In the past few months, since I’ve published the book, I’ve been getting daily feedback from customer success leaders and practitioners: comments, questions and suggestions.
The new blog is the place in which I’m going to engage with the book readers. It is also the publication where I’m going to add new content about customer success.
Please take a moment to FOLLOWit to get updates on new content that is being published there.
Daily Active Users – DAU is the most important metric for Customer Success and user engagement. When Facebook present their quarterly business results, it is the first metric that is being reported on their quarterly call.
You’ll see in their presentation that the second metric that is reported is of Monthly Active Users (MAU).
On a meeting with a very large enterprise software vendor, I was pleasantly surprised to see them starting to adopt MAU as the metric for business success.
Daily Active Users counts unique users active in a given day. Monthly Active Users counts unique users active in a given month.
Although not very sophisticated, DAU is a measure of customer (user) engagement. How many people take the time to use a product or service? If they use it often it means they see value in it, if they don’t, something is missing.
DAU is CSAT and NPS in one. It counts 100% of your customers, the ones that use your product and also the ones that don’t. And, it is objective!
By taking a deeper look into DAU and MAU you can come up with many important actionable conclusions.
Making the Metrics Actionable
DAU/MAU (ratio of DAU out of MAU) – this is usage frequency metric. DAU/MAU of a given group (could be users of in specific account) determines how often your product or service is being used. DAU/MAU that is closer to one (> 0.7) reflects daily use.
MAU/Licenses (ratio of MAU out of licenses sold) – is your license utilization. If licenses represents the number of seats purchased by an account, than MAU/Licenses represents the license utilization ratio. When license utilization > 1 – it’s time to grow the account, when license utilization is < 0.5 we have an adoption problem and potential churn risk.
Objection Handling
Many peeps in the customer success space are very uncomfortable with usage and utilization based measurements for customer success. Here are some common objections and my responses:
What if my product was not designed to be used daily?
If the product was not designed for daily use, change the frequency of measurement to the time window it was intended to – use MAU instead of DAU
What about non-interactive use? for example – website hosting service?
In some cases interactive use does not exist (really? not even admin and configuration?) – so measure utilization instead of interaction.
Isn’t business outcome the most important thing – more than usage?
Yes, value and outcome are very important, but DAU and MAU gives us great indications into that as well. There’s no single metric to measure, so if you can measure business outcome do that too.
If my customer is using my product – it does not mean they will not churn or cancel
That is true there are no guarantees, but if your customer does not use your product or service they WILL cancel eventually.
The most successful businesses in the world run on these metrics – you should do it too.
Tien Tzuo, CEO and Founder of Zuora the subscription billing company is well known within the SaaS industry. He had coined the term ‘Subscription Economy’ and has been pushing heavily for subscription model adoption by many companies.
When I approached Tien to speak at the Customer Success Summit – he immediately agreed. He promised that he has a very good story to share with the audience. Tien openly admitted to Zuora’s challenges with meeting customer expectations and keeping the promise, which is what Customer Success is about.
In this video presentation, Tien not only shares the challenge but also the proposed customer success solution they have implemented at Zuora. Tien is also doing this in a very engaging way, I’m sure you’ll enjoy.
It’s becoming increasingly clear that one of the best ways to get and maintain customer engagement is through video. Like all methods, though, there are some best practices that are always good to keep in mind.
April Bixel on via680 notes that video helps you show off your company’s personality and culture. Getting out in front of them is good all on its own, but putting a friendly and memorable face to your name is extra valuable.
Jacco vanderKooij’s webinar on social media for sales points out (amongst many other things) that video makes a good sales tool: you can show videos interspersed with your presentation on your iPad. They offer consistent quality content that can explain a product’s value at the executive level or provide solid customer use cases. Video will generate more trust and offers the sales rep the chance to sit back and watch the reactions of the audience. If you include a link to a video you sent to customers to watch at their own time, make sure to use a tool like Wistia so you can track who has watched your messages.
Video may be more difficult to produce than, say, a blog post (for instance), but the effort is worth it!
At first glance, “lifecycle email marketing” looks like three nearly-unrelated words stirred haphazardly together into a lukewarm buzzword hash. But appearances can be deceiving: Chris Sturk at Mequoda has written an excellent series of posts on lifecycle email marketing that give great insight into something we could all stand to be doing more of, and better.
– Lifecycle email marketing is about creating a relationship between you and your recipient through well-timed emails. Sturk outlines seven points during the typical customer lifecycle that would be good times to send an email.
– But what goes in those emails? There are plenty of opportunities to offer rewards to prospects and customers alike for their engagement, but it’s possible to do it wrong. Would you like some tips for email reward campaigns? Who wouldn’t?
– Knowing the lifecycle is great and all, but it would also help to segment your audience, so you can send the right messages to the right people. One useful way to differentiate the crowd is by — you guessed it — engagement.
– Just as there are plenty of ways to slice an onion, there are plenty of ways to write a good email. Sturk caps off the series by offering some good examples.
Lifecycle email marketing: less of a buzzword hash and more of a nourishing strategy stew. If you’re ready to start digging in, and you want some help with the audience side — segmenting your users by engagement, for instance — feel free to get in touch. You know where to find us!
How do you grow from trial to paying users? The freemium business model is popular with many cloud-based companies but depending on company size, the user experience for trial users is different each time. We sat down to discuss smart conversion metrics for the freemium business model with Vik Chaudhary VP of Product Management and Corporate Development from Keynote Systems. Keynote is experimenting with free mobile apps to drive demand and leads for their paid enterprise solutions.
To read the full transcription of the video, click here
It’s important to figure out how deeply your trial users are using your product. Here are some metrics to consider:
– Are they downloading your software?
– Are they registering for your service?
– How often are they logging in to the service?
The ultimate goal is to figure what they are doing within your service and how to get them to upgrade to your paid features. Identifying the right conversion metrics will allow you to more accurately target your users and extend the lifecycle of your relationship with them.
Video Transcript:
Hi, my name is Vik Chaudhary and I’m VP of Product Management and Corporate Development at Keynote Systems. At Keynote, what we do is test and monitor the online user experience for companies that are online or have a mobile presence. When you talk about premium business models, there’s really two kinds of premium.
One is if you’ve got a product that’s used by hundreds of thousands or even millions of users. Starbucks is a great product for that. The other one is a product that may be a premium product used by a smaller number of enterprises. We’re talking about maybe tens of thousand of companies using this.
When you have a premium product for the latter, it’s a very different kind of experience that you have to measure. When we talk about premium business models, you really have to think about who is buying your product. On one end, it could be a product like DropBox, which is bought by consumers or by small businesses.
And that could be used by millions of users. On the other side, it could be a product that’s used by tens of thousands of enterprises. So when you think about a premium business model, you really have to think about who’s gonna be buying it and how do you build conversion metrics into the process of going from trial to paying users.
When we start thinking about how do enterprises evaluate and use our products, we really have to go for metrics such as downloading a product, registering for it. But how do they deeply begin to use the product? Are they creating a test script, for example? Are they begging to play back the test script?
How many websites are they testing? How many times are they logging into the product? So as we begin to look at our funnel, we’re really thinking about, what are the users doing here? They’re logging in. They’re logging in many times, they’re creating test scripts, they’re testing their own websites.
Are they coming from existing customers, or are they completely new to Keynote? Those are the kinds of conversion metrics that we think about.
Zendesk, which is one of Totango customers, is using Totango to find out how people who are trying their product or already existing customers are actually using it and how engaged are they with their product.
J.D. from Zendesk, was covering the other 3 steps, to complete the process of building customers loyally, form the customer-service and support angle.
Here are Totango slides from the webinar – please feel free to share or embed them in your website/blog:
This week we’ve added a section into our website which I believe would add value to the SaaS Community – I present our SaaS Resource Center!
The Resource Center is a place where we update the most important/informative/valuable articles on 7 of the hot categories that are most current these days in the SaaS industry and I believe this knowledge base would assist many beginners as well as veterans in this industry to learn on new trends in their fields.
Here are the categories the Resource Center approaches:
SaaS Best Practices – Will consist our latest SaaS business models and SaaS best practices and is updated with the hottest topics facing SaaS software and Cloud app vendors today.
SaaS Sales Tips – B2B sales tips on different sales models such as low touch or zero touch, sales metrics and the best practices to build the ultimate sales machine.
Lifecycle Marketing – Drive the usage and adoption of your application and maximize customer lifetime value. Nurture existing customers based on their specific needs and wants and their use of your application.
Customer Analytics – Perform customer, conversion, cohort, funnel, usage or churn analysis. Discover how big data and customer intelligence can increase SaaS revenues.
Customer Engagement – Increasing customer/user engagement and customer lifetime value and reduce churn through lifecycle marketing and other techniques.
Customer Retention – New strategies to increase customer lifetime value and reduce churn for SaaS businesses, how to identify customers at risk and how to implement customer retention strategies.
If there is a topic that we haven’t addressed and you think is worth mentioning, please don’t hesitate to comment on this post with the subject and we promise to consider it.
Also, if you’d like to guest-post in one of our categories, please feel free to contact me through this form and I’ll get back to you as soon as possible.
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.
– Totango User: See this live for your customer base
– Not a Totango customer yet?: Signup for a free trial or contact us to talk.
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