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Customer Experience, Product Management, Products, Retention, Startups

Achieving product-market fit should be job #1. By @SueDuris

This is a guest post by Sue Duris, Director of Marketing and CX at M4 Communications.

Every startup wants to succeed. Startups want it bad. They know nine out of 10 startups fail. They want to be that one that succeeds!

They spend all their time first making that great product. And trying to make it better.  They add to it. A new bell here. A new whistle there.

And when they think they have the next big thing that’s going to disrupt the market, they go hunting for capital, trying to get any venture capitalist and angel investor they can to fund them.

“Capital first” is the battle cry so built into the startup community that whichever startup event people attend, the conversation seems to always be about raising money.  

Yet, when a founder does get an investor meeting, typically investors want evidence to support founder claims. They want to see metrics such as monthly and annual recurring revenue, active users, renewal rates, customer acquisition cost, customer lifetime value, and the like.

They also want to know about the market and the customer, in addition to your product. Is the market big enough? Who is your customer? What value do they get from your product? What kind of traction do you have in the marketplace?

Do you know this info?

While startups make their primary focus about raising capital, they place their secondary focus, if at all, on the customer.

Many times I hear startups tell me “I’ll focus on user and customer research after I get funding”.

Too many startup founders feel that getting funding is the magic pill that will solve all of their problems and put them on some fast-track to success.

But, don’t investors want to know about your customer strategy – i.e. how you make money – before they give you money?

Raising capital is very important. But to focus on it first is the wrong approach.

The first thing a startup should do is achieve product-market fit.

It is everything.

It typically determines whether you succeed or fail. It’s what sustains a startup and enables it to grow.

Make something people want.

It seems basic.

Creating a product that doesn’t fit what the market wants is silly. Yet, many do exactly this.

And if a startup doesn’t achieve product-market fit, chances are it will fail.

According to CB Insights, who has been compiling failed startup post-mortems, the #1 reason startups fail is because they don’t achieve product-market fit. This is cited by 42% of CEO’s of failed startups.

According to CB Insights, the #1 reason startups fail is because they don’t achieve product-market fit. Click To Tweet

Product-market fit is hard work and it takes time. There is no doubt about that. Yet, it’s too much work for some founders. They want the glory but not going through all the blood, sweat, and tears to do the work.

This is where things become paradoxical.

These are the same startups that worry about churn.

“We have to eliminate churn,” they say.

But to ultimately reduce churn means you have to first retain your customers, build loyalty and drive customer lifetime value.

So what is product-market fit and why does it matter?

According to Marc Andreessen, product-market fit means being in a good market with a product that can satisfy that market.

He goes on to say product-market fit is the only thing that matters.

When it’s not there you can tell because customers don’t get your value, no one is talking about you, usage isn’t growing, conversions are slow or not at all, etc.

But when it’s there, revenue, usage, and growth are fast.

People crave your product.

People are talking about you, especially your customers.

When your customers advocate and sell for you, you have achieved it, something I call “customer nirvana”.

It’s not a destination. It’s not a journey. It’s a mindset.

When your customers advocate and sell for you, you have achieved customer nirvana. And it’s not a destination. It’s not a journey. It’s a mindset. Click To Tweet

You have to keep on working towards it. You have to give your customer that experience. The experience is the product. And it all starts with product-market fit. And making everything about the customer.

To get to product-market fit, ask yourself:

  • What is the unmet/under met need my company or product is attempting to fulfill?
  • How do I meet that need?
  • What value do I deliver to my customer that enables them to achieve their business outcomes? What is my customer’s WOW or aha moment?

That moment is what gets you to the value. But it isn’t only the value, it’s how quickly you can get to that value. Time-To-Value is key.

You have to know your why – why do they buy from you?

You have to know the what – what is resonating for them that is compelling them to buy from you?

Then you must know the actions and behaviors they have with you that’s helping them be successful.

Knowing your why, and how customers use your product is what will sustain you.

This is THE WORK.

And, you’ve got to do the work if you want to drive revenue, growth and customer lifetime value.

This work will get you to a minimum viable product, which you can use to gain traction, which you can use to get noticed by investors, which will help you get funded.

Having the insights from product-market fit is what drives and sustains growth.

Can product-market fit be measured?

It’s questionable. But there are certain trends you can look for in the product-market fit path.

Retention is the social proof to product-market fit. Other metrics to be watching for product-market fit include NPS, Customer Effort Score (CES), increased sales (upsells, cross-sells, and greater share of wallet). Win-Loss can also hold insights to how healthy product-market fit is.  

I scratch my head when companies don’t focus on retention. They should double-down on it. Yet, for many, it’s an after-thought.

In its 2018 NPS & CX Benchmarks Report, CustomerGauge still finds retention is an issue.

44% of respondents don’t know their customer retention rates, that’s one in three companies don’t know this vital info!

This aligns fairly well to my research that 2/3 of marketing budgets focus on acquisition activities and 1/3 is focused on retention.

This is another head-scratcher.

Companies place more resources on acquisition and feel it is more valuable than retention. Forget about data points from Bain – it costs 6-7 times more to acquire a customer than retain one – or Gartner – 80% of your future profits come from only 20% of your existing customers.

According to Bain, it costs 6-7 times more to acquire a customer than retain one. And according to Gartner, 80% of your future profits come from only 20% of your existing customers. Click To Tweet

There are numerous reasons for the push on acquisition.

This is the culture of the organization and how it measures success. Marketing doesn’t view itself as responsible for Marketing (to this I find fascinating, considering many marketing departments feel they own customer experience). Retention gets passed around so many times that ultimately no one ends up owning it. Investing and analyst communities place high value on acquisition and so CEO’s follow suit to be in lock step. Leaders have number-envy.

Ultimately, retention must be a mindset that is engrained in the culture.

It also troubles me when I hear people say product-market fit is elusive.

Why? How?

You want to determine product-market fit?

Get out there and research. Find people. Ask people. Take the data they give you and identify insights to help you craft your business model. Do the work.

Raising capital is vital. But it should not be the first plan of attack. Startups must make product-market fit job #1. All roads to startup success begin there.

Churn, Customer Success, Quora Answers, Retention, SaaS

“What’s the best strategy you’ve used to decrease churn in your B2B SaaS business?” Answer by @NikkiElizDeMere

I don’t own a SaaS company myself, but I am a consultant for many SaaS companies. What I’ve seen work best for my clients when it comes to churn is to first look at how they’re doing from a Customer Success perspective.

  • Are they attracting customers who have the potential for success with their product?
  • Does their onboarding process get their new customers closer to reaching their ideal outcomes (and does the SaaS business understand what their customers’ ideal outcomes are – because that’s not a given).
  • Has the onboarding process been optimized to help new customers bridge success gaps, celebrate milestones, and trigger red flags for customer success (or customer service) if the new customer runs into trouble?

These first three steps are vital to setting up customers for success.

From there, I recommend not starting from a place of “Why are customers churning?” but rather “Why are my best customers staying?”

Focus on doubling down on what you’re doing well. You can’t afford to divert resources from what people love about your product and company so you can try to plug the holes in your bucket.

Finally, you can look at which customers are leaving (and check whether or not they’re your ideal customers – maybe they should leave), and why they’re leaving.

Then organize the Whys by what you can fix fastest, with the least amount of resources, for the biggest impact, and tackle them one by one.

I also recommend creating a community for your SaaS, whether it’s on Slack (BubbleIQ reported ZERO churn among the customers in their Slack community), Facebook, or it’s a DIY-community that you’ve built, that way you can get super close to your customers.

I originally answered this question on Quora.

💗 Check out Nichole’s Services for SaaS startups 💗

Acquisition, Customer Experience, Emotion, Human-to-Human (H2H), Product Management, Products, Retention, SaaS

9 Empathy Exercises that Help Product Teams Improve CX

9 Empathy Exercises for Product Managers

What is empathy?

Empathy is the ability to understand and share the feelings of another. For Product Managers looking to improve customer experience (CX), that definition translates to doing more than understanding the user’s pain points, but also looking at the emotional landscape of what it’s like to use the product – when it is working, and when it isn’t working.

Empathetic Product Managers ask themselves:

    • How does using the product make the customer feel?
    • How does the customer want to feel when using your product? What would be the best possible emotional outcome for them?
    • How do I ensure the product developers understand and take the customers’ needs into consideration in their process?

The answers to those questions affect every facet of business, from acquisition to retention. It’s how, through CX, you can generate rapid growth through word-of-mouth recommendations, and sustain your success with customers who never want to leave.

Read More on Wootric
💗 Check out Nichole’s Services for SaaS startups 💗

Community, Customer Success, Emotion, Human-to-Human (H2H), Retention, SaaS

Set the tone of your SaaS community to be like Sunday brunch with friends 🥞☕️

Set the tone of your SaaS community


This article was originally sent as an e-mail as part of my newsletter, Sunday Brunch with Nichole: A Weekly Missive on Community Growth


Here’s the thing you may not know about me: SaaS companies hire me to help them build and grow communities around their SaaS products. I don’t advertise this. But they’ve seen me doing community growth at Growth Hackers, Product Hunt, Inbound, and now Zest.is and…

They want in.

Because they know they’ll only get the benefits of a community for their SaaS company if they can manage to build a community that’s more like, well, Sunday brunch at my place.

Or your place. It’s not really the venue that matters.

It’s the chemistry of the people.

The tone.

To get all woo woo on you – the energy.

This is where you come in.

Every Sunday morning, we’re going to talk about building, launching, engaging, and growing online communities for SaaS products.

We’re going to start at the beginning. What is a community? What does it do? How can you set the tone so everyone has a good time, and gets what they came for?

That’s what this very first email is about.

What does a community do?

Communities share ideas, give advice, ask questions, make jokes, support each other’s goals, break bread and bake pies. And community members help their neighbors build everything from barns to businesses. At least, that’s how they work in real life.

Here’s something else you may not know about me: I host gatherings at my house with large groups of creative, brilliant people every Sunday.

We cook, eat, make things together, have deep important conversations and blow bubbles in the pool.

Sunday get-togethers

However, It’s a little different when I talk about online communities with SaaS businesses.

Here’s what they hope will happen:

  • Customer retention
  • Upselling opportunities
  • Brand advocacy
  • A ready pool of voice-of-customer data that’s pure gold for sales & marketing

These are great goals, and the best way to achieve them is to create an online community that feels like an offline one.

How can you set the tone of your SaaS community to be like a Sunday morning brunch with friends?

Here’s how it works in my house:

If the gathering is large with new people who don’t know each other, introductions are important.

I’ll ask everyone to go around the room, say their names, their pronouns, and fun facts about themselves. This opens up the conversation.

When I know two guests who really should know each other, I introduce them and tell them what they have in common.

Then we have ice-breaker games like Loaded Questions where people have to guess who answered what to questions like:

Loaded Questions

The first steps toward building an online community are actually very similar.

Incidentally, CRO specialist Talia Wolf, has a new Facebook group called We Optimize where she took my advice and tried this out for her ‘Intro thread.’ But instead of a ‘brunch,’ she went with a tea party.

Talia Wolf

The responses she got were thoughtful, honest and open – the raw ingredients of real friendships. It gets down to people’s values, rather than “what startup are you at? What do you do?” Much more interesting. Much more engaging. (If you want to see this in action, let me know and I’ll show you the thread.)

Step 1: Know your guests (You got this!)

You’ve already laid the groundwork for genuine connections to happen if you’ve defined your ideal customer, actively market to attract them, and have a customer success process in place to make sure they’re getting what they need. (And if haven’t laid the groundwork yet, don’t worry, we’ll get to this too in an upcoming post.)

Do this, and your customers already have a lot in common. They share the same goals. They want the same things. They share the same values. They’re onboard with your mission.

That is an incredibly powerful place from which to build an active, engaged community.

Step 2: Write down your vision (You already know what it is)

When I throw a party, I have a few specific outcomes in mind. I want everyone to get along really well; I want people with related interests to meet each other; and I want stimulating conversations. It’s about creating an experience for everyone there that’s helpful, inspiring and fun.

Now, my guests know that’s what they’re getting when I send out the invitation. But yours don’t – not yet.

Before you invite your first members, get clear on what kind of community you’re hoping to build, and what experience you’d like their help with creating. What is the purpose of your community? (Tip: That purpose had better be helping your community, not just making more money for your company.)

Next week, I’ll share how to make your online community the place to be for your niche – and it all starts with your initial guest list.

kitten tea party

Have yourself a gorgeous day.

P.S. Hit reply and I’m happy to answer all your questions.

Know someone who could benefit from reading this e-mail? Please forward it on!


This article was originally sent as an e-mail as part of my newsletter, Sunday Brunch with Nichole: A Weekly Missive on Community Growth

If you’d like to receive emails like this one, sign up for my newsletter:

Churn, Community, Customer Success, Human-to-Human (H2H), Products, Retention, SaaS, Startups

Slack’s community superpower for SaaS is all about churn


This article was originally sent as an e-mail as part of my newsletter, Sunday Brunch with Nichole: A Weekly Missive on Community Growth


For SaaS products – whether B2B or B2C – Slack is where it’s at. By which I mean Slack is where your customers are already. But Slack has more going for it than just that. The platform is remarkably well-suited to creating exactly the kind of communities and engagement we’ve been talking about. The kind that fosters loyalty.

Consider:

Subscription-based businesses require strong customer relationships to prevent churn and increase customer lifetime value (the metrics that make or break your business).

Creating a community is one way to strengthen customer relationships and improve loyalty.

This is really – really – about eliminating churn.

Eliminating ‘Champion’ Churn

One of the leading causes of churn, especially for B2B SaaS, is when your ‘champion’ (the person who’s been talking you up to the boss, convincing everyone that you’re the solution they need) leaves. But if the whole team is on Slack? You’re already cultivating relationships with everyone, and they understand the value you bring.

Eliminating Churn among VIP Customers

BubbleIQ reported ZERO churn among the customers they shared Slack channels with. Now, they only began opening up private channels for their VIP customers who were already loyal and engaged, but still. Zero is a good number.

“Most companies rely on email or chat for support — but it turns out that’s a surprisingly high friction method of support for business customers today. Forcing customers through a formal contact form or into a long email thread creates a barrier between you, and makes it difficult to respond quickly to high priority issues.” – BubbleIQ

ProdPad’s Slack Community Experience

ProdPad also has never had a customer churn who was part of their Slack community.

Customers who join our Slack community were not cancelling their ProdPad plans at all. In fact, 99% of our cancellations were (and still are) coming from customers who weren’t part of our community.

In fact, ProdPad published a fantastic 40-minute video about their Slack community, and you should watch it. But I particularly loved what they said about how their Slack channel fostered and strengthened their relationships with their customers.

Andrea Saez, Head of Customer Success, talks about the “happy accidents” she discovered when their Slack community went live.

  • Users were helping other users to troubleshoot issues – out of the goodness of their hearts. So for those of you who might be concerned about the increased pressure put on your Customer Service teams, you might see the opposite effect. Cool, right?
  • The whole ProdPad team became involved and made themselves available to chat and answer questions, even the CEO, which meant that customers were taken care of even if the primary Slack designees weren’t immediately available. The “side effect” of this was that the whole team became more customer-centric, adding “a human touch to everything.”
  • Engagement levels rose – to the point where customers made friends with other customers.

As with any community, moderation was a challenge. They help set expectations with a Welcome Bot named Winston who greets new members and tells them the basics: how to submit feedback and ticket requests, and how to reach ProdPad members, as well as reminding them to be kind. I love the use of automation here!

There are so many good ideas in in this video for how to set up and use your Slack product community. It’s definitely worth the watch.

If you’re considering using Slack for customer support, Robbie Mitchell wrote a comprehensive Playbook for Working with B2B Customers in Slack that I recommend.


This article was originally sent as an e-mail as part of my newsletter, Sunday Brunch with Nichole: A Weekly Missive on Community Growth

If you’d like to receive emails like this one, sign up for my newsletter:

Churn, Guest Posts, Offboarding, Product Management, Retention, SaaS, Startups

How Transparency in SaaS Offboarding Reduces Churn by @ShaylaPrice

This is a guest post by Shayla Price, a freelance content marketer.

Too often as marketers, we consider churn a bad thing.

So we design our SaaS offboarding process in a way to trap our customers into staying. However, there’s a better way to do it. And that’s with transparency.

You can use offboarding to your advantage by discovering why customers weren’t meeting their desired outcomes. Lincoln Murphy, a customer success consultant, explains:

“The beauty of the SaaS business model is that you have visibility into the behaviors of your customers… and you should use this to reduce your SaaS churn rate. Specifically, you should be looking for signs that your customer is getting ready to leave and then do something to stop it.”

SaaS offboarding is a gut-wrenching reality check to serve your customers better. Below are five ways to add transparency to the process.

Set the Stage with an Offboarding Workflow

Making it difficult for customers to cancel their services is a big no-no. They won’t miraculously stick around because of your unwillingness to let go.

The opposite will happen. Churning customers will leave your business and will feel justified in their decision to do so. On top of that, they may spread the unpleasant news with their social network of friends and family members.

To prevent the public embarrassment, your team should build an offboarding workflow or cancellation workflow. It’s a sequence of steps that a customer must take to cancel their SaaS subscription.

Below is an example from Leadpages. When users want to delete their accounts, they land on a multi-option workflow, allowing them to select a reason for cancellation.

Image Source

Each option counters the customer’s reason for leaving. For instance, selecting “Difficulty of Use,” let’s the user sign up for an educational webinar or contact support. More importantly, there’s always the option to delete the account.

This offboarding workflow mitigates churn by offering a solution to the customer. It also gives your team essential feedback to understand why customers churn. That way, you can go revisit your onboarding process to fill in any gaps in users’ expectations.

Educate with Customer Success

Once users sign up for your product, you can’t leave them stranded as they attempt to figure out your platform. Focusing on customer success entails educating users every step of the way.

Of course, your team wants to be proactive, providing users with video tutorials, ebooks, and one-on-one support. Alan Gleeson, a B2B marketing consultant based in London, adds:

“More established SaaS businesses with enterprise clients will typically have a dedicated team whose job is to ensure that new account signups are onboarded successfully, and that the application is delivering value. They will also identify and nurture internal champions, who can facilitate up-selling and cross-selling, leading to negative churn.”

Customer success should play an integral part in offboarding, too. You don’t want to kick users to the curb just because they want to cancel.

Instead, you want to educate customers. You may have to address why they feel their current needs aren’t being met. Or you may highlight their alternative options if they decide to churn.

This educational approach puts the customers’ needs first. It also doesn’t abruptly end the relationship. Because you never know, the user may decide to buy from your SaaS business again.

Access to Your Cancellation Policy

Ever customer relationship won’t end with users becoming lifelong brand advocates. And that’s okay.

What’s not okay is failing to prepare for cancellations. Some users will want to deactivate their accounts immediately, and others will want a full refund.

While some user scenarios may call for a case-by-case review, most cancellations should follow a standard guideline. The key is to create a cancellation policy and make it easily accessible to your customers—without the unnecessary hassle.

Before developing a policy, you’ll want to consult with a local business advisor or legal professional. Their expertise will ensure you’re not violating any laws and are adhering to common business practices.

The next step is to find a happy medium between your company and the customer. How can you maintain a viable business and satisfy your customers’ expectations?

Whatever the policy, you want it to be accessible to the customer before and after they make a purchase. Post it in a visible area on your website and include the policy somewhere within your app. Here’s an example from PushAssist:

Image Source

Transparency is all about empowering your users to make informed decisions. Customers then can determine what works best for their situation. Making your policy readily available is a part of enhancing the customer experience.

Close the Loop with Feedback Emails

Some SaaS companies treat churn like a taboo topic. If they don’t talk about it, maybe it won’t be a real issue in the future.

Well, that’s the wrong mindset to possess in offboarding. Consider churn a chance to have an honest conversation with your customers.

Depending on your business, this communication may happen over the phone with a customer success rep or via a live chat platform. While these methods are useful, it may trap the user into providing an immediate response. (No one likes being pressured.)

Email marketing helps close the feedback loop with churning customers. You can send a message inquiring about their experience with your product. You also can send multiple emails—without being annoying—if a user fails to respond.

Check out the feedback request email below. Baremetrics doesn’t shy away from asking customers why they decided to cancel.

Image Source

Use email as a tool to gain pertinent details from churning customers. Be straightforward with your ask and keep the request short. You don’t want to bog users down with lots of questions.

Bake Long-Term Value into Your Strategy

While mending parts of your marketing and sales funnel is helpful, it’s only a short-term fix to your long-term challenge. You want to bake your goal of reducing churn into your overall business strategy.

Throughout the entire customer lifecycle, your team should be observing and requesting feedback from your users. This undertaking translates into prompting new users to tell you why they signed up for your product, monitoring usage data to understand the most frequently used product features, and giving users a chance provide candid feedback after churning.

With that information, you open the doors to knowing your customers’ pain points sooner. Then, your team can focus on adding more value. Julia Chen, former content marketing manager at Appcues, offers her insight:

“As long as your product is solving the pain of a customer, there’s a chance that you can keep this customer or get them to come back after they’ve canceled. That’s why it’s so important to have active conversations and to understand what drives their behavior.”

Combating churn means taking a proactive approach to talk with your users. It also requires transparency on how you will use those conversations to their benefit.

Rather than concealing the value-added process from users, be frank and take them along for the journey with blog post updates and in-app notifications.

Improve Your Offboarding Experience

In offboarding, your team can learn how to help both current and future customers. It’s an opportunity to reevaluate your path to achieving customer success.

Take advantage of churn by collecting insight in the offboarding workflow. Just make sure you offer transparency throughout the whole process.

💗 Check out Nichole’s Services for SaaS startups 💗

Customer Success, Guest Posts, Retention, SaaS

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

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

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

“How will we become indispensable for our customers?”

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

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

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

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


So what does it mean to become indispensable?

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

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

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

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

How Customer Success comes into the frame

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

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

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

✔ Customers meet their desired outcomes

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

✔ It blends well with other solutions 

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

✔ It becomes part of a routine

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

💗 Check out Nichole’s Services for SaaS startups 💗

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

The Most Valuable SaaS Customers Everyone Forgets by @lovevalgeisler

This is a guest blog entry by Val Geisler.

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

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

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

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

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

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

And that goes for cancelled customers too.

Even better news?

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

Vampires

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

These customers are vampires.

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

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

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

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

Which brings us to…

Ghosts

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

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

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

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

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

As Jimmy said,

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

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

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

No.

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

Zombies

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

And you have zombie customers lurking just around the corner.

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

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

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

Why?

That’s what we need to find out.

Zombies, however can be immune to traditional communication.

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

So what’s a business owner to do?

Stand out.

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

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

Your Scariest Metric

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

(image courtesy of smile.io)

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

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

That translates to roughly 0.5% monthly churn.

According to Lincoln Murphy,

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

And you want more revenue.

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

Churn matters, yes.

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

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

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

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

Hey, You!

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

A typical service request and solution looks like this:

Customer: We have a problem.

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

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

Customer: We have a problem.

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

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

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

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

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

Let’s Make a Deal

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

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

Wrong.

Remember how zombies tend to be immune to traditional messaging?

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

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

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

Then make them an offer that matters.

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

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

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

Check out this graphic for extra emphasis:

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

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

Human With a Capital H

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

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

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

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

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

But what about those cancelled customers?

Guess what? (just guess…)

It’s the same!

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

Don’t know where to start?

Here are a few questions to get the ball rolling:

About them:

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

About your product:

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

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

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

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

Build the Habit

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

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

The Trigger: the event that starts the habit.

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

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

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

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

Something happened.

Something else makes that thing stand out.

You get to a solution that rocks.

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

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

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

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

The same onboarding they’ve already been through once.

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

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

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

Coffee is For Closers

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

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

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

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

Your win-back rate.

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

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

The last thing the world needs is more zombies.

💗 Check out Nichole’s Services for SaaS startups 💗

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

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

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

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

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

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

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

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

1. Score the Aha! Moment (Early)

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

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

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

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

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

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

2. Bake Success Into Your Messaging

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

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

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

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

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

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

Image Source

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

3. Identify & Remedy User Gaps

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

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

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

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

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

Image Source

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

4. Be Available for Questions

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

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

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

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

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

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

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

5. Evaluate Customer Milestones

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

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

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

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

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

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

The Customer Takes Center Stage

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

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

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

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

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

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

What is Appropriate Experience?

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

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

But what is it really – in practice?

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

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

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

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

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

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

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

The question you need to ask yourself is…

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

What experience are you able and willing to provide?

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

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

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

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

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

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

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

Problem-solving time

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

Uh oh.

You have a few options.

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

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

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

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

Both are actually good options.

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


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