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.

When marketing gets creepy

A company I'll call "NotAGreatIdea.com" is spying on me.

They know I've wandered onto their website and watched a video demo of their product.  I didn't provide my name or email address.  But somehow they think they have permission to contact harass

me.  

Perhaps "harass" isn't exactly the right word to describe the email that arrived a few minutes after my visit to their site.  It addresses me by name and mentions that they know that I've checked out their video.

Maybe "creepy" is a better word.

Nothin' for nothin'

Companies can contact me when I've asked for something from their website, like a white paper.  I actually expect that.  It's a fundamental principal of inbound marketing.  You give me something of value, and in return I give you an opportunity to connect with me.

Done well, this mutually valuable exchange can be a vital part of an effective customer acquisition strategy.  It can help companies earn credibility and move prospects along a path toward purchasing a solution.  And it can be designed and executed to fit within software-as-a-service (SaaS) companies' business model.  (See "SaaS companies can't afford to sell," November 2012) 

But when I've not explicitly provided my name and contact information, as in the case of my anonymous visit to "NotAGreatIdea.com," the company has not earned the right to contact me.

A productive relationship doesn't start with stalking

In fact, their intrusive email completely soured me on the idea of learning more about the company.  I have not the slightest interest now in taking them up on the invitation "to arrange a short meeting to answer any questions you have and to show you how NotAGreatIdea.com's easy to use patented technology can help take your marketing to the next level." (Name changed to spare public embarrassment.)

If by "take your marketing to the next level" you mean that my company too can use your technology to identify visitors - who thought they were anonymous - and try to establish a trusting and productive relationship with them... no thanks.  That sounds worse than spam; it's stalking.

Look, I'm not naive about what marketing technology can do.   I know you can use clever solutions like these to track all my comings & goings on a website, count my downloads, and even discover my name and email address.

But just because you can do it, doesn't mean you should do it.




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.

Why I'm cancelling my subscription: a failure to communicate

I just cancelled my subscription to the New York Times on my Nook.  Not because I won't be reading the New York Times any longer... but I won't be reading it on my Nook.

Why not?  Because the service provider, Barnes & Noble, routinely breaks a fundamental SaaS rule: 

Communicate with your subscribers.

What we have is a failure to communicate. 

Barnes & Noble is unable or unwilling to let me know when there's a problem with their delivery.

Several times over the last few months, my electronic newspaper didn't arrive as scheduled. 

Last Saturday morning, the New York Times icon on my Nook was showing some kind of inexplicable message:  "Connecting." Nothing about a delivery problem.

On the Barnes & Noble website, nothing about the problem.

On the customer support telephone line "hold" message (which I listened to for 15 minutes), nothing.

In my email inbox, nothing.

When I finally reached a customer service rep, she told me that their servers had been down since the evening before.  They won't be able to deliver my newspaper or anything else until the problem is fixed.

It's a daily newspaper.  It's not worth much the following day. 

Lots of SaaS applications - CRM, ERP, HR, etc. -  are time-sensitive.  You expect them to be available when you need them.  Late information is useless information.

Look, I understand that applications, servers and networks go down.  Sometimes it's for scheduled maintenance and sometimes unexpectedly.  It probably happens less frequently for SaaS solutions than it does for internal networks, but it happens nonetheless.
 
But that's not what I'm ranting about.  I'm ranting about the lack of communication.

Poor communication will hurt you

When something does go wrong, you've got to let your subscribers know. 

That's part of your obligation as a legitimate SaaS provider.

• Post a notice to your website.  
• Send an email to your subscribers.  
• Include the information in your "hold" message.  
• Run up a distress flag.  
• Say something!

Just don't keep us in the dark.  It can cost you subscribers.  In fact, I know one.





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.