Most demos are useless

When you're selling business solutions to companies, at some point in the sales process you're likely to end up doing a demo.

Too bad.  Most demos are useless.

They usually don't help the prospective customer make a good choice. They just confuse and bore them.

And they don't help the vendor make the sale, either.  That's especially true for software-as-a-service (SaaS) solutions.

In this short video, produced with help from the good folks at Openview Labs, I explain why most demos are dreadfully dull, and how we can do better than bore our prospective customers and waste our own time.

SaaS Marketing Requires Focus

There's a guy in my town who advertises himself as "The Bulkhead Man."  What he does is install the entryways that go from the outside of a house into a basement.  Most are heavy steel doors that are mounted onto the concrete foundation.  Here's a photo of mine, partially obscured by a very healthy holly bush.


I assume "The Bulkhead Man" could probably handle a lot of other construction projects around the house: build a deck, hang new cabinets, replace siding, whatever.  He could rightly call himself a "contractor" or "handyman." 

But that would be a bad idea.

Then he'd be just another guy in the long list of other "contractors" and "handymen" who advertise in my local paper.  His ad would be stuck in with about two dozen others, instead of being the one and only "bulkhead man."  

Companies want solutions for their particular problems

If I needed a new bulkhead, believe me, "The Bulkhead Man" is the guy I'd call.

And I'm probably like most people in that way.  Most of the time when we're looking to fix something, we're looking for someone with particular expertise, a specialist in delivering just exactly what we need.

This same logic applies to people searching for business solutions.  They're usually not looking for something that can "do anything for anybody."  They're looking for a solution to their particular problem.

How can software-as-a-service (SaaS) companies can take advantage of that logic?  One word:  Focus. 

Focus lets companies build visibility and a reputation as experts in their particular niche.  It lets them distinguish themselves from the pack.

When someone searches for solutions like theirs, they rank at the top of the list.  When someone sees them at a show or receives an email from the company, they pay attention.  "Hey, these folks have something that's exactly what I'm looking for!"

Focus on a problem, a customer, a geography, something

A SaaS company can focus on a particular problem or task.  For example, "our solution is specifically designed to help eCommerce companies more quickly and accurately update the inventory they present online."

Or it can claim that its solution is developed for a particular kind of customer, as in "this product is built for companies with teams of 5-40 customer support reps."

A company could even claim a specific geographic specialty.  For example, "our solution is designed to help public school administrators meet the unique reporting requirements of the State of Florida."

If you think about it carefully, you may find other ways to identify your particular market segment.  Contact me if you need help.

Focus isn't easy

Believe me, I know it's difficult to narrow in on a specialty and there's lots of temptation to present yourself as "we can do anything for anybody." 

I talk with a lot of companies that are rightly very proud of what they've built, all the things it can do, and all the markets it can serve.  "Yes, it solves that one problem well... but wait.  It does so much more."

My advice in most cases: focus.  Or at least take on a carefully selected handful of well-defined segments.

Focus is especially important if you're competing in an established market with a few 800-lb gorillas.  In the market for CRM solutions, for example, if you get head-to-head with companies like salesforce.com, they'll easily out-spend you with their vast marketing and sales budget.  You'll be buried.

Focus is essential to the SaaS business model

The key to survival in the SaaS world is getting your money's worth from what you spend on customer acquisition.  (See "Marketing Spend;  How Much is Enough?") Once you've spent money on developing your product, sales and marketing expenses are likely to be among your largest on-going expenses.   For your business to thrive, the return on that spending - the long-term customer value - must exceed the acquisition costs.

With focus, a company can distinguish itself from competitors, make itself easier to find, attract more leads, and close more business.

What does that means in terms of the "customer acquisition cost (CAC)/ long term customer value" (LCV) formula?  If the company spends $1 on sales and marketing, it's got a better chance at earning back much more than that in long-term customer value.


Don't just be another company that does everything that everybody else does.  Be the one and only "bulkhead man."




 


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

Turning SaaS Buyers into Satisfied Users

If you subscribe to a software-as-a-service (SaaS) solution, in most cases you can quit whenever you want.*

That's great for SaaS customers, but not so great for SaaS providers.

It puts a special burden on providers:  They need to be sure that the folks buying their solution are actually using their solution.

If buyers don't become satisfied users, they'll eventually leave.  The result: attrition, slower growth, higher customer acquisition costs, and other bad things.  (See "SaaS Renewals and the Multiplier Effect").

In this short video, produced with the good folks at Openview Labs, I talk through 3 ways that SaaS providers can turn buyers into users. 





*We'll talk about long-term contracts some other time.


 


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

How not to waste $30,000 on marketing

An entrepreneur who's just been accepted into a start-up accelerator that provides cash for young companies asks:

"How would you spend a $30,000 budget for marketing an SMB software-as-a-service (SaaS) application?" 

He's selling into "a huge but highly competitive market."  Based on feedback from about 10 active users, he explains, "I feel confident my application is ready to go to market."

Now it's just a matter of where to spend the $30,000.

Don't spend a dime yet

My advice:  Put the checkbook away.

Sure, the company could try several marketing tactics that might be helpful and reasonably cost-effective:  search engine optimization (SEO), Google adwords, PR, and others.

But in a highly competitive market, $30,000 won't go far.  The company could easily spend that amount on adwords in a single month, and good SEO or PR professionals need to get paid.

Before it spends any money on specific lead generation activities, the company should first figure out why anyone would buy its product.  And in a highly competitive market, why would they buy it from them?

If the company is facing well-established and well-funded competitors, it'll need to articulate a significant advantage over these other solutions.  A few extra features aren't nearly enough.

A new solution can't just be better; it needs to be a lot better.   

Don't promote before you know what you're promoting 

There's a lesson in here for all SaaS companies:

Don't spend money on search engine marketing, PR, or any other channel, until you have a

compelling message to promote.

Once the solution is built is not the time to start marketing.  Companies should think through these messages and their value proposition much earlier in the process.

If you're interested in building a viable business, developing a compelling value proposition is just as important as developing a sound technology solution.  Marketing and messaging are not after-thoughts. 

If you don't know who should buy your solution, what problem it solves, and why it's better than anything else out in the market, no amount of money - not $30,000, not $300,000, not $3 million - will help much.

Don't do tradeshows the wrong way

Tradeshows can be an effective way to get in front of prospective customers.  But not if you do them the wrong way.

You'll know it's the wrong way when you find yourself standing in a small booth in a remote corner of a vast exhibition hall, desperately hoping that some lone soul will meander their way past and glance in your direction. 

You'll know it's the wrong way when you're checking your email every two minutes, trying to relieve the monotony.

And you'll surely know it's the wrong way if you've spent thousands on exhibition space, booth set up, shipping and drayage, electrical, carpet, and give-aways, plus the travel expenses for everyone who staffed the booth, and you've attracted no new prospects.

Tradeshows can be expensive, especially for software-as-a-service (SaaS) companies that need to be especially careful with sales and marketing expenses. (I write extensively on the need for SaaS companies to spend wisely on customer acquisition in my "Practical Advice on SaaS Marketing" newsletter.)

One option is to skip tradeshows, dropping them from your budget altogether.

A better option, which I discuss in the video, is to select tradeshows carefully and get as much out of them as possible.

Thanks to the good folks at Openview Labs, who helped produce this video.

(By the way, I imagine there's a way to get a better still shot from the video than this rather unflattering one, but I've not yet figured out how to change that.)

Customers don't care about you

Sorry to break this news to you, but customers don't really care about you.

Even when they ask about you, it's really about them:

• "What problems can you solve for me?" 
• "What experience do you have with companies like mine?" 
• "What do you know about my business, my market, my product?" 
• "How can you help me?"

You may have a broad range of expertise.  You might have solved problems for all kinds of different companies in all kinds of different industries.  You might know a lot about a lot of different markets.

It doesn't matter. 

Prospective customers really only care about themselves. What do you know about their market?  What can you do for their business.

There's no problem with that.  After all, it's their business and their money.

Present yourself as an expert

So what does that mean for software-as-a-service (SaaS) marketers?  What does it mean for your messages and how you present yourselves?

Look at it from the prospective customer's point of view.  They'll be relying on your SaaS solution to support a key part of their business - customer management, finance, ERP, HR, whatever. 

They need to trust you.  They need to feel confident that you understand their particular needs. 

You need to present yourselves as experts at solving their unique challenges.  You need to focus, to specialize. (See "Don't market to the wrong people," Practical Advice Newsletter, April 2013.)  

For example:

• "Our billing management system is focused on the meeting the special needs of veterinarians in the US"
• "We deliver an HR recruiting solution built specifically for K-12 public school administrators"
• "We've built an inventory management system based on our deep understanding of the food service industry."

You can specialize by industry, by geography, or by company size.  Those are fairly common. 

Or the focus could be on a particular kind of problem.  For example:

• "We've built a solution for companies that need to coordinate long sales cycles that include multiple decision makers throughout a large enterprise"
• "We're ideal for small companies struggling to attract software developers"
• "Our solution eliminates the paperwork from tracking warranties and processing claims."  

That is, you could stake a claim to having the perfect solution to one special need which may be common to multiple industries.

SaaS is about a relationship, not a transaction

Of course your company probably knows a lot about other industries and other markets.  And it might be easy to configure your SaaS solution to work in a variety of environments to solve a whole slew of problems. 

But your prospective customer usually doesn't care about what you can do for other companies in other industries with different challenges.  They care about themselves.

Remember, SaaS means a relationship, not a transaction.  And customers want a relationship with someone that they are convinced knows their market, their business, their problems.  Someone they can trust.


 


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

SaaS Marketing Tactics: Do Whatever Works

Like most conventional wisdom, ideas about the "best" way to market software-as-a-service (SaaS) solutions make sense for some companies.  But for other companies, those same ideas don't work at all.

Take free trials, for example. 

For applications and markets where the prospective customer can actually get a good sense of how the solution works over the course of a short trial, where the company has the resources to support the trial, and there's an effective process in place to move prospects from trial to purchase, a free trial can be a very effective tactic.

But that's not always the case.  If the prospect won't see much value from a trial for months, or it costs the SaaS provider lots of time and money to support it, a free trial doesn't make sense. 

Here's the point:  Don't buy into the conventional wisdom: "SaaS companies must offer free trials."  Instead, go your own way and offer alternatives.  (See "Free trials don't always make sense.")

Certain social media make sense; others don't

Conventional wisdom also points to social media as a "must do" SaaS marketing tactic.

Facebook, Twitter, or LinkedIn can be effective in the right circumstances.  But if your target market isn't active on those media, don't bother. 

Or at least don't bother with all of them.  If your prospects participate in relevant LinkedIn discussion groups, spend time on LinkedIn, and ignore the other media.

Blogs can be useful too.  If they convey helpful information, they can organically attract a well-qualified audience.  But don't follow the pack here and start a blog just because "everybody's got one." 

Blogs take time and resources (Believe me on this, folks.  Even monthly deadlines come up quickly!)   If you can't make the commitment, don't do it.  A blog showing the latest post from 2010 is worse than no blog at all.

Don't rule out tradeshows

Conventional wisdom takes a dim view of tradeshows. 

For one thing, they are expensive.  I always figure the final cost of participating in a large show- counting in travel, entertainment, tchotchkes, shipping & drayage, etc. - will be at least 3x the cost of booth space.  That's a lot of money for a cost-conscious SaaS company.

But don't write off tradeshows out of hand.  Conventional wisdom aside, for some markets and some SaaS solutions, they're perfect venues to get in front of the ideal prospective customer. 

We recently developed a customer acquisition plan for a client selling to fitness clubs.  In talking with their target buyers - fitness club owners and managers - we found they all attended at least one of the two large national shows every year.   Participating in those events - both on and off the show floor - makes sense for that company.

So much for "conventional wisdom."

Use what works for you

When you're evaluating SaaS marketing tactics, of course it's a good idea to listen to your peers, pick up "rules of thumb," and skim relevant blogs (thank you).  But don't accept or reject ideas out of hand.  See if they fit your particular situation. 

Better yet, try them out.  Measure the results. 

If they work, do more.  If not, don't.