Tuesday, July 14, 2009

"Message cops" are essential to SaaS success

Marketing people usually pay a lot of attention to consistency. They want to convey the same message, the same value proposition, across all marketing media: the web site, literature, presentations, press releases, etc. And now there are even more places to police: blogs, twitter, Facebook and LinkedIn.

When I've been in that role, I called myself the "message cop."

Marketing people typically focus only on consistency across marketing material. But at a recent panel on software-as-a-service (SaaS) renewals, Jim Driscoll, the CFO at Kadient, remarked that consistency needs to extend beyond marketing. SaaS companies need to be consistent through all of their interactions with customers. They need to convey the same message from the initial customer presentations, to contracts and financial terms, and through to delivery of the service and support.

He explained that when the promises, obligations, commitments, and delivery are in sync, renewals are much easier to secure.

And if there's inconsistency, it's easy to detect. Customers are dissatisfied, renewals fall, customer acquisition costs rise, and the entire SaaS business model comes under stress.

When these problems surface, some companies respond with a corporate version of the children's game "button, button, who's got the button." The problem, like the button, keeps getting passed from one group to another.

  • Sales executives are promising 99.9 % uptime, but operations can only deliver 98%.
  • The marketing material implies that SaaS customers have the flexibility leave at anytime, but the contract specifies a 3-year obligation.
  • Sales is asking marketing for success stories, but customer support can't find any happy customers.
  • Finance requires payment when the contract is signed, but operations can't deploy the service for 90 days.
  • Customer training has been scaled back, but the product is still too complicated for the user to learn on their own.

In the SaaS world, each department's activities are intimately connected to the others. If marketing, development, legal, finance, sales, support, and operations are in sync, the company can benefit from a virtuous cycle. If not, it fails in a death spiral.

When it comes to building a successful SaaS business, there is no
their problem; there's really only our problem. You can't pass the button; everybody's a "message cop."

Wednesday, July 8, 2009

The Recipe for a SaaS Marketing Mix

During the summer, I spend most Saturday morning's tending to my yard and garden, though my tomatoes are struggling with all this rain we've had here in New England. But in the winter, I sometimes watch the succession of cooking shows that run all day on public television.

I prefer the ones in which the host chef measures ingredients in "handfuls of this" and "dashes of that." They pay most attention to the ingredients, and give only a rough approximation of proportions.

The more precise chefs I don't enjoy nearly as much, especially those that bake. Baking is a more exact science - chemistry actually - and it requires precise measurements. Most recipes for cakes are not very forgiving... something I learned from a tragic experience with a marble cake.

My approach to the marketing mix for software-as-a-service (SaaS) companies follows this same predilection. I tend to focus first on ensuring that companies are using the right ingredients in approximately the right proportions, before they get fixated on the precise measures.

Before a marketing executive at a SaaS company delves into exactly how much to spend on the assortment of tactical marketing programs - webinars, collateral, search engine optimization, etc. - it's usually best to ensure that they first have the basic ingredients on hand.

My Recipe for Effectively Marketing SaaS Solutions to Enterprises


  • A hefty dollop of brand awareness activity to go along with your lead generation efforts. With SaaS, customers are buying into your promise, not just your product. You need to win their trust.
  • A few shakes of education for procurement professionals. They may not be familiar with the terms and conditions of SaaS contracts, so you'll need to provide an explanation.
In preparing the concoction, be prepared to work quickly. The SaaS model usually involves frequent product enhancements, so marketing folks need to update programs and material quickly. Items left out too long will go bad.

And of course, the marketing mix needs to be kept within a budget that fits the SaaS business model. Customer acquisition costs can't exceed lifetime customer revenues.

So before you start measuring and calculating down to the final dollar, make sure you've got the right ingredients in the kitchen.

Bon appetit!