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.

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.

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. 

Upselling isn't easy

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I’m probably reading the same research you are about upselling.  The clear conclusion is that selling more stuff to existing customers is important for software-as-a-service (SaaS) companies.

The most successful SaaS companies are generating more than half of their new bookings from   Plus, they’re achieving “net negative churn,” meaning the loss of customers is more than offset by selling more to existing customers. (See KBCM 2019 survey of SaaS companies.)

upsells and expansions.

And this “land & expand” strategy can be a lot less expensive than selling to new customers.  The cost of selling to an existing customer is about half the cost of acquiring a new customer.

Where upselling can go wrong

But just because the strategy makes sense doesn’t mean it’s easy to execute.  In fact, there are lots of ways it could go wrong.

Poor experience with the initial product:  It may seem obvious, but upselling new products requires that the customer have a good experience with the first product.  Companies need effective onboarding, training and support in place to ensure customers are satisfied.  Without that, customers won’t even consider purchasing more.  (See “How to lose a customer in the first 90 days.”)

Poor product integration:  The follow-on products need to work well with the customer’s existing product.  If customers struggle to use the two products together, they simply won’t.  Things like a similar user interface, single sign-on, easy transfer of data from one product to the other are essential.

Difficult to understand the value:  It should be easy for the customer to see how they’ll derive significantly more value by adding another product.  For example, adding a tenant screening service to a residential property management solution makes sense.  Unrelated products and services don’t.  Don’t make your customer work too hard to understand the value.  (See “Your prospect has a day job.”)

Require new decision makers:  If the add-on product requires an OK from a new person within the customer’s company, a “simple” upsell can get complicated.  This is true even when one product is closely related to another.  For example, there may be an advantage to connect an HR administration solution directly to a payroll product.  But that means the purchase decision for the new solution now involves the Finance executive, not just the HR administrator.  That doesn’t mean it’s impossible to sell the add-on payroll product, but it does present another obstacle.

Poor timing:  Be careful not to jump into upselling too soon.  The customer needs to see value from the first product they’ve purchased, and they need to trust you.  That may take time.

Speaking of poor timing, don’t try to upsell a customer while they’re trying to resolve a support issue.  When they contact the support desk, they’re focused on getting the existing product to work properly, and probably not in the mood to think about purchasing additional products.

Lack the support of end-users:  If they’re happy, end-users can be a huge supporter and make it easier to sell add-on products and services.  If they’re unhappy, not so much.  If an HR manager is getting lots of pushback from employees about their experience with an HR solution, they’re unlikely to buy additional products.  Same for a Sales manager getting complaints about the CRM system, a Finance manager getting grief about an expense reporting system, etc.

Difficult to purchase:  Customers buying a related product from the same vendor expect a simple buying process.  A complicated multi-step process and pricing that’s hard to figure out will be confusing, slow everything down, and make the buyer wonder whether these two solutions really are from the same vendor.

Selling without understanding:  The people doing the upselling need to know what the customer really needs.  Mindlessly pitching one thing after another, just because it’s in the salesperson’s bag, isn’t very effective.  Because the customer is using a SaaS product, it should be possible to know precisely what additional products or services might make sense for them.  No need to spam them.

I don’t mean to scuttle anyone’s plans to grow their SaaS business by selling more to existing customers.  Done well, it can work.  And lots of SaaS companies have made it work.  But be aware of the obstacles.  Even though products carry the same logo and come from the same vendor, upselling isn’t as easy as it seems.