The new ABCs of SaaS

November 23, 2013 Paul Philp

ABCs of SaaS

A powerful insight into improving trial conversion struck me while I was watching the great PBS series Mr Selfridge recently. It stars Jeremy Pivin as Harry Selfridge, the founder of London’s famous Selfridges department store. As his vision and strategy came to life, it slowly became clear to me that Selfridge’s was designed to be a perpetual conversion machine. From the layout of the store (why is perfume always by the front door?) to the selection of merchandise and the personal quality of the service, everything at Selfridges was designed to convert customers to the next sale.

As the SaaS business model evolves, converting free trial customers to paying customers has become the most important activity for mnay SaaS companies. However, our approach to free trials remains stuck in the early days of the SaaS industry. What approach do we need if we want to improve our conversion effectiveness? The very best retailers, like Harry Selfridge, didn’t focus on closing their customers. Instead their focus is on coaching them to meet their own goals quickly and conveniently.

Selfridge’s secret to effective conversion was the powerful combination of store layout and function (product design) and personal service (customer success).

In the past few years, we have taken on the product design challenge with gusto and verve. The quality of our products has improved in every way. However, the way we engage with customers remains unchanged. Imagine Alec Baldwin cast as Harry Selfridge and starting each day with a rousing chorus of the ‘Coffee is for Closers’ speech for the sales professionals. Somehow, I don’t think PBS would be running that story today.

The key insight Harry Selfridge brought to retail is that customers have problems and they will buy from the store that helps solve them. Instead of moving people through a fixed sales process, Selfridge selected and trained his sales people to coach. What are the latest fashion trends for ladies? How can a gentlemen travel in comfort? What are the best appliances for French cooking? Selfridge coached customers to meet their goals and the rest is retailing history.

In the SaaS industry, our conversion programs need to evolve from drip marketing campaigns to Selfridge’s personal coaching approach. The experience of solving some part of their problem with the guidance of a personal coach builds trust and confidence. That trust and confidence becomes the foundation of a long-term successful and profitable relationship with that customer.

We no longer sell our products as one-time transactions. We provide them as continuous services and collect payment over time. If our goal is to monetize each relationship effectively, we need to let go of the hard ‘Always Be Closing’ approach of the enterprise software model, and embrace the personal coaching-based, ‘Always Be Converting’ approach that turned Harry Selfridge into a retailing legend.

The new ABCs of SaaS are ‘Always Be Converting’ and ‘Always be Coaching’.


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