Monthly Archives

November 2015

Churn, Customer Success, SaaS

The Right Way to Reduce Your Churn Rate by @NikkiElizDeMere

Some customers are past saving. They’ve made their decision to leave, and they’ll be out just as soon as they can find the “cancel” button.

Of course you don’t want them to leave — nor do you want more customers following suit.

To prevent more customers from leaving, you need to ask yourself tough questions: How did your churned customer get to that point? And once they’re at that point, is there anything you can do to save the account?

Read More on HubSpot


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Customer Development, Customer Success, SaaS

Two Mistakes I See SaaS Founders Make All The Time by @NikkiElizDeMere

mistakes-saas-founders-make

Software as a Service, and any subscription-based business model for that matter, relies on customers who stick with them. Attracting the “sticky” kind of customer is a science, some might even say an art. And the stakes for perfecting the acquisition of long-term, high-yield customers are high – they’ll make or break your business.

So why do I see SaaS founders making the same two mistakes over and over again?

Hook, line and sinker

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:

1. You don’t identify your ideal customer

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.

Meet your ideal customer

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:

      1. What was that customer’s industry?
      2. What problem did that customer need to solve?
      3. What was at stake for that customer if they didn’t solve their problem?
      4. What did that customer appreciate about your solution?
      5. How long did that customer stay with you (and if they left, why?).
      6. What other solutions did that customer try before coming to you? How did they find you?
      7. What was the thing that tipped them over the edge into conversion?
      8. Do they ask your customer service team a lot of questions – or rarely make contact?
      9. Have they referred more business your way, or agreed to upsells and cross-sells?
      10. How exactly have they experienced success/value from your product?

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.

2. You don’t talk to your ideal customer

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.


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

Customer Success, SaaS

Trying to acquire the wrong customer? by @NikkiElizDeMere

trying-to-aquire-the-wrong-customer

Image created by Yasmine Sedky (@yazsedky).

“Customer Success starts with acquiring the right customers.”
Lincoln Murphy, SixteenVentures

For some companies, defining their ideal customer is easy. If you make an app that tracks fertility, for example, your target market is very specific: women between the ages of 25 to 35, who are in long-term relationships, are likely college educated and who make a decent income. From that demographic foundation alone, you can derive enough information to inspire several complete marketing strategies.

But many of us, whether we own large companies, small businesses, or are solo acts, have a number of audiences we could appeal to. The trouble starts when we choose one, and choose poorly.

Don’t try to milk a steer – where businesses go wrong

The number one mistake I see SaaS founders make is failing to identify their ideal customers from the beginning.

If you haven’t defined your ideal customer, you won’t have the information you need to attract the leads who will become your best customers – the ones who love what you do, are a perfect fit for your service, and who will enjoy every minute of their customer experience with you.

Instead, you’ll get a grab bag of some happy customers, and some unhappy customers who will waste your time and drive you nuts when you attempt to deliver the kind of experience or results they want.

When you define your customer from the start, you can:

  • Improve retention,
  • Increase profitability,
  • And Grow faster thanks to referrals from delighted consumers.

The alternative is spinning your wheels dealing with the consumer equivalent of bad relationships – they’ll try to change you, complain about you, and never really love you. This is your business; it ain’t no country song! Stop trying to milk a steer, cowboy. It’s time to find your herd.

Of course, many businesses think they have identified their target markets, but they don’t realize they’ve done so incorrectly until:

  • Acquisition rates remain low
  • Retention rates don’t rise (and no customer success initiatives seem to work)
  • Sales cycles last too long
  • Customer service is overwhelmed with requests
  • Customers keep asking for services you don’t provide, or different features

What usually happens is the “target market” was based on an educated guess. Nearly every business starts out that way, but keep in mind – most businesses fail within their first year too!

How to ID your ideal customer

You’ll be starting from one of two places:

  1. Your business already has customers
  2. Your business is brand new, or still in the “idea” stage, and you don’t have any or many customers

Your business already has customers: If you already have customers, then you’ve probably noticed that some are awesome! Some are exactly the kind of customer you wish you could multiply by the thousands. Make a list of these customers, and then devote some time to analyzing who they are, what they are trying to accomplish, and why your product is such a good fit. What are their demographic details? Are there common personality traits (as in – they make decisions quickly, or they want all the facts before making a decision but are then extremely loyal)?

When creating this list and analyzing your best customers, be sure that they are in fact customers who are achieving their goals with your product. The customer who has been with you the longest but hasn’t logged-in in a year is not the kind of consumer you want to attract (he’s probably forgotten about the auto-renewal on his credit card).

Use the information you’ve gathered to begin building a detailed buyer profile, but don’t stop there. You’ll want to double-check your findings by actually interviewing a few of your best clients to find insights into their user experience you’ll never hear otherwise.

In these interviews, it’s crucial to find out why these customers looked for a solution and decided on yours, and why they’re still with you. Use the answers to these “why?” questions to validate your value propositions and develop customer-facing content and marketing campaigns.

Your business is brand-new: The questions you have to ask remain the same; the difference is that you don’t have a ready-made segment to survey.

One common self-inflicted roadblock is assuming that defining your ideal customer too early will limit your business. Nothing could be further from the truth. As Lincoln Murphy says,

“I think people forget that you actually get to choose your customers. You get to choose who you want to do business with. SO creating an Ideal Customer Profile isn’t limiting…it’s empowering!”

Moreover, this isn’t a one-time-only decision that will forever determine who you go after. Your ideal customer is going to be a (slowly) moving target, depending on what goals you want to achieve.

Now that we’ve leaped those hurdles, here’s how to start defining your target niche.

Begin by asking yourself:

  • What problems does your product/service solve?
  • Who has that problem?
  • Who really needs to solve that problem or their lives will be RUINED? (It’s not just the problem, it’s the severity of the problem!)
  • Will this customer immediately find value in your product/service once they buy it (and by “value,” I mean make progress towards their personal or professional goals)

Once you have a general idea of who has the problem you’re able to solve, it’s time to reach out to real people who fit that profile. This is where you’ll get into a Customer Development approach by using qualitative data gleaned from real-people interviews to get the details on your target market.

Then, make sure you’re targeting the right people by defining the wrong people.

Ask yourself:

  • What type of customer would need the most help and customer support?
  • What type of customer is unlikely to see the value in your product/service immediately?
  • What type of customer won’t be able to make progress towards their goals if and when they buy your product?

By defining who your product isn’t for, you’ll get a better idea of who your product is for.

Target Acquired: What’s Next?

Once you understand who your ideal customer is – and isn’t – you’ll be able to derive insights into how best to reach them, how to express your value proposition, and how to deliver what they need once they’ve signed up. You’ll be able to refine your acquisition process so new customers can realize value faster, which leads to retention as well as upsell and cross-sell opportunities.

Essentially, knowing your ideal customer is the foundation of the rest of your business, and as your business grows, your ability to fine-tune your segmentation will grow with it.

Which makes the next step optimization. Make that your next hundred steps, because optimization is more about the journey than the destination.

As your “ideal” customers begin to come in, you’ll want to put analytics in place to tell you how they found you, who they are, what their customer lifetime value (LTV) is, and what actions they take that correlate with greater or lesser LTV. You may also want to look at which types of customers are your loudest advocates, or who are so engaged with your brand that they’ve become integral parts of your social media communities.

With this information, you can change your marketing strategies to attract certain types of customers, or refine your onboarding process to encourage desired actions that correlate with reduced churn.

Don’t be Surprised

Don’t be surprised if your ideal customer doesn’t make up the majority of your current user base – they probably don’t. Once you begin optimizing to attract and retain them, however, you’ll see their numbers grow as the numbers of your less-than-ideal customers shrink (and hopefully disappear).


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

Customer Success, SaaS

Customer Success for Dummies – What Every SaaS Startup Founder Should Know by @NikkiElizDeMere

customer-success-for-dummies

Image created by Yasmine Sedky (@yazsedky).

Like most good advice, customer success sounds really simple, but gets complicated once you want to implement it in your own business. So instead of waxing poetical on its many virtues (and there are many), let’s take the For Dummies approach and drill down into what really counts:How customer success will help you take over the world!

Kidding! Kind of. Not really.

The definition of customer success is:

“A proactive, holistic, and organization-level approach that leverages technology and real-enough-time visibility into customer health (not just usage data, but any contextual inputs) to ensure your customers – including those who directly use (users, administrators, etc.) and those who benefit from the use of your product – continually and increasingly receive value from your product over the course of their lifetime as a customer.”

– Lincoln Murphy, Sixteen Ventures

Read More on SignupLab


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Customer Development, Customer Success

Close the Loop, Boost Your Business: Customer Development to Customer Success and Back Again by @NikkiElizDeMere

close-the-loop

Customer Development and Customer Success are like a stream that feeds into a river that creates an ocean. It’s all water going on one direction, and when they’re connected, they ensure a healthy, fast-growing, sustainable business. While the two terms aren’t interchangeable, they work best when intertwined. Before we get into how they flow together, let’s define both terms separately.

  • Customer Development means talking to people to find the motivations behind their actions. Gathering qualitative data from real people through interviews and surveys reveals the “Why?” behind the “What,” which you can use to validate your product and value propositions and inform every customer-facing decision. That’s my working definition, though you could also say that it’s a framework developed by Steve Blank for discovering and validating the right market for your idea and testing the best way to acquire and convert customers.
  • Customer Success, on the other hand, is more about determining when and why a customer might churn, and reaching out to them in ways that get them to stay. It’s about defining churn indicators, putting a system in place to prevent churn, and most importantly, designing those systems to support customers in achieving their desired outcomes in a way that scales.

TODAY on Will it Blend? Customer Development and Customer Success

At their cores, Dev and Success are both about achieving a thorough and meaningful understanding of your customer. And, both are dependent on qualitative research. Qualitative research is conducted through observation and inquiry instead of number-crunching. Using qualitative research, you can find answers to:

  • Who is my audience?
  • Why are they here?
  • What are they trying to accomplish?
  • When are they thinking of leaving?

So yes, not only do they blend, but you should combine them so your Customer Development data feeds into and informs your Customer Success data, and vice-versa. Here’s what that looks like:

The Intersection Between Customer Development and Customer Success

Step 1. Create well-rounded, accurate buyer personas by asking, not by guessing.

There are a lot of ways to go about building a buyer persona – some stress quantitative data, others sing the praises of qualitative data. I like both. Use quantitative data to build the demographic framework of your buyer persona (products like Cubeyou make this really easy). You can find the age, gender, income, geographic location, relationship status, interests and brand preferences, by using tools that leverage social media data.

That data is helpful, but it won’t answer questions like:

  • What motivates customers to find you?
  • What is your buyer’s desired outcome, or end goal, they hope your product/service will help them achieve?
  • What do they expect to be different once they switch to your service?
  • What is important to the buyer about how your company/product/service looks?
  • What has your buyer disliked about providers he’s used in the past?
  • How does your buyer currently solve his or her problem?

This is the gap only qualitative data can fill.

You’ll want to conduct a few persona interviews of recent customers, repeat buyers and long-time customers to find the answers to these questions, and you should also implement exit surveys just a people are leaving a conversion page to discover what stopped them from purchasing.

All of this falls under Customer Development, but are also key actions towards finding problem/solution fit, product/market fit, and finding out what success means to your prospects.

Step 2. Focus on what they want to achieve.

Once you have your well-rounded buyer persona sketched out, you’ll want to focus on what goals they want to achieve using your product. Nobody buys a hammer because they want a hammer. They buy a hammer because they want a hole in the wall.

In order to create value propositions, benefits, Calls-to-Action, and content that grabs your audience by leveraging what they desire, you have to find out what they want most. And, the only way to do that is by gathering qualitative data from interviews and surveys (not interviews OR surveys – if you only use surveys, your data may be distorted for any number of reasons, including biased question phrasing and self-selecting groups of respondents).

Remember: Success exists outside of your platform, not inside of it. Bring the outside success together with your products/services offered, and you’ve got the makings of a great customer success strategy that reduces churn and maximizes the potential for upsells and cross-sells.

Step 3. Incorporate this information into everything you do and make.

Buyer persona information from qualitative and quantitative data should inform everything the buyer sees or buys – products, content, messaging, CTAs, images, the tone of your copy, the offers and freebies you create, your methods of reaching out, where you place your online ads, and when you make contact for sales, customer success check-ins, and upsells. How you do this depends on what your data tells you, and will also depend on sequences of testing and iterating based on results.

Step 4. Make data-driven UX decisions.

The need for qualitative data doesn’t end when you’ve constructed a buyer persona. You can and should use surveys and interviews to improve the UX of your site, implement meaningful updates and create new features.

To double-check your UX and find out how people really experience and engage with your site, you’ll want to perform usability tests early-on and often. Tools like UserTesting.com and TryMyUI let you take actual videos of people navigating your website.

You can also use a live chat program like Wordle that lets you keep transcripts, so you can see what visitors ask about most, and whether something is unclear, vague, or missing from your site.

When Customer Development and Success Align

Customer Development is all about optimizing acquisition and conversion. Customer Success then picks up the relay baton and runs with it, retaining customers, reducing churn, and leading to up-sell and cross-sell opportunities you can only tap into when you know what your customers’ goals are and whether or not they’re achieving them.

The fastest-growing new companies are those that master acquisition and retention both, which means that to grow – you need to close the Development-Success loop.


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

Churn, Conversion Rate Optimization, Customer Development, Customer Success, SaaS

Customer Development: 4 Steps for Decreasing Churn by @NikkiElizDeMere

4StepsForDecreasingChurn

If you had to sum up conversion, customer success and retention into one phrase, that phrase might be “customer development.” Customer development doesn’t have a succinct and pithy definition – it’s just too complex of a concept to smush into a neat sentence. The best definition I’ve come across is from Patrick Vlaskovitz in The Entrepreneur’s Guide to Customer Development:

“Customer Development is a four-step framework to discover and validate that you have identified the market for your product, built the right product features that solve customers’ needs, tested the correct methods for acquiring and converting customers, and deployed the right resources to scale the business.”

Clear as mud, easy as an appendectomy.

Which is to say, it’s not easy at all. So let’s break it down in terms that lend themselves more to concision: Conversion, customer success and retention.

It’s like the circle of life. They’re all connected and flow into each other. To eliminate churn and increase customer success, you should constantly optimize your conversion process (hello retention!).

Read More on Conversioner


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Content Marketing, Conversion Rate Optimization

Good Copy, Great Copy, and Copy That Converts by @NikkiElizDeMere

conversion-copywriting

Good copy is readable, maybe even enjoyable, and probably free of spelling errors, grammatical snafus and typos. But it’s not going to win you customers (though it might show Google your website still has a pulse, which isn’t nothing). Great copy is the kind of thing people talk about and share with their friends. Great copy makes the rounds on Twitter and Facebook, garners high page views, and contributes something of genuine value to the world – or it’s just really, really funny.

But I’m not here to talk about good copy, or even great copy. I want to talk about a very specific kind of copy: Conversion copy.

Read More on SEMRush


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

Customer Success, SaaS

10 Ways to Grow Your SaaS with Customer Success by @NikkiElizDeMere

Customer Success isn’t just a way to retain clients – it’s the most potent way to grow your SaaS business. Here are ten Customer Success techniques you can use to spend less on marketing, make more money on sales, and keep your clients happy in the process.

1) Forget the new clients – current clients are gold

New clients are expensive! Their buyers’ journeys are long and paved with your company’s dollar bills.

Current customers, on the other hand, become more cost-efficient with each subscription cycle, reducing churn and raising profit margins. It’s not only about renewals though – current clients are more likely to purchase additional services and upgrades.

2) Make every customer a good customer

There will always be pain-in-the-neck clients, but you have the power to make each one of your customers a “good” customer. At least by Lincoln Murphy’s definition: “Good customers are those that continually realize value from your product.”

To achieve this, you’ll need a combo of accurate targeting and customer success to bring the right clients to you and keep them happy.

3) You care, they share – it’s karma in action

When you take action to help your customers be successful with your product, they’ll want more of your products. They’ll also want to tell their friends and business associates about your products.

They’ll not only share your useful eBooks and blog posts and social media interactions, but will also become your evangelists, saving you money on marketing.

Read More on TribeBoost


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

Customer Success, SaaS

SaaS retention opportunities are hidden within the Customer Success Gap

You know that space, perhaps a vast expanse or a narrow gorge, between what your customer wants to have happen, and what your product actually delivers? Lincoln Murphy coined a term for this – he calls it the “Success Gap.

But in between your customer’s desired outcome…

1

And what your product does…

Is a space brimful of opportunities.

But it’s also where many companies run into trouble.

As Murphy says – you might think you have one gap to bridge, but you actually have two. The first gap is between your product’s functionality and your customers’ hopes. The second gap is between what you assume your customers’ successful use of your product is – and what success means to them. Watch out for that step, because it’s a doozy.

2

What a customer’s success looks like to you (don’t be fooled)

Let’s say you’re tracking customer usage of your product (as you should be) and you notice that a customer is following all of the patterns that you’ve seen make for a successful, long-term, happy client. That doesn’t necessarily mean there isn’t a gap. Even if they are completing all the tasks, do you really know whether they’re reaching their desired outcome?

What if their desired outcome is out of your control – and far outside the scope of your product?

You might be thinking, “well, then there’s nothing I can do. Not my problem.”

Oh, but it is your problem! It’s your problem to solve. Because that’s where the opportunities live.

See, while you may be selling a product, that’s not what your customers are buying. They’re buying a desired outcome, and if they don’t get that desired outcome, they feel like they’ve wasted their money.

Therefore, if your customers are using your product, it behooves you to know whether they are finding success with it – by their definition – and if not, you have a chance to help.

Opportunities in the gap

This is where customer success content can make a huge difference. Let’s say your company is an e-newsletter service that captures email signups and lets users create simple newsletters with templates. Your customer Robin sends out a newsletter every month for six months, but his open rates are dismal because his newsletters are staggeringly boring!

Robin might be faithfully using your product, but that’s a far cry from getting the kind of engagement he dreamed of when he signed up.

If you’ve set up the right data, maybe you can target exactly what is going awry for your less-than-successful customers and create a content strategy around that. But, even if you don’t have that kind of data set up, you can think in terms of “What does my customer need to do his or her job better?” Create content around that, and you’re narrowing the gap.

But, content isn’t the only way to bring the two sides together. You could also develop additional services, add-ons, or partnerships. Maybe better templates that include grammar-checks and suggestions for how to craft titles for higher open rates? Maybe you form a partnership with a copywriting company to do a webinar on writing attention-grabbing copy?

3

Use that success gap as a jumping-off point for ideas to make your customer go “Oh? Yeah!”

I think Lincoln Murphy sums it up best: “If you know a customer is not achieving their Desired Outcome, either automatically or because the customer self-reports, don’t just let that stand… give them something to do, read, watch, or otherwise learn to improve the result next time.”

But I would add this: People are busy, distracted, and have other priorities. Because of this, we want solutions delivered on a silver platter and we’re willing to pay for the privilege. So don’t stop at instruction delivered by webinar, blog, email or newsletter – find ways to build these success lessons into the product itself.

4


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