Wednesday, April 1, 2020

Lessons from a pandemic

I’ll be honest.  Never did I think I’d ever write an article with a headline like that. 

Most of the time I’m writing about situations I’ve seen before – sometimes many times before.  This is not one of those times.

But I have learned a lot over the last few weeks.  Perhaps we’ll be through the worst of this crisis by the time you read this, but I think some lessons have value beyond the short term.

Prospects have other priorities

Right now, many prospective customers are trying to manage their way through urgent challenges,
doing what they can to keep their businesses afloat.  No matter how much your new solution can enhance efficiency, improve service, reduce risk, or whatever other benefits you're promising, evaluation new software-as-a-service (SaaS) solutions in not an immediate priority.

Though that’s surely the case as they deal with a pandemic, it’s true at other times as well.  For the people that use our SaaS solutions - HR managers, finance professionals, marketing executives, sales managers, etc. – they are always juggling lots of priorities.  (See “Your prospect has a day job.”)  The evaluation and purchase journey is not likely to move smoothly and predictably from one step to the next.  Sometimes it’s more like two steps forward and one step back. 

Adjust your marketing strategy to fit.  For prospects at the “not yet ready” stage, often it’s best to provide material that can help educate them.  A buyer’s guide, examples of other customers’ experience, or other helpful advice may be more effective than promotional material that’s all about features and functions.

Communicate with your existing customers

Staying in touch with existing customers during this crisis is critical.  Some of the more effective communication I’ve seen focuses on SaaS companies’ plans to keep the system up and running and maintaining access to customer support - issues that are probably most pressing for customers.  Some companies are also providing leeway to customers on monthly payments.

Any email or phone call that doesn’t acknowledge that we’re facing an unusual situation sounds like you’re living under a rock.
  
Regular communication with customers should extend beyond the crisis, as well.  You should pass along tips on how to get the most from the solution, how to use new features, or lessons from other users.  Customer are often interested in benchmarks compiled from aggregate data that allow them to look at their operations in comparison to peers.

Tell prospects who you are

Customers of SaaS solutions are relying on their vendors to run an essential part of their business.  During a crisis, they need to know that their vendors understand their business and the special challenges it might be facing.  

One of my clients, a provider of a SaaS solution for HR professionals, has communicated to customers that it knows these people are handling a deluge of urgent issues right now and assured them that their system is stable and supported. 

Letting customers and prospects know who you are is a good practice long-term as well.  Though your website, in presentations, and other marketing material, explain that you understand their business, speak their language, and know the challenges they face.  Features and functions, by themselves, are not enough.  Prospects need to know that they can trust you.  (See “Earning customer trust.”)

Make time for strategic thinking

As difficult as this crisis is, it can be seen as a unique opportunity to take a step back from the hectic
day-to-day of managing marketing campaigns.  Though it may be a forced hiatus, some SaaS companies are using this as a time to review fundamental strategy.

They’re thinking about whether their messages are still appropriate and speak to their prospects’ most urgent needs.  Those needs may have changed as a result of the pandemic and your message may need to be adjusted as well.  For example, it might be time to put special emphasis on the ability to access your solution remotely.

SaaS companies are checking that the channels and media they’re using are effectively reaching their target audience.  They’re assessing whether the programs they have in place cover the entire customer journey.

Taking this strategic perspective is a good practice even after we’ve emerged from this crisis.  It’s important to review the fundamentals of your marketing program periodically to be sure you’re reaching the right people, at the right time, through the right channels, with the right messages. 

I hope you will all come through this challenge with good health, a bit of wisdom gained from difficult experience, and greater perspective on what really matters.  Stay safe.

Sunday, March 1, 2020

Overcoming the implementation challenge


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So, you’ve built a great product.  Bravo!

Better yet if you’ve figured out how to market it.  You’re getting it in front of prospective customers and they quickly see how it can be helpful.

But just showing the product’s benefits and advantages isn’t enough.  Prospects need to see more than that. 
 
Before they make a purchase decision, they want to see a smooth path to implementing your   They want a painless way to get from where they are now to where you’re promising to take them.
solution.

They especially want to know that things won’t go wrong during the transition.

·      Important data won’t get lost 
·      Reports won’t be delayed 
·      Essential work won’t be interrupted 
·      There’ll be no pushback from end users.

No matter how wonderful your solution might be, prospects know that adopting a new product is risky.  That risk and fear can bring the purchase process to an abrupt stop.

What not to do

I’ll offer some advice on how to overcome this obstacle, but first let me point out what probably won’t work:  Doing more demos.  Showing more features, benefits, and advantages doesn’t address the core objection.  These prospects already see the value of the new features.

And dropping the price is probably equally ineffective.  Fear of moving from one process to another is the issue, not cost.

What could help

Instead, you should show prospective customers a clear, low-risk path to successfully adopting the solution. 

Share your step-by-step implementation process.  Show them that you have a proven methodology for moving data, creating reports, training users, etc.  Make it clear that you’ve thoroughly worked through the process and can navigate them through it flawlessly.

Show customer success.  In addition to talking about the benefits and advantages of the solution, these stories should also show that transition process has been painless for others.  Happy customers shouldn’t just tout the wonders of the new solution.  They should also talk about how easy it was to get there.

Sell the whole solution.  Don’t just talk about the features and functions of the product.  Focus as well on the implementation, training, and support services that go along with the product.  With a software-as-a-service (SaaS) solution, you’re selling more than just software.  (See link to “Are you forgetting the service part of SaaS?”)

Free trial… maybe

Some of you might be thinking, “What about a free trial?”  That might be one way over the “fear of transition” obstacle.  The prospect gets an opportunity to see first-hand how the product works. 

On the other hand, when using a trial, it’s difficult to assess whether a full-blown implementation will go smoothly.  If the product you’re selling is to be deployed widely for a critical application - an expense reporting application, for example - that looks easy enough to an HR administrator or Finance professional, might be rejected by the employees forced to rely on it.  (See link to “A free trial isn’t really free.”)

Don’t miss this key step

I’ve written before about the long and often interrupted purchase and evaluation process for B2B SaaS solution.  (Link to “Are you giving up on your prospects too soon?”)  And I know the challenge for marketers in guiding prospects through it.  Adding yet another step doesn’t make your life any easier.

But omitting the work where you show prospect’s how to painlessly “get from here to there” and overcome the fear that bad things will happen during the transition isn’t something you can avoid. 


Saturday, February 1, 2020

Upselling isn't easy


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I’m probably reading the same research you are about upselling.  The clear conclusion is that selling more stuff to existing customers is important for software-as-a-service (SaaS) companies.

The most successful SaaS companies are generating more than half of their new bookings from   Plus, they’re achieving “net negative churn,” meaning the loss of customers is more than offset by selling more to existing customers. (See KBCM 2019 survey of SaaS companies.)
upsells and expansions.

And this “land & expand” strategy can be a lot less expensive than selling to new customers.  The cost of selling to an existing customer is about half the cost of acquiring a new customer.

Where upselling can go wrong

But just because the strategy makes sense doesn’t mean it’s easy to execute.  In fact, there are lots of ways it could go wrong.

Poor experience with the initial product:  It may seem obvious, but upselling new products requires that the customer have a good experience with the first product.  Companies need effective onboarding, training and support in place to ensure customers are satisfied.  Without that, customers won’t even consider purchasing more.  (See “How to lose a customer in the first 90 days.”)

Poor product integration:  The follow-on products need to work well with the customer’s existing product.  If customers struggle to use the two products together, they simply won’t.  Things like a similar user interface, single sign-on, easy transfer of data from one product to the other are essential.

Difficult to understand the value:  It should be easy for the customer to see how they’ll derive significantly more value by adding another product.  For example, adding a tenant screening service to a residential property management solution makes sense.  Unrelated products and services don’t.  Don’t make your customer work too hard to understand the value.  (See “Your prospect has a day job.”)

Require new decision makers:  If the add-on product requires an OK from a new person within the customer’s company, a “simple” upsell can get complicated.  This is true even when one product is closely related to another.  For example, there may be an advantage to connect an HR administration solution directly to a payroll product.  But that means the purchase decision for the new solution now involves the Finance executive, not just the HR administrator.  That doesn’t mean it’s impossible to sell the add-on payroll product, but it does present another obstacle.

Poor timing:  Be careful not to jump into upselling too soon.  The customer needs to see value from the first product they’ve purchased, and they need to trust you.  That may take time.

Speaking of poor timing, don’t try to upsell a customer while they’re trying to resolve a support issue.  When they contact the support desk, they’re focused on getting the existing product to work properly, and probably not in the mood to think about purchasing additional products.

Lack the support of end-users:  If they’re happy, end-users can be a huge supporter and make it easier to sell add-on products and services.  If they’re unhappy, not so much.  If an HR manager is getting lots of pushback from employees about their experience with an HR solution, they’re unlikely to buy additional products.  Same for a Sales manager getting complaints about the CRM system, a Finance manager getting grief about an expense reporting system, etc.

Difficult to purchase:  Customers buying a related product from the same vendor expect a simple buying process.  A complicated multi-step process and pricing that’s hard to figure out will be confusing, slow everything down, and make the buyer wonder whether these two solutions really are from the same vendor.

Selling without understanding:  The people doing the upselling need to know what the customer really needs.  Mindlessly pitching one thing after another, just because it’s in the salesperson’s bag, isn’t very effective.  Because the customer is using a SaaS product, it should be possible to know precisely what additional products or services might make sense for them.  No need to spam them.

I don’t mean to scuttle anyone’s plans to grow their SaaS business by selling more to existing customers.  Done well, it can work.  And lots of SaaS companies have made it work.  But be aware of the obstacles.  Even though products carry the same logo and come from the same vendor, upselling isn’t as easy as it seems.