I apologize for missing last week’s edition of the Tattler. The dog ate my power. Seriously, I am staying north of San Francisco, and the big storms at the end of the week knocked out the power in this area for a couple of days. No power, no Tattler. Where have you felt powerless in your SaaS business recently?
So, that means the theme this week is SaaS Power. How do you increase your power as a SaaS provider?
Time to Value: A Key Metric
If you don’t Wow! them, you don’t keep them. Nello Franco, Senior Vice President of Customer Success at Talend writes about the critical importance of Time to Value in a SaaS business. He lays our a powerful framework for minimizing your Time to Value.
Step 1: Identify the unit of measure for value and set a quantifiable objective
Unless you define a “currency” by which you will measure value, you won’t know whether you’re delivering it. In some cases, adoption/usage may be used as a proxy, but to the extent that you can use a metric that your customer will use to measure the financial impact of your solution, start with that unit of measure. Examples for different types of solutions include:
- increased overall revenue
- larger basket size (for e-commerce transactions)
- higher customer lifetime value
- higher conversion rates
- quicker time to transaction
- lower cost per transaction
Even for a single given solution, different customers may measure value in different ways, so it’s important to connect with them to understand their specific objectives that will justify the time, effort, and funding they’re allocating to your solution. You’re getting their resources because you can solve a problem for them. Figure out how they’re justifying their investment in your solution and use the same currency to measure value.
Empower yourself. Read the whole thing!
SaaS Customer Experience Management
Until recently the only way most companies had to measure and manage customer experince was the Net Promoter Score. Brian Curry, of NPS pioneer Satmetrix, takes managing customer experience to an entirely new level. He points out the Customer Lifetime Value is the most powerful metric for managing most business, and it connects directly to the customer experience.
How do you actually manage to LTV?
Okay, so we all more or less agreed that LTV was the ultimate metric in making decisions and managing our business. We said it out loud. We said it in all-hands meetings. We made posters. Now what? Just go forth and acquire and retain profitable customers? This was much harder than it seemed. It required adopting a holistic perspective, one that held in balance both short-term and long-term objectives. Simple right? Need to decide whether to raise prices? How will it affect LTV? Sure, we’d earn more revenue from current customers but will more of them churn? Would we acquire fewer of them and see our conversion rates dip? How could we get beyond individual points of view and find a data driven way to make decisions? Most of what we saw was performance numbers in the rear view mirror.
A Customer Experience Perspective
As we sorted through it, we realized that managing to LTV required recognition that customers were constantly evaluating our brand through the experiences they were having. And it wasn’t exclusive to the ones they had with our brand. They were comparing their Yousendit experiences to those with other brands and options in the marketplace. They were keeping score; calculating an ongoing value equation. Through this, they were forming attitudes and these attitudes were expressed in their transactions, behaviors, and commentaries. Understanding customer experience could help us understand and predict behaviors. It offered a key to managing LTV.
Sales Predictability – The Begining of Financial Power
Tim Bertrand of Acquia updates the ‘ABC’s of the sales process to the modern, digital sales funnel.
First, before the opportunity even goes into Salesforce, a rep has to have a “validated discovery letter.” In order to generate one, a rep must do deep discovery over the phone and then we send the prospect a discovery letter that outlines everything we have learned about the project, we send this back to the prospect, and that letter then has to actually be validated by the prospect – in writing. It’s not a situation where we had a conversation and I sent you something and then I put the opportunity in Salesforce. Instead, the prospect has to respond back and say – “Yes. You’ve heard me correctly” or “Oops. You have this part wrong”. One of the biggest issues I see with any startups I’ve advised is that a good portion of their pipeline is “stuffed” with junk that reps entered in order to impress their boss, or convince someone they are doing their job. In our organization, if you don’t have a validated discovery letter – Sales Ops deletes the dollar value on your opportunity, sends you (and CC’s your manager) an email, and you either need to resolve the issue or you don’t get credit for the opportunity.
Super SaaS Fundings:
Bill.com – $50 M Series ‘F’ on February 11, 2015.
Conductor – $27 Million Series ‘B’ on February 12, 2015.
Unchained Labs – $25 Million Series A on February 12, 2015.
Quixey – $60Million Series ‘D’ on February 12, 2015.
Newest SaaS Services from Product Hunt
Cursive – Build your website with a human.
Revue – Create an engaging, gorgeous, weekly digest.
Dropbox for Gmail – Access your Dropbox files, right in your inbox.
Follow – Follow everything you competition does online.
Infographic of the Week:
Other Great Weekend Reads:
Brad Feld creates a simple rule for understanding the relationship between Growth and Profit. Brilliant! The 40% Rule for a healthy SaaS business.
In just the past three years, the growth in mobile business software applications has been tremendous. How much are B2B SaaS companies investing in mobile?
What makes a product great? Emotional Resonance. The Essence of a Great Product.
Implementing Customer Success this year? The Guide to Developing a Business Case for Customer Success will help you achieve your customer success mandate.
Want something added to the SaaS 2.0 Tattler – let us know! And let us know your take on the SaaS 2.0 Tattler in general – we’d love your feedback.
Curated by the team at Amity using the outstanding tools provided by Product Hunt, BetaList and CrunchBase. We encourage sharing and subscribing!
#SaaS Tattler Issue 45 - SaaS Power w/ articles by @nfranco, @Satmetrix, @timbertrand and more!
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