Another tip from VP sales at Hubspot Mark Roberge at the Sales 2.0 convention re top-of-funnel strategy.
Mark recommends on keeping the top-of-funnel as wide as possible and worry about the filtering and the quality further down at the funnel.
Most companies don’t know what type of a customer will convert and this will allow tracking a whole bunch of data that can be analyzed later.
However, the danger in that strategy is when passing all those customers to your sales team, it could lead to ineffectiveness and waste of their time so it is recommended to use filtering at this stage so that the most quality stuff is being transferred.
I highly recommend at the top of the funnel keeping it as wide as possible and worry about the the filtering and the quality further down to the funnel, and the reason being is especially when you are stunning out and most people are starting out with inbound. You actually have no idea who’s going to work out, what type of marketing tactics are going to work, what types of buyers are going to actually work well in your funnel, so keeping it why it is, possible allows you to capture a whole bunch of data to see what actually progresses through.
The danger in that strategy comes when you pass everything to the sales team, because that can lead to a lot of ineffectiveness in recent time by that sales team so with that process you want to have a lot of filtering to make sure that the most quality staff is actually getting down to the sales team.
And as you gather data and gather more and more leads, you will continue to optimize that process.
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:
As part of my effort to create the SaaS Executive Dashboard, which helps executives to put together their business metrics for SaaS on a single page and track them, I’ve online surveyed 522 executives at SaaS companies. The survey compiles the list of metrics that matter most to SaaS Executive.
We aimed to get an industry perspective on questions such as:
Which metrics are most important for SaaS executives?
How satisfied are they with the tools & methodology their organization uses to monitor metrics?
Some of the things we found:
Following metrics related to customer-acquisition is a common practice by SaaS executives, with growing demand for life-time value (LTV) measurement
As it pertains to CAC, most SaaS organization have a clear view of what and how to measure metrics (practices & tools). But for LTV, there is less industry knowledge.
Similarly, there is a lack of quality tools for “LTV measurements”, whereas most SaaS executives feel CAC related metrics are well covered with existing tools
While many executives rely on metrics, most also struggle with the in-house implementation of monitoring systems and find that there is a general lack of off-the-shelve tools:
The results of the survey overall were pretty insightful and we’ve learned a lot about things like:
The specific metrics people use to track their SaaS Business
How often executives review SaaS metrics
Differences in the use of metrics between start-ups and mature businesses
We hope this research is helpful to you as well.
We plan to continue and follow these trends by running a quarterly updated survey.
How does it compare to the use of metrics in your SaaS or online business? We would love to hear from you.
Managing a Software-as-a-Service (SaaS) business isn’t trivial. Successful SaaS companies are able to deal with a high volume of leads and turn those into a high volume of loyal customers with fast response and turnaround time.
This is often referred to as the ‘sales and marketing machine’ – a highly optimized, massively scalable and controlled business operation that is capable of:
Continuously increasing the service value, differentiation and offerings.
In order to build a ‘sales and marketing machine,’ companies need to invest in the tools that will get them the business scalability that is required and reduce the learning curve.
Many startups begin with homegrown solutions using spreadsheets and databases (with a bit of integration glue in between). This is sufficient for small scale, but quickly becomes unwieldy as the organization grows. Luckily, there are excellent tools available for SaaS companies to leverage.
Many vendors have a “starter” package, so there is really no excuse not to start building your tool-chest sooner rather than later.
The Customer Life-Cycle
To best understand where the different categories of tools fit, it’s best to look at the various stages of the customer life-cycle, as they evolve from early prospects to mature customers.
At Totango, we use the following customer life-cycle terms:
Visitor – Anonymous user on the website
Lead – Person who has expressed some interest in the service. This can be anything from downloading a white paper to signing-up to a trial
Evaluating – A user (or company) who’s actively evaluating the service usually during a trial period or fermium
Onboarding – A paying customer in the initial usage period
Mature – A paying customer who has been loyal to the service beyond the initial usage period
With those definitions in mind, it’s easier to associate solutions and tools to help carry customers through every phase of their life-cycle.
CRM (Customer Relationship Management)
CRM is a common way to keep a reference of all customers’ life-cycle stages. CRM organizes all contacts’ information and account details in a single database, so it’s vital you select a tool that fits your needs and can grow with you.
Specifically, your CRM software will be the main working software of your inside sales teams as they organize account work mainly during the sales life-cycle phases.
Web analytics tools keep track of visitor activity on your website and various other marketing properties; this is where you keep track of your top-tier leads funnel, measure the initial success of marketing and advertising programs, and work to improve visitors’ experience with your products’ properties.
Mainly the marketing team, though other users in the organization (product team, IT) will need to use it as well.
Select list of Web Analytics solutions Google Analytics is the most commonly used tool. It’s immensely powerful, feature-rich and free. But there are other good tools your marketing team should look at, such as Clicky, WebTrends that provide additional useful views into vistiors’ actions.
Marketing automation takes you beyond basic web-properties and aims to help you interact, build, and cultivate a relationship with leads, so they can ultimately be passed on to your sales team and “convert” to happy customers.
This is your marketing team’s main toy!
A post marketing (sales & customer success) solution stack for SaaS companies does not exist yet. Enabling the buying process (converting leads), ensuring customer success, and increasing service value, is something that I feel is needed and missing in the market, and this is what we’re building in Totango.
Having all the above tools in place enables marketing, sales and customer success teams to effectively do their jobs and be an integral part of the ‘sales and marketing machine’.
Having said that, it’s crucial to have a single business dashboard available to the executive teams that allows them monitor the business end-to-end.
The SaaS dashboard should include operational metrics, trends and key business performance indicators (KPI’s), which allow the business owners, get ‘the full picture’ of the business, identify bottlenecks and allow to teams to take appropriate actions.
The SaaS model presents an opportunity to run a predictable and high-volume business. The first step is to put the required business infrastructure in place in order to monitor, analyze and optimize the sales and marketing machine operation continuously.
In coming posts, I’ll discuss in further detail the actual attributes of the SaaS dashboard.
Aaron Levie, CEO and Founder of Box.net posted this excellent article on TechCrunch. I encourage you all to read it before reading onwards.
Levie describes a major shift in enterprise software towards ‘value to users’ vs. the old ‘perceived value to the CIOs’.
One of the key arguments in his article, that grabbed my attention is:
“By focusing on building enterprise software that the users love, driving demand up to the CIO. Vendors like Workday, Jive, Yammer, or Rypple are responding by investing more in design, usability, openness, and the total user experience. They’re measuring success by user adoption, rather than feature checklists“
I couldn’t agree more! Consumer products, such as the iPhone, iPad, Facebook and many others are changing the way people evaluate products, including enterprise software products.
Value to users is key decision criteria. Software vendors who fail to constantly improve and increase value to users will end up with shrinking user bases, resulting in replacement from others who will deliver the right value.
When thinking about the emerging customer facing business models of subscription (SaaS) and pay-per-use, switching costs and vendor lock-ins can not be a reason for enterprises to stick with overly complex products who fail to deliver ‘right’ value to users. We at Totango certainly appreciate vendors that do it differently, and create an ongoing dialog about value with their customers.
It is crucial for software vendors, to constantly monitor the current value their users are getting from their online software. It is the challenge and at the same time the big opportunity for the SaaS delivery model.
Luckily, measuring value is simple. Vendors can learn about the value their customers are getting by measuring how much the software is being used and how. By providing Totango Analytics service to some of the vendors Levie mentions in his article we’ve learned that investing a small effort in determining the right information to collect, companies gain great visibility of value their clients are getting (or not).
The need to constantly increase value to customers is inherit in the SaaS model and results in alignment of customer success and the vendor’s own business success. Successful SaaS companies realize this and constantly strive to get immediate feedback on value by monitoring increases or drops is usage. Combined with fast paced releases and methodical A/B testing, software vendors can focus on building customer-centric, value-first enterprise software products.
It’s great to share this vision with others. Enterprise customers should expect this level of value from their software vendors.
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!