Thoughts from my journey

I was on a super exciting panel at the All About The Cloud conference in San Francisco this week: “the Power of the Customer”.

Here are 3 predictions for the future that were discussed on the panel:

1. All SaaS companies will use predictive customer analytics. Measuring and optimizing customer lifetime value was a big topic. You can’t manage what you can’t measure so expect SaaS companies to invest big in customer analytics and predictive analytics.  These are technologies coming from the consumer marketing space. However, in software you can go one step further because all customer interactions, including interaction with the product itself are digital. So while Victoria’s Secret may analyze customer transactions to predict whether customers will buy again (and whether it’s worth sending you another expensive catalogue) imagine that you could actually know how often your customer wore that swim suit. That would be a pretty good indicator of how much you liked the swim suit and how likely you are to buy again from the catalogue. With software this is possible! And indeed software usage turns out to be the most reliable buy signal (or churn signal whatever the case may be).

2. There will be many SaaS companies with no sales teams. Think about Atlassian: a $100 million+ revenue B2B software companies with ZERO sales personnel. Their sales model is 100x or more cheaper than that of their competitors with field based sales teams. And their velocity is so much higher. I bet you their customer satisfaction is higher too.  At no-sales companies, marketing is responsible for demand generation and initial signups. For more complicated products a customer success function is emerging to coach customers post sign-up and to grow usage, users and use cases over time. There was common agreement on the importance of building out customer success teams regardless of the sales model. Customer success managers have responsibility over renewal revenues as well as upselling and carry a quota rather than being a glorified support team.

3. Products are becoming social. The product itself will be the primary sales tool. Much of customer engagement will happen from within the application itself. Customer actions speak loudest: usage is the most important buy or churn signal. Also customers will communicate with other users and with the vendor using in-application communities and communications. The panel agreed that the new Social Buyer demands self-service. It started some years ago with self-service information (‘inbound marketing‘) and these days the ‘must have’ is a free trial or freemium version of your product. The panel agreed that freebies were essential in creating trust. Also think about this: if your competitor offers  free trial of some version of your product and you don’t, then customers will be already half-way down the sales process with your competitor before they ever talk to you.

Thanks to the All About Cloud team for having us, thanks to Shubber Ali from Accenture for moderating and thanks to my fellow panelists Jon Miller (Marketo), Todd Bursey (FinancialForce) and Jeff Yoshimura (Zuora) for fun times! See you next year

If you are interested to analyze and predict your customers’ actions, or if you want to make your product social:

Try Totango free for 30 days

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.

As mentioned in my previous post: “Top 3 Metrics to Measure Customer Engagement“, there are ways to set your filters by. Choosing the right metrics and measuring them correctly will assist in screening out the non potential buyers and keep the high potential ones is essential to any successful SaaS business.

Once the data is gathered and there are more and more leads you can continue optimizing this process.

Tomorrow I will publish another tip by Mark Roberge regarding how to pick your sales model – zero touch vs. low touch vs. high touch.

To read the full transcription of the video, click here

Want to know which metrics are usually used in top and bottom of funnel?
Download SaaS Business Survey Results

Video Transcription:

Mark Roberge. VP of sales at Hubspot.

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.

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?

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.

For the complete results of the survey download the report here.