If you can’t back up your opinions with user testing results of at least 10 of your target users/buyers, then you my friend, are probably talking out of your ass.
Who am I writing for?
- Marketing, sales, product (business people) and engineers/programmers who need to work closely with each other in technology companies.
What’s my key point?
Find and work with engineers who are actually business people but solve their parts of the problem through code/engineering.
I’ve been working with engineers for a few years now. Some are an absolute delight to work with… you feel this sense of camaraderie where two people get together to tackle a problem, one with their engineering skills, one with business skills.
And then there are those who thought of marketing or non-engineering work as drudgery
Behavioral traits to look out for
- They ask for the end business goal of the project right off the bat… usually by saying something like “so what are you trying to achieve?” That’s the good ones. The incredible ones will also ask “and for whom?”
- They take time to understand the actions and processes needed to meet that goal, not just from engineering, but from all other departments. An engineer like this knows that any large project will need multiple teams, people & departments to work together to succeed, and they’ll plan accordingly.
- They’re able to suggest alternatives to the approach you’ve thought of. Shows that they can think for themselves about business problems.
- They include the project’s outcome in your overall reporting infrastructure/solution. Good folks know that post hoc reporting forms the basis for future, better action.
If you find people like this in your organisation, then management is doing something very right. But you rarely find engineers like this.
Who am I writing for?
SaaS startup founders and marketing folks who’re planning to, or currently engaged in, content marketing.
What’s my key point?
Content distribution, or the lack thereof, is the reason why your content marketing efforts aren’t giving you any real results. When creating your plan, spend a lot of time thinking about how you’re going to spread and distribute your content.
What are the goals of content marketing?
- Understanding who you’re trying to help with your content
- Creating useful content according to the stage of their buying cycle
- Making sure that the content reaches more and more of its intended target audience
- Measuring the results and tweaking things
Most of us are pretty good at understanding who we’re creating content for, and usually we’re good enough at creating useful content according to buyer stage.
However, most of us absolutely suck at distributing content, even when we have that person’s email address. And that’s where our entire goal falls apart.
I see this over and over again
So when you’re creating your content marketing plan, think deeply about how you’re going to spread and distribute the content. And if you’ve hired someone for the job, build distribution efforts as leading metrics into their KPIs.
Broadly, here are some channels you might want to think of:
- Organic search, so that people find your content when they face the problem you’re trying to help them with
- Email… still the best way to get your content out in front of the right people, but it means you always have to be offering something relevant and asking readers to subscribe
- Distribution oriented ecosystems like Medium, Product Hunt and Linkedin Pulse
- Your personal social media accounts
- Through your sales team
- Through your customer success team
- Comarketing efforts with other brands and influencers
- Paid amplification channels like Outbrain, Taboola, Facebook & Linkedin Sponsored Updates
- Good old personal email reachout
- Guest posting
- If you’re solving problems that are fairly large, like helping people lose weight through nutrition information, or if you make project management software, then you can use mass distribution channels like Outbrain. However, Outbrain sucked for me when I tried it for VWO. After all, not so many people care about A/B testing and conversion rate optimization. In our case, Linkedin Sponsored Updates work better because of the targeting options.
- When evaluating channels, the ones with better targeting work for B2B audiences where the number is small, but the dollar amount they can commit to you is much larger than what they would as individual consumers.
- I haven’t included social media and forum posting or Quora links in the previous list because I see they just end up becoming spam. Cracking content distribution on social media is a much larger topic on its own.
- Nurture and protect your email subscribers. However small they may be initially, don’t be an asshole and send them whatever the fuck that comes to your mind. Think of the stage they are in, think of what matters to them right now with regards to your solution, and try to send contextual emails. At VWO, we still sometimes err on the side of “we’ve released a new feature, so let’s blast it out to everyone, they might want to use our product because of this one new feature”. Hopefully, that’s something we’ll be able to do less of in the future.
- Segment your lists with permission. Ask people if they want to sign up to hear about the product, or get to know of new blog posts, or of new webinars and content. Don’t send webinar emails to those who only want to hear about new product updates, or vice versa. If that’s unacceptable to you, then tell them upfront that they’re subscribing to all your content and product updates.
- Doing really good content marketing is incredibly difficult. It’s also the most personally rewarding form of marketing I’ve seen so far.
Walking my talk
My goals from this blog are to
- spread the experience I’m currently picking up so that others don’t waste time making the same mistakes and learning the same stuff.
- gain the respect of others in the SaaS ecosystem so that they’ll want to come work on my team, hire me for a role, or partner with me to create a SaaS product and business.
To that end, it is obvious to me that I don’t do a good enough job of spreading my content. I’m going to start emailing this out more often and see what it leads to.
Who am I writing this for: people who are building or managing a Customer Success function.
What’s my key point: your CSMs need to provide value, and for that it’s better they specialize based on industry (or business-type) versus round-robin or regional distribution.
Our experience with the Hubspot CSM
When we bought Hubspot as our marketing automation platform, we were assigned a customer success manager (CSM). Our CSM did everything right; she got the entire marketing team and the CEO on a call, asked us questions like what will make us successful, what does failure with Hubspot look like, what our goals were, and more.
Then she gave us links to all of Hubspot’s training videos and said she’ll get back to us with a preliminary marketing plan that’ll help us get started. So we waited. When we got the plan we realized she didn’t know that we were a SaaS product. Instead, she mistook us for a marketing agency. It could mean that our website at the time did a shitty job, but I invite you to have a look for yourself.
After we corrected her, she got back with some other campaign ideas which were all a variant of:
- Create an ebook
- Add a bunch of automated, follow-up emails
Unfortunately, there was zero context of SaaS, about our goals, about how a visitor signing up for a 30 day free-trial is better than getting back to us to talk to Sales. We felt like she had very little understanding of who we were, of martech, or of the SaaS business model.
And Hubspot had 24/7 phone support for our plan level, has all their KB and documentation on the web, has all their training videos available in the Academy, so basically we soon had no need for the Customer Success Manager. That’s a good thing, when customers have everything at their disposal that they don’t need a human touch.
But it’s bad because we had zero need of the CSM. We knew she couldn’t really help us with our key goals. We knew getting on a call with her was not going to bring us much value. Soon enough, we just completely ignored her. And it wasn’t her fault. I’d put it on the person who planned that CSMs will be distributed region-wise without getting the ability to gain experience and expertise in any one industry.
Our experience with the Google Adwords rep
Our experience with the Google Adwords rep has been worse. While the Hubspot CSM just checked-in once in a while if everything was okay, the Adwords rep seems intent on getting us to run more campaigns and campaign types, tweak settings to what we know isn’t optimal for us (they might be good for Google though), and make us spend more budget in general.
She’ll make promises about doing some competitor benchmarking and give us best-practice recommendations, or going through our account and telling us how to optimize, but invariably those aren’t relevant and I now actively avoid getting on calls with her. In fact whenever anyone in the company or in my network asks me about talking to their Adwords rep, I discourage them from it.
So what do I think is the solution
Context. To be valuable, the Customer Success Manager needs to know and understand my problems, and be like a consultant who has seen these same problems and solutions at so many different clients that they can give me useful feedback, leading me to trust and respect them. In fact, the best case scenario would be if I pay extra to get a few more hours of their time every month or quarter.
After all, it’s their expertise that’s valuable, not the fact that they’re easily available.
Other reasons why industry based specialization is valuable
- Content marketing: Something written by a CSM who is basically an industry expert is extremely valuable and immediately appeals to readers, because in their language, in their suggestions and in their content resonates the voice of the customers.
- Product development: I’ll wager that they’ll end up giving more valuable product feedback than even Sales to your PM team because while Sales will close a deal and move on, it’s the CSMs who then work with customers to actually understand and solve their problems.
- A new revenue line: CSMs so valuable that customers pay for their time and help. Like the Forresters, Gartners or ZS Associates of the world.
Who is this for: startup founders who’re building SaaS tools.
TL;DR: when you’re a ‘tool’ the problem is a tactical one that’s solved by the product, but as you start adding features, increase prices and become more than a tool, the problem you’re solving tends to move towards your customer’s ‘success’ and you solve it through services, support, marketing and Customer Success Managers (CSMs).
When Visual Website Optimizer was a tool
When I joined Visual Website Optimizer in 2012, it was a tool that helped people A/B test web content. Marketers had long wanted to do that but the capability was restricted to companies which were willing to deploy their engineering resources on it, or buy extremely expensive enterprise solutions.
Visual Website Optimizer bridged that gap on Dec 14, 2009 by giving the average marketer a visual, WYSIWYG editor that would allow them to A/B test basic stuff like button and text colors, font-size, images and form fields. All of this without touching code and at a perfectly reasonable starting price of USD 49 per month.
VWO as a solution
As VWO started being bought by more enterprises, it became clear that just allowing marketers to A/B test website content wasn’t going to cut it. We had to help them become successful with A/B testing. That’s a completely different, and larger, problem.
Here’s how we’re going about solving that problem
- Being successful with A/B testing means the entire team in a large company needs to be trained on the product, so we need CSMs and Customer Marketing to work on a training module, which the CSMs deliver.
- A/B testing campaigns involve a lot of front-end coding, so we have Technical Support for technical queries, and a Services arm to implement tests for customers.
- People need to be able to understand our statistics to make the right decisions, and a graph can’t always help you do that, so that’s where content marketing comes in.
- Customers need on-going help with test planning, ideation and strategy, which is where the CSMs come in again.
The product lies at the center of solving the problem, but as you move upmarket you’ll need to solve the problem of making your customers successful, versus just giving them a few features and capabilities. That requires a mix of education, training, services, support and content to achieve.
Want to create an incredibly successful startup and make the world a better place in the process? Create a communication channel for businesses to reach their potential customers, and they’ll pay you handsomely for it.
Your approach to creating the communication channel doesn’t matter as long as you acquire a large enough user base with some spending power. There’s only one caveat: the users have to stick.
Let me explain what I mean with examples.
Facebook did this by creating a social network where it gave people the power to share and make the world more open and connected. Then it built an ad platform so that businesses could reach out to all these potential customers. The hard part was and still is acquiring and keeping people on the platform because the day they leave, so will the businesses, and so will the revenue.
Based on their Q4 2015 and Q1 2016 results, Facebook is doing a damn good job of keeping consumers on the network. Where it’s stumbling is getting new users from the “Rest of the World” category (the developing world). And they need new users to continue their growth rate. The desperation with which they need these users was evident in how they went bat-shit crazy trying to defend Free Basics (Internet.org) in India. Read more about that on link 1, link 2, link 3 and link 4.
Instagram is interesting. They acquired users but didn’t give businesses access to these users for a long time. Smart brands quickly found a way to still get to consumers through some women with large followers. Instagram is making no revenue out of that and recently launched the Instagram for Business service.
Youtube is slightly different from the pack because others are responsible for creating the content that brings in users, but they share some of the revenue with original content creators who attract and keep potential customers on the platform.
B2B industry news websites
Take for example iEntry, which owns WebProNews. They churn out “technology news” and somehow convince people to visit their website and signup for their email newsletter. Then these two channels are provided to businesses to advertise to their potential customers. Almost every B2B niche has its own news website where others can advertise.
Chrome push notifications
Google was concerned that unlike native apps, websites had no way of engaging mobile users. It responded by allowing websites to send push notifications through the Chrome browser installed on user’s Android phones. Firefox soon followed suit.
While Google was responding to a different threat, some smart people immediately figured that a new channel for businesses to talk to customers had just opened up. And now you have a whole bunch of SaaS products (25 as on date of publishing) that basically bring marketing automation capabilities to website push notifications.
This channel is similar to white-hat email marketing, where businesses have to build their own personal email database.
The largest “business to potential customer” advertising channels because of one reason: relevance. Think of every search query as a person looking for an answer to a problem. Google lets businesses bid for access and priority in the advertising channel with appropriate measures in the system to promote relevance.
“Facebook’s big announcement at its annual F8 Developer conference, was to make Messenger, its 900-million-user messaging app into a full-fledged platform that allows businesses to communicate with users via chatbots.” – 3 trends driving the chatbot revolution, VentureBeat
How to search for flights with Skyscanner’s new Facebook Messenger bot – Skyscanner
The hard part is getting and keeping users. Businesses will happily come after you’ve acquired users.
Or you could simply provide the means to the communication and let businesses build their own audiences… like website push notifications or email marketing software.
Think of all the interesting ways in which people have acquired users and then made them available to businesses: Chat bots, Amazon, Linkedin, Zomato, Yelp, Woot, mobile games, content and news websites.
The difficult part, as always, is a product that attracts and retains users.
When deciding on a lead scoring model for your enterprise B2B SaaS software, base your scoring on the following points:
- The lever on which your pricing is based. For example, at VWO our pricing depends on the website traffic that you want to A/B test. So this becomes an important question for us to ask on any free-trial or ‘Request a Demo’ form.
- How similar are they to the kind of people who normally buy your product? Here you’ll have rules like [+10 points because has ‘Director’ in title] AND [+20 because industry is ‘Ecommerce’], and so on.
- The number of people from the same company that have signed up for your free-trial. The more the better.
Most people in SaaS expect (and hope?) that their lead-scoring model will be super scientific and involve lots of data… and they scoff at the notion of marketing just walking up to the sales team and asking them what factors should they give “points to”.
So here’s the deal, if you have a LOT of sanitized and well maintained data, then your data-scientist delivered lead scoring model will be awesome. If you don’t, like every other SaaS in the world, then the data-scientist will come back and say they’ve found no real correlations.
In that case, it’s better to just ask your experienced sales colleagues for the factors they consider important, and run a quick analysis of your Google Analytics + marketing automation data to compare converters vs. non-converters on pages per session, time on site, new vs. returning visitors, number of forms filled, etc.
We did this and the resultant lead score was pretty damn correlated to them being an enterprise customer or not.
Again, lots of people might laugh at you, but those people have no context of the [quality + quantity] of data that’s required to build a real, ‘scientific’ lead scoring model.
P.S. — Did you notice that I missed out on factoring in-app activity in your lead scoring model? Well here’s where ‘context’ comes in. In-app activity is important when your SaaS is mostly self-service, and the majority of your MRR comes from customers adding their credit card details and paying monthly. These are usually apps focused on SMBs.
Enterprise SaaS doesn’t work that way yet. For us, the number of users in the company joining the product demo is a better indicator than their actions inside the app.
When you say “reduce SaaS churn”, most people will immediately imagine tactics like drip email campaigns, great onboarding, customer marketing, gamification and automated alerts when users show signs of leaving. But this post is not about tactics. This post recognizes that users are smarter than any of the cute tricks we can come up with, and it attempts to get to the core of why there are some products that business users keep paying for, and others they discard.
If you’re a founder or product manager, I’ll encourage you to think deeply about this stuff, versus thinking about your next “growth hack”.
Products on which company processes are based
There are products on which organizational functions are dependent and processes are built. These are usually CRMs, Marketing Automation, HR software and Support software. The defining features are
- they’re used by decision makers for reporting purposes and are often used to track teams’ KPIs and goals
- they’re used to run day-to-day functions of the team and organization, for example, the process of applying for and approving employee leaves, or changing the stage of a sales opportunity
- some people are logged in to the system during their entire working day
- others log in once in a while to complete certain tasks
- the system collects and retains valuable data that companies are not comfortable losing
Some observations about these products are
- the sales cycles are usually longer than a month
- customers will rarely buy these products without first being sure of the processes that are dependent on them
- they need extensive API support and data integrations, because the data they collect becomes more valuable once combined with other data
- heavy cross-functional training is required after the sale, and the product takes the blame if a customer org. doesn’t adopt and use it to the best of its capability
- you need a lot of quality documentation so that you’re not overburdened with support tickets
An important note about products used by decision makers
When I started out at VWO a few years ago, the most important metrics were “free-trial signups” and “paid customers” (about 95% were self-service monthly subscriptions). Back then, Google Analytics (GA) was our most important source of data. We recorded free-trial signups, upgrades to a paid subscription and revenue in GA so it was what we looked at everyday.
In the past couple of years, we’ve started serving more mid-market and enterprise customers. Because of this, a few things have changed:
- The average deal size has increased from $x00 to $x0000
- The quality of free-trial signups matters as much as the quantity
- A large amount of revenue comes from payments made through bank-transfers and other offline methods
- “New MRR” is now more important than “new customers”
Because of all these changes, Google Analytics isn’t important anymore. Instead, the big decision are made after looking at reports in the CRM and our database, where all lead/deal/customer/revenue data sits. Through this shift I observed how when businesses evolve, the metrics that matter to them change, and this has a domino effect on the SaaS products that fall in and out of favor.
Now here’s another interesting anecdote: VWO has a large number of ecommerce customers. For the majority of these businesses, Google Analytics is the “source of truth”, so we simply had to build an integration with GA. In fact, we once lost a big customer because their VWO test reports didn’t agree with their GA data (completely possible and for good reasons, read this to understand why). The internal VWO champion tried to fight it out and explain the difference to management, but we lost the customer after some time.
So my point is this… it is well worth your while to build capabilities that will be used to make the important decisions, and if that’s not possible, then align your product with the primary reporting tool used by your target market.
Products that give results with minimal effort after initial setup
Some of these are:
Lead generation pop-ups, sidebars
- Landing page software (specially when tied to on-going PPC campaigns or SEO keywords)
- Retargeting software, like Perfect Audience and AdRoll
- Exit intent pop-ups, almost always tied to lead generation
- Personalization and behavioral targeting
- Email automation like Vero and Intercom
While you’re building a product that keeps producing results with minimal interference, give a thought to how you can add public branding for that little bit of ‘virality’.
It’s also important to note that products tied to performance will quickly be removed when that performance isn’t enough. In this case, the product itself may be great, but it is dependent on something else working. For example, landing page software gets abandoned when the Adwords campaigns it was used for aren’t working out.
Products that monitor and provide reports and alerts on a recurring basis without needing additional effort
Few that come to mind are
- Mention (social mention tracking, we’ve had it on for at least a couple years… rarely log in but open almost every daily email report)
- Server Density (server monitoring)
- SEOKeywordRanking (SEO keyword rank tracking; old school interface and not updated in a long time, but am sure its creator Will Reinhardt doesn’t need to work anymore)
While building your product, talk to users about the data they find most useful and want to look at everyday, or see what parts of your reports are accessed most often, then send that data out as daily/weekly emails. It becomes a part of users’ morning routine to check the emails and note/discuss/alert if something’s going right or wrong.
Products that enable data flow between different systems
Think Zapier, PipeMonk, Jitterbit and Informatica. Admittedly, data integration is more of an enterprise problem, but the good thing is that once put in, they’re very difficult to remove. That’s because they’re usually implemented after someone high enough has identified the need to have all the various data silos talking to each other, and that robust decisions can’t be made without a complete picture of the issue at hand.
Case study: Hubspot
- Processes are based around the product? Yes, for marketing and sales
- There’s someone almost always logged in? Yes, marketing
- Managers use the product to report on performance? Yes, primarily marketing qualified leads, then customers and revenue
- Product collects and retains valuable data that customers are not comfortable losing? Yes
- Has components that produce results without needing on-going effort? Yes, lead-gen landing pages, website personalization, automated rule-based emails
- Components that monitor and alert automatically? Yes, primarily alerts to sales owners about lead activity, and other alerts around social media, monthly/quarterly goals, etc.
- Components that enable data flow between different systems? A well maintained and documented Salesforce connector, otherwise they have a platform for developers
As you can see, Hubspot is doing pretty well in minimizing churn. It seems to me that would be the case with most large, successful SaaS products. In fact, understanding the reasons why organizations keep paying for products is why large successful software are large and successful, as compared to just large.
I hope you’re able to use this post as a framework to think about what makes products stick, and apply those principles to the products you’re managing or building. Also, do you have anything else I can add to this? For some reason it seems to me the list is incomplete.