It's Hard to Overcome Inertia

One thing I’ve learned in talking with customers:  People have a high threshold for pain.  It’s really difficult to get them to move away from whatever system they’re using to handle some task in their organization – no matter how bad that system is - and adopt a new one.

When I talk with customers that have recently purchased a new software-as-a-service (SaaS)

solution for their organization, I always ask “What system did you have before, and why did you decide to change.”

I nearly always hear back that the system they used before had to be bad - really, really bad - before they decided to replace it.  Even when they know that it’s less than optimal – slow, hard-to-use, messy, whatever – they will often choose to just live with that pain if they can. 

I’ve heard this from HR managers, finance executives, property managers, advertising professionals, and pretty much everyone else.  Most people are willing endure a lot in order to avoid the expense and hassle of making a change. 

Only urgent problems get attention

If people are busy in most organizations, that’s doubly true for folks that are considering SaaS solutions.  As I’ve talked about before, these people have day jobs.  They’re managing HR, finance, sales, or some other full-time responsibility.  They don’t have a few open weeks or months to evaluate SaaS solutions.  They have a long list of tasks to focus on and only the most urgent problems an get their attention.  (See video “Only urgent problems get attention.”)

If you’re marketing a SaaS solution and the problem you solve is way down on your prospect’s list of problems that need attention, your first task is to push that problem toward the top of the list.  An annoying problem – one they can live with - needs to become an urgent problem – one that can’t be ignored.

Look for deeper pain

When SaaS solution vendors are touting their advantages over existing systems, I typically hear some variation of this: “We’re faster and we’re less expensive.”  They talk about how their system will save

the customer money and let them work more efficiently.  Some will go on to quantify the saving and even calculate the ROI on buying their solution.

“Faster and cheaper” are useful advantages, but they’re usually just table stakes.  Marketers should look for the deeper, more urgent problems – issues that can truly imperil the business - that can more effectively motivate a prospective customer.  

For a financial services professional, for example, their biggest problem – one near the top of their list – may be the need to reduce risk.  For an HR professional, it may be that they are so buried in administrivia that they’re unable to have significant impact on the organization.  I once heard from a property management executive that managed several different offices that their biggest fear was the risk of embezzlement.

Focus first on the pain, not the solution

A reminder to marketers: your biggest competitor is usually inertia.  At least in the initial discussions with prospective customers, you’re usually competing against the impulse to “do nothing,” not against a vendor offering a similar solution. 

Showing how you stack up against other vendors’ solutions doesn’t matter so much at this stage.  It’s way more important to show that the customer has an urgent problem – one that cannot be ignored.  Only when they get there have you earned the right to show them that you can solve that problem.

How much should you spend on marketing?

I get this question a lot.

But even though I’ve been working with software-as-a-service (SaaS) companies for more than 15 years, I still don’t have an answer.

Or at least I don’t have a simple answer.

To answer that question – how much should we spend on marketing - first you need to answer a second question – how much revenue are you generating from your marketing.  The two questions go together.  Just asking the first, by itself, isn’t very helpful.

To know how much you should be putting into marketing, you need to know how much you’ll be getting out of it.

The SaaS metrics gurus express this as customer acquisition cost (CAC) relative to customer lifetime value (LTV).  (See “Acquiring Customers Ain’t Cheap.”)

Think of customer acquisition like a machine

A former colleague explained the concept to me like this.  SaaS companies are trying to build a customer acquisition machine.  This machine turns the marketing and sales investment into customer revenue.

When the machine is working well, for every dollar you put into the machine, at least three dollars comes out. 

By contrast, a poorly functioning machine turns every dollar into 80 cents.

So, to get back to the original question – how much should you spend on marketing - if you’ve built a well-functioning customer acquisition machine and it turns one dollar into three dollars or more, you should spend as many dollars as you possibly can.  At least until the machine stops working.

Where’s the best place to spend your marketing budget?

Here’s a related question I get often and again one that I can’t answer simply. 

There’s certainly no shortage of options:  SEO, pay-per-click, email, LinkedIn, webinars, social media, events, ad infinitum.

I’ve tried them all and in all kinds of combinations.  Some have worked well, others not so well.  What works for some companies doesn’t work for others, and some tactics that work well at first sometimes just stop working.  (See “SaaS Marketing Tactics:  Do Whatever Works.”)

Sorry I can’t answer the question directly about where to spend your marketing resources most effectively, but I can suggest two ways to help you find out.

1.     Try different tactics, measure what works, and make adjustments. 

2.     Ask your customers where they look for solutions like yours.  Ask how they found you.

So, there you have it.  Two common questions with no simple answers.  Yes, SaaS marketing can be difficult.

Benchmarks: Don't Hide This SaaS Benefit

A company may have lots of ways to know what’s going on inside their organization.  But it’s more

difficult to know what’s going on outside.  How are they doing relative to other companies.  What are others doing that they can learn from?  What mistakes are others making that they can avoid? 

During the height of the Covid-19 crisis, one of my clients asked a few dozen customers what they were doing to adjust to the new business conditions.  Besides helping some struggling customers and providing reassurance, it also let them gather a few useful insights.

Then they shared those insights, anonymously of course, with the rest of their customers.  It was sent to that large audience under the subject line: “Here’s what your peers are doing to manage through the crisis.”

Customers responded well. The advice was helpful, timely, and gave a window into what their peers were up to.

Understanding your customers is something SaaS companies can do especially well

Lots of software-as-a-service (SaaS) companies should be able to easily gather and share information like that.

In fact, they don’t even need to talk to their customers.  Because they’re hosting the data in the cloud, they can see the vital information themselves.

A SaaS HR systems vendor, for example, can find in the system useful information on sick days, turnover, or time-to-fill open positions. 

A CRM vendor can see the ratio of opportunities per lead and the average length of the sales cycle.  An ERP vendor can see average inventory levels or key financial metrics.

Vendors that sell into verticals can share industry-specific information.  A vendor that hosts a solution for car dealers, for example, can see the average sales per month, the value of extras sold with each vehicle, and the average time a vehicle stays on the lot.

Benchmarks are useful

Of course, SaaS vendors need to be very careful to share only aggregate data.  They can’t be in the business of sharing private data of individual customers.

But with proper protections, they can regularly collect and share helpful benchmark information that allow companies to compare themselves to their peers.

That information is valuable.  HR managers, marketing professionals, sales executives, supply chain managers, etc. all want to know how they stack up.

Avoiding Website Ratholes: Advice for SaaS Marketers

Nobody seems happy with their website. 

In talking with lots of Marketing managers over many years, I’ve found that they tend to fall into one of only two camps: 

• People that are currently redoing their website, or
• People that are planning to redo their website.

In other words, nobody’s really happy with their existing website.

Over the last year, I’ve worked with 4 different clients on a complete overhaul of their websites.  And I’ve recommended suggestions for website improvements for almost every other client.

Too many choices

One of the most challenging parts of overhauling a website, or building one from scratch, is all the choices.  You need to make decisions about design, text, navigation, development, illustrations, ad infinitum. 

Though certain conventions have been established (e.g. a navigation bar running horizontally across the top of the page), there are still millions of details to wade through.  I’ve had discussions about the right color of a person’s hair in a stock photo, I kid you not.  Working through all these issues large and small, it’s easy to get lost, stuck, or frustrated.  You can head down a lot of ratholes.

Based on my experience – meaning I’ve gone down lots of these ratholes myself - let me offer some suggestions on avoiding the same mistakes.

Keep your goals top-of-mind

Specify your primary goals at the start of your website overhaul, get everyone on board, and keep those goals in front of you throughout the project.  They’ll help you stay focused, remind you of your priorities, and guide you as you work through details.

As you think about whether to add a particular section, use a screenshot instead of an illustration, or where to put call-to-action buttons, refer back to your overall goals.  Which action best supports those objectives? 

By the way, you may find that some of these choices make no real difference at all, in which case you’re wasting time fixating on them.  Move on.

Clearly articulate your value proposition

The key benefits and advantages of your solution should be consistently conveyed throughout your website.  In fact, that should be the case with all your marketing programs.  (See “Two essentials for SaaS marketing.”)

You can argue about particular words or illustrations, but the messages should be set in stone.  It should be crystal clear to the visitor who your solution is for, what problem it solves, and why they should buy it from you.  Don’t move ahead with the website until the value proposition and messages are in place.

Work from an outline

Before you start writing text, selecting illustrations, considering designs, or doing anything else, prepare an outline.  Think through and get agreement on the structure, the purpose, and contents of each page or section.  You’ll probably end up making changes as you get into the project, but to use a construction analogy, you don’t want to be designing the house while you’re building it.

 

Measure what can be measured

Rely on actual website data when it’s available. Information on visitors’ behavior collected on the   You’ll see how visitors found you, how they entered and navigated through the site, what material was most popular, what material was never found, and other vital information that can help you make improvements with the new site.  Referring to data can often be more useful than opinions in guiding the project.

existing site can often be helpful in making decisions about the new site.

Overhauling a website or building an entirely new one is a big project.  But that’s what you should expect with such a critical piece of your customer acquisition process.  It will require hard thinking, difficult decisions, and probably more time than you think.  By following a few basic rules, though, you should be able to make the experience a bit less frustrating and a lot more productive.

Is all that blogging working for you?

I’m a believer in blogging.  I’ve been writing a monthly post for more than 10 years, and people do find me through my blog.

Based on the numbers, I know lots of others have a similar faith in blogs.  I’m not sure of the official

count, but my guess on the total number of blogs out there is about a billion.

Blogs are a standard part of the marketer’s repertoire, and for good reason.  Done well, they can help companies attract visibility and gain credibility.  If they’re publishing useful information, people that care about the topic should pay attention, and they may conclude that the writer is some kind of an expert.

But what if they’re not done so well?

Write about what the reader cares about

Sometimes blogs start off on the wrong foot right from the start.  Instead of being about topics the reader might care about, they’re all about the company and its products.  They’re just a series of promotional copy, barely disguised as a blog.  Who would want to regularly read something like that? 

My friend, John Crowley, writes a blog for People HR, a company that markets software for HR professionals.  It’s one of the most popular HR blogs in the U.K. and covers all kinds of topics that HR managers care about.  The blog almost never talks about HR software.  Instead, it offers useful insights on video interviews, employee mental health, office dress codes, and workplace coffee etiquette.  One of its most popular posts is titled: “How to tell a colleague they smell.”

Write on a regular schedule

Lots of marketing people commit to a blog schedule that’s way too ambitious.  Though I’m sure their intentions are good, marketers that plan to crank out a blog post every week or even 2 or 3 times per week may underestimate how much work that requires.  That initial flush of enthusiasm usually wanes after a few tortured weeks living under a deadline.

I do see a post from Seth Godin every single day, even it’s only a few sentences, but that commitment is super-human.  On the other hand, thousands of us SaaS Marketers – me included - avidly read For Entrepreneurs from David Skok, which he publishes only a few times per year. 

The lesson here is that consistency matters.  Publish on a regular schedule and commit the time and resources to hit that schedule.  Seeing a blog with the most recent post dated “2013” doesn’t send the right message.

Show some personality

One of the great things about blogs is how easy they are to publish.  No giant corporate infrastructure is required.  Someone with something useful to say can just have at it. 

And blogs are best when they actually sound like they’re written by someone – a real person – not some anonymous corporate oracle. 

I have no problem with blog writers adhering to corporate standards and reflecting the company’s particular culture.  But how many people are eager to regularly read a stream of disembodied corporate mush?

My friend Michael Katz’s posts include stories about his family and friends.

For years, my own blog posts included a family of cartoon characters to accompany them, hopefully to illustrate key points.  But when someone commented that the cartoons don’t look “professional,” I left them out of a few issues. 

Surprisingly, I then got comments that readers missed the cartoons.   I missed them too.  So, I brought them back, “corporate image” be damned.   

Blogs can be a helpful marketing tool.  But if you choose to do one, make it interesting, publish it regularly, and don’t be afraid to show some personality.

Lessons from a pandemic

I’ll be honest.  Never did I think I’d ever write an article with a headline like that. 

Most of the time I’m writing about situations I’ve seen before – sometimes many times before.  This is not one of those times.

But I have learned a lot over the last few weeks.  Perhaps we’ll be through the worst of this crisis by the time you read this, but I think some lessons have value beyond the short term.

Prospects have other priorities

Right now, many prospective customers are trying to manage their way through urgent challenges,

doing what they can to keep their businesses afloat.  No matter how much your new solution can enhance efficiency, improve service, reduce risk, or whatever other benefits you're promising, evaluation new software-as-a-service (SaaS) solutions in not an immediate priority.

Though that’s surely the case as they deal with a pandemic, it’s true at other times as well.  For the people that use our SaaS solutions - HR managers, finance professionals, marketing executives, sales managers, etc. – they are always juggling lots of priorities.  (See “Your prospect has a day job.”)  The evaluation and purchase journey is not likely to move smoothly and predictably from one step to the next.  Sometimes it’s more like two steps forward and one step back. 

Adjust your marketing strategy to fit.  For prospects at the “not yet ready” stage, often it’s best to provide material that can help educate them.  A buyer’s guide, examples of other customers’ experience, or other helpful advice may be more effective than promotional material that’s all about features and functions.

Communicate with your existing customers

Staying in touch with existing customers during this crisis is critical.  Some of the more effective communication I’ve seen focuses on SaaS companies’ plans to keep the system up and running and maintaining access to customer support - issues that are probably most pressing for customers.  Some companies are also providing leeway to customers on monthly payments.

Any email or phone call that doesn’t acknowledge that we’re facing an unusual situation sounds like you’re living under a rock.

  

Regular communication with customers should extend beyond the crisis, as well.  You should pass along tips on how to get the most from the solution, how to use new features, or lessons from other users.  Customer are often interested in benchmarks compiled from aggregate data that allow them to look at their operations in comparison to peers.

Tell prospects who you are

Customers of SaaS solutions are relying on their vendors to run an essential part of their business.  During a crisis, they need to know that their vendors understand their business and the special challenges it might be facing.  

One of my clients, a provider of a SaaS solution for HR professionals, has communicated to customers that it knows these people are handling a deluge of urgent issues right now and assured them that their system is stable and supported. 

Letting customers and prospects know who you are is a good practice long-term as well.  Though your website, in presentations, and other marketing material, explain that you understand their business, speak their language, and know the challenges they face.  Features and functions, by themselves, are not enough.  Prospects need to know that they can trust you.  (See “Earning customer trust.”)

Make time for strategic thinking

As difficult as this crisis is, it can be seen as a unique opportunity to take a step back from the hectic

day-to-day of managing marketing campaigns.  Though it may be a forced hiatus, some SaaS companies are using this as a time to review fundamental strategy.

They’re thinking about whether their messages are still appropriate and speak to their prospects’ most urgent needs.  Those needs may have changed as a result of the pandemic and your message may need to be adjusted as well.  For example, it might be time to put special emphasis on the ability to access your solution remotely.

SaaS companies are checking that the channels and media they’re using are effectively reaching their target audience.  They’re assessing whether the programs they have in place cover the entire customer journey.

Taking this strategic perspective is a good practice even after we’ve emerged from this crisis.  It’s important to review the fundamentals of your marketing program periodically to be sure you’re reaching the right people, at the right time, through the right channels, with the right messages. 

I hope you will all come through this challenge with good health, a bit of wisdom gained from difficult experience, and greater perspective on what really matters.  Stay safe.

Overcoming the implementation challenge

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So, you’ve built a great product.  Bravo!

Better yet if you’ve figured out how to market it.  You’re getting it in front of prospective customers and they quickly see how it can be helpful.

But just showing the product’s benefits and advantages isn’t enough.  Prospects need to see more than that. 

 

Before they make a purchase decision, they want to see a smooth path to implementing your   They want a painless way to get from where they are now to where you’re promising to take them.

solution.

They especially want to know that things won’t go wrong during the transition.

·      Important data won’t get lost 

·      Reports won’t be delayed 

·      Essential work won’t be interrupted 

·      There’ll be no pushback from end users.

No matter how wonderful your solution might be, prospects know that adopting a new product is risky.  That risk and fear can bring the purchase process to an abrupt stop.

What not to do

I’ll offer some advice on how to overcome this obstacle, but first let me point out what probably won’t work:  Doing more demos.  Showing more features, benefits, and advantages doesn’t address the core objection.  These prospects already see the value of the new features.

And dropping the price is probably equally ineffective.  Fear of moving from one process to another is the issue, not cost.

What could help

Instead, you should show prospective customers a clear, low-risk path to successfully adopting the solution. 

Share your step-by-step implementation process.  Show them that you have a proven methodology for moving data, creating reports, training users, etc.  Make it clear that you’ve thoroughly worked through the process and can navigate them through it flawlessly.

Show customer success.  In addition to talking about the benefits and advantages of the solution, these stories should also show that transition process has been painless for others.  Happy customers shouldn’t just tout the wonders of the new solution.  They should also talk about how easy it was to get there.

Sell the whole solution.  Don’t just talk about the features and functions of the product.  Focus as well on the implementation, training, and support services that go along with the product.  With a software-as-a-service (SaaS) solution, you’re selling more than just software.  (See link to “Are you forgetting the service part of SaaS?”)

Free trial… maybe

Some of you might be thinking, “What about a free trial?”  That might be one way over the “fear of transition” obstacle.  The prospect gets an opportunity to see first-hand how the product works. 

On the other hand, when using a trial, it’s difficult to assess whether a full-blown implementation will go smoothly.  If the product you’re selling is to be deployed widely for a critical application - an expense reporting application, for example - that looks easy enough to an HR administrator or Finance professional, might be rejected by the employees forced to rely on it.  (See link to “A free trial isn’t really free.”)

Don’t miss this key step

I’ve written before about the long and often interrupted purchase and evaluation process for B2B SaaS solution.  (Link to “Are you giving up on your prospects too soon?”)  And I know the challenge for marketers in guiding prospects through it.  Adding yet another step doesn’t make your life any easier.

But omitting the work where you show prospect’s how to painlessly “get from here to there” and overcome the fear that bad things will happen during the transition isn’t something you can avoid.