Behind the question of whether a billing system can help your SaaS business grow is the question of what it means for a SaaS business to grow. This guide tackles both — it creates a model you can use to approach SaaS growth and a 360-degree view of how your billing system fits into it. Read More >
“A chain is no stronger than its weakest link”
Every process has one step that’s weaker than the rest,one constraint that’s bigger than the rest.
And unless you find and fix your weakest link/strongest constraint in a process, states, The Theory of Constraints, you will not be able to improve the overall performance of the process.
Local improvements of individual steps (local optimum), will not translate to the global improvement of the operation (global optimum), if they don’t work towards a single collective goal.
For instance, let’s assume that for a coffee shop, the speed of the cash register is the constraint that’s preventing the shop from serving more customers.
If that’s the case, then “that coffee shop cannot serve customers one iota faster than the speed of its cash register. Literally nothing else will make a difference to the bottom line except an improvement in cash register speed. Not better customer service, not higher quality food, not better interior decoration, not faster WiFi or cleaner bathrooms or stronger coffee or any one of the million other ideas we could come up with in a freewheeling Design Thinking workshop,” explains Tiago Forte, the founder of Forte Labs.
Coming up with the perfect transactional email (local optima) isn’t going to get you anywhere, unless you close the entire loop of the particular communication process, leaving no constraint or bottleneck unattended (global optima).
And the step number 0 will be to fix the ultimate goal of the process.
For example, in the case of a welcome email sent to your new subscribers, the goal is to move the customer from Acquisition stage to Activation stage, with specific actions that will get the users to understand the benefit of your product; to get them to experience the Aha! moment.
The bottleneck might crop up at any stage of that flow - the customer finding the email in their inbox (spam folder alert!), opening the email, clicking the CTA, getting inside the app, following the right steps in the right order without any confusion or frustration and without making any errors, and eventually experiencing the true value that your product has to offer them.
Now, let’s consider a hypothetical version of Dropbox’s activation flow:
It’s evident from the above image that the second step has the lowest conversion rate (16.2%) and in other words, is the weakest link (or the biggest bottleneck) in the process.
So the best way to boost their overall activation rate is to work on that specific bottleneck.
You’ll have to take actions like these to remove the inherent friction and bottlenecks in the Acquisition - Activation flow:
- Having a delayed email verification process
- Providing a link in the welcome email that takes the user directly inside the app, without prompting them to log in
- Collecting information about the customer’s industry and tailoring the demo data in the app accordingly
- Having a short tutorial in place, with the Common Conversion Activities, complete with help snippets and a progress bar (which will also act as a reminder every time they log in)
- Anticipating possible user errors and user frustrations while carrying out tasks, and provide more detailed walkthrough videos specifically to those tasks Offering an incentive upon the completion of the onboarding process
- Sending follow-up emails to sustain the learning experience (Joanna Wiebe suggests using the Fibonacci series (1, 1, 2, 3, 5, 8, 13…) as a guide to send these emails - pack the majority of the information during the first 8 days when the customer is the most eager to get their hands dirty, and then gradually reduce the frequency)
As you can see, it’s not just about the slickest welcome email with the best string of words and the most heart-warming design.
Rather, it’s about the process which the email is a part of.
It’s about the elephant which the trunk belongs to.
In some versions of the above fable, the blind men realize their misconceptions, and decide to collaborate - listen to what the other men are saying and work together to see the elephant as a whole.
Collaboration doesn’t just apply to teams. Every activity in a process has to collaborate with the other activities and work towards one common objective.
If you’re going to keep your head to the grindstone and fine-tuning individual activities with a myopic vision, that’s what your process is going to look like - a disaster of an animal.
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