Thoughts from my journey

In today video post, Tracey Kaufman, VP of Customer Experience for Cloud9, speaks about how a business should aspire to its customer’s success in order to become successful itself.

I agree with that saying. Furthermore, I think that if a business is constantly supplying an added value to its customers and focusing on the quality of its service rather than on sales (read: How NOT to Sell in SaaS and Increase Paid Conversions), that would lead to a win-win situation as both the users will get added value and the business will gain loyal customers.

Tracey is also talking about how to count active paying customers, referring to Jeanne Bliss book: “Chief Customer Officer“. How do you measure how many customers you have? Do you count your customer accounts? buy do you include cancelled account in this amount? and did you count how many of them have actually succeeded and how many are going to renew?

In this blog I mention the importance of the measurement of the key metrics that any successful SaaS business should have. There are measurements which sometimes look simple but takes several metrics to calculate. Also should also keep in mind, that measuring is just the first step – the second step, which is just as important, is to interpret these numbers into customer behavior and make the right decisions by them.

To read the full transcription of the video, click here

Learn How to Convert Free Users into Paying Customers in a 30 minutes webinar
Register here!

Video Transcription:
Hi, my name is Tracey Kaufman, I’m the a VP of Customer Experience for Cloud9. In a lot of times, I think people look at, when they look at their customers, they say, “OK, well how do we know we’re done and if you have a product you know are they using that product? Have you deployed that product? Have you gotten them implemented?” But really you have to ask yourself–the question is, “What is the greater vision for that product?” Are you telling this customer that they’re gonna grow their business or they’re gonna gain more revenues or they’re gonna gain more forecast accuracy like we talk about.

And so I really believe at the beginning of an engagement with a customer, you have to dream. You have to figure out, what is it that they really want so it isn’t just the tactical, and then gauge success and come up like with a little success curve so you have key metrics along the way and you can have, you know, individual wins along the way but at the end of the day you’re really reaching high up, and that’s when you’re successful, when they’re increasing revenues, when they’re growing their company because of using your application.

Jeanne Bliss wrote a book called, “Chief Customer Officer”. And it’s really the Bible that I use for if you’re trying to do a customer success. disorganization. You really should read that book. It’s asking yourself the very basic questions of, how do you count your customers.

So many companies You ask them how many customers they have. And they look at their active paying customers and that’s their customer account. But you also have to know other questions like how many customer did you have now many of them actually cancelled? And how many of them are successful? And how many of them are going to renew?

So you have to be a lot more granular and segment your customer base and understand what your patterns are. If you had a hundred customers and now you have fifty customers, well that’s a problem. Because now you have a fifty percent turn rate. So it’s really being much more honest with yourself.

I declare this week as the “Top 10″ Practices week in Totango!

After yesterday’s post on Top 10 Requirements for an Effective Client Lifecycle, Today, I’m going to review Jeff Bennet’s top 10 must do’s for young SaaS companies.

Jeff Bennett, who is the founder and CEO of ServiceVantage, has a lot of experience working with SaaS companies in various sizes and being part of the SaaS Industry myself, I see eye to eye with his key strategies and therefore thought it would be interesting to share:

1. Easily Consumable and User Initiated – have ALL of your customer experience as easy as possible. This includes software trials, sales, on-boarding, training,  support etc.
2. Hold off on the elephant hunt – Don’t start off with the big shots companies, take it step by step and wait till you’ll have a more mature infrastructure
3. Configure, don’t customize – Rather than customizing, allow configuration which do not change the core product yet provide some tailoring to specific customer needs
4. Marketing can close deals – Sales are all about conversion from lead to paid. Incent your marketing to close deals!
5. Understand your cost of sale – Push deals by their cost – bigger deals to outside sales and smaller to marketing
6. Understand usage rates – Learn to measure customer engagement and usage data, you can use specified SaaS dashboard to do it for you!
7. Have a Client Lifecycle Program – Especially important for SaaS businesses that need to ensure customer retention and recurring revenue
8. Don’t be an island – Aspire to integrate your solution with other solutions to increase dependency on your service
9. Broaden the impact of your SaaS solution through services – Provide service offerings to compliment your solution
10. Make client retention a corporate mantra – this is not only the concern of your Support group – have the entire company focus on client retention and reducing churn

For the full version of the tips, please refer Jeff’s post on ServiceVentage blog

Do you know how to measure your Customer Engagement?
Our SaaS Dashboard can easily do that for you!
Try it now for FREE

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.

At the Sales 2.0, I’ve met Darren Suomi, VP Sales at HootSuite who gave me a tip regarding social media – If you’ve ever considered not to give a salesperson your phone or email address, consider giving them a social media address.

As you probably know, nowadays, where customer engagement is the focus of successful SaaS business, social media is a central player in communicating with your customers and for customers to communicate with each other. As I presented in my previous video post, the world have moved on from “system of records” to the system of engagement and social media become a big influence in the system of engagement.

According to Darren, a lot of companies are afraid from allowing their workers interacting on this medium, however, Darren encourages they allow it as it worth while in the long run. Of course it should be accompanied with guiding you team about what’s acceptable and what’s not.

In my next post I will publish another tip from Darren regarding self service model and how to adjust it to reduce churn.

To read the full transcription of the video, click here

Video Transcription:

“Darren Suomi, VP Sales from HootSuite.
Well, what I was talking about earlier was in terms of well, in the past if you’ve ever considered not giving a salesperson a phone or an email address. I think it began by giving them a social media address. A lot of companies are afraid to let people go and interact on that medium, I will say, really, “Open up, stick your foot in the water.
Get the waters warm.”
So come on in, play around, let people go but give them a little bit of guidelines in you know, what’s acceptable and what’s not, what kind of branding you want to give them.”

Interview to DreamSimplicity.com

Lately, I’ve started building a SaaS Dashboard for my own usage (which I’ll be happy to share with others as well) and I have put together a short survey in order to learn what are the key metrics to measure SaaS business success. As I posted in our previous post, every metric matters when trying to see the whole picture, however, according to Chris Zane’s interview in Christoper Brown latest post, if he could only have one measure to manage his business, he would have chosen “lifetime value of customers”.

This metric, in Zane’s opinion is not a static number but a dynamic one that can grow with the customer, so that customers will first purchase their bike when they’re 4 years old, then when they’re 6, again when they’re 12 and they might come by to buy their own kids their first bikes. That’s the power of a happy customer.

This classic example could be taken to any sort of business, as in all businesses, it is critical to understand customers behaviour.

What is ‘customer lifetime value’ translated to the terms of a SaaS company? It’s when your service is valuable and highly appreciated by your users who chose to repeatedly and constantly use your service.

Most customers will encounter SaaS online services when signing-up to their free trial period / freemium. As the funnel goes on, the amount of users converting to paid customers naturally goes down, however, user’s usage pattern in crucial to understand what’s behind those numbers and also to reflect the users behaviour and needs.
Therefore, even though measuring many other metrics should be taken under account, I agree that customer lifetime value should be standing in front of our eyes when thinking of our business plan.

To run a successful SaaS business and increase the chances to gain lifetime users and revenue, a business must make the right conclusions and adjust its service according to customer / user experience.

Tell us how you adjusted your service to fit your user’s needs!

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

Increase you customer lifetime value!
Try TOTANGO free for 30 days