Talking about Customer Engagement, there are many metrics that could show a user engagement level, i.e. user are considered to be higher engaged if they refer your app to other potential user. Another example would be for returning users – users are more committed to your app if they keep coming back and use your app.
Talking to Mark Kofman, CEO and Co-Founder of 300.mg, these 2 metrics are what’s on his company’s schedule these days and using tools like Totango, help them calculate them correctly and exempt them from developing their own solution in-house.
My name is Mark, and I am CEO. and cofounder of 300.mg.
We’ve built an education center for all your collaboration activities. so we like consolidate all the indications which comes from Dropbox and Google Docs and other things at work with the team. I’d say a couple of months we are in beta right now and doing lots of tweaks and lots of experiments with the application right now.
Since we are coming from 500 start-ups. So, as you might have guessed if you know about Dave McClure’s activation acquisition of AARRR metrics. So, this is probably one of the core things what we do and in addition to the beta we also use a lot of metrics called Virility to understand how our current users actually referring the product to other users.
So, these are the two core things which we do. I think right now one of the most important ones is returning users. Basically, in this we track it simply, if user has been signed up last week like before last week, and if he is still coming back to the applications, so, this what we call a returning user in our system.
Just basically the only thing we are doing, and yeah its like lots of experiments we try out different positioning, ideas, different products, feature improvements. I would say everything what we do is to actually to increase that part, to measure the things which we are trying to achieve, have less metrics probably, not more, and focus on two or three things which we are trying to once and not more.
We try to use the tools and Totango is one of them but clearly something with other people who has built in that, and ideally we would not like to do any calculations or full metrics for this part and overall but there are some components which neither of the tools do, so we to need to do that ourselves.
The webinar will take place Tomorrow, Thursday, April 26th @ 10am PT.
If you still haven’t registered, please go ahead and do so in this URL
Here are some more details about the event:
6 Sure Fire Tips to Retain and Grow Customers
Customer success starts with understanding how your customers are using your product and what problems they might experience. It ends with more relevant and efficient information delivered at the right time, via the right channel.
During this webinar, you will learn the six things you can do today to retain and grow your customers. Zendesk is joining forces with Totango to share with you the insider secrets to transforming your customer support organization into a revenue center and turn prospects into life-long fans of your brand and services. Register here.
I am looking forward to see you there!
Regarding the integration with Zendesk which we accidentally omitted from our news update yesterday:
Integrate Totango with your Zendesk Help Desk
If you use Zendesk to manage your help desk, you can easily create a feed of ticketing activity into your Totango account, expanding your engagement database. You will then be able to tell which accounts are opening support tickets, how this influences their use of the application and their likelihood to subscribe to premium plans or to cancel their account. Read more…
Fergus states that Marketing Qualified Leads (MQL) won’t turn into Sales Qualified Leads (SQL) by themselves – this phase can’t be automated and requires human interaction.
I agree with Fergus about the necessity of an additional role which businesses should consider. This role should help submitting qualified leads for the sales team. Mark Roberge, VP Sales at Hubspot has also talked about this by distinguishing the Hunter’s job from the Farmers.
But how would this function know which leads are qualified for their sales team? Well, Marketo is offering their scoring system, which based on user behavior on your website, which is a really efficient tool!
However, how would you know what leads are doing inside your APP?
For example, would you react differently if a new signup of yours signed up once and didn’t invite new users for your service rather than a user who logged in 3 times and invite 2 of his colleagues? Of course you would! You would like to invest more on the second user which reflects a higher level of engagement, won’t you?
And what if several users have entered one of your most important pages which suppose to lead for a sale and then signed out and never go back? you would probably want to look at that page again and figure out conversion issues, right?
This is why Totango service also offer the engagement score that would show you in-app engagement involvement.
But why compromise on one of the solutions – why not use them both?
This is why Totango and Marketo have joined forces and now Totango is also offering integration with Marketo’s services – this is how you could both know what’s happening in your application, get analysis on wha’t going on your app and then use Marketo strong nurturing tool to send your users exactly what they need to know by the stage they’re stuck on or need help with – the perfect match – Totango’s Lifecycle Marketing with Marketo’s automated nurturing – can you afford not to have it?
When you’re in the Software-as-a-Service (SaaS) business, you should think of how to attract your users to your application in a way they’d be more successful due to it and therefore happier. If you think about selling, chances are it won’t going to happen… especially when your sales model contains a trial period or freemium, where users check up your app before deciding they need it. Also, you should think of your existing customers – you want them to renew their service, right? They’re all seeking the added value to reach success.
Make sure your application is adding tremendous value to your users, making them happy and successful with what you offer. Also, your users should go through an enjoyable experience while in your app and receive great support, resources and help.
It’s not easy, but Customer Engagement can help. By listening to your customers, understanding them and engaging to fulfill their needs you will get customer love. It’s really that simple.
2. A Customer Success Team
Assign an executive on your team to be responsible for customer success. That would help you understand the value your users subscribed for, guide new customers through training steps, and monitor for any signs of unhappiness.
Customer success is key to your growth – successful customers stay longer, increasing your revenue.
3. Create a Customer Health Score
To help customers succeed, you need to find out who’s doing well and who’s struggling to get value from your application. The only way to do that systematically is to define a consistent health benchmark for your paying customers, then track each account to see who needs help. Here are some example benchmarks:
Good Health: Successfully using the application
Average Health: Using the application, but not at the level of a successful customer
Poor Health: Not using the application; unsuccessful
What defines a healthy customer depends on your service, but be sure to define, track, and monitor it on an ongoing basis.
4. Nurture Your Paying Customers
Lifecycle marketing is the discipline of marketing to your existing customers, based on the status of the relationship. There are two important lessons here.
Don’t stop selling once customers sign up for the paid service.
Don’t treat all customers equally. That means you should communicate very differently with a customer in poor health than with a customer in good health.
Membership Length: How long were they customers before cancelling?
Engagement Trends: How engaged were they throughout their subscription?
See if you can identify and mitigate trends. Your goal should be to improve the experience for current and future customers. Customer success should be a pillar of your business. Happy customers help generate new leads and business. Unsatisfied ones create PR nightmares. In our connected world, customer success is your most important marketing asset.
I met Matt Childs from DreamSimplicity again at the CloudForce 2012 event and had another opportunity to share what Totango is up to lately. I wanted to share with you the interview I gave him at the show.
Full Customer Engagement Management
Totango is all about helping SaaS companies to increase their users’ customer engagement. With Totango you can listen to your customers within your application and then decide how you’d like to communicate back to them.
In CloudForce, we chose to introduce one of our new tools that can help you communicating with your users from inside your application.
The Appbox is basically an inbox that you can place within your app and which allows you to send messages to your users at all times – and of course it’s free, built in open source environment, available at your service and you can give it a try today!
View the complete interview to DreamSimplicity here:
Both companies, who are using the Totango technology, managed to increase their visibility on what their users are doing in their application and therefore optimize communication with them to make sure they’re gaining value out of their product.
Many app services in the SaaS industry lack that visibility. This problem is especially in onboarding new customers and in converting free trial users into paying customers.
“Understanding user behavior is critical to success in the XaaS model”, states Sacha Labouray, founder and CEO of CloudBees.
Zack Urlocker, COO of Zendesk is happy that this solution exists and therefore saves the time on self development: “Rather than trying to build the technology to do this in house, we love the fact that Totango has already figured this out, giving us tremendous insight into what is going on with our users during that trial period.”
Zendesk’s goal was to increase customer engagement for their 30 days trial users and increase the free to paid conversion that way:
“We changed how people experience sending and receiving customer service tickets during the trial. Totango helped us figure out ways to try different approaches to highlight key features which and see ones got the most usage” says Urlocker.
Since Zendesk has massive amount of daily downloads and thousands of customers, they needed visibility into who to focus on in order to gain the most success and Totango is helping them to achieve that and thus increase their conversion rates.
Similarly, CloudBees needed to understand, in real time, how developers in its freemium model use their platform. “We need to see where they start using specific services and using multiple services,” says Labouray. “Before implementing Totango, we tried using analytics to track user behaviors. It gave us overall trends but no insight into what specific teams or specific users within a team or group are doing on our platform. You don’t know what you don’t know. Totango showed us what we didn’t know. We’re using those insights in working a lot of services and reaching out to our users.”
He says they had a big “aha” moment when Totango revealed an unexpected spike in usage all of a sudden. They then realized there is often a lag between when customers sign up for the freemium model and when they actually get ready to use it.
Creating value for customers is the most important activity for retaining customers longer, so all customer-facing teams need to align around that objective. With the right data, you can get real insights into which customers are likely to convert from free to the paid model as well as where those customers come from, their overall lifetime value and the customer acquisition cost and with all of that information, you can build an effective marketing/sales model!
We want to help ensure our customers not only improve their communications with their users but also gain the ability to drive to monetization and unified value-creating goals for acquiring and retaining customers.
Zack Urlocker is chief operating officer at Zendesk and heads up Sales, Marketing, Business Development and Support. Zack came to Zendesk from MySQL, where he was Executive VP of Products. Besides building the business model for MySQL, he helped grow revenues to more than $100 million annually. He has more than 20 years of experience in the software industry and has held executive management positions at Active Software, webMethods and Borland.
Sacha Labourey is founder and CEO of CloudBees. In 2001, Sacha joined Marc Fleury’s JBoss project as a core contributor and implemented JBoss’ original clustering features. In 2003, Sacha founded the European headquarters for JBoss and in 2005 he was appointed CTO. After the acquisition of JBoss by Red Hat, Sacha became co-General Manager of Red Hat’s middleware division until leaving in 2009 to eventually start CloudBees.
The Totango team is excited to announce the release of the Customer Health Dashboard which helps cloud application providers and software as a service companies of all kinds track and manage overall user happiness at a glance (Read Press Release).
The first of its kind, the Customer Health Dashboard is a configurable cloud-based tool that summarizes customer success and engagement using their realtime activity streams, capturing and calculating data like overall time spent, license use, CRM system feeds, and trouble tickets. With it, you can get a clear picture of your customer base’s health, identify customers at risk, and track trends across segments.
The Customer Health Dashboard is especially useful to businesses who see value in the growing trend of shifting focus from acquiring new customers to driving usage, adoption, and happiness in existing ones — the hallmarks of customer success.
For providers of software as a service, company revenue depends on having happy customers who keep renewing their subscriptions; the lifetime value of existing customers may end up far exceeding the gains made by simply picking up new ones. Customer success begins with customer acquisition and onboarding, but continues after a customer signs up with you; renewals and expansion sales depend critically on customer happiness.
Totango found in recent customer success research amongst over one million prospects and customers of software businesses that over 50% of paying customers aren’t using the service they paid for. The same study also found an unsurprisingly near-perfect correlation between non-use and cancelations: cancelations of software subscriptions were almost always preceded by a period of non-use.
The Customer Health Dashboard can show you at a glance how well your success strategies are working and gives customer-facing personnel the tools to help customers be more successful where needed. Not only can you quickly locate your best customers, but you can also identify the ones requiring the most attention and take immediate action, engaging with them before they see a problem.
Interested in learning more about customer success management (CSM)? Totango would be delighted to host you at our free meetup on The Future of Customer Success on Thursday, April 5th, from 7-8:30pm in San Mateo, CA. Mikael Blaisdell, publisher of The HotLine Magazine, will be on hand to give a talk and host a Q&A. Come have a snack, meet your fellow CSM professionals, and stick around for some customer engagement tips from yours truly.
Promotional discounts, credits or value-add offers can be an important part of a product launch strategy. A properly timed discount, upsell or cross-sell or “bundling” can positively change the perceived product value and dramatically impact adoption of SaaS applications.
But, making on-the-fly changes according to the dynamic needs and circumstances of customers can inherently complicate your billing and pricing models. How does your billing system support the various iterations of a subscription discount, promotion or credit?
For example, how does the discount get applied? What is the duration of the discount? Does the discount apply to all subscription types (recurring, one time charges, activity)? What about conflicting offers? What types of customers are eligible for discounts?
Subscription discounting can get complex very quickly because most billing platforms use a very limited set of “price levers” (time, duration, quantity) capable of shifting the Perceived Product Value.
What you want is to have many price levers around where you dynamically configure and reconfigure services and pricing on the fly: subscriptions + sign-up/activity/event fees + bundles + add-ons + incentives + promotional products.
The ability to add and manage activities, consumption or usage-based price levers to a promotion gives a company a powerful tool for growing its customer base (recurring revenue) and maximizing lifetime value of the customer (reduce churn).
Effect of Changed Product Value
Positive changes in the product – or its perceived value proposition – have the potential to drive improvements in ARPU. Product differentiation can lead to short or long-term market advantages, depending upon how quickly the differentiation can be continued.
As stated earlier, with the simplest subscriptions, a business only has control over the price, the term of the offering, and the product mix of the relationship. Because choice is limited, tweaking price levers in those three categories provides limited results.
For example, if a $10 per month subscription is the MSRP, reducing the price to $7 to attract more users may simply cannibalize the existing customer base.
For this reason, it is important to add additional pricing levers around consumption or usage parameters to evolve the relationship with the customer. For example, the consumption or usage price lever can be implemented as a limit or as a set of charges that are generated by ongoing use. For example, as a person consumes, reward him with a discount or promotion every time he reaches a certain threshold, thus enticing him to continue to consume (along the lines of airline “point” systems.
When charging for different classifications of the good or service, customers paying the set amount for unlimited access will have a different value equation than those paying a lower price for limited access.
Over time, customers can migrate from an unlimited ($10 per month) to other price segments, depending on the customer experience or the changing perception about a subscription’s value – especially to those initially not interested.
Customers that do not see value in paying a set amount for unlimited access to a good or service may become interested if offered a chance to pay a nominal per piece price. For those subscribers, the value comes in the flexibility to consume the good or service at will. In a SaaS application, for those not willing to pay for a $10/month for unlimited access to articles may be willing to pay a $7/month plus a discounted price of $0.25 per activity such as time entry, project, download, computing cycle, contact, or any other measureable activity.
In this scenario, the customer who does not see value in paying $10 for unlimited access may become interested when he can pay $0.25 for only the activities that have value. At $0.25 per activity, the customer has a low barrier to trying out the new content, and the business succeeds in making money on content that previously would not be monetized. But the real value for the business is the opportunity to convert the customer to different subscriptions over time, as the subscriber’s situation and interests evolve.
Billing: A Strategic Asset & Enabler of Innovative, Sustainable Business Models
In a subscription business model, it is the relationship with a person that matters most, and no customer touch point is more important than billing, as it connects businesses with customers on an ongoing, personal basis.
Though not the sexiest topic, “billing” is the medium by which companies can truly drive and capitalize on customer usage patterns and preferences.
Billing is, therefore, central to improving adoption. Product management and sales strategies that focus on long-term relationships and maximizing customer lifetime value must address billing models.
Utilizing any one of those practices requires sophisticated billing that goes beyond a cookie-cutter approach for maximizing volume and per-unit profits. Now, billing has to boast real-time intelligence, the type of which is derived only from sophisticated rating and charging engines built to dig into data about actual usage (as opposed to forcing business people to pore over enormous reports after the fact, when opportunities have slipped away).
The next generation of billing has to enable business users to dynamically implement, enforce and change parameters on the fly. By implementing activity, usage or consumption-based billing, companies create more opportunities to innovate and drive new sources of revenue.
About the Author
Christopher Couch is COO and co-founder of Transverse, LLC. TRACT, from Transverse LCC, is the all-in-one activity, rating and subscription-billing platform that can bill for anything. SaaS, cloud, MSP, ISVs, telcos or wireless providers with TRACT’s pricing levers to rapidly build and evolve any business model: if it can be metered or measured, TRACT can bill for it. Learn more at www.tractbilling.com