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Customer Success, Guest Posts, Retention, SaaS

How to Become Indispensable for Your Customers With Customer Success by @ritonium

This is a guest blog entry by Rita Theologi — Growth Agent at 24sessions ⚡️ winter addict 💙 professional people watcher 🧐.

The other day I was in a meeting with our Customer Success team and the big question popped:

“How will we become indispensable for our customers?”

When it comes to Customer Success, your product is the means for your customers to achieve their desired outcome. The means, not the reason. What they need from you is to provide them with everything necessary to be successful and achieve this outcome.

Even though we did not reach to a solid answer – also I guess it’s different for every case anyway – there were lots of insights from all team members so I thought it might be interesting to share my thoughts and start a discussion. 😊

When it comes to Customer Success, your product is the means for your customers to achieve their desired outcome. The means, not the reason. Click To Tweet

Related resource: Nichole talks about Desired Outcome in depth in her Everyone Hates Marketers podcast on 4 Vital Things To Do Before Marketing Your New Startup:


So what does it mean to become indispensable?

We use a plethora of tools every day for different tasks and we tend to stick to certain ones. But it’s not necessarily because we can’t do without them. There are so many options for everything, after all. It’s because:

  •  We achieve our desired outcomes
  •  The product blends well with other solutions (ex: how Slack and Zapier integrate with other tools)
  •  The solution becomes a part of our routine

Of course this doesn’t mean we’ll use them eternally, but if a tool ticks all three it’s more likely to stick to it for longer even if a not-so-good experience comes along the way. 😊

So it’s not about becoming indispensable the traditional way but it’s more about your customers not giving up on you by choice.

How Customer Success comes into the frame

A Customer Success Manager is the mediator between product and customer and always leans a bit more on the customer’s side of things. In fact, a successful Customer Success Manager mainly focuses on how their customer will achieve what THEY, the customer, define as success. What’s more, for the latter it might be that this outcome has nothing to do with the product. The product is just a choice they make along the way. That simple.

The good news is that if your customer is successful with your tool, then they’ll become your advocates which is basically like your best salespeople, selling for you indirectly, with immediate results and no cost.

The checklist: does your product tick all three to be indispensable?

✔️ Customers meet their desired outcomes

No matter how hard your try to improve your product and offer the best service out there, the real value will come from how it helps your customers achieve their goals. Does your product bring ROI? Do your customers save time and money in the long-term? Of course, building and implementing a customer success strategy is different for every company and there is no one-way road. The only thing that is the same is the end-result: it has to be what your customers use to achieve their desired outcome.

✔️ It blends well with other solutions 

It’s essential for your solution to combine smoothly with your customer’s other tools without sacrificing efficiency. This is where a Customer Success Manager works closely with customers to make sure there is no friction. Even though sacrificing your product’s efficiency is a no-no, you may end up offering your customers only half of the capabilities of your product just because they only need half. But no worries. Just make sure it will bring them to number one above and in the future the ground will be set for upselling and expanding your services. 😊

✔️ It becomes part of a routine

The more successful your customers will get (and you want them to get as successful as they can) the more concrete their process will be. As soon as your product becomes a steady part of that process your customers will feel comfortable enough to continue using it  and make it solid part of their pipeline. And that is exactly what you want. The more comfortable your customers feel with your product the more unlikely it is that they change a recipe of success.

Churn, Customer Success, Customer Support, Guest Posts, Onboarding, Retention, SaaS

The Most Valuable SaaS Customers Everyone Forgets by @lovevalgeisler

This is a guest blog entry by Val Geisler.

In the world of software, there’s a lot of talk about conversions. Everyone’s high on customer acquisition and lead gen and building a growth team and sales pipelines and ads managers and top-of-funnel and email list building, to name a few.

“Let’s give life to this customer base!” can be heard as the rally cry at sales team meetings around the world.

But there’s a way to grow your MRR without looking at new customers at all.

In fact, the most valuable customer you have is the one who you thought was dead.

Let’s talk through why cancelled customers are your greatest ally in the race to increasing MRR and how you can win them back… for life.

According to research from TARP Worldwide, it’s five times cheaper to keep a customer than to get a new one.

And that goes for cancelled customers too.

Even better news?

I have a game plan you can use to win back those cancelled customers using three under-utilized retention strategies. But before we dive into that, let’s talk about the three kinds of customers to consider winning back (and the scary ones to steer clear of).

Vampires

Let a customer service team get to talking for just a little while and you’ll start to hear stories about customers who sent in dozens of tickets, made daily feature requests, cost the company hours (sometimes dozens and hundreds of hours) in support time, and eventually churned.

These customers are vampires.

They suck the life out of your team and then disappear.

As the founder of Teachery.co, Jason Zook has dealt with his fair share of vampire customers.

“Not all ‘real’ customers are ideal customers. There’s a lot to running a software company and doing customer support, while also running a sustainable business.”

Vampires are customers you can take a hard pass on. Unless they change their habits and come crawling back to you, there’s no need to go chasing after them.

Which brings us to…

Ghosts

As Director of Marketing at Animalz, Jimmy Daly is a time-strapped human with more things to get done in one day than any one person can handle.

So he signed up for TaskRabbit, a task completion service seemingly made for people like Jimmy.

Only problem was…. he was too busy to use it.

“I signed up for TaskRabbit last year, checked it out but never actually used the service. Until I do, I’m in limbo – a segment of users who has expressed interest in TaskRabbit but never really acted on it.”

Customers like Jimmy–those in limbo–should be celebrated. You’ve done the hard work of converting them from casual browser to interested signup. But just because they didn’t convert yet doesn’t mean they won’t ever convert.

As Jimmy said,

“The Internet is a busy place and it’s easy to get distracted.”

So what’s a marketer to do about those customers stuck in limbo?

Are they just ghosts who haunt us daily? Customers who might have been?

No.

While technically a segment of their own, your ghost customers can be a valuable resource in the fight against churn. They won’t impact your true churn numbers (that is, if you use a free trial) but they will impact your win-back rate. Just like…

Zombies

The walking dead, the un-dead, living dead… zombies go by many names (but they rarely say hello!)

And you have zombie customers lurking just around the corner.

They’re the customers who did convert to a paid account. Who were with you for a month, three months, 12 months, 2 years…

They loved your product at one time. But they left.

They’re still out there, the living dead, using another product or still searching for the right fit for them.

Why?

That’s what we need to find out.

Zombies, however can be immune to traditional communication.

Email overload and the onslaught of endless push notifications have made people nearly immune to re-engagement efforts, even if they like the product, but especially if they were “meh” about it in the first place. This noisiness means it’s getting harder and harder to successfully pull users back into your product to help them build a habit of regular usage1

So what’s a business owner to do?

Stand out.

Look, zombie customers are the very best customers you can try to win back. They are already familiar with the platform so they require little onboarding, they likely gave you clues as to how you can win them back, and they’re still out there, waiting to hear from you.

Reviving the un-dead isn’t an easy road, but it can be easier than creating a brand new customer.

Your Scariest Metric

The first thing you need to know to start reactivating already churned customers is what churn is for your business. While the basic formula for churn is always the same: Churn rate = # of customers lost in a period / # of customers at the beginning of the period.

(image courtesy of smile.io)

That period, for almost every purpose, should be Annual.

And SaaS churn rate experts talk often about the “good churn rate” of 7% Annual churn.

That translates to roughly 0.5% monthly churn.

According to Lincoln Murphy,

“This means companies with acceptable churn only lose about 1 out of every 200 customers (or dollars) per month. On the flip side, a high churn rate is the reason you ended [the year] with a whole bunch of new customers… but had about the same amount of revenue.”

And you want more revenue.

If it’s not already, churn will quickly become the top metric you’re discussing in your all-hands meetings. Your team will start to look at retention strategies–ways to keep existing customers happy and out of danger of churning.

Churn matters, yes.

You should care about it and be proactively working toward reducing it.

But how can you get on the offensive line? How can you put some of your team on defense (traditional retention strategies) and flip the script for your offensive line?

Those same retention strategies you use to keep existing customers can be repurposed for those cancelled customers you can still win back.

With that end goal in mind, here are the slight shifts you can make to those traditional retention strategies so that they win over your otherwise lost customers.

Hey, You!

It’s easy to look at managing your customer’s support tickets and feature requests as something you only do with current customers. It’s also easy to look at it as a “one and done” situation. Neil Patel’s retention strategy for support follow up takes a single instance and turns it into a world of care:

A typical service request and solution looks like this:

Customer: We have a problem.

Support Team: I’ve helped you. Have a nice day.

I recommend that you add another layer of follow-up to this process:

Customer: We have a problem.

Support Team: I’ve helped you. Have a nice day.

Bonus Follow-Up: Hey, we helped you a couple weeks ago. How are things going now? Anything else we can help with?

But what would happen if you did that same follow up months later?

“Hey, you submitted a feature request a few months ago when you were a customer of ours. Totally appreciate that you might have found a new solution for X in your business, but I wanted to let you know that we did build exactly what you requested. Here’s the run down and I’d be happy to share more if you’re interested.”

Reaching out to cancelled customers who submitted a feature request for something you’ve recently built can open the flood gates of “new” customers.

Let’s Make a Deal

Around the end of the year you can find inboxes stuffed with offers to “go annual and save!”. One last push to get customers to put the expense on this year’s taxes and lock them in for another year, huh?

And, sure, you’re thinking that you send the offer to your whole email list which contains customers who’ve cancelled so you’re covered, right?

Wrong.

Remember how zombies tend to be immune to traditional messaging?

You have to grab their attention and speak right to them.

So send those upsell emails to your current customers, sure. But draft an entirely separate message for your cancelled customers.

Tell them about product updates, position changes, or any other relevant–and exciting–detail.

Then make them an offer that matters.

The customer success experts at Groove found that upselling is a true power move, if you have the right offer and the right audience.

In the book Marketing Metrics, the authors share a fascinating finding from their research:

The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70%.

Check out this graphic for extra emphasis:

While you could argue that cancelled customers are not existing customers, they fall much closer to the Existing Customer than they do New Prospect. After all, they were a customer of yours at one time.

Speak directly to them, not to the masses, and they just might sit up and pay attention to your upsell.

Human With a Capital H

People love to talk about themselves. Ask someone what they’re working on or what inspires them or what they’re most passionate about and you’ll have a friend for life.

Caring about your customers seems obvious but, unfortunately, it’s not.

As a retention strategy, it pays off in dividends to get to know your customers, where they struggle with their business and/or your product.

An advocate for the human experience, Kevin Fontenot has an idea for growing SaaS companies:

While it might not be possible to get to every customer depending on how many users you have, it’s important to have those one-to-one conversations to improve your product and your retention rates.

But what about those cancelled customers?

Guess what? (just guess…)

It’s the same!

Send a message out to a selection of your cancelled customers. Get on the phone with them (Skype or Zoom is best so you can screenshare as needed). Spend actual time talking to actual human customers.

Don’t know where to start?

Here are a few questions to get the ball rolling:

About them:

  1. How would you describe your job title + role at work?
  2. What are you working on right now?
  3. What is the biggest problem you’re facing that keeps you awake at night?

About your product:

  1. What was happening in your world that led you to sign up for [product] previously?
  2. What happened during your trial that convinced you [product] was the right solution at that time?
  3. What were you skeptical or anxious about when you signed up? Is that what ultimately prevented you from using [product] long-term?

Take notes or record and then transcribe the conversation. Use some of the above tactics like following up with an offer (double tactic!). People like to be treated like people, not machines. Act accordingly.

If you’ve followed up with your cancelled customers, cared about their business, and given them a customized offer, you likely have won them back by now.

Keeping them around (again) is all in building the habit.

Build the Habit

James Clear, an expert in habit building with the research pieces to prove it, noted in one of his foundational articles on habits:

In his best-selling book, The Power of Habit, author Charles Duhigg explains a simple three-step process that all habits follow. This cycle, known as The Habit Loop, says that each habit consists of…

The Trigger: the event that starts the habit.

The Routine: the behavior that you perform, the habit itself.

The Reward: the benefit that is associated with the behavior.

The image below shows how these three factors work together to build new habits.

​​​​​​​​​​​​​​
This same cycle can be observed in a common copywriting technique called the Problem-Agitate-Solve formula.

Something happened.

Something else makes that thing stand out.

You get to a solution that rocks.

It’s everywhere from Joseph Campbell’s The Hero’s Journey to nearly every movie, sitcom, and fiction book ever produced.

If Hollywood can profit off of getting people hooked, you can too.

And since humans are in the constant rat race of either chasing pleasure or avoiding pain, it’s natural that we develop habits around those things we find pleasurable.

Do you know what someone who was a customer before and is giving you a chance again will not find pleasurable?

The same onboarding they’ve already been through once.

Creating customized onboarding for your newly won-back customers can be a beautiful beginning to a restarted relationship.

At Appcues, Ty Mangin regularly waxes poetic about personalized onboarding (it is, after all, what Appcues does best). Ty says,

People will often have different use cases for your product that don’t easily correlate with their role or location. In these instances, giving users the option to choose how they want to get started will steer them in the right direction and minimize the chances of them getting lost in the product.

Coffee is For Closers

Of course, testing your efforts is the only way to know what works. And you should Always Be Testing.

Choose a segment of your cancelled customers and try a few of these techniques.

Record the results and then pick another segment. Find out what’s effective and go all in on that strategy.

Since we started out talking about churn, let’s wrap up with a new measure to check:

Your win-back rate.

Bring that growing number to your weekly all hands meetings. Talk about it in relation to your churn rate (you’re still implementing changes there, right? good.)

And then make sure those customers who came back to life stay that way.

The last thing the world needs is more zombies.

Customer Success, Guest Posts, Product Management, Retention, SaaS

How Top SaaS Companies Create Customer-Centric Onboarding by @ShaylaPrice

Here’s a major SaaS growth challenge: How do teams ensure customer success from the onset?

With the goal to quickly convert new customers into loyal advocates, it’s easy for SaaS teams to forget what’s important. In this case, it’s onboarding.

Seen as just another to-do, teams neglect how crucial onboarding benefits the customer. Yes, they activated their accounts. But can you get customers to their desired outcomes?

Too often, SaaS companies marvel in their own products, from an eye-appealing user interface to near-perfect functionality. That’s only part of the equation.

Onboarding leads you from acquisition to retention. So it’s time to shift your focus to where it belongs—the customer.

Follow these five steps to achieve a customer-centric onboarding flow.

1. Score the Aha! Moment (Early)

Life is all about precious moments. People like remembering their first awkward kiss, the time they visited Disneyland with friends, and when their first-born kid peed on the floor.

Whether it’s embarrassing, sad, or joyful, certain moments define our lives and stay etched in our memory bank. The same principle applies to customer success.

Customers will recall their first interactions with your brand. Therefore, you should make that moment special. And the best way to do that is to help the user achieve value, or the Aha! Moment, as soon as possible.

“The customers need to understand your uniqueness, the costs, and benefits of the product…If the customer sees the core value of your product immediately, if they understand how it’s going to help them, they are far more likely to continue using it,” writes Gabriela Tanuri, a content analyst at Pipz.

Every company defines an engaged user differently. Maybe your users must complete three tasks in one week, or invite five friends to your app within 15 days. For instance, Dropbox considers users reaching the Aha! Moment when they put at least one file in one folder on one device.

Work with your team to unlock product value during the onboarding process. Users want to succeed—make it happen promptly.

2. Bake Success Into Your Messaging

SaaS businesses do an effective job at gaining potential customers’ attention. Teams spend lots of time designing creative display ads, developing witty copy for their homepages, and writing hilarious emails. The branding is dynamic and worth sharing on social.

Yet, once customers enter the onboarding stage, the brand personality wanes. Customers get dull messages with technical jargon.

On top of that, the messaging only informs the customer about a feature or provides access to an upcoming how-to guide.

When learning something new, customers seek validation that they’re doing things the right way. They need that recognition to move forward.

So treat onboarding like a celebration. When customers achieve a milestone, let them know and award them with personalized messages.

Mailchimp knows how to celebrate customer success. Right before customers send a campaign, they see an image that builds the anticipation, even the copy screams excitement —“This is your moment of glory.” Then, once the user sends the campaign, Mailchimp gives the user a virtual high five.

Image Source

If customer milestones aren’t acknowledged, users may feel like they’re failing. They start second-guessing their actions and the value of your tool. Keep them on the right track with messages that praise their activity.

3. Identify & Remedy User Gaps

It’s impossible to see all the gaps in your onboarding process before launching. And if you focused on finding every imperfection, you would never ship the product.

To identify gaps, start by monitoring user behavior over time. Are there increases in new user inactivity? Do customers stop opening onboarding emails after the third message? Is there an influx of similar support issues?

The next step is to fix the problem. Let’s say new user activity drops by 25% on the fifth day after signing up. You may want to lure customers back to your app with a nurturing email on the third or fourth day.

“Users should never wonder what to do next. Often this is best achieved by holding the customer’s hand and walking them straight to whatever they consider success. This can be done with popups, tooltips, or a guided tutorial that only shows the user what they need to see,” states Dennis Hammer, a content strategist at Audience Ops.

Slack is well-known for its guided tutorials in the onboarding process. Customers get short descriptions about each feature. There’s even an opt out link if users feel comfortable moving forward without guidance. These tutorials ensure users attain success.

Image Source

Don’t freak out about onboarding gaps. Instead, take action to fix the mishaps and get back to delivering value to your customers.

4. Be Available for Questions

Building a worthwhile product is important for your SaaS. If your application sucked, no one would bother purchasing it. However, it’s not the only thing that matters.

Teams sometimes forget that no matter what your SaaS product does, you’re still in the service business. Your primary objective is to build amazing customer experiences. And one of the tenets to achieve that goal is offer superior customer support before, during, and after onboarding.

Of course, you’re nice to customers and respond to their concerns. But another key ingredient is accessibility.

What annoys customers the most is signing up for a product and not having multiple channels and times to access your team members. Either customer support is only accessible by email, or you only respond to questions from Monday morning to Friday afternoon. It’s frustrating to the user who wants a solution now.

So what should you? Make yourself available on several channels. For your SaaS, that may include investing in live chat software to answer customer inquiries. Or you may need to expand your phone support times by three extra hours on the weekends.

You can streamline the support system for the customer, too. For example, Trello customers who are signed into their accounts can send a help message with their names and email addresses already pre-filled.

Onboarding is a critical stage. If customers feel helpless, they may decide to churn. Gather the right tools to make the experience convenient for them.

5. Evaluate Customer Milestones

It’s a completely normal process: Set a goal. Take action. Measure the progress. Adjust and repeat.

Whether it’s fear of failure or a forgotten step, SaaS teams skip over measuring their customers’ progress. It’s the only way to know if the customer is reaching their desired outcome and is fully buying into your brand promise.

So revisit those customer milestones. Are users accomplishing them? How often? What can your team do to make the process easier?

Understanding where users fall on the milestone spectrum gives your team insight on how to drive them toward becoming a power user or brand advocate.

“Keeping this ‘success milestone’ way of thinking after they become a customer—or are otherwise past the customer onboarding process – will allow you to surface upsell/cross-sell offers, as well as advocacy requests, at the perfect time so you’re more likely to get a positive result,” says Lincoln Murphy.

Experimentation is vital as well. Try breaking your onboarding into separate workflows, or customizing onboarding based on specific user segments. You may learn that certain customers need concierge onboarding.

The Customer Takes Center Stage

While these insights don’t reach the level of rocket science, SaaS teams often undervalue and overlook them. You possess the power to get customers to their desired solution. So start giving the customer your undivided attention in the onboarding process.

Customer Experience, Customer Success, Emotion, Products, Retention, SaaS, Startups

A Completely Different way to Look at Customer Fit for SaaS Startups ft. @LincolnMurphy

There are so many ways businesses segment customers, and many of them are useless: demographics, location, purchasing histories, size of company, how much the customer pays, and so many more.

But there’s one method of segmentation that tends to be overlooked. And overlooking it will lead, invariably, to churn.

It’s called Appropriate Experience (AX). And I guarantee it’s not what you think.

What is Appropriate Experience?

Appropriate Experience is an extremely customer-centric idea, because it’s all about them. The customers. Their experience. But this isn’t “customer experience.” Forget CX and customer satisfaction. No, no. This is completely different.

Appropriate Experience is about how the customer needs to be treated and supported by you so they can reach their desired outcome.

But what is it really – in practice?

For SaaS, a good example of Appropriate Experience might be customers who need high-touch customer support vs. low-touch. Maybe the customer’s Appropriate Experience is self-service, because they have the expertise and technical abilities to figure out most things for themselves. Or maybe the customer’s Appropriate Experience requires some hand-holding, a designated customer-success manager and 24-7 help desk.

Lincoln Murphy, who championed AX, explains it this way:

You see, a customer has a required outcome. A thing that they need to achieve… And they have a way that they need to achieve that Appropriate Experience. That Appropriate Experience – AX as I call it – goes across the entire customer lifecycle.

He mentions Appropriate Experience within the context of the checklist he recommends using to see whether a customer has “success potential.”

Here’s that checklist (view full descriptions on his article about success potential.)

  • Technical fit
  • Functional fit
  • Cultural fit
  • Competence fit
  • Experience fit
  • Resource fit

In many ways, Appropriate Experience (aka. Experience fit) is the flip-side of Resource fit. Resource fit asks the customer if they can spare the resources to put in the time/money/manpower to succeed with the product. Experience fit asks you – the SaaS company – the same question.

The question you need to ask yourself is…

Do you have the resources to ensure that this customer has the experience they need to reach their ideal outcome?

What experience are you able and willing to provide?

You may not have the resources to serve customers who need the high-touch approach.

And that means that you can’t give that particular customer segment their Appropriate Experience, and they won’t be successful with you.

You can’t afford not to identify your customer segments by the experience they require.

Yes, that also means you can’t afford to keep customer segments to whom you can’t deliver an Appropriate Experience. Even if they’re paying you.

It sounds crazy to turn away good money, I know.

But these are people who will never be satisfied with what you offer. They won’t refer you business. They’re highly likely to leave lackluster reviews. And they will churn – after wasting a tremendous amount of your time and resources trying to make them happy when that was never gonna happen.

What happens when you segment your customers and find that a lot of them could use a different experience? Well, then it’s…

Problem-solving time

When you use Appropriate Experience as a factor in customer segmentation, you may find that a large part of your customers demand a type of experience you’re not currently providing.

Uh oh.

You have a few options.

You might consider expanding your services and scaling to meet that need.

If this is a possibility, you’ll want to first survey that segment and ask them what experience would most help them achieve their desired outcomes. But when you do, keep Lincoln Murphy’s checklist in mind. Are these customers who have success potential, if only they had a slightly different experience?

Also keep in mind that Appropriate Experience isn’t limited to how much help a customer gets. It’s not just a high-touch/low-touch issue. If my desired outcome is to go out to dinner with my significant other for a romantic evening, there is a very specific experience I need to achieve that, and Burger King isn’t going to do the job. Think holistically.

Another option, of course, is to not scale or change the experience you provide. You could decide to focus on the customer segment whose Appropriate Experience matches what you’re prepared to offer.

Both are actually good options.

The only bad option is accepting the business of someone you can’t really serve.


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Customer Success, Retention, SaaS

Podcast ft. @LincolnMurphy: The Secret to SaaS Retention: Cutting Time to First Value (+ other insights from @SamuelHulick, @patio11 & @statwonk)

If you’re charting customer success milestones into your user flow and/or onboarding processes, congratulations! You are way ahead of those who don’t. But before I can offer the panacea statement “You’re doing everything right!” – there’s one step you might be missing.

It’s easy to miss, because it’s counter-intuitive.

It’s counter-intuitive, because, being the very good CSM that you are, you’ve done ALLTHERESEARCH on your target customer. You know what they want to do and need to get done with your product. And you are building milestones into your product to keep them on track.

But here’s the missing link.

It’s easy to assume that time to first value is the same as time to first milestone.

It isn’t.

And understanding the difference is very… well… valuable.

It’s easy to assume that time to first value is the same as time to first milestone. It isn’t. Click To Tweet

We’re talking dollars and cents, make-or-break your company valuable.

First, a couple of definitions for the newly initiated:

Your Milestones: Typical milestones include trial period, sale, onboarding, product usage, upsell opportunity, renewal, etc. These are your milestones – the things you’d like your customers to accomplish so your product is successful. These are not your customer’s milestones.

Customer Success Milestones: The steps a customer has to take in order to reach their desired outcome. (Lincoln Murphy’s definition.) You can also think of them as the little successes along the way to reaching the customer’s ultimate success.

Time to first value (TTFV): Time to first value is how much time it takes for the customer to get real, tangible value from using your product. And this is “value” by their definition, not yours. This first value is probably going to be related to your value proposition – that promise that got your customers in the door in the first place.

The onboarding process, in particular, is where we really win or lose customers – and the surest way to win them is to show them value. In The Most Important SaaS Metric Nobody Talks About, RRE ventures connects the dots between the value proposition and time to first value in a nice, concise way:

Onboarding should emphasize and reinforce the value prop that drove the user to your product in the first place. Sign-up should be frictionless and deployment should be self-service to the point where the customer is up and running in minutes and, most importantly, getting value from your product a few moments right after.”

Onboarding should reinforce the value prop that drove the user to your product in the first place. Click To Tweet

A few moments isn’t much time to deliver value, and if your product simply can’t manage that – you’re not alone.

Lincoln Murphy has been noodling over the idea of time to first value for a while – and I particularly like what he has to say about including “quick wins” in the onboarding process. Quick wins don’t have to happen within the first “20 minutes” like the RRE Ventures article suggests, but they do need to happen fast enough to prove that your product is worth the time/money investment before the customer loses interest (or patience).

Reaching that first value quickly is easier in simpler SaaS products. But what if you have a complicated product, one which does a lot of things and has a steeper learning curve? I asked Lincoln Murphy, Founder of Sixteen Ventures to weigh in on time to first value, and what the TTFV process looks like for a more complicated product.

Time to First Value (TTFV) Podcast ft. Lincoln Murphy

Lincoln on Time to First Value

Since there’s some confusion over value versus milestones, Lincoln clears that up first.

I like TTFV because it forces us to think about value; milestones can quickly devolve into the typical inward-focused CX of just trying to get a customer to do what we want, not what they need to do.

The purpose of milestones is to get the customer closer to finding value – I might have to go through several milestones to reach first value. If a milestone isn’t value-based – if it’s not moving the customer toward their Desired Outcome – it isn’t a milestone. Or it isn’t a milestone in the context of Customer Success.

Also remember that “first value” may be actual value delivered (or received, depending upon your POV) or it could be when the value potential is first recognized by the customer outside of their interactions with sales and marketing.

More complex products often take awhile for value to be truly recognized, so the value potential is what we focus on initially.

Lincoln on First Value when it’s Complicated

Onboarding design is usually about prompting the new customer to complete “setup” tasks and/or learning how to use the product.

It’s a bit like creating a new character when you want to play your computer game – you pick a name, do some cosmetic surgery on the face, choose a species (I know I’m not the only RPG gamer here). The best games make that part fun too, because they know that fun is their customer’s desired outcome. It’s not that different for SaaS products, but with SaaS products – especially those adopted by teams and businesses, you also have to manage expectations.

Setting up the system is part of getting to first value, but you need to be prescriptive and manage expectations with them along the way, meaning you really have to understand what first value actually is [for the customer] and design a process to get them there quickly.

Structure begets trust.

The more we can help our customer set things up and manage expectations on their end, so they can plan for it accordingly, the more they’ll trust us. Often it’s the unknown that causes our customers to lose confidence in us.

The unknown is problematic because it’s confusing, hard to plan around. Sometimes, onboarding processes are even confusing on purpose.

For most vendors, the onboarding process is a total black box, at least throughout the sales process, and only then does it become more apparent that it’s… not actually that great.

You see this when vendors try to hide the details of onboarding from their customers until it’s too late for customers to back out. We need to be open, prescriptive and structured with our customers.

That said, very often, the setup, implementation, data seeding, integrations, etc., aren’t necessary to getting the customer to first value. That’s a huge idea, because vendors often don’t understand what initial value is for the customer. They think that in order for a customer to get value they have to have everything set up. The customer has to have all the implementations and integrations complete.

The reality is that’s not true.

It may be true for the customer to get ultimate value, but that’s not first value.
The critical piece here is understanding the difference.

Back to my role-playing games – sometimes the setup is more fun than the game. That’s doing it right. ie. finding the first value insta-fast. But in the serious world of SaaS, product development and sales folks are so concentrated on full adoption, that they miss opportunities to identify other, in-between ways in which their customers can get closer to their ideal outcomes.

Most vendors have an idea of value for their customers and that idea usually greatly varies from the idea of value that their customers have for themselves. The vendors’ idea of value is often full adoption, full breadth and depth. Customers must use all the seats and every feature or they can’t be successful, but your customers tend to have something else in mind. They have a business outcome that they need to achieve and that may not require what *you* think success really is.

The question is: do you care about what your customer sees as success? Or do you care about what you see as success?

You have to make a decision. If it’s all about you, all about that full depth and breadth of use, that’s fine, but know that’s not the same as your customer’s definition of success.

And that’s going to be a problem.

So how do we dig deeper and find out what first values to target?

We need to ask what is their ultimate business outcome and what would first value actually be?

Is it when they first get some real tangible value, or is it the first time, outside of sales and marketing, that they see the potential for value in their relationship with us? Figure out which one it is and that’s your onboarding goal.

Now we have to engineer a process to get them to that point.

Here’s the deal: We have this ultimate business outcome, and to get there we have to achieve these smaller outcomes along the way – an initial outcome followed by logical milestones.

If they don’t achieve those first few milestones, their ultimate goals don’t really matter because they won’t get there. This is why we see so much churn and non-renewal attributed to early lifecycle issues.

It’s your job as the vendor to know what that initial outcome is and help them achieve that in the appropriate way, and you have to know what those milestones are on the way to the next logical outcome.

But because software vendors often invest millions and millions into features, they want to shove those features on customers as quickly as possible instead of understanding what the customer needs and just giving them that.

Just that.

Instead, vendors tend to overwhelm their customers with too much stuff – features, tasks, integrations, enhancements, training, whatever – and the customer never gets any real value because they’re never really onboarded.

And how does timing work in this onboarding process? It’s not tied to the typical 30 days – that’s for sure!

I see a lot of vendors tie their onboarding to some artificial time frame, usually 30 days. And they say, “Well, they’ve been a customer for 30 days, check that box, they’re onboard now.” So even though they have an onboarding process, they have some arbitrary time frame, they overwhelm the customer, and then they say after that 30 days, the customer is onboard.

This makes no sense.

Then, of course, the customer complains they’re not getting any value and the vendor blames them for not finding value from this – obviously – super valuable product. There’s a mentality that has to change here.

Treat time to first value as a goal.

Every customer achieves success in their own timeline. We have to set a goal for them. We would like our customers, or at least a specific customer segment, to achieve first value either by getting actual value from their relationship with us, or, for the first time, see that real value potential in the product.

We want them to achieve that milestone in 30 days, but that’s a number we made up. It might take them 3 days, or three months. We might have to intervene, or it might be fine. It’s a goal. And we want to make sure that, if things aren’t fine, we intervene before those 30 days are up and get them back on track.

Instead of saying we have a complex product, we should start viewing it as a complex customer relationship. If they have a more complex goal, we’re going to have to work with them in various ways to help them achieve that goal. It’s not a complex product – the product is there to facilitate success through this relationship. It’s a different way to look at things.

But at the end of the day, you need to know what the ultimate value is, and you need to know what first value is, so you can design and engineer a process to meet them where they are and get them to that first value.

What other people are saying about TTV

Of course, Lincoln isn’t the only one talking about time to first value. Here’s what other SaaS industry insiders are saying.

How do you define TTV?

Samuel Hulick, UX Designer, UserOnboard.com:

“This is surprisingly tricky to define, because on the surface it would simply be “the amount of time it takes for someone to experience value from your product,” but HOW MUCH value is necessary for you to officially call it “finished”? Ideally, you provide some value in your product’s very first experience, but if that was also equal to all of the value someone COULD EVER get out of your product, you probably don’t have much of a product at all. Instead of coming up with a rule of thumb for when it’s “enough value to count”, I would instead focus on something like “value per minute”, wherein you focus on delivering more and more value more and more efficiently, kind of like this concept in video game design.

Of course, the people who NEVER receive value will skew that ratio way down, but, well… that’s sort of the point!”

Patrick McKenzie, Kalzumeus:

“Are you familiar with the character Walsh on Firefly and how he uses the word “Shiny?” When I’m thinking about this in my own head, I think Time-To-Shiny. You’re looking for a combination of both a) delight and b) either demonstrably improving someone’s life or credibly demonstrating that you have the capability of doing so.

Twilio, for example, has among the best Time-To-Shiny of any complicated, development-heavy software product you’ll ever use. You can credibly promise a massive improvement in folks lives as soon as their phone rings in response to code they have written; Twilio can have that happening in ~30 seconds or so for a new user if they’re being guided; perhaps ~5 minutes or so if they’re a motivated self-starter.

How to improve it? One, figure out a way to track it obsessively. Two, cheat like a mofo; ruthlessly defer as much as possible about the full experience until AFTER you have achieved that one moment of concentrated joy. Exact tactics for doing this depend a lot on the product at issue; often they involve (e.g.) having fake data pre-loaded in accounts so that someone doesn’t have to do weeks of data entry prior to seeing any improvement in their lives, scripted onboarding experiences, etc.”

Christopher Peters, Data Scientist at Zapier:

“Studying survival analysis taught me a great rule of thumb for this. The highest likelihood of TTV is always the moment after signing up. This is when the user is active, it’s only downhill from there. Having realized this, I’ve guided the team to really focus on onboarding well. Incorporating UX research is invaluable to get customers to TTV faster.

TTV is a curve. Some reach it in seconds, other years or even never. I think of it in terms of influencing a curve rather than a discrete point. The key is using statistics to measure TTV, but qualitative UX research to guide the improvements.”

How are you building value into your product or onboarding process? Leave a comment – I’d love to hear from you!


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Customer Success, Retention

Why Setting Expectations is a Customer Success Must ft. @Wootric

Image created by Yasmine Sedky (@yazsedky).

Most customer success articles you’ll read talk about helping customers reach their ideal outcomes – ideal outcomes are the most important thing, the very job description of customer success. But there’s another job that comes before ideal outcomes, one which, if done poorly, will result in churn even if ideal outcomes are achieved.

Setting expectations.

Let’s begin with a cautionary tale – a true story – of a SaaS app that failed to set expectations that matched what the app did.

It’s a fitness app which shall remain nameless, but it’s much like its primary competitor, MyFitnessPal. Unlike MyFitnessPal, it offered a sleek, integrated user interface that seamlessly brought together exercise tracking via pedometer and nutrition tracking, but it also offered something more: A personal fitness coach. (I should also mention that this particular fitness app is one of the most expensive currently on the market – but for such personal attention? Totally worth it.)

Except.

While on the website copy and in the app itself, this company promised a customized approach to getting fit, complete with a personal wellness coach who would be accessible via private chat to offer encouragement at times of crisis and temptation, it didn’t deliver as described.

Within a few days, it became apparent that the “personal coach” is really only accessible via group chat. In fact, if you try to contact the coach via the in-app private chat box (which even has the coach’s picture on it), the coach will never actually see your message – you’ll get an automated reply from a bot.

When all of this was revealed – in the group chat room – every participant was taken aback, and several initiated their free trial cancellations within days.

Even though they liked the app.

Even though they were already seeing the results they’d hoped for.

Yes, even when customers were achieving their ideal outcomes, because of the mismatch between their expectations and the services delivered, they left.

But not before sending feedback – which went unanswered.

It was a customer success failure of a magnitude we don’t, frankly, see very often. And it’s almost painful when you realize that nearly all of their churn was completely, 100% avoidable.

If only they had matched customer expectations to what they were actually prepared to deliver.

What it felt like was a bait and switch.

Read More on Wootric


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Churn, Customer Success, Retention, SaaS

Stop Churn in its Tracks with 5 SaaS Retention Hacks by @NikkiElizDeMere

churn

Existing customers are where successful SaaS companies make money, which makes reducing churn the key to sustainability, growth, and — what we all want — swimming in money like Scrooge McDuck.

But in today’s highly competitive market, you’ll need more than a lucky dime (or even a really great product) to prove your ongoing worth to your current customers. You need some serious SaaS retention hacks.

Let’s take three things as given:

  1. You have a great product that solves somebody’s problems.
  2. You are already attracting your ideal customers.
  3. Your challenge now is keeping them.

Stop Churn Lesson 1: Listen to the signals your customers are giving you

A good animal trainer knows that before an animal misbehaves, it will give a cue. Whether that’s the cock of an ear or the swish of a tail, there’s always a sign. And, if you catch that sign in time, you can prevent the behavior. People are no different. When someone disengages with your product, there are signs, and you can track them.

If you’re not sure what to track in the beginning, look for gaps in activity, or if you have something like an e-mail marketing service, see if anyone is downloading their list of contacts. You may even want to have an exit survey. Once you know which behaviors indicate imminent departure, you can start to construct a plan.

Stop Churn Lesson 2: Easy Fixes

Don’t let credit cards expire. Don’t let credit cards expire! It’s really simple and it’s easy money. The only trick is to find a billing system that provides a credit card updater service, which will automatically let users know when their cards are about to expire.

Stop Churn Lesson 3: Learn Why They Came in the First Place

Conducting an onboarding survey, when clients are just signing up, can give you invaluable insights into what your clients are hoping to find and expecting to get. It doesn’t have to be a survey in the Survey Monkey sense — having questions as part of your onboarding drip is an awesome trick of itself. You can use this information to drive your Customer Success initiatives and increase engagement. To help your clients use your product successfully, you have to understand what success means to them. Entrance surveys will also tell you whether you’re setting yourself up to over-promise and under-deliver.

Stop Churn Lesson 4: Stay on their Radar

Whether they’re in your app or on their Facebook page, you should have a presence on their desktop, smartphone and tablet. But, you have to do it the right way. With strong content marketing that provides value and interest, combined with responsive, fun and friendly social media staff, you can continue to develop relationships (read: engagement) with your clients all day, every day.

Don’t be afraid to interact with them. Joke with them. Answer their questions. Offer tips. Sharing your helpful blog posts is just the tip of the iceberg! Most importantly, become your clients’ friends. Friends don’t leave friends for cheaper friends — you know what I mean?

Stop Churn Lesson 5: Partner Up

Developing partnerships with complimentary services is a great way to expand your reach, increase your usefulness, and make it more difficult for people to leave. You can either join an established group or form your own by inviting companies to build add-ons and integrations for your product.

I’m going to let my Geek flag fly high for a moment and cite the Elder Scrolls game, Skyrim. By opening up Skyrim to amateur and professional mods, they continue to add interest and value even if you’ve beaten the game five times already. They’ve partnered with their users and that game may outlive us all.

Well, so far I’ve cited Scrooge McDuck and Skyrim, so I’m going to quit while I’m ahead and just say this: When your customers can unsubscribe any time, you have to keep providing compelling reasons to stay. Customer Success and churn reduction are two sides of the same coin — or even, one might say, the same Number One Dime…


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.