I joined Growth Mentor to discuss this very topic on their podcast.
Thanks so much to SEMrush for featuring me in their Top 100 Content Marketing Influencers and Experts list for 2022.
Agile product development.
Customer development.
Lean Startup methodology.
This is how both new companies, and established companies creating new products, are growing intelligently and sustainably, while avoiding the pitfalls that have spelled disaster for the thousands of companies that fail each year. In fact, the Lean Startup movement, along with customer development, are in many ways a reaction to the high mortality rate we’ve seen in startups, and they gain followers by presenting solutions.
At the core of these solutions is qualitative data.
When founders collect and use qualitative data correctly to inform their product design and marketing strategies, they can and will avoid most common pitfalls. Most importantly, they will produce a product that people need and want, finding problem/solution fit (and maybe even product/market fit.
In The Startup Owner’s Manual by Steve Blank and Bob Dorf, the authors sum it up like this: “Startups solve customer and market risk by reading this book.” Their book is all about gathering and using qualitative data, and their list of “9 Deadly Sins” is indicative of the problems qualitative data is uniquely able to solve, including…
Their four-step formula for business building aims to circumvent the dangerous assumptions that lead to startup failure, and their prescription begins with “Customer discovery” (read: Gathering qualitative data!).
What is qualitative research?
Qualitative research seeks to find information about the behaviors, needs, desires, routines, use cases, and other information on how a product might best fit into a user’s life or work, including details about emotion, personality, and other intangibles affecting purchasing decisions.
For Blank and Dorf, they recommend founders create a set of business model hypotheses for how they envision their businesses working, and physically go out and ask people in their target market for insights:
Of all the lessons of Customer Development, the importance of getting out of the building and into conversations with your customers is the most critical. Only by moving away from the comforts of your conference room to truly engage with and listen to your customers can you learn in depth about their problems, product features they believe will solve those problems, and the process in their company for recommending, approving and purchasing products.
What does this look like in practice?
It’s not hard to do.
Your goals are simple. You have to find answers to these questions:
First, you have to find the right people to ask.
You can’t gather qualitative data from just anyone. The people with the answers you need are your ideal clients – those that have a problem or need, know they have a problem or need, are actively searching for a solution, and is willing to pay you to provide that solution. Blank and Dorf even add that the most ideal prospects are so desperate for a solution to their very painful problem that they’ve cobbled together a DIY solution in the meantime.
How many people should you ask? Start with 50 potential customers who don’t know you. Persuading them to give you some of your time is the hardest part of this process! (You can do it.) Start with asking people you know directly and ask for referrals to friends, and friends of friends.
Second, you have to designate the right person to ask the questions.
Who should conduct qualitative data interviews? The answer will probably surprise you, but more than one expert says it should be none other than the founder. Who better to find out what is needed, and who needs it, than the person driving the entire operation?
Then, you have to ask the right questions, in the right way.
You can ask your questions one-on-one, collect qualitative data within a focus group setting, or through (totally not creepy) observation. You can even ask for qualitative data through email and surveys (though that becomes problematic, since only a self-selective group will respond, potentially skewing your results). The most important part of qualitative data is digging for the insights you wouldn’t be able to find any other way, and the best way to do that is through good, old-fashioned conversations.
Ask open-ended questions that lead you to these insights:
DO NOT ask them what features they want in a product. Not only is this asking them to do your work for you, the average layman is really bad at product development and will lead you into the product death cycle:
Other useful information…
The most important characteristic of your target prospect is whether they have a problem you’re uniquely able to solve, but while you’re finding out, you may want to make notes on:
Find the common threads in the answers and use them to create a user story. It might look like roughly this:
Sample Target market: Freelancers
The goal of this list is to clarify your company’s vision, distilling it down into a few bullet points, for your Customer Development, product development, and marketing teams to use as guidelines for growing from a minimum viable product to a successful, sustainable business.
A Minimum Viable Product is the smallest possible group of features that will work as a stand-alone product that solves the core problem, and demonstrates the product’s value. It requires much less investment than creating a full product, and makes it easier for product development to iterate based on customer feedback.
Qualitative data isn’t just for startups
Any time you’re making a change, starting something new, or toying with the idea of adding another feature, taking the time to gather qualitative data can help you avoid making costly mistakes – mistakes that result from assumptions.
This is a guest post by Thomas Smale, Founder of FE International.
The SaaS business model has enjoyed monumental growth in recent years, and though nearly ubiquitous at the enterprise level—with organizations having used 38% more SaaS apps in 2021 than in 2020—the vast majority of SaaS businesses are owned by hard-working entrepreneurs and are either owner-operated or run by small teams. Not surprisingly, the ever-increasing popularity of the SaaS model has resulted in a corresponding rise in demand from investors and buyers attracted to the potential for SaaS businesses to realize predictable, recurring revenue and steady, incremental growth.
If you’re the owner of a growing SaaS business, you know what it takes to build it into a successful enterprise—and chances are you’ve wondered how much your business is worth. When arriving at an accurate valuation of a given SaaS business, an established M&A advisor will take dozens of factors into consideration in order to take a holistic view of the business.
In this piece, we walk through the basics of valuing a SaaS business, with a specific focus on areas where owner intervention can positively impact the value of the business.
The first step in arriving at an accurate valuation of a SaaS business is determining the current revenue of the company, which is most commonly done in one of two ways. For SaaS businesses with an estimated valuation of $5M or less, the Seller’s Discretionary Earnings formula is applied. For businesses with an estimated valuation of over $5M, we typically employ the Earnings Before Interest, Depreciation, and Amortization (EBITDA) method.
A relatively straightforward method of determining earnings, SDE is calculated by taking the gross revenue of the business, then subtracting any Cost of Goods Sold (COGS) and non-discretionary operating expenses. Then, because many SaaS businesses valued under $5M are owner-operated, the owner’s compensation is “added back” into the final earnings determination. Other acceptable add-backs for the purposes of determining SDE might include discretionary expenses passed through the business for tax purposes, such as travel. Without these “add-backs” the true earning potential of the business may be obscured. The goal of using SDE is to give potential buyers as accurate a picture as possible of current earnings and profitability of the business.
Valuations of companies with an estimated value of $5M or higher are more complex and typically use the EBITDA formula.
Again, the goal is to arrive at an accurate earnings picture. SaaS businesses valued above the $5M threshold typically are not solely owner-operated, have multiple shareholders, and a management team in place. With EBITDA calculations, any owner compensation and discretionary expenses are subtracted from earnings to give a clearer picture of earnings power. Additionally, by discounting expenses like interest and taxes, EBITDA provides an accurate snapshot of the operational efficiency and earnings of a SaaS business.
In some circumstances, SDE or EBITDA may not provide an accurate measure of the true earnings potential of a SaaS business. For a fast growing, young SaaS business, EBITDA could come to zero or even less, but the business might still be an attractive acquisition for buyers who are interested in its growth potential. In such cases, it is possible to predict earnings based on projected growth. Such determinations are not without their hazards as they rely solely on growth forecasts that are by nature volatile, and highly subject to change.
Revenue multiples are also employed in larger, more strategic acquisitions. Again, the goal is to put large, often one-time, investments in areas such as development into perspective and to uncover the true earnings potential of the business.
Finding the most accurate way to determine the earnings power of a SaaS business requires a nuanced approach, sometimes utilizing a combination of all three of the methods outlined above. It is vital to determine an accurate picture of current earnings and future growth potential to assess a SaaS business’ attractiveness to buyers.
Once the net earnings of a SaaS business are determined, the next step is to determine the multiple that will be applied to the business to arrive at the listing price. To do this, we examine hundreds of different data points. Broadly, these boil down to the transferability, scalability, and sustainability of the enterprise. On a more granular level, some of the most crucial valuation drivers include:
Based on the factors above and others not mentioned, SaaS business valuations typically fall within the 4x – 10x annual profit (SDE) range. Obviously, this is a broad spectrum. If the SDE of your SaaS business is $100K, that’s the difference between a valuation of $250K and $400K.
The four most critical factors determining the multiple for a SaaS business are:
As mentioned above, the rate at which customers leave your SaaS business is a critical factor in determining the valuation multiple. There are many nuances to calculating churn, but the simplest way to is to take the number of customers who have unsubscribed from a SaaS over a specified period—typically a month or a year—and divide it by the number of total customers at the start of that period. The percentage derived from this equation equals the churn rate. When measured over the long term, churn has a substantial impact on revenue. Take the example below of two SaaS businesses, one with a 5% annual churn rate and the second with 20% annual churn:
Customer Acquisition Cost (CAC) refers to the resources and monetary investment required to acquire a new customer, while Customer Lifetime Value (LTV) is the average amount of revenue that is earned from a customer throughout the time they are paying for the service.
Taken in tandem with CLTV, CAC is a powerful way of measuring the efficiency of a company’s sales and marketing processes. If CAC exceeds LTV by a wide margin, this will have an adverse effect both on the valuation multiple and the long-term success of the business. An LTV/CAC ratio of 3:1 is considered ideal for most SaaS businesses.
While selling “lifetime deals” on platforms like AppSumo may be a tempting way of boosting short-term cash flow, relying heavily on discounted lifetime and annual plans can have a negative impact on valuation. Buyers strongly prefer Monthly Recurring Revenue (MRR) to Annual Recurring Revenue (ARR) and lifetime plans.
SaaS metrics of revenue, in order of value to an investor:
To maximize valuation, a SaaS business should aim to achieve a 5:1 ratio of MRR to ARR. MRR is valued at around double the rate of revenue derived from lifetime plans.
While some critical valuation factors, such as the age of the business, cannot be proactively impacted by the owner, there are many ways to increase the value of a SaaS business, such as:
While there are numerous platforms to consider when the time comes to try and sell a SaaS business, these can be broken down into four categories:
Regardless of whether or not you are currently considering an exit, a thorough understanding of how to value a SaaS business creates the opportunity to positively impact the asking price. If you are interested in having an experienced M&A advisor value your SaaS business at no cost and help you determine if now is the time to sell, don’t hesitate to get a free valuation.
If you don’t cross-sell or upsell on your e-commerce store, you are losing money. Product recommendations drive about a quarter of sales, simplify navigation, and contribute to personalization (which is expected by over 75% of the shoppers).
Moreover, product recommendations create a better customer experience by adding value to the initial purchase. Do you see why marketers shouldn’t miss out on this opportunity?
Whether you are an experienced e-commerce marketer or a savvy entrepreneur, our guide will give you a few ideas on how to take your sales to the next level and keep your customers happy using cross-selling. Let’s roll!
Prior to everything else, let’s get to the bottom of what’s the difference between upselling and cross-selling. In essence, both techniques serve as means for increasing sales and getting a customer to buy more. Although they are often synonymously used as interchangeable terms, there are several key distinctions.
Upselling is all about convincing a shopper to purchase an advanced version of a product or some additional extras. Perhaps one of the simplest examples that you could have come across are offers to switch to an enhanced “package” or to upgrade a service you use.
For instance, companies that focus on B2C sales, primarily software or some services, can use upselling by suggesting buyers invest in a plan upgrade. Say, choose in favor of an extended package instead of the one that’s currently used. An example of that could be moving from the “Mini Business Web Hosting” plan to “Plus” as shown in the following screenshot. The client can thus benefit from extended storage, complimentary backup, and other perks.
Cross-selling means suggesting a complementary product to the client’s purchase. Such additional items extend the functionality of the final purchase and add value to it. These can be items that go well together as a combination. The famous “Would you like fries with that?” is a perfect example of relevant cross-selling.
Below you can see an example of a “You May Also Like” section on the Bright Star Kids online store. It is a progressive web application that was built using the Magento 2 PWA Studio. The pitched products could make a good addition to the order since a shopper can add a lunch bag and water bottle to the backpack to make a neat combo.
Why is cross-selling so useful? This technique is indeed effective as it allows a business to gain in multiple ways. There are several reasons behind the success of cross-selling in online retail stores.
It is a well-known consumer behavior of buying an unplanned product spontaneously. From mints and chocolates in the supermarket to cars and home appliances, impulse buying is a strong psychological factor.
Cross-selling sections of an online store can serve as such “product shelves” by the checkout counter. They highlight complementary products or something extra worth buying. The tactic allows you to increase the customer’s cart, thus expanding the average check size.
It is the gap between the amount of money that the customer is willing to pay and the actual product price. Cross-selling helps minimize this gap by giving customers a chance to spend more and receive more value.
Let’s say your customer is buying jogging pants. A matching hoodie or sneakers can make the outfit complete as shown on the screenshot that was taken on the Armani Exchange online store.
Perhaps the client doesn’t really need this extra item. But you may encourage them to add the product or accessory in many ways, say, by offering the chance to receive free shipping if the order exceeds the X sum. So, by adding the item to the order, the client can get free shipping and a complete look. This brings value and satisfaction to the customer.
In fact, statistics show that online retail businesses can expect an up to 20% income growth if they implement cross-selling and upselling wisely. This sales and marketing strategy may bring a deal of return on investment.
Therefore, some of the major overall benefits of cross-selling for online stores are:
Ready to learn about the applications of cross-selling? Here are some ideas.
One of the most beloved tactics used by e-commerce marketers is adding “Other customers also bought” or a similar section on the product page, just as in the example from Tommy Hilfiger below.
Shoppers trust other shoppers and love honest testimonials. So once a customer sees real reviews and recommendations, they are more likely to buy this product.
This is an awesome and simple marketing strategy that you can take note of. Obviously, as an e-commerce store, you’ll need to put in some effort in picking and matching items to pitch in these sections. If you don’t have the opportunity to add on extensions to your e-commerce platform that would automatically collect and display such data, then you’ll need to do it manually.
Because emails remain a powerful marketing tool, marketers actively use them to cross-sell. Such emails serve as a follow-up that is sent after the purchase is completed. They inform the user about the possible additional products that would go along with the bought item and can be sent either manually or automatically.
There is no need to remind about the importance of personalization and users’ expectations towards it. That’s why the “Recommended for you” sections work so well.
Being unique and tailored for an individual user, these sections perform exceptionally well in terms of cross-selling. You could also try implementing personalized product recommendations into your store.
Even better, if the recommendation is targeted at the two eyes looking at the screen, this can become a trigger to check out the product. Below we can see a screenshot taken on the official Guess online store. The products in the “Our Suggestions for You” cross-selling section are of similar styles and colors that may appeal to the shopper.
Marketers and online store owners should also bear in mind proper pay-per-click ads and retargeting. As such, Facebook allows you to create relevant ads that would show your customers recommended products in accordance with their behavior in your store.
There is one more remaining question: when should you cross-sell? Is it at the beginning of a shopping process or after its completion? You can actually do both.
The first option is to cross-sell when the customer is in the cart. While the user has not paid yet, you may convince them to toss in something extra to their shopping cart. Check out how Tom Tailor uses this method. Once a user adds an item to their cart, a pop-up with additional items appears. It is shown prior to checkout or cart area view.
The second option is to cross-sell after the purchase is completed for engagement purposes. You may gently hint at the recommended products via a follow-up email or a website pop-up.
Upselling is all about offering a similar product but at a higher price. Unlike cross-selling, upselling does not offer any complementary products and adds value by suggesting a more expensive option. As shortly described before, a premium subscription is one of the most popular upselling examples.
Surprisingly, upselling is responsible for 4% of total sales, as per Econsultancy, while cross-selling drives in 0.2% only. Of course, the numbers may vary depending on the type of online business and the sold products or services.
Upselling is incredibly efficient, yet, there is an important question to consider: how would a customer win from the upgrade? This is a primary thing to keep in mind when planning an upselling strategy. You need to clearly show how a customer would benefit from purchasing an upgrade without feeling ripped off.
Here are some ideas for efficient upselling:
As shown on the following screenshot from the Banana Republic website, the user can browse entire outfits with accessories to complement the browsed item. This is a far better experience than what you can get from the standard “You may also like” sections shown in the previous examples, agree?
Now let’s move on to the areas where you can implement upselling.
Before the customer pays for the product, you may offer a more expensive option right in the cart, in the form of a recommendation, or as a part of the dropdown list.
When upselling in the cart, it’s important to emphasize the upgrade value and little difference in prices. Justify why the customer should change their mind with clear benefits and ensure the price does not differ drastically.
A tip: side-by-side product comparisons work great. A customer is more willing to make a decision when all the data for consideration is organized in an easy-to-consume manner. Here’s an example of the Verizon Unlimited plans comparison. We see highlighted perks, features, and other major takeaways in one table format.
Strike the iron while it’s hot! Upsell when the customer openly speaks about his struggles or issues.
If you have a live chat in your store or app, it may be a perfect chance to upsell. While speaking with the customer, you may learn about their current needs and grab the opportunity to offer a solution.
But be careful in forming your proposal. Don’t start with “Can I offer you X?” Instead, try something like: “I see that you have concerns about X. Maybe you’d be interested in learning about Y?”
If a customer has stayed with you for a significant amount of time and purchases products on a regular basis, try upselling. But first, thank them for staying loyal to your brand.
In this case, you can offer a discount to go with your upgrade. It would complement the customer’s milestone nicely. You can do it via email or a pop-up.
Taking the extra mile to offer your customers something special can be very beneficial for your business. Various selections of products that a client might find to their taste can help them choose the perfect item or even help them add several ones to their shopping cart. An e-commerce store can gain over a quarter of revenue if it gives cross-selling and upselling the due attention. Hopefully, the best practices, tips, and examples can serve as inspiration!
So why do I see SaaS founders making the same two mistakes over and over again?
You know who doesn’t make these two mistakes? A fisherman. A fisherman goes out knowing exactly the type of fish he wants to catch. He comes prepared with the correct type of fishing reel to catch his fish. He chooses from among hundreds of types of fishing lures and bait, finding the exact combination most likely to appeal to his fish. According to Field and Stream, you can find a lure that catches fish, “specified right down to size and color.” Then, he finds the part of the stream, river, brook, or ocean where his prey is most likely to be, according to the time of year and weather conditions.
This leads me to the first mistake far too many SaaS founders make:
Oh, there are variations. There are a number of SaaS founders who think they’ve identified their target customer, but haven’t done enough homework to flesh out the details. It’s like saying you’re going after trout, but do you want rainbow trout? Brook trout? Brown trout? Cutthroat trout? Did you know Ireland has more types of trout than anywhere else in the world?
And each type of trout has its own lifecycle, feeding habits, and habitat.
You can’t just say you want trout and expect to catch one. You need to know the details.
You can’t just say your target audience is women, between the ages of 25 to 35. You need to know what their problems are, what frustrates them, what they love, and what outcome they would most like to the problem you’re uniquely prepared to solve.
Lincoln Murphy has a theory about why so many founders fail to ID their target – he thinks that people forget that they can choose their customers. I would add that many business owners have a “beggars can’t be choosers” mentality and fear excluding potential buyers by targeting one group too specifically.
However, unless you’re attempting to become the next Amazon or Apple, chances are your product won’t appeal to everyone equally. This isn’t a liability, it’s an opportunity. Business that are able to become leaders in their niches do very, very well.
There are many methods and theories for how to create customer profiles and buyer personas. Many require you to go into incredible depth of detail, fleshing out your target’s family role, religion, hair color, ethnic background, geographic location, house or apartment, favorite celebrity trend-setter, shoe size.
I appreciate what a well-developed buyer persona can offer businesses. Advertising Andy in his size 10 Birkenstocks can be a useful rallying point for the different teams responsible for attracting, acquiring, retaining and delighting his segment.
But I recommend starting by finding out the information that is most pertinent to what you have to offer and what business problem you’re trying to solve (Retention? Lifetime value? Creating brand advocates?).
Picture the best customer you’ve ever had:
The answers to these 10 questions are a recipe for who your customers are, where you can find them, and what is likely to appeal to them most. You won’t get this information by guessing, which leads me to the second most common mistake SaaS founders make.
There is a right way and a wrong way to talk to your customers, but many SaaS founders don’t talk at all. That’s definitely the wrong way! Here’s another wrong way:
If I asked my customers what they wanted, they would have said faster horses. – Henry Ford
While you can’t rely on your customers to come up with their own solutions, it is important to ask them questions and listen to what they are, and aren’t saying.
Focus on understanding their problems, the severity of their problems, and the contexts of those problems.
What is their workflow?
Ask questions about their desires and find out what drives them. Their goals probably have nothing to do with your product, but your product could be exactly what they need to reach their goals of saving time (to spend more time with their families), working more efficiently (to experience less frustrating and impress their bosses), or whatever it is.
Ask them where they look to find answers – do they Google problems? Do they ask their co-workers?
Ask your best customers if you can speak with them for 20 minutes to find out how you can better meet their needs – most will be more than happy to comply. Be sure to take word-for-word notes, since your copywriters may want to use the exact language of your customers in their conversion copy.
So much valuable information can only be gleaned through customer interviews. Yet most founders are reluctant to “bother” people. But here’s the thing: When the purpose of your questions is to create a better solution, improve the user experience, and essentially make your customer’s lives easier – they’ll be glad you asked (and impressed by your commitment to customer service).
The information you gain from your customers can be used to refine your marketing and sales tactics, strengthen your customer success efforts and drastically improve retention. The trick is to ask the right questions of the right people.
What’s your biggest problem as a Product Dev professional? Too many demands and not enough time? Limited resources? Oddly enough, none of those topped the list for Hiten Shah’s crowd.
Hiten Shah (of KISSmetrics, Crazy Egg, and Quick Sprout fame) once wrote that that “the problems people have on Product teams fall into two main categories: Customer Feedback and Alignment.” This conclusion came after Hiten asked his readers to share their biggest product problems, and in more than 100 replies, those two themes emerged as the leaders.
Let’s go through the problems real Product professionals sent Hiten Shah point by point.
Qualitative data – ie. freeform responses versus ratings or multiple choice answers – are notoriously difficult to sift through and analyze. It’s only recently that, with advanced technology and machine learning, it’s become much easier to tag, sort, and assign sentiment to qualitative feedback at scale.
Tagging, in particular, is a huge time-saver when you switch from just manual tagging to auto-tagging. Tagging comments with their major themes is the first step towards conducting frequency analysis to identify trending topics – or find relevant feedback with a click.
Using an NPS survey with an open-ended comments section, for example, you might find that your ‘detractors’ (low scorers) comments tend to be tagged with “slow loading time” or you may see a specific feature request recurring.
Yep, modern customer feedback software should be able to deliver every comment with a feature request, for example, tagged and prioritized by frequency, from the highest-value customers, in about a second.
You can even use tags to route specifically tagged feedback straight to the appropriate department for follow-up. No need to hunt for bugs – the bugs will come to you! (Don’t they always?)
When your customer feedback comes primarily through surveys that *don’t* include open-ended responses (to gather all of that golden qualitative data), it’s impossible to get the context you need to evaluate the issue and possibly solve it.
But understanding the why behind NPS, CES and CSAT scores (to name a few) isn’t all the context you need to decide where to allot your time and resources.
You literally have to consider the source.
Is the feedback coming from a high-value, ideal client? Is your existing survey solution capable of identifying those markers?
Did you know that it’s even possible to target specific customer segments with survey campaigns?
And for even more context – you can target customer surveys based on product milestones. For example, you can set a CES survey to deploy after new feature use to find out how easy (or difficult) new customers think it is to use.
An overwhelming number of customer comments can leave you feeling like you are trying to drink from a fire hydrant. It’s time to talk about the wonders of machine learning.
Historically, extracting insights from piles of unstructured feedback has been difficult, expensive and time-consuming. That is not the case today. When you need insight from feedback at scale, it is time to invest in text and sentiment analysis using software with natural language processing.
Machine learning has come a loooong way. Yes, algorithms must be trained to understand your company and customers, so chose a software vendor that will keep their team in the loop and ensure you’re getting good insights right off the bat. Then the software just gets better and better at telling you what is most important to your customers.
Okay, there’s no excuse – this is so easily doable. You can set any CX survey you want to deploy on a regular basis, or, deploy after customers complete specific milestones. Having to go get customer feedback shouldn’t be something you have to think about. It should be automatic! Part of your daily, weekly, or monthly routine.
But, it’s only that easy if you’ve got software that makes it that easy – let’s be honest here. Modern customer feedback software can integrate with Slack, Intercom, or whatever you use, as well as deliver surveys to customers while they’re in your app, and deliver it to you tagged, sorted, and prioritized.
Regularly!
You can have your finger on the pulse of customer satisfaction and will know immediately if there’s any fluctuation. As an added bonus, give a pat on the back to whoever built an update or solution for customers so they can see the results in action!
Surveys are great – we love them. But you know what? Even with a qualitative feedback field, a survey can’t take the place of a real, person-to-person conversation. And usually, the biggest barrier to having those conversations is making the time.
We can’t pick up the phone for you, but we can save you time. Enough time to schedule interviews with your customers and get even deeper insights that they may never tell you in writing.
Here’s the thing, Product friends. You aren’t the only department that has to be “customer-centric” and talk to customers all the time and review steady streams of feedback. So to make this part of your job easier, you might have to reach out to other departments and make customer-centricity a multi-team effort.
If you have a Customer Success department, start there – you might find that the Customer Success Manager is the Product Manager’s BFF. They’re also talking to customers every day, and in many ways, they’re closer to the problems customers face than you are. Most CSMs would be delighted to build better relationships with their Product Dev departments, working together to answer the question “What can we do to help our customers achieve success?”
It’s not easy – true. But it is getting easier to solve qualitative feedback issues with modern customer feedback software.
What you want to look for is a customer feedback program that can pull all of customer comment sources together, like NPS or CSAT feedback, user interviews, support tickets, app store reviews, social and analyze those comments in a way that lets you see the big picture and slice & dice by theme, sentiment, survey date, and data source.
When it comes to B2B SaaS, there’s a lot of talk about growth — and these conversations often include buzzwords like “growth hacking.”
For good reason: Everyone wants the go-to-market hack or shortcut that will help their brand launch and scale more quickly (and outpace the competition while they’re at it.) And for many B2B SaaS companies, that growth is already happening. Data shows that in 2016, the median growth rate for B2B SaaS was 48%.
The trouble is: There’s a lot of misinformation out there that can put growth on the wrong trajectory.
If you’ve ever wondered where to draw the line between fact and myth around go-to-market strategies for B2B SaaS, you’re in the right place. In this post, we’ll look at the top five most common myths in this realm, as well as insights from experts that help break down false information.
Before we jump into the myths, let’s first get on the same page about what “go-to-market” means.
Go-to-market (or go-to-market strategy) is how an organization delivers its unique value proposition to customers (via inside and outside resources) that ultimately helps the brand achieve a competitive advantage.
Essentially, this is the series of tactics a SaaS company uses to grow. It can include marketing and sales strategy, funding, user acquisition and onboarding tactics–anything that will help the business grow and scale at maximum velocity.
With this in mind, let’s now take a look at some of the myths floating around in this realm.
If you’ve ever heard that bootstrapped SaaS companies can’t compete, you have false info on your hands. Just take a look at a company like Basecamp that’s achieved incredible growth and massive market share without a cent of outside funding.
Tom Zsomborgi, CFO of Kinsta, expanded on this:
“If you have a great idea and a good product, it doesn’t matter who the competition is–you can bootstrap your way to success despite the big players in the industry that have secured millions in funding and that work with a team of hundreds of people. Experts or founders on different platforms might advise you to go after another market or niche because that one is saturated and dominated by X companies with deep pockets–but that’s not a good enough excuse. There is always room for another company and a great product that can achieve great results.”
Content is indeed an important go-to-market strategy that B2B SaaS companies use pretty much across the board. But quality and strategy are two key components that have to be part of that approach. Without them, companies can tie up a lot of time and money with lackluster results.
SaaS writer Amy Ahrens expanded:
“Typically, I hear things like: ‘I just need a bunch of content to help our SEO.’ While there is some truth to this, what needs to happen first is research. By that, I mean that you should research your company’s competitive set and try to find something that isn’t covered and do that well. Also, the algorithms have changed and now content marketing is all about pillar-based content and how that affects SERP. Do these two things well and I guarantee that your SERP placement will improve and your content will resonate better with your audience.”
Onboarding is another area where SaaS companies get things wrong thanks to best practices that don’t work across the board. Sometimes, breaking industry norms and testing new strategies that let users guide the way is the best path to success.
SEO expert Brendan Hufford shared his firsthand experience with this:
“SaaS usually is entirely self-serve or entirely something you have to go through a sales team on. But a different option is to let people sign up and get started and then have the sales or success team come in from there. We tried both self-serve and very hands-on onboard assistance for Happy Meter. Both produced poor results for differing reasons. The best option we found was to hop in to assist at a strategic time. I think in B2B SaaS there’s often this myth that it has to be a high-touch service or self-serve and that’s it. It creates a false dichotomy.”
Silos are never a good thing–especially in the world of B2B SaaS. Even big brands with years of success under their belts are finally taking note of this and implementing changes. If your go-to-market strategy pivots on teams that work independently, it’s time to reconsider your approach.
SaaS writer Elise Dopson explains why this is so important:
“Misalignment between these sales and marketing departments leads to low conversion rates since the marketing people are referring irrelevant leads. Huge companies like Mars and Coca-Cola are appointing new people for this, but the same applies with B2B SaaS. The people you’re selling to have long, complex sales processes. Confusion and overlap between teams when convincing them to buy + their sales process = long time to see results.”
Circling back to the topic of content, let’s talk about content that is specific to go-to-market purposes. Is it okay to skip over it? In most cases, the answer is a resounding no. You need content that helps inch the buyer closer to the conversion point through the customer journey.
Jordie Black, a B2B expert, explains:
“SaaS buyers, especially those in B2B, much prefer to self-educate in order to come to a buying decision. Too many companies put more focus on gearing up their sales teams as opposed to gearing up their content arsenal to ensure that they have enough content that supports a buyer at EVERY stage of the buyer’s journey.”
Information is power, and hopefully the myths we’ve busted here will help you get back on the path to rapid growth. Just remember: Don’t take someone’s word for it when you hear blanket statements about SaaS growth or hear about one-size-fits-all approaches to always work.
In the go-to-market environment for B2B SaaS, you always need to keep and open mind and put information through the ringer before letting it guide your decision-making process.
Here’s what we know: Effective customer acquisition tactics for B2B SaaS marketing are based in understanding the customer, their jobs-to-be-done, and making your value proposition crystal clear.
That hasn’t changed.
What has changed:
Business audiences are getting harder to impress. There’s a glut in products, content, ads and emails that’s trained them to stop paying attention, unless they’re confronted with something truly unexpected.
Which means, B2B SaaS marketers like me, like you, need to find more creative ways to stand out, even when your product serves an important need.
I consulted some of the best B2B SaaS marketers in the biz, who’ve shared some of their best B2B SaaS acquisition strategies that are both timely and timeless.
These are strategies you can start implementing right now to acquire more customers.
Content and copy work hand-in-hand to lift up early-stage SaaS businesses; the first to bring target audiences in and win their trust, the second to hook them with a strong value proposition and buyer psychology. For some companies, their content strategy is their acquisition strategy.
Finding the right words, for me, is really about finding market-language fit: Identify your ideal customers, talk to them, create a value proposition based on those customer conversations, and use their exact words to inform the rest of your marketing. In fact, I’d say there’s no better ‘growth hack’ than just talking to your customers.
But what does talking to your customer really mean?
It’s not like you’re inviting them out for tea and cookies every week for a casual catch-up (that would be cool though).
Tea and cookies?
When we say “talk to your customers,” we usually mean sending surveys that include long-form free-response fields, building quick in-app surveys to uncover moments of friction, and maybe (hopefully) getting some of your ideal customers on the phone or in person for more in-depth interviews. These are all valid ways of talking to your customers. But I’d like to see companies going several steps further and including genuine conversations with their customers. Getting to know your customers as human beings and building real relationships with them that power positive customer experience.
In this section, we’re talking about how B2B SaaS companies use words – their words, and their customers’ words – to make marketing more effective at kickstarting those relationships.
These experts have not only found the right words, but use the right strategies to bring in people, convert them into customers, and retain them.
“I swear we’ve tried almost everything and, the only thing that always, always, always works – in any situation – is storytelling.
Other things work well (or not) depending on the buyer, situation and cost.
And by storytelling I mean telling our story… like this:
Our mission is…
We started Vervoe because we want to…
We do this by…
Now let’s talk about you…”
| Omer Molad Co-Founder & CEO Vervoe |
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“I find that the magic place of storytelling is where your company’s story intersects with your customer’s story. So, if you can define your story identifying your values, your passion, your history, and your greatest skills you can find where that intersects.
That particular pain you are trying to solve with your product is the same pain your customer feels. When they hear your story, they recall their own story. There is an immediate connection. It’s magic.”
| Todd E. Jones Helping tech entrepreneurs resurrect flatlined content Copyflight |
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There is a place of magic in storytelling.
“Ostensibly, B2B buyers are purchasing software based on hard facts that words and numbers convey. But emotional connection plays an important role in how people make decisions–and B2B buyers are people. I have a background in B2C marketing, so I know first-hand the power of brand to elicit a positive emotional response such as trust.
So, one of the first things I did in the early days at Wootric was to establish a strong brand identity. Remember the old adage about dressing for the job you want, not the job you have? It can be tempting to choose a logo that reflects a fun startup culture. You are better off creating an identity that embodies where the company will be in three to five years. Our roadmap had Wootric quickly expanding from an NPS survey tool to a end-to-end customer experience management solution, and our brand identity needed to take us there.
Approaching brand this way gives you a competitive edge. You will enhance the credibility of the messaging and content you’ve worked so hard to create. When Wootric acquired one of its first marquee customers, the sales team shared this post-sale customer comment with me: ‘Wow, I thought Wootric was much bigger!’
That is the power of brand. “
| Lisa Abbott Head of Marketing Bodly |
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“For almost five years now, I’ve been focusing on content marketing for cybersecurity and privacy companies. A big challenge is that the usual topics are stark and complex to the point of being overwhelming for the target audience.
It also doesn’t help that most content in the industry relies heavily on FUD (Fear, Uncertainty, and Doubt) to make a point or persuade readers to become customers.
I’ve found storytelling to be the most effective way to build an emotional connection that can nudge readers to reconsider their online security habits.
Sharing experiences that people like themselves lived through changes their opinion from “this can’t happen to me” to “I wouldn’t want to walk a mile in their shoes.”
Focusing on storytelling in building content for information security companies is an essential way of turning the reader’s attention from someone else’s problem to their potential problem.”
| Andra Zaharia Host Cyber Empathy Podcast |
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“At Skuid, we start with a strong foundation and define our message map. This document can be used across all teams at Skuid to ensure that we are fully in sync with our message to the market.
For us marketing must be omni-channel – we call our approach a flywheel. Each facet of marketing—content, product marketing, demand gen, PR and communications—plays an integral role in the overall strategy.
The Flywheel effect is a concept developed in the book Good to Great. No matter how dramatic the end result, good-to-great transformations never happen in one fell swoop. In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.
Once the flywheel is built out, each facet propels the other forward, creating momentum in acquiring customers.
We create content to celebrate our customers’ successes and educate prospects and customer about our product through webinars, blogs, case studies, at in person events and virtually. We also use a combination of paid advertising (Google, Facebook, LinkedIn) and organic search to promote our content to our target audience.
At Skuid, we’ve seen success in taking a land and expand approach to sales and marketing. Once a customer uses our product and understands the versatility of the platform, they want find additional uses cases across their organization. This has been the case in some of our largest customers, including BHGE, Intuit, HPE, RedHat, and others.”
| Karie Lepito Marketing Consultant |
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“I’m with Text Request, a 4-year-old B2B SaaS startup in Chattanooga, TN. We hit $1M in revenue earlier this year, and have not taken any funding/investment. Here’s how we’ve acquired customers.
If you already know who your target customer is and how to take care of them once they’ve signed up, then all you have to do is find more of your targets. Right? But that’s easier said than done. We’ve split our approach between inbound and outbound (pretty evenly).
For inbound, we use a combination of SEO best practices for keywords related to business texting, a high quality blog, and Google Ads. The concept is to be the resource people are looking for.
They go to Google with a question. Our content, ads, and website answer that question well, so we show up at the top of search results. Once they make it to our website, we have various calls-to-action to get them to take a next step. (E.g. Let us show you how it works. Schedule a demo!) In fact, almost all of our enterprise-level customers found us via Google search.
For outbound, we take an ideal target (let’s say pest control companies). We Google search for those companies in a particular town, and then we send them an email. We’ll say “Here’s the problem other exterminators are having, and here’s how we fix it. Here’s a link to more info. Schedule a demo to see how it works.” It’s a numbers game, but that process works very well for us.
In my experience, it’s not difficult to find more customers if you know who your targets are and where they spend their time. You also don’t need fancy marketing tech. A CRM is good for keeping up with everyone, and a CMS is good for regularly updating your website, but you don’t need to spend thousands a month on software just to build an effective sales funnel.”
| Kenneth Burke VP of Marketing Text Request |
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“Email segmentation is one the best B2B SaaS marketing strategies. I can’t stress enough the importance of targeting the right people with the right message at the right time.
I helped one of my clients increase their sales from email by 10% with a solid segmentation strategy. So, experiment with segmenting subscribers by purchasing history, opt-in form submissions, contact with support team, and in-app behavior.”
| Shayla Price Founder Primo Stats |
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Segment!
“At a meta level, one thing that worked for us is to keep in mind that even though we’re a B2B startup, at the end of the day we’re in business to help people achieve their goals. That means looking at our customers as people and not as businesses or users. It’s a small shift in the way we think, but goes a long way in terms of how we approach our marketing.
An example of how we approach this – Since we’re (Zepel.io) an early-stage startup, we reach out to our users as soon as they create their first project (we’re project management tool) and walk them through how they can get maximum bang for their buck quickly.
We believe this is important for any B2B SaaS company, but it’s even more important if you’re in your early days.
Earlier this year, we decided to write about a topic that people who might buy our product have problems with. Something they constantly think and worry about. And we knew one thing every product manager worried about is feature prioritization. So, we wrote about it and it was well received – generating plenty of shares (nearly 500!), eyeballs, and more importantly, conversions.
Naturally, we were excited. People were moving from our blog post to our website and converting! What marketer wouldn’t?!
But we didn’t have a good enough process to reach out to our new users and understand more about them. And that left us in the dark when it came to understanding why someone didn’t take a key action on our product. Fortunately, we were quick enough to realize and act fast. Today, we reach out to new users and guide them through our product.
Sure, everyone does that with onboarding emails.
But when we took a step back and looked at users as people, we saw them similar to tourists in a new city who knew what places to go and see (our features), but didn’t know how to get there. The more we treated them as people by having genuine conversations, the more they trusted us.
This has not only helped us improve key areas within marketing and improve our engagement in the app, but also find areas we can improve within the product itself.”
| Vikash Koushik Sr. Product Marketing Manager Microsoft |
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It’s really easy to get lost in the tactical aspects when you’re doing marketing. Writing copy, creating assets, using your creativity to come up with ideas, even being open to finding inspiration all around you.
While the tactical can be fun and fulfilling, what really matters is that your message resonates with your audience. This type of resonance doesn’t just happen by accident. It takes experimentation, practice and repetition to figure out what resonates with your audience and what doesn’t.
Experimentation is obvious. You have to be deliberate in your efforts and know what your goal is before you start. Even better is if you start with a hypothesis of what you think will happen with your experiment.
Practice is about knowing that you’ll fail and need to learn by doing. Post-mortems where you review what happened (even if things went well) are key to improving every time you practice marketing. Don’t forget the critical step of reviewing what you did, what happened, and any lessons you can take from each attempt.
Repetition is key because that’s how you’ll scale. Once you find something that works with your audience, you want to run more experiments by repeating what you did that worked and improving each time.
Finding what resonates will help you know when you hit the mark with your marketing efforts, and when you didn’t. Experimentation, practice and repetition will help you find what resonates most.
| Marie Prokopets Co-Founder Nira |
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“Marketing will often struggle going from a blank page —not knowing what to say— to having so much to talk about that it’s impossible to find focus. Both problems can be solved by going to the source: your customers.
It’s your customers you’re trying to connect with. So why not spend quality time talking to them and understanding more about their businesses?
Whenever I work with a new client, I always start by doing research. That includes a handful of one-on-one calls with their best customers. After you’re done talking to them, you’ll notice important trends around how they speak, what words they use, how they refer to themselves, how they describe their pains, challenges and your product.
Once you discover the common threads and what your customers describe as their biggest pains and benefits, you’ll find focus. You’ll know exactly what needs to go on the page, and what to leave out.
Now you are ready to open a new text doc and write a quick outline of what the page should say. Then, start copy-pasting actual quotes from your interviews to fill in the gaps. Part of the creative work is editing the quotes to increase impact and adding your own flavor to it. But you’ll be amazed at how much gold you’ll find in these recordings. Use that to write headlines, tag lines, product descriptions and even testimonials. No more fear of the blank page.
Follow this process to get the most out of your customer interviews:
| Federico Jorge Founder Stack Against |
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Listen to your ideal customers and “steal” their words.
“When my co-founder, Elias Torres and I started Drift, there were over 5,000 other products in the marketing technology space. So we knew that the only way we stood a chance in such a crowded market was to do things that don’t scale.
People are always looking for the quick shortcut, the growth hack that is going to make you an immediate success. But building a business is all about building relationships. So from day one, we focused on that. We replied to every email, tweet and message. And it made all the difference because people knew that real people were out there listening.”
| David Cancel CEO Drift |
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If content marketing is inbound, and cold-calling and traditional advertising is outbound, what’s in between? Is that an odd question? It’s not one very many people ask. But when I think of my favorite way of reaching out to ideal customers and getting to know them in a meaningful way, neither of those more traditional avenues fill the bill.
My ‘hack’? It’s not a hack. It’s building a community around your product.
Your ideal customers have so much in common – their challenges, their pain points, their goals. When you can bring people with so many of the same interests together, everyone benefits. And, when it’s in a more social setting, like Slack or Facebook groups, you learn a lot more about what your customers need, and what delights them.
For B2B especially, I think Slack communities are an incredible, untapped resource. Subscription-based businesses require strong customer relationships to prevent churn and increase customer lifetime value, and Slack is remarkably well-suited to creating exactly the kind of communities that sustain that high level of engagement.
Of course, nobody will join your community unless it’s A) useful, B) fun, and C) has a beneficial and enjoyable group of people. It’s your job to set the tone. Here are three steps you can take the lay the foundation of a community that gets you and your ideal clients together.
From a platform this strong, you can promote your content (within reason), get early feedback from highly-engaged customers to tailor product-market fit, collect qualitative data galore, and announce new features and opportunities to an enthusiastic audience.
That’s my preferred way to reach out to the right people. But there are so many other ways to build genuine, human-to-human relationships as a growth strategy.
Here are how these companies are doing it.
“One of the biggest hurdles to overcome as a start-up is that you don’t yet have a reputable name, or portfolio of impressive clients to show prospective customers. Word of mouth is incredible powerful in the B2B world and we knew we had to align ourselves with credible names quickly to get us off the ground. To do so, we asked ourselves a question: who is already selling to our perspective customers? Can we work with them to sell our solution? We formed partnerships with resellers and distributors who have many existing customer relationships in place already, so by working with them we were able to quickly access customers who were difficult to reach directly.
Alongside partners, we also focused on marketing and outbound sales strategies too. Digital marketing is vital for B2B success, and a tip for start-ups is to focus your SEO on your niche, rather than broad terms which will always be won over by big names. Even a couple of simple, focused pages will help you to be found by people looking for your solution.
And finally, sometimes you can’t beat some old fashioned prospecting. Whether it’s through calls, emails, letters, LinkedIn messages, make sure you use any and all means to proactively reach out to your customers! It may not be glamorous, but it works!”
| Patsy Nearkhou Marketing Manager Talkative |
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Form partnerships to help sell your solution.
As a marketer, you need to see through your customer’s eyes. To live and breathe their stories as if they were your own. To know what they care about, what their problems are, what brings them joy and what frustrates them to no end.
This should be the fuel for your creativity. The soul behind each task you do.
Every word of copy you write, every asset you create and every marketing activity you do should be centered around an empathetic understanding of the customer.
How do you develop this deep understanding and resonance with your customers? You get your hands on as much research about them as you can – either from other parts of the company (Product, Customer Success) or by doing it yourself. User testing marketing pages and launch announcements. Doing competitive analysis to understand your customer better. Interviewing your customers. Whatever you can do to get closer to the customer will pay off tenfold.
The more you hone this skill, the better you’ll see your marketing initiatives perform. You’ll see better analytics on your marketing site. More views and shares of your blog posts. Better rankings in search results. Higher engagement.
The more you hold your customer in mind through empathetic marketing, the more you’ll accomplish. And the more fun you’ll have along the way.
| Marie Prokopets Co-Founder Nira |
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Marketing is about people, first.
Everything you do in marketing starts with people. The people who see your ads, ones who visit your website, those on your email list, people who sign up for your product and of course the people who buy from you.
B2B marketing is about doing everything you can across your customer journey to attract, delight and retain people. The best way to accomplish that is to think deeply about these people’s experience and the part of the journey they are in.
You’ll discover the best message for them when you take every piece of marketing you are doing, step in people’s shoes and think about the copy, layout and imagery through their eyes.
Read the words out loud and think about how your audience will react to the message. This is one of the best ways to figure out the most compelling message you can use across the entire customer journey.
| Hiten Shah Co-Founder Nira |
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“One of the first things I look at when I’m auditing a business is if they have an opportunity for an expert program. Experts are those ‘power-users’ who can help setup new customers on your platform. It’s a no-brainer in B2C SaaS and yet so few companies are doing it.
The fact is your new customers LOVE your product and want to get setup as quickly as possible. They want to make the most of their monthly investment. And they’re telling your customer support team about it.
The problem is that your team can’t do that kind of deep support and keep up with the growing number of customers. You want to do real customer SUCCESS… but how do you and your teams stay focused on your core competencies while scaling customer success without bursting at the seams?
When you have an expert program in place that scales easily, supports your CS team, and benefits your customers long term, that’s where the growth happens. Customer satisfaction goes up and tickets in your queue go down.
Leads are generated on a rolling basis and they easily become paying accounts. Monthly accounts turn into totally satisfied annual accounts and retention is increased.”
| Val Geisler Customer Advocacy Klaviyo |
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“One of my favorite B2B SaaS marketing strategies is one of the most straightforward, easily implemented and overlooked.
It’s super simple: Reach out to your happiest customers (promotors) and ask them to review your product on Capterra, G2crowd or the review sites where your best-fit customers are.
The most recent “real-world” example I’ve seen of this is Appcues (full disclosure, Appcues is a client of mine). Senior Product Marketing Manager, Ali Haris, set out to get 10 reviews last quarter. Just by asking their happiest customers, found that more than expected were happy to share their experience. With little effort they received 30 reviews with just a couple of hours spent per week.
It’s easy to overlook the amount of value these reviews will yield over time. Not only with they help potential customers discover Appcues, but they’ll help those who are already well into their evaluation of the tool, tip over the fence to buy. It’s one of those marketing strategies that has the potential to positively impact customers at every phase of your customer journey; Mobilizing your engaged and loyal customers to become one of the most effective drivers of growth.”
| Georgiana Laudi Co-Founder & CEO Forget The Funnel |
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“As marketers, we can tell people about the potential benefits of a product or service all day long—or, we can actually show them the good we helped others build by leveraging our customers and their success stories.
Customers know what the value of our product/service is better than we do, because they are the ones putting it to work. At Hotjar, we like to run informal interviews with our customers to find out as many details as we can about how our tool fits in their everyday work schedule. And each time we invariably discover at least one interesting story that would make for enjoyable and useful reading—for example, we wrote an entire guide to market research after an in-depth conversation with one of our customers who shared their step-by-step process so other people can simply follow it.
Warning: you need to practice your empathy muscles and facilitate the conversation so it’s not self-serving, and then translate it into broader terms that can inspire and help others. Our mission should be to educate, be helpful, and make sure that people leave each piece of content with the inspiration and/or ability to do something they couldn’t before.”
| Dr. Fio Dossetto Editorial Lead ActiveCampaign |
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Success! Going up!
“I’ve been lucky enough to interview some of the world’s top B2B marketers for Quuu’s podcast and they all say that the best marketing strategy is to build genuine relationships.
I’ve seen this work firsthand at Quuu. When Daniel Kempe and Matthew Spurr started Quuu, they knew that one of the most effective ways to get people using it was through word of mouth. So they gave influential figures in the marketing / tech industries free access to both Quuu and Quuu Promote, in exchange for supporting and mentioning Quuu when appropriate.
Not only did this ensure us a bank of high quality content, since these influencers submitted their blog posts to Quuu Promote for our Quuu users to share, but it also meant we were able to reach the right audience for our product. We’ve kept on nurturing these relationships and I would say it’s been essential to Quuu’s growth.
What’s really important is that this publicity doesn’t feel forced – our ‘Quuurators’ actually use our product and see the value of it, so it’s natural for them to mention us if, for example, they’re writing a roundup of content marketing tools for a big publication.
In B2B, you can’t lose sight of the fact that you’re still selling to humans – people with emotions, fears, doubts, etc. You need to build trust, and having people your customers admire recommending your product is a really effective way to do this.”
| Lucia Fontaina-Powell |
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“When doing your customer research, ask your customers what kinds of tools they use. What’s in their stack? What do they open everyday? What other tools do they live in?
The reason I always add this question during my customer research and development process is because integrations (along with partnerships and business development) are an incredible growth channel, and it’s one not many marketers think about.
It’s definitely a conversation for both marketing and product, but if there’s clear demand and fit for an integration between your product and another, you might find that growth improves across the entire funnel — from acquisition to activation to retention.
Plus, when building integrations or even exploring the possibility of an integration with another company, you can build and form relationships with their teams. This opens the door for co-marketing opportunities like guest blogging, featuring each other on your integrations and strategic partnership pages, hosting virtual events together, attending conferences together, and so much more.
If it fits your product’s model and makes sense for your market, I’d definitely consider it — especially if your prospects are a little harder to reach.”
| AsiaOrangio CEO & Co-Founder DemandMaven |
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So much of successful B2B SaaS Marketing is the result of cultivating a culture of growth and a mindset that makes testing and optimizing integral to every process.
One roadblock to achieving a Growth Culture that I see far too often is when teams dig out their trenches and never cross over to see what the other side is doing. I’m not just talking about data silos, where information that should be shared is kept by a chosen few. I’m also talking about a sort of territorial unwillingness to collaborate freely. This is my turf, that’s your turf, stay on your side and don’t bother me!
I’ve said it before and I’ll say it again: Growth depends on a free flow of information, especially between Customer Success, Customer Service and Product Development. This is a lot harder to achieve than it sounds, because each of these departments usually has its own set of KPIs to meet. And, sometimes they conflict.
Consider the onboarding user flow.
From a Product perspective, there are milestone actions customers need to complete to finish the onboarding process.
From a Customer Success perspective, there are success milestones, like “time to first value” (when the customer sees real-world value from using the product) that are vital to retention.
From a Customer Service perspective, they’re on the line to bridge the (often unnecessary) success gaps, when the customer can’t figure out how to achieve success with the product.
When you bring these three groups of people together – the ones who build the product, the ones who ensure customers succeed with the product, and the ones who troubleshoot when the process breaks down – in one room, magic happens.
They can solve problems. They can build an onboarding flow that bridges success gaps, and gets the customer from point A to point Z.
Of course, I don’t mean that collaboration should only happen for user onboarding! Collaboration between teams should be a daily, ongoing part of the process. Everyone should have access to user stats (and know what they mean). Insights, not just ‘fix-it’ tickets, should flow from Customer Service to Product and Customer Success. And, all parties need to be aware of putting undue burden on the other teams (yes, product tends to get buried in requests – let’s lighten their load, okay?).
Team work shouldn’t just happen within teams, but between teams.
And with that, let’s look at how other companies are cultivating growth cultures.
At MobileMonkey (an official Facebook Messenger Marketing platform) our most successful “marketing strategies” have all been “product-led”.
This means that marketing and product teams collaborated on building features that were not only cool for our users, but that also through some genius hack, would also result in opening a floodgate of new users.
For example early on we changed our pricing to include a “forever free” version of our chatbot, rather than only offering a free trial.
This dramatically increased our user adoption because it let everyone have enough time to learn about the features and functions of the product and not be subjected to some arbitrary 7 or 30-day free trial period.
Another thing we did was simply to re-package some of our software as a WordPress chatbot plug-in – the modest 2-month effort generated thousands of more sign ups!
At a high level, Product-Led Growth means your marketers need to think like product people and vice versa.
| Larry Kim CEO MobileMonkey, Inc. |
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“Most businesses start marketing right away, only later to begin to setup their sales and marketing dashboards, sign up for tools like Mixpanel or Amplitude and start to narrow in on what to they could be tracking better.
The idea of wanting to make smarter business decisions based on data insights is the right approach. However, without first defining the metrics that matter most, how are you going to know if your marketing activities are actually contributing to growth vs have you constantly juggle marketing activities and spinning in place?
One of the best ways to implement a more focused, and strategic, marketing approach is to know what you want to track before kicking things off.
When working with clients we [Inturact] start with a simple framework called SaaS actionable metrics, or AARRRR metrics. They consist of:
These actionable metrics help you to clearly define the most important metrics and better understand your customers, so you can market (and build) your product more effectively.
With this approach you will properly define the most important growth metrics BEFORE kicking off your next marketing campaign. Hone in on what matters most and start focusing your efforts on strategies that actually contribute to growth.”
| Trevor Hatfield Founder Inturact |
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“SaaS business is all about the customer experience and directly depends on information. The faster you’re able to discover what does and doesn’t work, the faster you’ll grow your business.
At SEMrush, we test everything. Headline ideas, images, advertising targeting models, pricing algorithms and more. We want to figure out which of these ideas work for us and which don’t.
For example, say we want to determine which marketing efforts are really paying off for our SaaS company. So, we experiment to determine the variables that drive more customers, to understand what content is the most relevant or how to convert visitors into buyers. We know that the real magic happens while we’re learning from each test. Such data allows us to determine the baseline, our winning ideas, and losers.
Experimentation is our engine to move forward and accelerate growth.”
| Elena Korotkova Campaign Lead SEMrush |
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“I never want to lead with any specific tactics, because I think context is almost everything, and what works really well for one company is often not optimal for another (even in the same industry). In addition, we’re all at different stages of growth, so some tactics in the beginning stages may be impactful but costly in time, whereas with scale we can focus on shifting resource costs to money rather than time.
In any case, I don’t think you can go wrong if you make experimentation your operating system. If you start by asking questions rather than applying “best practices” or even well-thought-out theories, I think you’ll find the answers are more effective than the stock answers given by most blog posts and conference talks. Instead of closing ourselves off from potential ideas and trying to fit a square peg in a round hole, we can design experiments to unlock innovative solutions, and we can use data to inform our tactical endeavors.
I think this is becoming a more approach with B2B marketers today, and it’s definitely popular in the B2C startup space. But we can move beyond A/B tests and treat almost everything we do as some sort of experiment, and then the learnings and results compound over time (plus, we don’t have to constantly rely on copying competitors, chasing stale tactics, or implementing best practices as a default). “
| Alex Birkett Co-Founder Omniscient Digital |
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Make experimentation your operating system.
Several responses for this round-up were along the lines of “understand your customer really really well.” I did not include them here, because that’s not a strategy. Rather, it’s the foundation of every strategy. Everything I do begins with substantial customer research.
So I want to end with my own favorite strategy of creating accurate personas that can effectively form the backbone of every marketing strategy and tactic you employ, from your value prop to your content calendar, and everything in between.
An accurate buyer persona helps in a few ways:
Here’s the thing: you can do your research, talk to your customers, find out their goals, dreams, ideal outcomes, current challenges, and which parts of their ‘jobs to be done’ make them want to pull out their hair.
And you can compile all of that research, slap a stock photo on top, and give it a name.
What you’ll have, really, is just a description of your current customers, which is still very useful for giving your entire company a solid understanding of your customer. But it’s not an actionable persona for marketing unless you can do this:
Can you use your customer description to find 10 people, 9 of whom will absolutely buy your product?
If you can, then you have a predictive persona you can use to align your teams AND use for product dev and marketing decisions. Including content marketing and distribution.
In her article on persona creation, Laura Klein, Principal at Users Know describes it perfectly:
If you can create a predictive persona, it means you truly know not just what your users are like, but the exact factors that make it likely that a person will become and remain a happy customer.
Use predictive personas.
How can you elevate your persona from a descriptor to a predictor?
Research, describe – then verify.
It’s the step most marketers miss: to go out and find people who you think fit your customer description and check your work.
Take the information you’ve already gathered about your customer and create a hypothetical persona. Then test it in real life. Here’s how:
Have we missed an acquisition strategy that’s succeeded for you?
I’d love to hear your best tips and real-world experiences! Tell me your story in the comments, especially if you’ve got a case study.
It sounds simple — but it’s not easy: talking with your customers through every stage of the customer lifecycle.
There’s been a lot said about the value of talking to your customers before you build the product to ensure market fit, but very little said about continuing the conversation past marketing and past the sale.
Why do I know talking with your customer is *the* very best predictor of, and contributor to, SaaS business growth? Because creating a constant flow of customer feedback, input, and conversation makes Customer Experience (CX) better.
Multiple studies show that CX leads to revenue growth.
CX also drives brand advocacy (aka. word of mouth), creating a virtual sales army, which leads to:
Decreased cost-to-acquire.
“Customers with the best past experiences spend 140% more than those with the poorest past experiences.” — Harvard Business Review
Increased customer lifetime value.
“Customers with the best past experiences have a 74% chance of remaining a member for at least another year.” — Harvard Business Review
Plus, qualitative customer research leads to making data-informed decisions that streamline product management, ensure customer success, and make marketing and sales far more efficient.
In short, as Laura Klein, author, VP of product, and co-founder of Users Know says,
“User research saves time. Period. When you actually understand what your user needs before you build things, you have a much lower chance of having to go back and rebuild everything after shipping something that nobody uses.”
It’s not like you’re inviting them over for tea and cookies every week for a casual catch-up (though that would be awesome, and you should do that and invite me).
When we say “talk to your customers,” or “listen to your customers,” I usually mean getting on the phone with them (or better, meeting up with them in person). But, it can also mean sending surveys that include long-form response fields, or building quicker in-app surveys into your roadmap to uncover moments of friction.
And, of course, if you’re earlier in your business, there’s the Lean approach of interviewing dozens of target customers in person and over the phone — groundwork that helps founders (and product developers and marketers) form better hypotheses around what will deliver the best product-market fit.
There’s also user testing.
These are all valid ways of listening to your customers. But I’d like to advocate for doing all of these things and going several steps further. I’m talking about combining all of the above and adding genuine conversations to the mix.
It’s just not input. It’s just not feedback. It’s getting to know your customers as human beings and building relationships with them that drive positive CX far more powerfully than any of these elements could do alone.
So much has been written about interviewing customers prior to developing products that I’d like to focus on how to keep communication lines open after the launch, after customer acquisition, starting with onboarding.
(This is a chart I created for: “Product Managers: Why You Should Include Customer Success Milestones in Your User Flow”)
The first key to ensuring communication stays clear and open is to observe your customers. We communicate far more by our actions than we do verbally, and tracking the actions of your customers, especially (but not limited to) during onboarding can tell you the truths you need to hear.
Tracking customer behavior during onboarding and throughout product use allows you to see:
Yes, you want to track how well your customers accomplish the required tasks outlined in your User Flow, but usually, tracking stops there. If they press the right buttons at the right times, if they input the requested information, if they log in relatively regularly, it’s easy to assume customers are happily using your product.
But that’s not always the case. There may be ‘success gaps’ you can’t see that are causing churn. FYI: A ‘success gap’ is “the gap between what you think represents the customers’ successful use of your product and what they think equates to success,” according to Lincoln Murphy.
This is where aptly timed in-app surveys come in handy, which I’ll get to in the next section.
Tools that can help:
While you’re tracking user behaviors, successes and failures, you’ll also want to check in with your users in an unobtrusive way to get their feedback at specific points in their user journeys.
For example, if you identify a page or prompt during onboarding that tends to ‘lose’ people, have a trigger-based in-app AI chatbot pop up and offer to clarify, or transfer them to an agent. (This, incidentally, would have saved my relationship with more than one app! If you hit a ‘wall’ during onboarding, the odds of completing the process and becoming a successful customer are terrible — unless you get timely help).
You can set up event trigger-based surveys to deploy when users spend too much time on a page, ‘click away’ before completing the action, or when they’ve been ‘dormant’ (not logging in) for a while.
By giving customers opportunities to tell you they’re confused, are experiencing failure, aren’t getting the results they’d hoped for, or are suffering from a lack of time/motivation/technical skills etc., you will know who is really at risk of churning in time to save them, and really impress them with your customer service skills.
Another place where checking in with your customer can really pay off is after the onboarding sequence is complete. It’s a perfect time to ask “How difficult was this?” (aka. A Customer Effort Score survey). The easier a process is, the less friction people experience, and the more likely they will be to complete your desired actions and reach their desired outcomes.
Then, after your new user has had a chance to put your product to work, you should send out a Net Promoter Score survey (NPS) to find out how they *really* feel about your product. Do they like it enough to recommend it to a friend or colleague? That’s an excellent indicator of how well they’re succeeding. And be sure to send an NPS follow-up question to understand the why behind the score.
Tools that can help:
Wootric: For these types of in-app surveys, I recommend Wootric. Their dashboard makes it very easy to understand what you’re seeing, and they do great work with extrapolating insights from qualitative data questions too.
Tracking what customers do and asking them what they think at strategic points is a very good start; the trouble is, that’s where most B2B SaaS companies begin and end. But B2B SaaS businesses are subscription-based. They’re in this for the long-haul. They depend on customers sticking around (customer lifetime value! retention!).
And that means you also have to build relationships with your customers.
This is why I so strongly advocate that B2B SaaS companies build social communities around their products. It’s an opportunity to relate to your customers as people.
The bonuses are many. B2B SaaS product communities give you:
The most important thing to remember about building a community is that it’s not a one-sided arrangement. This isn’t a place for you to ‘shout into the void’, post blog posts nobody reads, try to ‘sell’ or advertise. It’s a place where you and your customers can come together around your common interests. Human to human.
Tools that can help:
When you are tracking user behavior in your product, identifying predictive patterns of behaviors/successes/failures, locating trouble-spots and offering timely help, checking in with surveys to ask your customers what they think — in their own words and with numerical ratings, AND forging human-to-human relationships in the casual setting of social media groups, you’ll see a few things happen…
Are you ready for that?