Category Archive : free trial

Best of 2011: SaaS Sales Models Tips

Tip - theory into practice

Are you running a B2B sales or inside sales organization?
Do you have a freemium or free trial in your service?
Are you considering a low or zero touch sales model to increase velocity of your sales funnel?

These modern sales models are somewhat evolutionary as the official enterprise sales model is just not the customers first choice anymore.

Today, in my last “Best of 2011″ post series, I’ve gathered all the videos and posts from which you could learn about low and zero touch sales models and about free trial and freemium best practices so you could go ahead and build your ultimate sales machine!

Low Touch Sales and Zero Touch Sales Tips

Free Trial and Freemium Best Practices

>>Read other posts in this series<<

10 Tips for B2B Sales in the Subscription Economy

Subscribe

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!

6 Steps to On Boarding Software-as-a-Service Customers

Customer Engagement Funnel

It is more critical than ever to make sure customers get started and find value during the first days, weeks and months after signing up for your SaaS service. Customers sign up long before they start paying you and only if they see value, month in month out, they will (continue to) pay you. This means that in addition to a sales funnel, successful SaaS companies now also use and track a customer engagement funnel (see picture).

Customer Engagement Funnel

There are six steps to successfully on boarding a new SaaS customer:

1. Sign Up: provide self service sign up

Take all friction out of the sign up flow. Ask for as little information as necessary to setup an account. As long as you can track usage and prioritize prospects later on, you can keep the top of the funnel wide.

2. Activation: provide clear instructions

Provide clear instructions to get your new signups up and running as soon as possible.

3. Active Use: include ample examples

Usually active accounts are only 35% of monthly sign ups. To move the needle on active users, demonstrate immediate value. Make sure that you include default settings and, if necessary, some demo data. Also include examples of how others have been successful with your product.

4. Paid Use: personalize customer engagement

Free to paid conversion is difficult to achieve. The key is to personalize your communications with the user at this moment. You should know what features they have tried and target your sales pitch. With the right message delivered at the right time, you can increase free to paid conversion by 37% or more.

5. Renewal: check in with the user often

The key to high renewal rates is to predict which customers might be unhappy and to pro actively engage these users. If you know that a customer hasn’t logged in recently you might e-mail or call. If you see they are not using certain features, perhaps they need a helping hand.

6. Expansion: increase lifetime value

If customers are happy, you may have the opportunity to sell them more. It should be possible to achieve negative churn: this means that the total revenues derived from your existing customer base is growing over time through a combination of high renewal rates and expanding existing customers.

Freemium Sales Models for B2B and SaaS

PBWorks

As promised, here is the second tip from Chris Yeh, VP Marketing of PBWorks about freemium sales models for b2b and SaaS.

Knowing of the advantages of free trial / freemium models, I agree that companies that are making the adjustments towards those sales models have an advantage in today’s online market where users can pick their products without a moderator (sales person) and pay for it only it it’s valuable for them

Similarly, Chris believes that the way to business success is establishing a trial for its product. This way customers feel they’re not taking a risk by buying a product but they test it first and understand how the product works before paying for it and this is tremendously important for building up a Successful contemporary business.

In his blog post: Bought vs. Sold (Why Jive is a dinosaur & Dropbox is the future), Chris compares 2 types of companies that have similar revenues achieved it in very different ways. The first company is Jive software and the other is Dropbox.
Jive is a 10 years old traditional enterprise company who spent millions of dollars in marketing and still not profitable and on the other hand there’s the 5 years old Dropbox, who has 40 employees already and a hundred millions in revenue.

To read the full transcription of the video, click here

 
 

Video Transcription:
I’m Chris Yeh. I’m the VP of Marketing for PBworks, which is a SaaS company that does collaboration software for various markets like advertising agencies, law firms and, of course, general business.

Well, it just so happens that I wrote an extensive blog post about this, comparing Jive Software with Dropbox, two companies which, interestingly enough, have almost the same revenues, but have achieved them in very different ways. Jive is a traditional enterprise company that was started almost 10 years ago and has spent hundreds of millions of dollars in marketing to get to where they are today and are still not profitable.

On the other hand, we have Dropbox which was started in 2007, has something like forty employees in a hundred million in revenues and so where I really see this going is that you know, certainly the tradition enterprise world still applies to large complex products but the ability to get a trial going, the ability to get people to say, okay I’m not taking a risk by buying this product, I know that it can deliver for me, is tremendously important for building up the business, so somebody like Dropbox or somebody like PBworks who offers the ability for people to really understand how the product works before they have to make a six figure commitment I think and that’s the way to go.

Trial Conversion “The Early Days” – Lean Startup Presentation

Lean Startup Meetup

We’ve held yet another very interesting lean-startup meetup on Thursday to discuss free to paid conversion best practices for cloud applications.
First, please find within the presentation I’ve used. It’s a collection of many ideas we’ve been working on at Totango collected into idea presented by this presentation.

I emphasized during the talk the need to focus on the ‘evaluating’ users – the ones that their actions indicate genuine intent to come up with a buying decision.
Many people still wanted to understand what to do with the other group. The short out of the sleeve answer would be: “It depends ;) ”. Seriously, this question deserves a blog post on it’s own which I’m going to write later this week.

In the mean time, please feel free to enjoy the presentation. You will be able to learn a lot also by starting a ‘free trial’ for the Totango trial conversion product. So here’s the link for that as well.

If you enjoy this content, please be kind and share it with your friend. The links are above and below.

Converting from Visitors to Signups and from Freemium to Paid in a Fun Way

BadgeVille Interview

In the next couple of weeks I would like to share some short video interviews on relevant subjects taken at several events I’ve been to.

At the Enterprise 2.0 Conference, I’ve met Eric Montoya from BadgeVille and interviewed him about the ways to convert from visitors to signups and from freemium to paid users.

These topics are highly relevant to every SaaS business and I’ve been writing a few posts about it lately, including my previous post.

In this interview, Eric explains how the conversion process become a simple mechanism when you find unique and fun ways to get your users to know your product by gentle guides or creating a feedback system that is presented back to the end-user once they conducted a series of behaviors that we wanted them to.

Eric also gave some interesting examples in which he mentions a 500% lift for a unique application of Samsung – view the interview to learn more

Tomorrow I will upload another interview from the Enterprise 2.0 Conference. This time Jessie Wilkins, Director System of Engagement for aiim will talk about how the document system era evolved to the system of engagement era.

To read the full transcription of the video, click here

 
 

Video Transcription:

“My name is Eric Montoya, I am with sales and business development here at BadgeVille. You know, there is a couple of really, really unique things that happen within the context of any sort of online community or any sort of interaction with the product, the first is some sort of anonymous or local capture, right?

How do i get that person who has just come to my platforms, to my products and my brand and what can I do to try to capture them at that point? How do I convert them, maybe from fremium to paid and all of those mechanics that go along with could be something as simple as a mechanism like gentle guide or something where I am taking a series of behaviors or actions and presenting that back to the end user in some sort of unique, very step oriented, fun way with that getting feed back as they through all of the interactions learning the platform, taking a steps in necessary to become engaged within the product, but they are doing it in a way that’s very controlled and really wrapped around the behaviors and the actions that you want dozen users to perform.

Us, like our kind of broad, you know, 100 plus customers that we have now, we’ve seen, you know, strategic impact to the goals and objectives tied to a lot of those specific behaviors in the, like, 25 to 30% range, if you want to be very broad.

When you look at very, very unique applications or specific behavior such those users are performing. Samsung, for example, has just put out this last week that they are seeing a 500% lift on some of the drive and user engagement and actions that are very relevant to the success of their community.

Things like rating and reviewing and interacting with the product and the brand overall. So, you know,we have seen a lot of variance but the impact, you know, whether that’s 10%, 50% or 500%, absolutely the numbers are there.”

3 Outright Strategies to Improve SaaS Customer Success

Outright Image

Totango is now (also) located in Mountain View, CA! Having a new Totango home in California is great and allows me to meet many cutting edge businesses with free trial or freemium business models while here. Today I caught up with Laura Messerschmitt, VP Marketing at Outright. Outright helps small businesses to organize their finances. Over 100,000 users worldwide are tracking the health of their businesses with Outright. Outright is a free service, with a premium product available for a monthly fee. The sales model for Outright is entirely customer driven: the sales process is self-service (zero-touch selling).

What struck me most about Outright is it’s commitment to customer success. Making existing customers successful is the highest priority for the company. In my blog on “customer engagement is key for SaaS” I have written about the importance of increasing customer lifetime value and preventing churn in SaaS business models.

Here are a couple of things Outright is doing to align it’s entire company with it’s customer success (and thus customer lifetime value):

1. Define a customer engagement funnel

Key to customer success is realizing that not all customers are created equal. When a visitor to your website first signs up to your service, you have not yet won a new customer. In fact, a large percentage of sign-ups may never activate the service. I discussed this phenomena in my blog on “3 ways to do cohort analysis on SaaS churn“. In the case of Outright, they have explicitly modeled the different stages in what you might call the “customer engagement funnel”:

Stage 1: Sign-up, user has registered
Stage 2: Activation, in the case of Outright has started using the product
Stage 3: Use, in the case of Outright has continued to use the product over time

While you can get a lot more fancy with this and define further actions and life cycle stages (including those that include up selling and expansion opportunities), just recognizing the difference between a sign-up, an activated user and a truly active user is a huge step in the right direction.

2. Make customer success metrics central to the business

You cannot manage what you cannot measure so the next step for Outright was to develop a dashboard that shows sign-ups, activated users and active users and the conversion ratio between each of these stages. Outright is looking at this on a daily, weekly and monthly basis via cohort analysis to see how the service value which is delivering customers is improving over time. If you want your company to be customer driven, you have to give everybody in the company access to these metrics . Only if you make the customer success metrics central to all your management meetings, will the entire team be laser focused on improving customer success.

3. A customer driven organization chart

The most innovative thing Outright has done is to align their entire organization chart with the different stages in the customer engagement funnel. There is a dedicated team, including product managers, developers and designers, focused on improving the product for those users who have just started using the product. The focus is on making it easier and easier for these customers to help themselves and get more value out of the product. Automated e-mails are sent with helpful tips to help customers along the way. Then there is a separate team, also with its own product managers, developers and designers to improve the value in the service for those customers who are already active.

Thanks so much to Laura for sharing. I am looking forward to check in with Outright again in a couple of months to see how their customer driven organization chart has impacted the key conversion metrics of their customer engagement funnel.

Trial Conversion is Top Priority in SaaS

Trial Conversion is Top Priority for SaaS-DreamSimplicity Interview

Interview to DreamSimplicity.com

Thanks so much to Matt Childs for giving me an opportunity to tell the Totango story on DreamSimplicity.

Matt and I met each other on a very nice day at San Francisco and conducted this interivew which is actually about Totango’s core believes.

Here are the main points from the interview we had:

The Customers are Kings

Totango is all about helping SaaS companies to be more successful by understanding their customers.
The idea with SaaS is that customers are kings, meaning that in order to be a successful SaaS company, businesses should make sure their clients continuously have value, otherwise customers have other choices and they can easily switch into other solutions, so that Totango helps them understand the value they are currently getting from their service and continuously improve the value they are providing to their customers.

Increase Trial Conversion Rate

One of the big challenges big companies are currently experiences is that they have enough leads but having free trial or freemium programs, they are naturally trying to convert those free accounts to paying customers and in order to get there they will need to make sure that customers are getting value through their trial and they can help them being more successful.
So what Totango does is actually help them see what their users do during their trial period and then help them convert into paying accounts.

View the complete interview in the following link:

Get your FREE copy of our latest RESEARCH:

The 2012 SaaS Free Trial, Freemium and Pricing Benchmark

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About Totango:

Totango analyzes in real time customer engagement and intention within SaaS applications to help you grow your business

 

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Free Trial Average Conversion Rate and Other Metrics

Following Lincoln Murphy’s post on SixteenVentures.com (talking about conversion average rate for free trials, pricing pages or Freemium for SaaS or Web Apps), conversion rate average figures will do no good, as it doesn’t reflect the whole picture and usually lacking context.

It’s hard to know what metrics are being used for the “average conversion rate” and Lincoln claims that looking on average numbers to plan businesses around might make us average ourselves – and who want to be considered average?

Every company aspires to increase their conversion rate figures but Murphy’s suggestion is to figure out where you are today and then figure out how to make it better.
Meaning, if you’re at 1% conversion rate, reaching 2% is achievable, even though it’s 100% increase over what you have now.

I agree that context is crucial and also explained about this in “Measure trial conversion rate” webinar. Furthermore, in order for each SaaS business to understand where they stand, a lot of other metrics need to be taken under account besides conversion rate from free to paying customers. For example – do you also review unique visitors to your website? Social media mentions? signups, churn rates, customer lifetime value, account activation rate, account usage statistics, etc.?
All of these are metrics that should be taken under consideration in order to reflect the whole picture for a SaaS company and to allow it to set its goals.

Which metrics do you use to make your goals setting?

SaaS Key Metrics Survey Results

 

Want to know which metrics other Sales Executives use?
Download SaaS Business Survey Results

 

About TOTANGO:
TOTANGO analyzes in real time customer engagement and intention within SaaS applications to help you grow your business

 

Increase your trial conversion now!
Try TOTANGO free for 30 days
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