Saturday, April 8, 2017

3 Ways to Waste Your Marketing Budget

I’ll admit it.  

Over my long career marketing all kinds of technology solutions, I’ve run a few marketing campaigns that flopped: events that attracted no real prospects, email campaigns that generated no serious leads, promotions that drew no response from prospective customers.  

It happens.

And I’m pretty sure that I’m not alone among my marketing brethren.  In fact, if we're trying new ideas and taking a few chances, from time to time some program is bound to fail.

But these occasional duds usually won’t doom an entire marketing effort.  While they’re nothing to brag about,  a program or two that just fizzles won't sink a company.

What's really dangerous are the big mistakes.

Three in particular can do serious damage to a company’s overall effort to attract customers:

Not measuring

If you’re not measuring the results of your marketing campaigns, you have no idea if they’re working or not.

Your decisions on which programs to fund and which to cut need to be based on data:  how many leads, qualified prospects, and paying customers did a campaign yield.

I know there are hazards to attributing a new customer to a particular campaign, but that doesn’t mean you just throw up your hands and give up on measuring entirely. (See "Marketing numbers can lie.")

Making funding decisions based only on a few anecdotes or seat-of-the-pants impressions - “it looked like steady traffic at our booth,” or “we got a few nice comments on our cool video” - is a mistake.

Unless you’re carefully analyzing results, you could be wasting your marketing budget on one failed program after another.

No end-to-end plan

SaaS buyers often follow a long evaluation and purchase process, interrupted by other priorities.   If your marketing plan doesn’t span that entire process, prospects will get stuck, or they’ll leak out of the pipeline.

Spending lots of money on programs that build visibility and drive visitors to a website, for example, won’t work unless they’re followed up by efforts to convert those visitors into legitimate leads and paying customers.

The same goes for marketing programs that convert leads into customers, but aren’t followed by efforts to bring those new customers on-board.  (Link “How to lose customers in the first 90 days.”)

Any single program, no matter how matter how many “views,” or “opens” or “contacts” it generates, cannot stand on its own.  It needs to be connected to a well-structured, multi-step process - something that covers the entire customer evaluation journey.  Otherwise, it could simply be a waste of money.

Remember, the goal of customer acquisition efforts isn’t “views,” “opens,” or “contacts.”  The goal is long-term paying customers.

Poor messages

SaaS buyers are usually busy people, and you don’t have a lot of time to make your case.  (See "Your prospect has a day job.")

There's precious little time to clearly and consistent present what they need to know about your solution:

  • Who should buy it?
  • What problem does it solve and how severe is the problem?
  • Why is it better than alternatives… including doing nothing?

If a prospective customer can’t grasp the answers to these questions within a minute or two, then
whatever time and money you’re spending on marketing is probably wasted.
  • You’re paying for SEO, adwords, or PR to drive people to a website… but visitors won’t wade through multiple pages to figure out why they should be there. 
  • You’re sending out emails and promotional offers, but prospects don’t know why they should learn more about your solution.
  • Or you’re showing up a trade shows, but nobody walking by your booth has any idea why they should stop and ask for more information.
More than the marketing budget is at risk

Any marketer is bound to run programs or try new tactics that don’t deliver.  It goes with the territory.

But a marketer that makes one the three big mistakes - inadequate measurement, lack of an end-to-end plan, and ineffective messages - risks wasting a big chunk of the marketing budget.

And in SaaS companies, sales and marketing costs usually account for the largest single expense.
That means that spending money on poor programs can do more than just waste your marketing budget.  It can bring down an entire company.


Saturday, March 4, 2017

Don't put your SaaS marketing plan on auto-pilot

Imagine that last year I had somehow managed to put together a perfect marketing plan: a perfect
message and a perfect mix of tactics delivered perfect results.

If that actually happened (not likely, but use your imagination), this would be my first thought as I put together this year’s marketing plan:  Let’s do the same thing again.

If it worked last year, it should work this year too.  Why do anything different?

That would probably be a mistake, and here’s why:  Things change.

New tactics

Like music or clothes, marketing tactics used to reach prospects come in and out of fashion.  What worked last year might not work this year.

I remember when clever dimensional mailers were in vogue.  For example, you’d send a single walkie-talkie to a prospect, and offer to send the second one if they called to schedule a demo.  I haven’t seen that kind of promotion for awhile.

More recently, marketers have come to rely on webinars, white papers, blogs, and other content to attract leads.  Even if the concept of content marketing still works, the particulars usually need to be tweaked over time.  The topics and formats that worked one year might not draw the same response the next year.

It’s often worth allocating a portion of the marketing budget just to try some new tactics.  It’s possible that something you’d never tried before - or never even heard of before - will somehow grab the attention of prospects.  A few years ago, who would have guessed podcasts would be so popular?

And, by the way, keep in mind that some marketing tactics that were once out of fashion can come back into fashion.  I’ve worked with companies that have had success recently with a well-done direct mail piece, sent via snail mail, to reach a well-defined audience.

New competitors

Marketing plans will often need to be adjusted when new competitors come into the market.  In particular, your messages may need to be tweaked to better highlight the advantages of your solution vs. the new competitor.

To respond to a new vendor competing on low price, for example, your website, collateral, and other marketing material might need to call out the advantages of your more complete feature set or your expert customer support team.

In general, I advise companies to stick with the same messages, telling the same story again and again and again.  It takes a long time for a message to sink in with your prospects, so repetition is a good thing.

But it’s also a good idea to periodically review the message - perhaps once per year - and tweak it.

New concerns and new expectations

Over time, the things prospects care about are likely to change, and the marketing messages will need to change as well.

In the earlier days of software-as-a-service (SaaS), for example, lots of prospective customers had concerns about SaaS and cloud computing, and they needed to become more familiar with the basics.  “SaaS primers” that included a glossary of terms like “ subscription pricing,” “multi-tenancy,” and “SSAE 16” were a necessary part of the marketing collateral library.

Most folks are now familiar with SaaS and this material isn’t often needed. (See "Customers Don't Really Care About SaaS.")

Customers’ expectations also change over time.  Things like mobile capabilities, for example, that earlier buyers may have never thought about, may now be at the top of their priority list, and your marketing plans need to present them more prominently.

New kinds of buyers

In some cases, marketing plans need to be adjusted to suit new kinds of buyers.  As markets mature and solutions become more widely adopted, a company may find it’s selling to more mainstream buyers.

Unlike early adopters, these buyers may have more concerns about support or ease-of-use.  They may also follow a longer evaluation and purchase process, which a revised marketing plan needs to fit. (See "Pivoting from early adopters to mainstream buyers.")



Look, if there are pieces of your existing marketing plan that are working well, keep doing them.  But don’t revert to the same plan year after year by default.  Always ask yourself, “Does this still fit?”

Chances are there have been changes - new tactics, new competitors, new concerns and expectation, and new kinds of buyers - that you’ll want to adjust for.  You can’t afford to put your marketing plan on auto-pilot.  

  

Saturday, February 4, 2017

Pivoting from early adopters to mainstream buyers

If your software-as-a-service (SaaS) solution is relatively new to the market and you’ve already managed to bring on a group of early customers, congratulations. 

That’s usually solid proof that your product works, somebody’s getting value from it, and people will pay for it.  No small feat.  
But before you go overboard celebrating, I’ve got a bit of bad news:  It gets more difficult from here.

Sure, signing on that first group of paying customers probably was tough.  But signing on 10, 20, or 50 times that number... that's even tougher.

A new kind of buyer

Why does customer acquisition get more difficult?

Here's why:  you’re now selling to a different kind of buyer.  You’re not just selling to early adopters anymore.  You’re now marketing and selling to mainstream buyers.

Yes, these mainstream buyers may be in the same industry and they may need a solution to solve the same set of problems.

But they follow a different evaluation and purchase process.  And your marketing and sales plans need to adjust.

A longer sales cycle

When they evaluate new solutions, particularly those that are critical to their business, mainstream buyers tend to proceed more deliberately.  Unlike many early adopters, who are usually eager to try something new, these folks won’t jump right in. They move forward step-by-step.

Your marketing plan needs to follow this more deliberate process.  Plan to stay in touch with these prospects over an extended time, and implement programs to carefully nurture them along, one step at a time. 

Trying to rush things along is a bad idea.  For example, don’t expect prospects to jump from their first visit to your website and go directly to a one-on-one demo.  Not many will get your first email and immediately contact your sales rep.

They need more time to get more comfortable with you and your solution before they’re ready to talk with you directly.   

Need more proof

Mainstream buyers need to see more proof that your solution works as advertised.  They want to know that organizations similar to theirs have had success.  Unlike early adopters, they’re not interested in being the first of their colleagues to try something.

To satisfy their need to see proof, your marketing programs should include a healthy dose of customer success stories, references, and other ways to show that your solution really does deliver the benefits it promises.

Not interested in tech wizardry

Mainstream buyers usually aren’t wowed by cool technology.  They just want a solution that helps them run their business, and they don’t care a lot about what’s under the hood.  (See “Don’t talk techie to SaaS buyers.”)

They’re especially interested in how easy your solution is to learn and to use.  No matter how sophisticated the underlying technology or how long your list of features, these prospects know that if they can’t figure out how to use your solution - or train their employees to use it - it’s worthless to them.

Talking on and on about your platform, your proprietary algorithms, and your impressive feature list is more likely to distract, overwhelm, or confuse them than it is to impress them.

Rely more on support

Unlike the more adventurous early adopters, the next round of buyers tend to need more help to implement the solution.  Your ability to get them up & running quickly factors heavily in their evaluation.

Show them your on-boarding and training process and highlight your customer support capabilities.  Show them they’ll be working with a company that understands their business and won’t just leave them on their own to figure stuff out. 

Marketing pivot

Many of the companies I work with gotten themselves through the first stage of growth.   By word-of-mouth or direct contacts, they’ve managed to attract a cadre of early customers.

But to ramp up beyond that, they need a “marketing pivot.”  They need to adjust their initial messages and tactics to fit a different kind of buyer.

You may find yourself in a similar spot.  You need to reach beyond the early adopters to attract the broader pool of mainstream buyers.  That’s where you'll find the opportunity to accelerate growth and build a sustainable SaaS business.

Tuesday, January 10, 2017

Winning new SaaS customers may be easier than keeping them

I talk with a lot of new customers about how and why they bought a software-as-a-service (SaaS) solution. Here are the kinds of things I hear:
  • “We didn’t spend a lot of time with the free trial.  We just subscribed.”
  • “With such a low monthly cost and no long-term commitment, we figured if we didn’t like the product, we’d just drop it.”
  • “We didn’t spend weeks looking at demos and trials; we just bought it.  Once we used the solution for a couple of months, we figured we’d know whether we wanted to keep paying for it.”
It’s not that these companies didn’t evaluate the SaaS solution seriously.  In fact, often they were considering it to manage a critical part of their business.

But they didn’t want to spend time looking at slick demos or inputting lots of data into a free trial - data that they’d lose when the trial expired.

Just do it


They took a different approach:  Just buy it and try it.

After all, subscription pricing is one of the great advantages of SaaS solutions over traditional on-premises software.  Monthly fees are much lower than up-front license costs, deployment expenses are lower, and often there’s no long-term commitment.

For customers, it’s just easier to evaluate and buy SaaS solutions.

That’s good news for SaaS solution vendors, too.

Solutions that are easier for customers to buy are also easier for vendors to sell.  Converting prospective customers from “opportunities” into “paying customers” is faster and simpler.

But there’s a catch

But it’s not all good news for vendors.

For most SaaS companies, they need a customer to stay for at least several months, even 2-3 years, to recover the cost of acquiring that customer.  If the customer leaves too early, the vendor will actually lose money, not make money.   (See “Acquiring Customers Ain’t Cheap.”)

For the SaaS sales and marketing team, this means even when they’ve brought in a new customer win, their work’s not done.

Now they need to convert those new customers into committed users.  Success requires more than converting prospects into paying customers.  It also means converting new customers into long-term customers.

Their responsibilities now include helping with on-boarding, training, expert guidance, or whatever else it takes to convert a new buyer into a committed user.

To fill that role, I’ve seen marketing teams add all kinds of “post-sales” activities to their programs:
  • Host webinars for existing customers to pass along advice on using the solution more effectively  
  • Publish customer success stories that share best practices
  • Support online forums where customers can share ideas with their peers
  • Communicate with customers on new features that they should be taking advantage of
  • Establish a “VP of Customer Success” role with responsibility for keeping existing customers happy.
(For more thoughts on effective on-boarding, see “Get SaaS customers off to a healthy start.”)

Another step in the customer acquisition process

I know this isn't the best news for sales and marketing folks - adding more work to the customer acquisition process.  As it it wasn’t tough enough already to build visibility, capture leads, convert them into qualified opportunities, and finally into paying customers.

Now you need another step: retaining new users.

Sorry, but that’s the cost of SaaS.  It may be easier to win new customers, but it’s tougher to keep them.