Category Archive : cltv

Best of 2011: Top Videos and Blogs on Customer Engagement

Customer Engagement and Customer Success

2011 was a busy year! We’ve discussed a lot of important themes which are the hottest topics for any SaaS business such as Customer Engagement, Customer Success, Customer Lifetime Value, SaaS Best Practices, Low Touch and Zero Touch Sales Models, Free Trial and Freemium, Customer Analytics, SaaS Churn, Customer Retention Strategies and more.

With such a vast range, it’s easy to get lost and so I’ve decided to bind the best of blogs and videos related to each topic.

Today I’m going to review the best of Customer Engagement, Customer Lifetime Value, Churn and Customer Retention Strategies.

As you already know by now, Totango’s goal is to help other SaaS companies to optimize their free to paid conversion/on-boarding/up-sell opportunities, or in other words – increase customer engagement opportunities and by that reduce churn whereas our customer success is actually our own success and customer success will naturally increase Customer Lifetime Value (CLTV).

Below are our top posts on these topics to help you get oriented in the Customer Engagement, CLTV and Churn areas:

Customer Engagement and Customer Lifetime Value:

SaaS Churn and Customer Retention Strategies:

Tomorrow I’m going to review the best of SaaS Best Practices for SaaS and Application Vendors


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What is the Best Sales Model for You?

HubSpot Tip

So how do you know which sales model is best for you – zero touch vs. low touch vs. high touch vs. field?

In his last tip from the Sales 2.0 Convention, Mark Roberge, VP Sales at Hubspot explains that it’s really depends on your buyer, what you’re selling and the full sales context and it does require some experimentation.

Preferably you should aspire to go on no touch or low touch as possible as the economical will always be best if you can pull that off.
But it is best to simply run experiments – set 100 leads to no touch and 100 leads to low touch and check the conversion rate, revenue, Customer Lifetime Value and in SaaS see what the CAC to LTV is  (Customer Acquisition Cost to Lifetime Value) and what the payback periods are and take the approach which has the best economics.

Furthermore, as mentioned in many of my previous posts, it is highly recommended to keep a thorough and updated Cohort Analysis for your metrics so that user behavior would come out accurately. This is the only way a successful SaaS business could reach the right consequences and choose its suitable sales model!


Review Mark’s first tip “Do you Distinguish Your Sales to Hunters and Farmers?

Review Mark’s second tip “Top-of-Funnel Strategy

To read the full transcription of the video, click here


Video Transcription:

Mark Roberge, VP of Sales at Hubspot.

Yes so, zero touch versus low touch versus high touch versus fields, the quick answer is it depends, unfortunately, and I’ll walk through the dynamics. It really depends on your buyer and what you’re selling in the full sales context. And it’s gonna require some experimentation. I think in general you’d prefer to go as no touch or low touch as possible.

I think the economics will always be best if you can pull that off. But hey, if you’re wondering, “Here’s a lead that has 50 employees in this particular segment. Should this be a no touch or a low touch or a high touch?” You run experiments. You send a hundred leads like that to no touch, you send a hundred leads like that to low touch, and you see what the conversion rates are, you see what the revenue is, you see what the lifetime value is, in a SaaS role you see what the LTV to CAC and the payback periods are, and then whichever ones have the best economics, you take that approach.

Using Customer Analytics to Increase Revenues of SaaS Business

Presentation: Using customer analytics to increase saas revenue

This week I was attending the Business of Software Workshop talking about Using Customer Analytics to Increase Revenues of SaaS Businesses.

I’ve shared the presentation I’ve used in the workshop in which I discussed:

  • Characteristics of the SaaS business
  • How CLTV (represents Customer Success) should be higher than CAC (represents Marketing & Sales)
  • The Customer Engagement Cycle
  • Grow Conversion Rates
  • A case-study on the SaaS Low Touch Module which shows how to focus on the converting opportunities and create priorities in order to increase conversion, reduce churn and enetually increase revenues for a SaaS business
  • Ensure customer success (CLTV)

Can you implement those important tips in your SaaS business?

SaaS on the House. A Dialog About Value

Who doesn’t like it when the bar tender pours an extra glass of fine wine ‘on the house’?
Every time it happens to me, my emotional attachment to the establishment grows, and it makes it that much more likely that I’ll visit again.

I tend to have the same feelings when I receive monthly emails from amazon AWS about new features and cost reductions, and a recent email I got from Beanstalk announcing a bunch of new services all included within the same package I’m already paying for. It’s a great way to create loyalty for subscription services.

Constant increment to value and service level improvement without additional costs is probably one of the biggest benefits for SaaS customers. It is inherent to the subscription/pay-as-you-go business models. The power is in the hands of the customers who can always decide to cancel their subscription. SaaS vendors must constantly innovate and create additional value to keep their customers happy.

SaaS vendors, frequently monitor a metric called Customer Life Time Value (CLTV). How much revenue does my average customer generates over it’s life-time. However, this metric can also be seen from the reverse perspective, how many months does my average customer continue to see value from my service such that they are willing to continue paying for the service.
It is also a key benefit for software vendors. Success comes from focus on the customer-lifetime value, which can only come when you truly understand customers and their changing needs. Anyone who developed software products knows how easier, more productive and more enjoyable it is when you have than organizational knowledge. With SaaS you have no choice but to develop it.

These type of customer/vendor relationships are healthier and thus last longer. As long as customers are getting real value they will pay for the services they are consuming. In the old, on-premise applications world, customers had to pay in advance for a service/product they didn’t really use yet. This up-front payment created a dynamic where application vendors where focused on the initial sales, and decision makers where focused on making the first initial buying decision. You can clearly understand why the new model is better for both sides. The new conversation between vendors and customers is about constant value creation, delivery and consumption.

Another great benefit which comes from both SaaS business models and the web based delivery model is a much faster value creation cycle. The motivation of the SaaS vendor to create value faster, combined with the opportunity to manage a single version of the service enables rapid cycle times. Customers are getting new features and functions which create value much faster.

Shorter customer commitments and business model flexibility presented by SaaS promotes healthy relationship between vendors and customers which revolves around value – simply win win!

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The 2012 SaaS Free Trial, Freemium and Pricing Benchmark


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