Freemium version of it’s Jam product (a Salesforce.com Chatter competitor). For now the product is only free to customers, but Dmitri Krakovsky, SuccessFactors VP of global product management, said (when asked if the company is planning to extend the freemium model to non-SuccessFactors customers): “Yes, for sure. We’re always thinking about making it a very broad tool.”
The hot topic at Sales 2.0 Conference today in San Francisco remains (surprise, surprise) social selling (for B2B companies). Lots of speakers and lots of wisdom but also became abundantly clear to me that for most B2B organizations it is very early days in the adoption of social selling techniques. Therefore, for my wrap-up blog of Sales 2.0 I decided to summarize six things that any organization could do to get started with Social Selling.
Mike Derezin (@mikedfresh), Global Head of Sales, Sales Solutions at LinkedIn shared that second degree (LinkedIn) connections are 87% more likely to respond to any e-mail or phone call as compared to a cold call. If there is one place to start it would be to use your second degree connections as part of our (outbound) sales efforts. And not just your own second degree connections: also the second degree connections of the rest of your team. The new LinkedIn TeamLink product looks promising in this regard: it lets you tap into the second degree network of your entire company’s team.
2. Follow and engage strategic accounts on Twitter
Jill Rowley, Director of Strategic Accounts at Eloqua is the queen of using social media to engage with strategic accounts. You cannot do this for all your prospects and customers, but the best place to start is to create a short list of accounts that you are targeting for this quarter and deeply engage with them via social media. Follow them on Twitter and engage with them. Make the conversation personal. Often twitter, and sometimes even a text message, can be a great alternate way to get in touch with target accounts these days when people’s e-mail inboxes are overflowing. Be careful about engaging with prospects on Facebook. Mike Denizen shared research that shows that 80% of people want their social and professional networks separate.
3. Turn all employees into customer coaches
Your goal as a salesperson is to add value. Think of yourself as a customer coach: your job in sales is to make your customer successful and revenues will follow. Jill Rowley, super-star sales queen mentioned above, calls herself a “content concierge” on behalf of her prospects. “Think of prospects as as future advocates for your brand”, says Jill Rowley. “She clearly does a good job”, says Matt Heinz, a marketing consultant on stage at Sales 2.0: “Until today I didn’t know Jill is in sales. I thought she was an evangelist”. Eventually, not just your sales reps should be customer coaches, but every employee in the company is representing the brand and could be building trust with prospects and customers on social media.
4. Focus on lifetime customer value
Eryc Branham said it: “the only sales metric that matters in the end is customer lifetime value”. Customer lifetime value also featured high on Matt Heinz’s Top 10 Sales Metrics list, but I am with Eryc that all that matters in the end is customer lifetime value. Jim Cyb, VP of North American Sales from Zendesk shared: “the key to the success of Zendesk is a land and expand selling strategy”. It is not about the first sale, but about a lifetime of purchases. You can start small, establish any kind of paid relationship with your customer and grow from there. And, as Donal Daly, CEO of the TAS Group pointed out, when calculating Customer Value include “network value”: the revenues generated from referrals made by your customers.
5. Assign leads based on social proximity
I wrote about this before in Top 5 Trends in Sales 2.0 but this is still one of my favorite social selling black belt techniques: assigning leads based on “social proximity” (remember Tip 1 on leveraging second degree connections) makes the most sense. This time, Jim Cyb from Zendesk offered a good alternative if you are not quite ready for “social territories”. Zendesk is assigning leads based on a round robin system which is straightforward, eliminates any territory fights and aligns with today’s low-touch, virtual selling environment.
6. Make your product social
Research says that by 2020, 85% of the buying process will be completed before a salesperson is called. In a day and age that direct contact with buyers is sparse, you should be listening to other channels. Deploy social media tracking like Radian6 and Google Analytics to listen to your prospects. If your product is software, you should also be listening to what your product is telling you. Which trial users are active and what are they doing with your application? Did your paying customers stop using your application (and may cancel their subscription soon)? Of course this is the core of what Totango customer engagement is all about. Even better – make your product a two-way social communication channel. Communicate with your customers when and where you are top of mind: in your application with free tools like Appbox.js.
6. Mike Derezin, Global Head of Sales, Sales Solutions, LinkedIn
7. Robert Pease, Founder & CEO, Nearstream
8. Jill Rowley, Director of Key Accounts, Eloqua
9. Paul Melchiorre, Global Vice President, Ariba
10. Anneke Seley, Founder Phoneworks, co-author Sales 2.0 book
They are all speaking about some of the most important trends in Sales 2.0:
Big data is changing the way products are being bought and sold. It has been called sales metrics, sales analytics, predictive sales analytics and sales intelligence. The bottom line is that there is much talk this year about a more data-driven approach to sales. Jim Cyb, Vice President, Sales for Americas at ZenDesk will be on a panel and talk about ZenDesk’s move from a zero touch sales to a low touch sales organization. His company, which now has 15,000 customers, started life without a sales team. Pete Eppele, VP Product Management, Zilliant will be presenting interesting new technology that can uncover where you can sell more, sell other products and win back wallet share that competitors have taken.
Both Steve Patrizi, Chief Revenue Officer from Bunchball and Kevin Akeroyd, SVP Field Operations from Badgeville will be speaking on how to use gamification or Behavior Lifecycle Management (BLM) as Kevin calls it, can be used to motivate your sales team. I always thought that gamification was used primarily to drive usage and adoption of your products and services by customers. However, both of these sales leaders are eating their own dog food and will share how they get their own teams to use sales best practices and tools by throwing in some fun and games. It should be an interesting duel!
I was pleasantly surprised to see that Kirk Mosher, VP CRM Product Marketing from Oracle will be speaking about “customer success” (a concept Totango deeply cares about). I still of Oracle as the classic Sales 1.0 company: bully customers into signing seven-figure deals, adding another seven-figure professional services engagement and then counting on the fact that customers won’t switch ever to a competitor because they have invested so much money with you. However, it seems that things have changed!
Everybody recognizes that social selling has huge potential but in the real-world sales haven’t yet embraced all new possibilities. There are a large number of sessions (again) at this Sales 2.0 conference to help sales teams learn. Mike Derezin, Global Head of Sales, Sales Solutions at LinkedIn, will break down his social selling tips by lifecycle stage. Robert Pease, Founder & CEO of Nearstream, will cover tactics for identifying buying signals on social media networks, essentially capturing demand that’s already out there rather than generating leads.
Jill Rowley, Director of Key Accounts, Eloqua has been an evangelist for the lead management automation space since its inception. She is a leading commentator on social media and one of the top networkers in the space. She was the winner of 20 Women to Watch in Lead Management last year. More importantly, my friend Matt Childs from Dreamsimplicity tells I absolutely have to meet Jill while at Sales 2.0. She will be on a panel about, what else, nurturing revenue-generating prospects to close.
In Silicon Valley we love technology and I am a tech-girl guilty myself so last but not least I am much looking forward to the talk by Paul Melchiorre, Global Vice President, Ariba and Anneke Seley, Founder Phoneworks and co-author Sales 2.0 book which both focus on “getting real”. Does all this technology really pay off in terms of sales effectiveness?
A full agenda and lots of people to meet!
If you are going to be at the Sales 2.0 conference, give us a shout on Twitter @totango #sales20 and we are looking forward to connect! I will even buy you a beer!
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.
The way that enterprise products are being bought and sold is changing rapidly. Customers are increasingly demanding instant access to all information about your product, including pricing and a Freemium or free trial version of your application. We call this trend the consumerization of B2B sales.
Totango recently conducted a research studying the Freemium, free trial and pricing practices of 550 Software-as-a-Service (SaaS) companies.
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
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?
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.
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!
1. Must be a corporate wide initiative – not just a client services initiative.
Without Board and CEO level visibility, buy-in and sponsorship this type of corporate-wide initiative can be challenging to have all key stakeholders involved and invested. Although it is often lead by the client services team, a multi-departmental approach is necessary for it to be highly effective.
2. Each Department Leader has a key role to play
In a successful Client Lifecycle program, the leaders in departments such of Sales, Marketing, Product Management and Client Services all have a role to play at some point. Their contributions provide the pieces to the puzzle for a client when they are decided whether or not to renew.
3. Market and Promote your client lifecycle program
When you develop and execute on a truly unique approach to client engagement that will absolutely be a differentiator from your competitors, brand it. Market it. Don’t be afraid to let people know that your whole company has an approach that will make your clients successful with your product & service over the long haul. This added visibility also provides the appropriate amount of pressure to make sure your organization sticks with it.
4. Have a designated owner who acts as a “quarterback” of Client Lifecycle program.
Coordinating multiple stakeholders does require ownership for a client lifecycle program. The Executive owner is often the most senior client-facing (post-sale) executive. Depending on the size of firm, this would be the CEO, COO or VP of Client Services. This executive owner should be responsible for client retention. From a client to client perspective the owner should be a post-sales account manager, often referred to as a Client Advocate, Client Account Manager or Client Success Manager who is measured on retention, and not new sales revenue.
5. The Client Lifecycle activities should support the three main criteria that a client will use when deciding to renew:
Although this is a potential point of debate, from our experience there are 3 key factors that your client assesses when deciding to renew business with you:
Is your organization meeting or exceeding their current business needs / business drivers;
Does your client have confidence that you will continue to meet their current, future and evolving business needs business drivers, and;
The client is confident that they picked a market “winner” not a market “loser”. For example, even though RIM continues to be quite strong on meeting the business needs of the corporate user community, they will still lose many clients because they are now perceived , wrongly so, as a market “loser”. No one will want to be the one that made the decision to go with a market “loser”.
Each of these three areas must be proven, measure, re-evaluated over and over again throughout the client lifecycle to ensure that the elements your can control or influence are in your favor when they are making a renewal decision. There are other factors outside of your control, but they are just that, outside of your control.
6. Should leverage, and take advantage of, your ability to use client driven referrals to generate new business.
This should be an obvious, but many companies stop at having a logo on a website, or perhaps a case study, as a method to use an existing client as a reference. The reality is, that if you are doing a great job for your client, many of them would take a call from a prospect, or even better, refer you to a peer from another organization who would also benefit from your solution. As a former colleague of mine used to say, “Don’t ask, don’t get”. Understand, per client, what type of reference they are willing to be, and leverage it – but don’t take it for granted either. You need to continue to earn their reference.
7. Should concentrate on user adoption and overall usage rates
The user community within your client’s organization can change frequently due to layoffs, new hires, mergers, and other business events. You client lifecycle approach must have a deep understanding of the user community and adapt to a changing and evolving user base within the client’s organization. A strong client lifecycle approach is highly proactive in tracking usage & adoption and stays on top of the shifts in user community and reacts accordingly. A fantastic product that could help you get great detail on usage iswww.totango.com . It gives a level of usage intelligence that is invaluable.
8. Should provide client intelligence on the renewal health of each client
Having a client lifecycle program that measures, among other possible things, business driver attainment, Vendor-Client interactions, client’s willingness to be a market reference and usage rates provides an ongoing scoring ability to gain a solid understanding of the likelihood of renewal. Doing this in regular intervals gives you plenty of time to change the course for any client who is on the path of not renewing.
9. Measurable with centralized access for all stakeholders
A successful client lifecycle program is like a hub on a wheel with information “spokes” going to and from all key stakeholders in the your organization. Each group will benefit significantly from the knowledge/intelligence gained about client activities, successes, failures etc. In our experience, it can have a profound effect on who you market to, how your market to them, what the actual development priorities should be, etc. With one of my clients, it provided great clarity into a market segment that just wasn’t right for their solution. They pulled all Leads, Opportunities with prospects from this segment, and they exited gracefully from existing contracts that we knew were doomed to fail.
10. Proactive in nature,
If your sole interaction with your clients is reactive by definition it’s a failure. Getting ahead of a train, is far better than being run over by it.
This blog was first posted at ServiceVantage by Jeff Bennett, Founder and CEO. His company, ServiceVantage, which has helped technology clients to maximize recurring revenue, strengthen client retention and increase client-driven referrals via a unique client lifecycle approach since 2002.