Sunday, March 27, 2011

Building connections to your SaaS customers

I'm one in a million.

Actually, I'm number 172,370 in a million. So says the thank you note I recently received from Reid Hoffman, Co-founder and Chairman of LinkedIn, as a way of showing his appreciation to me and the other first million LinkedIn users. His note says, "I want to personally thank you because you were one of LinkedIn's first million members (member number 172370 in fact!*)"

The company just added its 100 millionth member and it wanted to celebrate the milestone by recognizing and thanking the first million LinkedIn early adopters.

Believe me, I'm not one of the most high-profile LinkedIn users, nor am I one of the most sophisticated users. And I'm definitely not one of the users spending lots of money with LinkedIn. But I've been recognized nonetheless.

OK, it's not exactly personal. My notification came via a mass email, over Mr. Hoffman's electronic signature, and with my name filled in via that "automatically fill in name here" function.

But there's something in this recognition gimmick that I like.

For one thing, I get to brag to you that I'm LinkedIn member number 172,370, and I can lord it over all of you who are 172,371 and higher.

But besides that, there is a lesson here that could be useful to software-as-a-service (SaaS) marketers.

It's about how to treat your customers. Remind them that they matter to you. Recognize them as special. Look for excuses to say "we know you're out there and we appreciate you."

With some thought, you could surely come up with a list of reasons to recognize them for some special achievement: people who use your application in an unusual way, most active users, newest users, users from places we'd most like to visit... whatever.

And you could probably find more personal ways to convey this recognition and appreciation than a mass email to one million of them.

There's the tried & true annual customer conference - always a great excuse to get to Orlando or Las Vegas.

But there are things that you can do besides these annual events to build an on-going relationship. For example, many SaaS companies find it valuable to host online customer communities, a place for the people using a solution to share ideas, ask questions, suggest enhancements, and interact with each other and people inside the company. See Constant Contact or Concur for examples.

Why do they bother setting up and maintaining these online communities? Because it helps the company. It builds an on-going connection, a stronger relationship between the company and the customer. The result - deeper loyalty, more positive referrals, a better understanding of customer requirements, higher renewals, and fewer defections. These are essential ingredients for a successful SaaS business model.

One more thing: To all you LinkedIn users who aren't in the first million, maybe you'll get your "thank you" note when the company adds its 200 millionth member.

Note: SaaS Marketing Strategy Advisors provides marketing services to Constant Contact.

Creative Commons License

This work by Peter Cohen, SaaS Marketing Strategy Advisors is licensed under a Creative Commons Attribution 3.0 Unported License.

Thursday, March 10, 2011

Please don't sell me stuff I don't need

My regular readers can skip the next two paragraphs. I need a minute to talk to my brethren in the PR community... privately.

To the PR folks who have been pitching me on stories about computer viruses, streaming music to cars, online advertising solutions, and 3D mice, please stop. If you've read my blog or newsletter, you'd know that I do not write about these topics. While I appreciate your generous invitations to talk with the CEO, download screen-shots, or receive a review copy of your client's book, they're wasted on me.

Let me pass along some advice that I was lucky enough to get from a seasoned PR pro and mentor early in my career. "Read the papers!" Read what the editor, analyst, pundit, or blogger writes about before you pitch a story to them.

Identify your buyers

OK, regular readers, you can come back now. I was just asking PR folks to please stop sending me stuff I don't care about. Actually, that's a good practice for all marketers. Know who your prospective buyers are and identify them explicitly. Skyward, for example, does a good job of this:

This item sits on the top of their home page. If you're not responsible for student, finance, or human resource administration for K-12 school districts, you're in the wrong place.

And what about companies that have multiple audiences? They can try to sort out each audience and direct them each down the right path. Concur, for example, asks on its home page whether visitors are a "small business" or "medium & large business."

Coupa takes this a step further and asks visitors to identify themselves by their needs, their company's size, and their role in the organization:

Why we "spray & pray"

Targeting is much more effective than a broad, undifferentiated approach, where you blast your offering out to anyone with an email address. But the 'spray & pray" approach persists. Why?

For one thing, it's cheap and easy. The marginal cost of adding 1000, 10,000, or 100,000 email addresses to your distribution list is insignificant. That's the secret behind spam.

Another explanation is poor metrics. If marketers are rewarded for "impressions," "visitors," or "contacts," they're more likely to focus on activities that cast a wide net. This, despite the fact that most of the "catch" has no use for the product and will never turn into a paying customer. Rather than rewarding marketers by "how many people walk in the door" or "visit the web site," measure "qualified opportunities" and "wins."

There's also the fear that marketing to a well-defined audience will scare off some prospects who are excluded from the explicit target. Marketers don't want to rule anybody out.

The truth is, though, there really aren't a lot of enterprise software-as-a-service (SaaS) solutions that can be used by everybody. When someone tells me that "this product can be used by anyone," I'm skeptical.

My advice: Find the people who truly can benefit and focus your marketing efforts on reaching them.

Creative Commons License
This work by Peter Cohen, SaaS Marketing Strategy Advisors is licensed under a Creative Commons Attribution 3.0 Unported License.