Tag: customers

How to Price Your SaaS Product?
For many new products, price is a decision made shortly before launch. But pricing a software-as-a-service (SaaS) product presents unique challenges for product and marketing teams. Unlike traditional software, customers licensing SaaS products pay for your product on a recurring basis. This gives you more options for pricing models. The problem is, you have no idea how to price your SaaS Product. You are probably asking yourself:
- “Should I be charging less than my competitor, or more?”
- “Should I gate off specific features, or charge by a metric like number of users — or maybe both?”
  And the list of questions goes on…
Pricing for SaaS Product

This article aims to help you find answers to all your pricing questions. “You must know your customers to know your pricing”. Gathering customer data helps you understand the general makeup of your customers and quantify the value people derive from your product, so you can drive your pricing strategy accordingly. Surveys are a very effective and relatively fast way to obtain information, but you need to be smart and intentional about the questions you ask.

Standard survey templates include demographic data points such as age, gender, location, etc., but behavioral insights are more useful for pricing purposes. One of the most important things to consider when it comes to pricing strategy is what your different customers actually care about when they use your product. By realizing who wants what, you can understand which features all customers should have, and which features can be gated by tiers.

Also read: New year Party Ideas for Office | Amazing Party Ideas
Must read: How to Track Customer Acquisition in SaaS?

Pricing Models for SaaS Products

SaaS pricing models
1. FLAT RATE PRICING: Flat rate pricing is probably the simplest way to sell a SaaS solution: you offer a single product, a single set of features, and a single price. This method is still used by eCommerce SaaS CartHook. A single monthly price of $300 (or $2,400 billed annually) grants access to all features of the company’s product.
2. SAAS USAGE BASED PRICING: Also known as the Pay As You Go model, this type of pricing strategy directly relates the cost of a SaaS product to its usage: if you use more of the service, your bill goes up; use less, and your spend decreases. Usage based pricing works particularly well for recurring billing platforms like Chargify.
3. SAAS TIERED PRICING MODEL: Tiered pricing allows companies to offer multiple “packages”, with different combinations of features offered at different price points. SaaS content marketing company HubSpot employ tiered pricing to great effect: each tier is designed around the needs (and budget) of a different type of potential customer, ranging from Basic to Pro to Enterprise.
4. PER USER PRICING: A single user pays a fixed monthly price; add another user, and that price doubles; add a third user and, you guessed it, the monthly cost triples. Example of such pricing is road mapping SaaS ProductPlan. The only variable in their business plan is the number of users added to the account, and the per-use price is the same, whether you’re a single user or a team of 100.
5. FREEMIUM BUSINESS MODEL: Thanks to high-profile success stories like Slack, Evernote and Dropbox, many SaaS companies use freemium pricing: offering a free-to-use product, supplemented by additional paid packages. Live chat SaaS, Drift use freemium pricing to great effect. Their “Free” package allows small companies to talk to their first 100 contacts for free: when demand for the service increases beyond that point (most likely correlating with company and revenue growth), it becomes necessary to upgrade to their paid packages.
Also read: List of Pune Startups | Entrepreneurs & Startups in Pune
Relevant read: Challenges Faced by SaaS startups

SaaS PRICING STRATEGIES

Your pricing model is at the heart of your SaaS business: it’s the foundation that allows you to build out repeatable sales processes and generate recurring revenue. But, within the framework of your pricing model, there are all-manner of different goals you’ll need to hit on the way to your over-arching objective of “growth“.
That’s where SaaS pricing strategies come into play. Each of these strategies is suited to a different objective: whether that’s rapidly expanding into a new market, or attracting particularly high-value customers.

Here are a few additional areas to consider when pricing SaaS products:
- Your sales model influences your pricing.
- Create upsell opportunities within your pricing model.
- Use caution when offering annual pre-purchase discounts.
- Build discounting options in enterprise licensing.
- Consider free trials.
- Service is key.
- The demand curve is not linear.
Also, a lot of companies offer a “free tier” which has limited features. The idea is that people will start using the product, get value out of the free tier but see a lot more value if they were to start paying and eventually upgrade. In theory this sounds great and for some companies it is. The problem with the free tier is that you may start running into problems such as the high cost of providing support to the free customers, the free tier bringing in the wrong type of customer, and requiring you to spend resources to try and convert the cheapest customers to actually pay you. Early-stage startups feel this pain the greatest since they can only afford spending resources on critical operations. Look at your buyer personas and product — sometimes the freemium model works well and sometimes it does not.

Also read: 8 Ways to Toggle SaaS Customer Retention
Must read: How to validate your SaaS idea before building an MVP?

SaaS Pricing Strategy: The 10x Rule

Applying the 10X rule to SaaS product pricing is simple. Just make sure that the value your solution delivers is at least 10x what you charge for it. If you can save a company $100,000 per month, you should probably initially think about charging them $10,000 per month. If you can save a company $10,000 per month, you should probably be charging them $1,000 per month.

10x Strategy

Now, let’s see some companies with their pricing models.
1. Upscope Co-browsing doubled revenue by doing per seat pricing only after making lots of mistakes.
2. Drift made a free plan so they only charge those really using it.
3. Hubstaff found their free plan ended up costing them money
4. TribeHR took a data driven approach to pricing their product
5. Aircall figured out pricing by calling their customers and talking
6. Creately made a ‘Pay whatever you want plan’
Conclusion

Pricing your product is an ongoing process. You will never be done with your pricing strategy. As you get more data and feedback from your customers you will change your personas to be more accurate and change your pricing strategy to better target those people.

Comment your views on the article and also let me know what is your pricing strategy in the comment section below.
February 26, 2020
What is Customer Engagement?
Customer engagement is the key to sustaining growth for SaaS companies. SaaS businesses must aim to educate and entertain their users to boost satisfaction and retention. You want customers to feel compelled to login to your platform in the morning, during lunchtime, and even before bedtime. You want the stickiness factor. Not only does this help boost user satisfaction, but it can also help your company improve customer retention.

More and more SaaS companies are recognizing the amazing value that product-led growth provides. As a result, user engagement tools have become increasingly important. The goal of a SaaS CEO should be to increase the profit they make from each customer (LTV), and lower the costs in sales and marketing that it takes to acquire each customer (CAC). Measuring Customer Engagement is a key tool that will help you achieve that goal, as it will allow you to increase your trial conversion rates, which directly reduces CAC. And it will help you lower your churn rates, which directly increases LTV.

What is Customer Engagement?

Customer engagement is all about interactions between your customer and your brand. As a result, the interactions that you qualify as an engagement will be just as unique as your business. When you let your customers choose how they’d like to engage with you, you’ll be more likely to uncover the type of interactions that they find valuable. By making it easier for customers to engage in ways they find valuable, you’ll strengthen their emotional investment in your brand.

What is customer engagement?

Some customers will have a deeper level of engagement than others. For example, a new shopper might engage by following your brand on social media and placing an order, but this level of engagement is very different than someone who’s placed 10 orders in the last year and also referred their friends. Finding ways to add value to your customer experience can help you drive more valuable engagements more often. When customers feel like they have just as much to gain from engaging with your brand as you do, you’ll foster a sense of reciprocity that keeps them emotionally connected to your brand.

Also read:
Why is Customer Engagement Important?

The digital marketplace offers customers a greater range of options than they’ve previously experienced. Now, the majority of value is gathered over time through a continuing cycle of commitment and re-commitment. To maintain a customer’s interest, enterprises need to be responsive to change, alert to a customer’s day-to-day needs, and in frequent contact. Customer engagement helps to continually demonstrate your commitment to the customer and allows you to deliver value in every phase of the customer journey.
The importance of great customer engagement can’t be emphasized enough, as it builds and fosters:
- Trust
- Commitment to excellent service
- Better communication
- Healthy customer relationships
- Valuable customer knowledge
- Customer loyalty
Customer engagement is the proof you provide to your customers that you value their success and are always working to deliver more. Remember, friendships endure while acquaintances come and go. With the right engagement strategy, you can foster long-term, mutually beneficial relationships with all your customers.

How to measure Customer Engagement?

You can’t improve customer engagement if you don’t know how to measure it. There are a number of different ways you can calculate engagement, which is why we’re giving you a head start by highlighting the most important metrics to start with. Measuring customer engagement requires that you do the following:
- Identify the key events that you would like to track.
- Track the number of customers who complete a purchase without making an account
- Assign engagement scores to each action in a way that can be changed as your company evolves
- Keep an eye on how often your customers make a purchase
- Find the average amount a customer spends when they make a purchase
- Create a database to store this information, ideally in a form that allows for fast querying, and easy cube-style, cross tabulated analyses.
- Connect this database with other data sources that contain additional customer attributes that are relevant for understanding segmentation
- Compute an engagement score for each user that can be used by sales and support.
- Customer Engagement Score = (w1*n1) + (w2 * n2) + … + (w# + n#) where w is the weight given to a random event and n is the number of times the event occurred.
Relevant read:
Some Promising Customer Engagement Strategies

Send Triggered Messaging

Communication plays an integral role in customer relationships. You’re already emailing customers welcome messages, product updates, and the occasional thank you note. Real-time triggered emails get good results because they respond to subscriber actions and are relevant to them, so they benefit from current high engagement. Whereas routine marketing emails can be more like interruptions and are sometimes rejected as irrelevant.

Let’s imagine that new users who don’t take a significant action on your platform within 2 days of signing up are more likely to churn. You can set up a triggered message to nudge these users to login to their accounts. Below is a triggered message from Buffer. Their system automatically emailed when social media post surpassed a specific audience reach.

Triggered messaging

While routine marketing emails may seem interruptive because they may be irrelevant, triggered email messages tend to have a more positive impact on customers. Since the messages are triggered by specific actions that the customer did or did not take, these messages are more relevant and thus, more beneficial to the customer and more likely to promote engagement.

Award points when a customer makes a purchase

Showing your customers that you appreciate their investment in your brand can be as simple as awarding them points each time they place an order. Polaroid Originals adds value to every order their customers place, making each of them more likely to return to make another order in the future.

Award points for a purchase

By showing their customers they have just as much to gain from each purchase as they do, they’ve fostered feelings of reciprocity that will give them every reason to order from you again.

Must read:
Engage customers through the in-app chat feature.

After working in SaaS marketing for years, it can be easy to forget how challenging it can be for a new user to navigate your company’s platform. Many customers may not be familiar with SaaS technology and may have a hard time successfully using the platform or getting the most out of its features. This frustration can often cause users to give up or move on to another SaaS product they may believe is easier to use. In addition to sending triggered messages with helpful tips, tutorials, and advice, you can also engage these users through in-app messaging to help provide ongoing assistance.

In-app chat feature

Simply establishing the fact that you are available makes your customers feel better. It makes them not just view the product as some pixels on the screen, but as an extension of the people behind its creation: you. In-app messaging is effective because it allows you to speak with your customers one-on-one, helping them solve their greatest challenges. In addition to providing direct assistance to customers, you can also use the chat feature to find out which features new users are finding most difficult or asking specific questions about their experience. You can then use the information that you gather through these conversations to create interesting and relevant content that is helpful for users who are having similar issues.

Encourage your best customers to share your brand with referrals

RUNGUM Give 5 Get 5 Explainer Page

Driving engagement also doesn’t have to be solely between your customers and your brand, it can also be between customers. Empowering your best customers to easily share your brand with their friends and family can not only help you acquire a new one, but also engage the customers you have. RunGum’s Give $5 get $5 simultaneously adds value to the friend that’s been referred to their brand and the customer that referred their friend. It’s this value that will make both customers more likely to re-engage again in the future.

Also read:
Develop educational tutorial videos.

Continuing education is a vital part of SaaS customer engagement. In addition to free trainings and webinars, you can also create video tutorials as part of your SaaS marketing strategy. While you will still want to provide the typical educational assets such as blogs, e-books, and guides, you can also use video tutorials to engage your audience. Videos are stimulating and allow you to clearly and simply communicate your message to users faster than you can in text. Videos are also easier to consume on mobile devices, allowing users to quickly and conveniently access your training videos on demand.
Basecamp, a project management company came up with a series of tutorial videos to educate prospects.

Educational tutorial and videos

If you want to produce video tutorials that are engaging, you need to think about what your customers most want to learn about your software. Consider what your customers greatest challenges typically are when they start to use the platform. Also, think about which features your customers will find most useful and create content around these topics. In addition to the topics that you choose for your video tutorials, it’s also important to consider how you plan to structure the content. To keep users interested, use storytelling methods that will help draw them in and make your content interesting and helpful.

Conclusion

Customers are the lifeblood of your business. To retain your users, experiment with different engagement strategies to improve retention. In the end, it’s important to remember that engagement = retention. If people aren’t using your platform, it could be because they are not engaged.

It’s essential that SaaS marketers try out different user engagement strategies to find the most effective tactics for improving customer retention. You can use the SaaS marketing strategies above as a starting point for experimentation. Choose one or two of the strategies above and watch as your engagement rates steadily improve over time. Also, please let us know if this article helps you in any way.
February 25, 2020
How to Track Customer Acquisition in SaaS – SaaS Customer Acquisition Strategy
We’d all love to drive Bentley’s and live in mansions overlooking the beach, but not if it means spending the money your family relies on to buy food. Similarly, every business wants to get as many customers as possible, but not if it means going broke in the process. In order to achieve that balance, a crucial metric for businesses (especially startups) to track is customer acquisition cost (CAC).

Achieving sustainable growth for a SaaS company means constantly acquiring new customers and keeping them around for as long as possible. While this may sound simple, it can be incredibly challenging to find new opportunities for growth and customer acquisition in the crowded SaaS industry. If you’re too cautious about your CAC, you will likely be missing out on customers and future revenue. Yet, if you spend too freely, you won’t be profitable and will likely end up in the dead pool.

This article will walk you through the saas customer acquisition strategy.

Also read: Boonbox- Taking Online Shopping to Rural India

What is Customer Acquisition Cost?

Put simply, customer acquisition cost (CAC) is – you guessed it – the cost of acquiring a new customer. To compute the cost to acquire a customer, CAC, you would take your entire cost of sales and marketing over a given period, including salaries and other headcount related expenses, and divide it by the number of customers that you acquired in that period.

It doesn’t take a genius to understand that business model failure comes when CAC (the cost to acquire customers) exceeds LTV (the ability to monetize those customers).
A well-balanced business model requires that CAC is significantly less than LTV:

Well Balanced Business Model

Here are some typical industry standard cost of customer acquisition values, the amount of money each company spends on average on marketing and advertising to acquire just one new customer:

Travel: Priceline.com – $7
Telecom: Sprint PCS – $315
Retail: Barnesandnoble.com – $10
Financial: TD Waterhouse – $175

Relevant read: 8 Ways to Toggle SaaS Customer Retention

How CAC works?

Let’s say you run a company called ABC, which sells movie inspired accessories.
From June to December 2019, you spent $100,000 on sales (mainly sales team salaries) and marketing (Google ad spend, Facebook ads, content creation, marketing team salaries).
In that same time frame, you made 10,000 sales.

CAC Calculation

Dividing $100,000 by 10,000 gets you 10. So, for this time period, ABC has a CAC of $100.

Relevant read: Kapture CRM – A Single Platform to Manage the Sales and Service Teams

Why Is CAC so Important?

Understanding CAC is critical for businesses of all sizes. However, it’s particularly relevant to startups that are in the early stages of scaling up or trying to woo potential investors. Once you know your CAC, you can evaluate the cost of growing the business and the value each new customer brings.
To acquire new customers, most SaaS companies devote a substantial amount of time and money before they see a full return on their investment. Examining just how many months of revenue from a customer are actually needed to recover these costs becomes essential as your business grows, as it may take much longer than you think for your company to recover CAC and actually begin to profit.

Tracking Customer Acquisition allows for a better control of your spending and makes sure you’re being profitable on specific channels.

Also read: Must-Read Startup Books For Students

Why is SaaS Customer Acquisition So Difficult?

The average length of the sales cycle for a SaaS company is nearly 3 months. That’s quite a long time to be chasing someone down and asking them to buy something from you. If you consider some of the factors that lead to this extended buying process though, you’ll see that it makes quite a bit of sense for customers to take their time:

High Cost

SaaS solutions aren’t usually very cheap. Even with less expensive tools, customers must factor in the recurring charges that go along with the SaaS subscription-based payment model. This can add up to be a significant amount of money for some customers.

Privacy Concerns

Because SaaS solutions are based in the cloud, new customers can sometimes be reticent about allowing an unknown tool process their (or their customers’) personal data on external servers without learning more first.

Complexity

Most SaaS tools are built with deep sets of features and complicated use cases to solve complex problems for which customers may not even know the extent of their needs.

Too Many Options

The SaaS industry has exploded in the past 10 years, meaning customers have usually have several different choices when choosing a SaaS solution.

All of these factors act as barriers to customer acquisition. This is why SaaS customers require an extra level of care and education (or nurturing) to incrementally move them towards a purchase decision

Relevant read: Tally Dekho – A simple Tool for Accounting

How to Track Leads through the Stages of SaaS Customer Acquisition?

There are 4 unique stages that leads go through before making a purchase and becoming SaaS customer:

Awareness

Prospects first become aware of your business. This is usually the stage in which leads find you through a blog post or other content. Often, they’re not looking for a solution at this stage, and they may not even be aware that they have the problem your product solves.

Engagement

Potential customers start regularly consuming your content, subscribe to your newsletter, and maybe even download an eBook or other resource from you. They are more aware of the problem you solve and begin questioning whether they need a solution.
- Exploration: After learning that they have a problem and need a solution, prospects will do research on their options. This usually means visiting your pricing page, reaching out to sales, requesting a quote, or signing up for a free trial or free account to test out the product.
- Conversion/Retention: Once prospects have fully explored all of the options you offer, they sign up for the plan that’s right for them and become a paying customer. Now it’s all about making sure they succeed with your tool and continue to be an active user.
Also read: The 10 Best Tools for Graphic Designers

Things to Consider

While tracking Customer Acquisition may sound simple at first, here are just some of the things you’ll need to consider:
1. Ability to clean the data whenever necessary
2. Ability to cater for your own business needs (targeting Accounts VS Users)
3. Ability to integrate with other software (e.g. CRM, Payment Processors)
4. Ability to manage all the Ad Platforms you use
5. Ability to monitor all costs (CAC calculation)
6. Ability to choose and switch between Attribution Models

Relevant read: List of Top Startups in Bangalore

Strategies for Reducing Customer Acquisition Cost

If your CAC is higher than you’d like (or can afford), something’s got to change. Here are a few strategies you can use to reduce CAC and improve your bottom line.

1. Conversion Rate Optimization

Optimizing your website can increase your revenue and lower your CAC by making it easier for visitors to convert. This is particularly important for e-commerce sites that might be losing out on sales even if their traffic is high.
Check that your site loads quickly, displays properly on mobile devices, and that your checkout process is simple and bug-free. You should also perform A/B testing on your landing page copy to find out what works best for your target market.

2. Using influencer marketing, even for B2B

The phenomenon of influencer marketing doesn’t start and end with Instagram models, especially not in the SaaS space.
An “influencer” is simply someone who can lend their credibility, and in doing so boost an organization’s reputation. In the B2C world, celebrities will often sell just about anything.
The audience for B2B influencers is different. Influencers have a reputation, so they won’t be promoting junk. They will seek to partner with superior products that align with their brand and are disrupting their space.

3. Reward Referrals

If you can get consistent referrals from existing customers, your average CAC will drop significantly. Say, for instance, a customer who cost you $15 to acquire refers two new customers. This brings your CAC down from $15 to $5 because you landed three new customers for the cost of one.
Implement an attractive referral program that gets more customers to spread the word about your business – not just because they enjoy your product or service, but also because you’re offering a referral bonus to sweeten the deal. This could be something as simple as a discount code for their next purchase or a temporary upgrade to your premium service for referring new users.

4. Building product-led growth into the marketing strategy (the flywheel)

Startup unicorns have built insanely good products that catch on faster than any marketer can sell them. What does a product-led growth campaign look like out in the wild? Take Expensify, for example. As part of their marketing efforts, they directly targeted people who submit expense reports. Their slogan was “Expense reports that don’t suck.” Instead of looking mainly at buyers, they tried to hone in on a more specific user pain point.
The Slack platform allows users to invite others into their workspace. Dropbox has a functionality where you can add a new user to unlock more space. The Ice Bucket Challenge raised $100 million in 30 days. All of these are examples of product-led growth.

Look at the level of touch required to complete a sale. Some products are easily understood, while others may require a careful walk-through by a sales person. Sometimes, the customer will want a trial with their own data. Consider every possible way to minimize this. For example:
- Create demo videos that answer every likely sales question.
- List the common sales objections that come up in the sales cycle, and provide answers to these on the web site.
- Try using customer references to avoid the need for a trial.
- If your customers are going to compare you to the competition as part of their process, consider doing this for them, with a section of your site that has a comparison matrix with appropriate check marks.
Also read: Life Story of Sundar Pichai: The Hurdles and the Success

The Key to SaaS Customer Acquisition

Tackling the SaaS customer acquisition cycle is not for the faint of heart. It requires a lot of work, and most importantly, a deep understanding of your customer and their needs to create a SaaS acquisition strategy that works.

JASON LEMKIN, FOUNDER, SAASTR

“A rough rule of thumb is successful SaaS companies are spending about 20%-30% of the fully calculated CLTV on customer acquisition.”
JASON LEMKIN, FOUNDER, SAASTR

So, if a SaaS customer LTV is $1,000, then their customer acquisition costs should be in the range of $200 to $300 to stay competitive. Or put another way, ⅓ to ⅕ LTV.

When you’re applying these principles in your own acquisition efforts, be sure to always put your customer’s needs first. By focusing on their benefits and what they’re looking for in a solution, leads will be much more receptive to your messages. Keep this in mind and find ways to guide them through the acquisition process with helpful interventions that come at the right time and add value to their experience. This will lead to much more success in the long run.

Also read: BookMyShow – The Indian Startup That Did Not Have A Smooth Sail

Comment your views and if you know any other tip to track customer acquisition, please let me know in the comment section.
February 20, 2020
Different Stages of SaaS User
You probably use a variety of different SaaS products every day. That’s because software as a service (SaaS) market is growing quickly, and spreading rapidly. But on the other side of the coin, if you’re a business leader or a customer success manager (CSM) at a SaaS company, you need to understand the different behaviors and strategies for earning new SaaS customers or else you’ll be one of many SaaS companies that don’t grow fast enough.

You don’t buy a SaaS product once and forget it. There’s no true autopilot or end of the journey, just a SaaS customer life cycle that continues to grow and evolve, generating the recurring revenue that you need to survive. It’s a cycle that seems very straightforward but proper execution requires a lot of smart timing and knowledge. In essence, you’re finding a customer, getting them to sign up for your SaaS offer, and then trying to keep them. In practice, there are a variety of considerations during and between each step that can lead to success or frustrated customers who leave.

SaaS growth funnel

The SaaS customer life cycle can be broken down into three stages – the acquisition, engagement, and retention of your customers. SaaS products are different than others because it’s not enough to get a customer to buy once, you need them to engage with your product repeatedly to see value so that they’ll keep buying from you every month, or every year.

How to:
Acquisition Stages

During the acquisition stages of the customer life cycle, customers are looking for a solution to a problem they’re experiencing. Education is vital at this point: you need to help your customers understand their problem, and help them understand how your SaaS tool will help them solve it.

Traditionally, companies aren’t great at this – they have a tendency to sell too hard, too soon, and put-off prospective customers with an overly enthusiastic sales pitch when they’re in ‘research mode’, rather than ‘buying mode’.

Awareness

The start of the customer life cycle, whether you’re a SaaS provider or any other company, is when your customer first becomes aware of an issue they have. Through marketing, referrals, demonstrations, and other tactics, you also make them aware that your solution solves their problem. Think of this as the educational stage. You’re just trying to inform someone about your offering, and that can mean providing a lot of context.

Awareness stage

If you’re struggling on where to start with awareness, there’s one content trick that works with successfully with companies from start-ups to some of the largest cloud security companies in the U.S.: turn each question in your FAQ into an individual post, graphic, video, or other element. Answer the questions people have and demonstrate your capabilities, and they’ll be aware of you and what you do.

Consideration

By now, your customers will have a decent understanding of their problem, and will have identified several potential SaaS solutions that they’re considering.

Qualification

Building on awareness is the qualification of leads and customers. In this stage of the SaaS customer life cycle, you’re taking a potential customer and determining if they’re a good fit for your business. At the same time, the customer is looking through your materials or perhaps trying a demo to see if they think you’re a good fit. Your customers will narrow down their options to just a few solutions. They might start free trials, request a demo, or start a conversation with your sales team.

Qualification stage

If you’re in a new software category or have a very different take on functionality and workflows, make your support information and teams available to help. Treating the qualification stage as the start of your on-boarding will help your team deliver quality service that can boost conversions.

Also read:
Engagement Stages

The engagement stages are key to the success of your SaaS company. It’s where your customers make their leap of faith, and start paying for your service. According to Intercom, 40-60% of users use a SaaS product once, and then never return.
You then need to provide real, tangible value to the user as quickly as possible, to convince them that it’s worth their investment. Getting that first session right is essential for keeping your customers coming back for more.

Engagement Stages

Evaluation

Your customers are now in the final stages of their decision-making. They’ll be asking your sales team very usage-specific, or company-specific questions about the capabilities of your solution, to assess whether or not your solution will meet their needs and solve their problem.

Purchase

This is it – the magic moment when they part with their credit card details and officially become paying customers. Your customer has made it to the first major milestone, congrats!
Carve out purchase decisions as their own step when you’re mapping your customer journey. This helps you test and validate the process as well as see why customers do or don’t buy from you. Closing the deal is also an appropriate time to evaluate your marketing and other efforts so far, plus perform audits on documentation and payment methods.

When the interested party becomes a paying customer, thank them. Introduce your team again and remind the customer of your dedicated support and services. Be helpful and ask for your first round of feedback so that you can make the qualification and purchase steps easier for potential customers to complete.

Activation

Now they’ve paid for your service, your customers are starting to use it. They’ll work through any on boarding processes you have, and (hopefully) start to get value from using your solution. After the purchase decision is made, the SaaS life cycle shifts. You’re dealing directly with fewer managers and C-Suite leaders. Your focus becomes the daily user. This is the person who needs training and support to figure out how to use your software.

The benefit to thinking about this stage as a shift in your target customer is that you and your teams will focus on making a good “first impression” with daily users. Actively listening to their needs and being responsive during the onboarding and training process can keep them happy. In many cases, SaaS contracts can be cancelled at any time. Competitors are also waiting to grab frustrated users from you. This is your first big customer filter and you want to get on the good side of users to keep their whole organization happy.

Relevant read:
Retention Stages

In these later stages of the customer life cycle, your focus should be on customer success: providing continuing value to your customers, and providing excellent support and information to help your customers maximize the value they get from your service, to reduce or prevent churn.

It’s cheaper to retain existing customers than it is to acquire new ones, but many companies often overlook investing in customer success, focusing instead on lead generation and customer acquisition to fuel their business growth.

Expansion

The next phase in the SaaS customer journey is when the customer and their teams become regular users of your service. You become part of their daily operations and need to treat this with the respect that it deserves. They may decide they need additional features or functionality available from higher-price packages, expanding from the initial package or service they signed up for.

For demonstrating that respect, your mission is here to give your customers the tools, information, and support they need to properly implement change management. By understanding customer workflows and how your product disrupts them, you can determine the best way to position your SaaS capabilities. Ask your customers what they hope to achieve with regular use and provide tips and guides for how to accomplish this.

Renewal

After you’ve become part of the customer’s new daily routine, you need to ensure that you’ve made the routine better. The months or year after first landing an onboarding is a big-time milestone and decision for many. Your customers’ initial contracted use period has come to an end, and they decide to continue paying for, and using, your service. Your customer is looking at their budget for the next quarter or year and questioning if you’re worth it. You’re doing the same and seeing if you need to change your pricing structure or what features to provide to keep people happy.

The purchase decision often relies on hopes for improved efficiencies and bottom-line gains: how will this help our business. The renewal decision, however, is focused on if those gains were achieved and how the customer felt about it. You have to not only be a benefit but feel like one. To put this in perspective, think about a time before you had one of your go-to SaaS tools, like a CRM. In your pre-CRM days, you did all that customer management in spreadsheets and hand-written to-do lists and called or emailed when you remembered and had the time. Some people just fell through the cracks, even if they were good leads and customers.

Adopting a CRM automated a lot of this and even gave you tools to weed out the less lucrative clients so you could focus on the big wins that made your business successful. You fell in love with the tech and what it could do, and now you had a name for the software: CRM. If the company was a pain to work with, the system crashed often, or its helpdesk never answered a question right, you’d probably not renew. Even if it made your marketing and sales better, you’d take this knowledge that “a CRM is helpful to me” and use it to find a different provider. The boom in SaaS means there are more providers and competition each quarter, making customer service a key differentiator when it comes to the renewal phase.

Referral

Your customers are delighted with your service, and are so impressed with the value you deliver, that they’re recommending your service to colleagues, or others in their network. When the customer does renew, rejoice! And then, ask them to tell you why they chose to renew. Your customer is loyal and satisfied and you’re likely to get some messaging you can use in your marketing to make a pitch to similar companies.

For those satisfied customers, you should follow-up. Thank them for being a customer and ask if they would refer to you to colleagues, partners, or other businesses they know. If you want to sweeten the deal, create a referral program that allows them to save a little or earn some freebies when they make referrals that work for you. In some rare cases, you’ll have a customer who loves your product. They want to tell the world about it, and you should help them do just that. These advocates or evangelists can bring new companies and plenty of revenue to your door. Because they like you already, the rewards you provide don’t need to be huge, they just need to be useful.

Adobe has always had a very loyal customer base and they really capitalize on this advocacy piece with their Ambassador Program. People who sign up get training and webinars and other tools, while being asked to make commitments to advocate for Adobe and evangelize its products at their office and in their community. You don’t need to immediately launch into this step, but it is a smart thing to think about for down the road.

Adobe campus ambassador program

Must read:
Conclusion

In customer life cycles—as in life—the best approach is to take it one day (and one phase) at a time. Plus, while it might be tough to take a data-driven approach to life—that is, of course, unless you track all of your daily activities as data points—customer life cycles are ripe for data collection and analysis. So, let the data science be your guide. Implement systems and software to measure and track customer success, and watch your base of engaged, loyal customers grow.
January 31, 2020
How to Design Drip Email Campaign?
An email drip campaign is a series of messages that are sent, or “dripped,” in a predefined order at a predefined interval. Drip campaigns are commonly used to communicate to new subscribers or someone who made a purchase but didn’t join your email list yet, but you can use them at any time.
Email drip campaigns are intimidating. They’re complicated, requiring you to create a bunch of content, write a bunch of emails, and then stitch it all together somehow.

Drip Email Campaign

Now that we know what is drip email campaign, how do you actually map out a successful automated drip campaign? Turns out, it’s not as hard as it seems.

Know more about drip email campaigns: Drip Email Campaign
Also read: How to Track Customer Acquisition in SaaS?

How to Set Up a Drip Campaign?

Here are eight steps to keep in mind to create your first drip campaign — plus examples of how to target your audience, write your emails, tweak for best results and so on.

Set up your objectives.

You need to define your objectives to achieve your expected results. These objectives must be SMART, which is an abbreviation for the words — specific, measurable, attainable, realistic and timely. Let’s break them down below:

SMART objectives
1. Specific: Be clear about what you want. Do you want to promote your products? Or, do you want to educate consumers with actionable advice? It’s time to plan and decide.
2. Measurable: Create success metrics for your drip campaign. What is the click-through rate you want to achieve? How will you measure your conversions? By introducing target numbers in your objective, you can clearly define the level of success you want.
3. Attainable: Are these objectives achievable for everyone in the team?
4. Realistic: Nothing is impossible, but you have to be a bit realistic when it comes to your time and your resources. Are your objectives attainable based on the number of your subscribers, and the amount of time in your hands? Is the amount of work required for the campaign reasonable based on the number of marketers and designers in your team? While it’s great to be ambitious, you also need to be a bit realistic about your objectives.
5. Timely: Set a time frame and schedule to make sure that your drip campaigns will stay on track.
Your objectives should be based on your end goals. Do you feel that your leads only try the free trial and none of them end up buying a subscription? Try an email sequence that contains product tutorials to highlights its value and show users how they can benefit from it.
Don’t forget to create SMART objectives. A lot of people set big goals only to fall short, because they don’t have a concrete plan to achieve what they want. So, it’s important to clearly define your goals from the start.

Identify Your Target Audience

Drip campaigns are all about breaking your subscriber list into subsections, and targeting information to niches of customers. So, the most important piece here is determining which triggers and groups you’re going to use for your drip campaign strategy. But how do you segment your customers? Here are some ways you can get started.

Segmentation of audience
1. Demographics
  Demographics contain basic information like age, gender, location and job. It’s pretty obvious, but failure to use this data may lead to disastrous emails. For instance, let’s say you’re in the business of selling shoes. Without segmenting your emails based on genders, you may send emails promoting high heels to males. This is a disaster and a complete turn-off to customers. No one wants to receive a message that’s obviously not meant for them.
  The good news is that by segmenting customers based on demographics, you never have to face this dilemma. In addition, you also send messages that are tailored to the needs of each customer.
2. Actions
  You can also segment customers based on their behavior such as purchase, visit frequency, length of subscription and content. With the use of triggers, marketers can send emails based on products bought or the content users interacted with.
  For example:
- A user subscribes to your company newsletter, and you send them a welcome email via your drip campaign
- A user makes a purchase, and you automatically send them a receipt with shipping information (plus a few up-sells)
- A user downloads the trial version of your app, and you send them a series of six instructional emails over the course of the trial, which offer helpful tips on making the most of your app.
Visualize your end goal

Step back and think about what action you want qualified leads to take. Ultimately, we want to get on the phone with these top-tier leads to not only try to make a sale, but to also explore possible partnerships and discuss their current challenges. Your action might be a purchase, a download, or a demo; regardless, make sure the desired action is clear.
By the time users reach the end of the drip campaign, they should have a clear picture of their unique problems, how you can help them solve them, and how exactly you can work together. Ideally, when our customers are ready to buy, they have a good understanding of content marketing and its long-term commitment. Eliminate as many surprises beforehand by working backward from your end goal.

Determine Frequency of Your Drip Campaign

Next, think about the frequency of your emails. Let’s say, your drip campaigns is about a course on a specific skill. You can space these emails out for two to three days each — rather than 7 or 14 days apart. This way, your viewers will easily recall what the email is about. The rules of how often you should send an email isn’t set in stone. So, if you’re in doubt, test your results or ask your customers.
Let’s say, you have an educational drip campaign about your product tutorials. Try to find out your open rates if you send tutorials every two days, five days and so on. Are customers more likely to open your email, if the previous one is still fresh from their minds? Check your analytics to find out.

Determine Your Email Sequence

Next, it’s time to determine your email sequence. The sequence of your email campaign should be in sync with your objectives. What do you want your users to achieve by the end of the drip campaign? Will these emails help them achieve it?
The emails you send should serve as a customer’s path to achieving your objective. As for how many emails you’ll send, you can go with as low as five emails and a maximum of ten emails, but there’s really no limit. Just don’t go overboard! Simply send enough emails to get your message across.

Create Irresistible Subject Lines

How do you write an email that gets read? It all begins with an irresistible subject line. Here are some tips:
- Keep It Short
- Add a Personal Touch
- Be witty
- Use a Call-to-Action
Select your content and create the campaigns.

Now that you know whom you’re targeting, you need to generate a message that’s helpful and grabs their attention. What do you want the user to do? Or, what do you want the user to learn? When it comes to selecting content, it all goes back to where your lead’s focus currently resides and how close he/she is to making a decision. For those who aren’t purchase-ready, include blog posts and other content covering a variety of questions and concerns. These readers aren’t ready to jump on a call about budgeting, targeting, and possible solutions — they’re just testing the water, and it might be too cold.
Based on your answer, write copy that’s clear, actionable, and attractive. Maintain the voice that you’ve built for you brand, but make sure that your message is clear. To move qualified leads closer to a buying decision, focus on content that digs deep. Think whitepapers, case studies, and demos that clearly highlight your understanding of their problems — and how you can be the solution.

Here are some phrases you can use to create an actionable email:
- Shop now, Share, Get social, Spread the word
Combine this with phrases related with time to create a sense of urgency:
- Only [number] days left, today only, Limited-time, offer ends at [time], Sale ends at [time]
Automate your emails.

Once you’ve decided on a strategy, start sending. To do this, you can either implement your own custom drip software or buy an off-the-shelf product that’ll have you up and running in minutes. Once your content is ready, it’s time to let your marketing automation solution take care of the heavy lifting. The content you’ve selected — blog posts, external articles, whitepapers, case studies, etc. — that covers the basics should be delivered at a routine pace.

Drip Email Tools

For those leads at the bottom of the funnel, we utilize content to address questions and objections that might slow down a potential sale. These emails are best delivered via triggers, like link clicks, open rates, or lead qualification. As leads approach the decision-making part of the process, they’ll need answers quicker; match that pace, or you’ll lose their interest.
Ultimately, developing a drip campaign isn’t a plug-and-play method to maximize sales. Rather, it’s a powerful tool to create prepared customers. Put in the work, and your drip campaign will result in a flood of new business.

Evaluate and Adjust

Just because your drip campaign is automated doesn’t mean you can let it run unsupervised. You spent a bunch of time researching user segments, and it’s important to readjust those segments and your strategy based on the results.

Evaluate, adjust and repeat

If you aren’t getting as many clickthroughs as you want, try rewriting your calls to action; if you aren’t meeting your conversion rate goals with your sale-closing email, try more educational communications before asking any user to pull the trigger.
Evaluate, adjust, repeat.

Conclusion

Drip email campaigns are of great help when it comes to getting users and popularizing your idea/product. Though, different strategies may work for different companies and products, we have given some basic steps that anyone can follow to create a successful drip campaign. Just follow the steps and tweak the details according to your needs. If you have some other tips, please let us know in the comments section.
January 25, 2020
What is Drip Email Campaign?
Whether you’ve been using email marketing automation for years, or have just started to dip your toes in, you’ve probably come across the concept of “drip campaigns”. Email drip campaigns are intimidating. They’re complicated, requiring you to create a bunch of content, write a bunch of emails, and then stitch it all together somehow.

What is an Email Drip Campaign?

An email drip campaign is a series of messages that are sent, or “dripped,” in a predefined order at a predefined interval. So, for example, if someone joins your email list, they receive Email #1 upon signup, Email #2 three days later, Email #3 five days after they join, and so on.

Must read: How to validate your SaaS idea before building an MVP?
Relevant read: How to Track Customer Acquisition in SaaS?

The primary goal of an email drip marketing campaign is to attract the right subscribers. And send subscribers highly relevant emails that encourage them to commit to your call to action. Even though these are automated emails, they can be personalized with your contacts’ name, company info, customer behavior, and more.
Automated email drip campaigns have been proven to perform better toward reaching your business objectives, for example:
1. To effectively nurture your leads,
2. Communicate regularly with your customers,
3. Increase sales or
4. Re-engage lost customers in a scalable way.
Drip campaigns are commonly used to communicate to new subscribers or someone who made a purchase but didn’t join your email list yet, but you can use them at any time.

What makes a drip campaign successful?

To create an effective email drip campaign, first, you need to pinpoint your pain:
- Do you need more checkouts?
- Drive back to your website your one-off website visitors?
- Do you need to increase engagement among your existing subscribers?
- Or onboard users smoothly so that they set up their accounts and start using your service?
All of these can be automated via the right drip campaign!
The secret to creating the perfect drip is to revisit it along the way; feed your insights and results into your existing drips and customize them accordingly.

Relevant read: Essential Tips for Marketing Your Business to Boost Profitability
Important read: Challenges Faced by SaaS startups

Common Types of Drip Campaigns

A drip email campaign is a primary nurturing/communication channel with your prospects and customers. Let’s look into how most common drip email campaigns are structured.

Welcoming

You did a great job at marketing your product, and you’ve gotten a lot of users to subscribe to your newsletters or sign-up to learn more about it. But how do you turn these new users into actual customers? How do you get them to try your product? Why should they be interested on what you have to offer?
That’s where welcome emails shine — they introduce users to your products and highlight what you have to offer.

Welcome campaign

Since the goal of a welcome email campaign is to deliver the first unit of value (aka the ‘Aha’ moment), you can stop this series of emails at any time when user becomes an ‘active user’. At this point, prospects understand your product value proposition and the next step is to teach them how to get maximum value from your product

GETU’s Welcome Email

GE Learning Technology (GETU)’s welcome email begins with a clear introduction of its business and benefits outlined in bold, followed by a video that provides a more in-depth explanation of its services.

User Onboarding

If welcome drip campaigns introduce your customers to your business, then onboarding campaigns are here to make them stay. They’re useful to software companies who encourage users to try their free trial first.

User Onboarding

For example, if a user submits a registration form to create an account on LinkedIn, he/she will receive a welcome email. If the user never comes back, he/she will receive a series of welcome emails to encourage them to come back. On the other hand, if a prospect has registered to LinkedIn and started using it but hasn’t completed their profile details, then LinkedIn’s user onboarding emails will be sent. These explain why and how providing more profile information can enrich a user’s LinkedIn experience.

box’s user onboarding email

Cloud storage app Box employs drip campaigns to teach people how to use their product.

Also read: Bootstrapping SaaS Startups
Relevant read: Email writing for Engagement stage

Nurturing Leads

Some users need a little push, or nurturing — engaging promotions until they’re ready to buy your product. As a result, most businesses nurture their leads by offering emails with links to relevant content such as newsletters and webinars.

Nurturing Leads

Prospects don’t always come through your free trial gate. Downloading a marketing asset, such as a whitepaper, industry research, case study or signing up to a webinar is another way to start a communication process with a prospect.

Zapier’s email

Zapier sends new users a nurturing drip email to help them brainstorm automation ideas.

Product Engagement

Product engagement campaigns are essential to a SaaS company with a freemium business model. Companies that use freemium models need to ensure that customers who aren’t paying for the product right now are engaged and increasingly use the product.

Product Engagement

The math here is pretty simple: the more often someone engages with your site, the more likely they are to convert into a paying customer. Engagement emails are a type of drip campaign that invite the recipient to return to your site and look around, triggered either by some on-site activity or a general lack of activity.
Social sites are a great example of how to use activity-based triggers. If someone on Twitter mentions you in a tweet, Twitter can send you an alert-style email, encouraging you to visit Twitter and respond.
But it doesn’t have to be just happy feelings; guilt can work as well. If you don’t log an activity in fitness app RunKeeper for a while, they’ll send an automated “We miss you!” email. It’s a subtle way to remind you that you should work out, combined with a touch of nostalgia for the app they hope you’ll use while exercising.

RunKeeper’s email

RunKeeper sends users who have not logged a workout in a while a re-engagement drip email.

Promotional Drip Campaigns

Promotional emails are used to upsell, promote and inform customers about limited-time promotions, special offers, new products and discounts.
“You might also like” isn’t just for Netflix bingeing—recommendation engines are a cornerstone of nearly every giant online retailer. The more a company knows about you and your buying habits, the better they can predict what you will and won’t like. With that info, they can send you targeted drip emails that contain products or coupons specific to your purchasing tendencies.

Jaybird’s Promotional Email

Jaybird’s email which introduces its wireless headphones is one good example.

Relevant read: How to Set Pricing for Your SaaS Product?
8 Ways to Toggle SaaS Customer Retention

Confirmations

You’ve closed the sale, or better yet, convinced a user to stick with your product for another year with a renewed subscription. But your drip email work isn’t done. You can also use a drip campaign to confirm your user’s purchase renewal—just set up a “thank you” auto-responder that goes out right after they hit the “purchase” button. In that confirmation drip, you could include some links to your product’s newest features to re-engage them with your brand.

Confirmation email

Fairfield uses drip campaigns to confirm user reservations, and show off some of the hotel amenities.

It should be a no-brainer to send your users an email receipt after they make a purchase, but you can also leverage that communication with related products and upsells. And with confirmations for things like plane tickets and hotel rooms, send a quick email a day before the event to put any important confirmation codes at the top of the user’s inbox. Then, perhaps, that same drip can send another email a few days later, asking them to review your product or service and offer a coupon for future purchases.

Conclusion

In this article, we have seen what is drip email campaign and learnt about different types of drip email campaigns. If used correctly, drip email campaign strategy can be of great value to the marketing and growth of your company. With drip email campaigns, you will be able to get the right subscribers, nurture your leads, increase sales and/or re-engage lost customers.
So, apply the suitable drip email campaign strategy right now, and get started. Let us know your views in the comment section.

Also read: How to Design Drip Email Campaign?
January 24, 2020