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 >
Customers are the lifeline of any SaaS business. Without paying customers, businesses growth comes to a halt and capital eventually runs out. Burnout becomes evident and staff morale goes down. You can therefore understand why having paying customers is crucial to the growth and sustainability of any business. Getting customers is easy, but how do you win them?
The SaaS business model is at the heart of today’s online economy. Big and small companies are experimenting with the SaaS business model, with varied success. Such experiments do not come as a surprise given the success of pioneer SaaS companies like Salesforce, Omniture, LogMeIn and others. However, while the prospect of getting recurring revenue is enticing, there is churn to think about. Ultimately, the fool-proof way of reducing churn is to win your customer’s head and hearts. And here comes the big question: how do you do this?
Customer satisfaction is one of the components that contribute to the success of any SaaS business. Poor customer satisfaction can increase churn, erode brand confidence and ultimately reduce your revenues. While product development is good, any development of your app should be geared towards fulfilling the needs of customers to win them.
Let’s look at some of the ways through which you can win customers to your SaaS business.
1. Deliver your promise
Business is about being faithful to your customers and delivering your promise. When it comes to delivery, it is not just about your product, but your whole brand. Users should have the experience they expect from your brand right from when they come across your content on your website or connect with you on your social media network, up to when they sign up for a trial or pay for your service.
Don’t sit on the fence when it comes to delivering. Ruth Stevens of eMarketing Strategy points out that most businesses lose sight of their product or services by focusing on ways to keep customers. Before you think of pleasing customers, know what you want to offer.
Delivering your promise is part of your brand. To successful execute your brand, you need the 3Cs as reviewed by Dr. Alan Middleton (Executive Director of Executive Development at Schulich School of Business, York University). The 3Cs refer to the commercial, culture and community pieces of business that work together to result in strong brand equity. The outcomes of the 3Cs working together include less price sensitivity when it comes to competition, more sales, and loyalty among customers. Winning customers over makes them loyal to your brand.
2. Do the SCD Test
Before you go out to market your service, do the SCD test. Every marketing promotion that you put out, whether online or offline, should be Simple, Creative and Dominating. Don’t be clever with your target market. SaaS founders and teams can get egoistic, trying to sound all geeky with marketing. Wrong approach. The best ad is one that is simple and clearly communicates your message.
Ever wondered why GoDaddy commercials are always a resounding success during Super Bowl? The company must have one of the most creative marketing teams. Simplicity, creativity and domination are evident on their commercial ads.
Great marketing should entertain as well as deliver your message. The message is the most important part of the marketing.
Knowing your audience is key to identifying how to approach them with your messages. And with the right approach, you will see improved brand awareness, loyalty and sales.
3. Needs Before Inventory
One of the mistakes that most SaaS companies make is waiting for the “right” time to launch or add a feature to their app. Granted, you have to be careful not to ship a half-baked product. However, you do not have to ship a perfect product. Think of the needs of your users and address them the best way you can at that moment. Buffer got its first paying customers in 7 weeks. And just so you know, what they launched and what is Buffer in 2013 are very different in terms of features and functionality.
Eric Ries’ Lean Startup Book talks about shipping when you have the MVP (Minimum Viable Product). One of the pluses of shipping an unfinished MVP is that you get feedback quickly and can know for sure what features your customers are looking for. You do not have to burn R&D capital and hundreds of hours coding features that your market does not need. I recommend you keep up with Ries at his blog Startup Lessons Learned for more insights and advice on lean startups.
Assumption is the mother of all screw ups. Yes, don’t assume you know what your customers want. Ship your product, let it be criticized but you will come out a winner knowing what you should spend more time on.
4. Believe in your customers
Another stumbling block to winning customers is waiting for them to prove their “worth”. Many SaaS businesses offer their services at different price plans. The SaaS Freemium model is popular among startups mostly because it reduces the entry barrier of users and can be crucial to understanding which parts of the application are popular.
However, most businesses do not take steps to cement the relationship that they have with free users from the onset. Instead, more focus is directed on paid customers. Erick Duckhot of Crucial technology warns businesses against approaching customers with the mindset that they must “earn” their way to a good relationship with the business. From the onset, assume that any new customer can be loyal customer and treat them as such.
With successful education and inbound marketing techniques, you can nurture free users to become paying customers. Hubspot is a leader in inbound marketing and the company practices this from the onset. New leads are nurtured through consistent content education that helps them realize the benefits of the company’s software . Apart from this, every new lead is given a dedicated point of contact that can help them with information about the company’s services.
5. Customers first…bottom line later
While profits are crucial, it is customers who generate them. Thus, it is only logical to focus on customers first and your bottom line later. Joel York talks about the recurring revenue mirage as one of the reasons why SaaS companies fail.
Engage with your customers and ask them what they would like with your service. Feedback coming from actual users of your app is more valuable than those you would get from consultants. It is customers who know their pains best and what they want. Listen to them. As you take care of your customers, you should know which metrics to watch. We covered the essential metrics that any SaaS company should be keeping tabs of. And profit is not one of them.
Winning customers to your SaaS business is all a matter of knowing what to approach first and how. The “what” is the action to take and the “how” is the way you do it. Founders need to listen to their customers and go an extra mile to win them. Having a great product is not enough to win customers if your support, marketing, and customer relationship are wanting.
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