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A Framework For Building SaaS Products That Don’t Churn

When you say “reduce SaaS churn”, most people will immediately imagine tactics like drip email campaigns, great onboarding, customer marketing, gamification and automated alerts when users show signs of leaving. But this post is not about tactics. This post recognizes that users are smarter than any of the cute tricks we can come up with, and it attempts to get to the core of why there are some products that business users keep paying for, and others they discard.

A Framework For Building SaaS Products That Don’t Churn

If you’re a founder or product manager, I’ll encourage you to think deeply about this stuff, versus thinking about your next “growth hack”.

Products on which company processes are based

There are products on which organizational functions are dependent and processes are built. These are usually CRMs, Marketing Automation, HR software and Support software. The defining features are

  • they’re used by decision makers for reporting purposes and are often used to track teams’ KPIs and goals
  • they’re used to run day-to-day functions of the team and organization, for example, the process of applying for and approving employee leaves, or changing the stage of a sales opportunity
  • some people are logged in to the system during their entire working day
  • others log in once in a while to complete certain tasks
  • the system collects and retains valuable data that companies are not comfortable losing

Some observations about these products are

  • the sales cycles are usually longer than a month
  • customers will rarely buy these products without first being sure of the processes that are dependent on them
  • they need extensive API support and data integrations, because the data they collect becomes more valuable once combined with other data
  • heavy cross-functional training is required after the sale, and the product takes the blame if a customer org. doesn’t adopt and use it to the best of its capability
  • you need a lot of quality documentation so that you’re not overburdened with support tickets

An important note about products used by decision makers

When I started out at VWO a few years ago, the most important metrics were “free-trial signups” and “paid customers” (about 95% were self-service monthly subscriptions). Back then, Google Analytics (GA) was our most important source of data. We recorded free-trial signups, upgrades to a paid subscription and revenue in GA so it was what we looked at everyday.

In the past couple of years, we’ve started serving more mid-market and enterprise customers. Because of this, a few things have changed:

  • The average deal size has increased from $x00 to $x0000
  • The quality of free-trial signups matters as much as the quantity
  • A large amount of revenue comes from payments made through bank-transfers and other offline methods
  • “New MRR” is now more important than “new customers”

Because of all these changes, Google Analytics isn’t important anymore. Instead, the big decision are made after looking at reports in the CRM and our database, where all lead/deal/customer/revenue data sits. Through this shift I observed how when businesses evolve, the metrics that matter to them change, and this has a domino effect on the SaaS products that fall in and out of favor.

Now here’s another interesting anecdote: VWO has a large number of ecommerce customers. For the majority of these businesses, Google Analytics is the “source of truth”, so we simply had to build an integration with GA. In fact, we once lost a big customer because their VWO test reports didn’t agree with their GA data (completely possible and for good reasons, read this to understand why). The internal VWO champion tried to fight it out and explain the difference to management, but we lost the customer after some time.

So my point is this… it is well worth your while to build capabilities that will be used to make the important decisions, and if that’s not possible, then align your product with the primary reporting tool used by your target market.

Products that give results with minimal effort after initial setup

Some of these are:

  • Lead generation pop-ups, sidebars
  • Landing page software (specially when tied to on-going PPC campaigns or SEO keywords)
  • Retargeting software, like Perfect Audience and AdRoll
  • Exit intent pop-ups, almost always tied to lead generation
  • Personalization and behavioral targeting
  • Email automation like Vero and Intercom

While you’re building a product that keeps producing results with minimal interference, give a thought to how you can add public branding for that little bit of ‘virality’.

It’s also important to note that products tied to performance will quickly be removed when that performance isn’t enough. In this case, the product itself may be great, but it is dependent on something else working. For example, landing page software gets abandoned when the Adwords campaigns it was used for aren’t working out.

Products that monitor and provide reports and alerts on a recurring basis without needing additional effort

Few that come to mind are

  • Mention (social mention tracking, we’ve had it on for at least a couple years… rarely log in but open almost every daily email report)
  • Server Density (server monitoring)
  • SEOKeywordRanking (SEO keyword rank tracking; old school interface and not updated in a long time, but am sure its creator Will Reinhardt doesn’t need to work anymore)

While building your product, talk to users about the data they find most useful and want to look at everyday, or see what parts of your reports are accessed most often, then send that data out as daily/weekly emails. It becomes a part of users’ morning routine to check the emails and note/discuss/alert if something’s going right or wrong.

Products that enable data flow between different systems

Think Zapier, PipeMonk, Jitterbit and Informatica. Admittedly, data integration is more of an enterprise problem, but the good thing is that once put in, they’re very difficult to remove. That’s because they’re usually implemented after someone high enough has identified the need to have all the various data silos talking to each other, and that robust decisions can’t be made without a complete picture of the issue at hand.

Case study: Hubspot
  • Processes are based around the product? Yes, for marketing and sales
  • There’s someone almost always logged in? Yes, marketing
  • Managers use the product to report on performance? Yes, primarily marketing qualified leads, then customers and revenue
  • Product collects and retains valuable data that customers are not comfortable losing? Yes
  • Has components that produce results without needing on-going effort? Yes, lead-gen landing pages, website personalization, automated rule-based emails
  • Components that monitor and alert automatically? Yes, primarily alerts to sales owners about lead activity, and other alerts around social media, monthly/quarterly goals, etc.
  • Components that enable data flow between different systems? A well maintained and documented Salesforce connector, otherwise they have a platform for developers

As you can see, Hubspot is doing pretty well in minimizing churn. It seems to me that would be the case with most large, successful SaaS products. In fact, understanding the reasons why organizations keep paying for products is why large successful software are large and successful, as compared to just large.

I hope you’re able to use this post as a framework to think about what makes products stick, and apply those principles to the products you’re managing or building. Also, do you have anything else I can add to this? For some reason it seems to me the list is incomplete.

Guest Post by Siddharth Deswal, Lead Marketing at VWO.

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5 things to think about before starting your company blog

A few days ago, a friend of mine who’s starting work as a content marketer told me that she was putting together a plan for the company’s new blog. She was starting from scratch, she said, and this meant that she would putting the base in for future marketers in the company to take off from. This meant that her task was very important, as well as would be set the benchmark for the team.

Roadmap To A Cashless CountryShe asked me for a few pointers, and I jotted down a five point list I’ve distilled from my time as a content marketer at Freshdesk. Her experience is as a sales professional, and this gives her a unique vantage point of the system, and I thought this would be a good lens to look at the process through.

Here’s what I told her –

1. You have to know what your blog stands for, what it’s going to advocate over the long term. For example, the Freshdesk blog talks about how customer support is very important for companies and how new companies are looking at support as integral to their success. That’s the blog’s positioning. This makes the blog a place for support professionals to come in and read about their peers and get tips to improve upon their skills. It has become a destination for them. This kind of thought leadership is beneficial to the business as a whole, because by garnering top-of-the-mind recall among professionals, you have made your product one of the first ones in contention when organisations look for a solution. You have to do this for your company.

2. Once you do that, you have to be consistent. Twice a week would be ideal. A productivity newsletter I follow recommends Monday and Saturday as the best days for a blog to go out, and I have found these two days great for traffic as well. This done, you must have a pipeline for over a month at least. Meaning that the post you put out today should have been written a month ago, and you should have eight more ready for the next month. Don’t go live before filling up the pipeline. This doesn’t mean you don’t write an immediate, urgent post responding to something in the present. I just mean to stress that the blog should never go silent on your posting days.

3. Invest in a good writer and researcher. And yes, they both may be one person. Hiring tip – I use the word ‘good’ knowingly. Don’t go for eloquence (If that comes along, it’s a bonus). Instead, go for the grinder, the person who will sit down and write. This person is more likely to get the job done for you than an aspiring novelist (I should know. I’m one!) Grammar can be learnt, discipline not so much.

4. Benchmark yourself against great blogs in your domain. For example, if you are in the CRM space, read Salesforce, Predictable Revenue, and of course, Hubspot, and so on religiously. Read what newcomers are doing and writing about. See what new strategies blogs are using to grow audiences and more traffic. Think about how you can employ them for your blog. Replicate, measure, repeat.

5. Look at the blog as another top-of-the-funnel point, not as just a branding exercise or somewhere for the company to write a few things. Leads from the blog can be pure gold if you do this well. The important point is that this will take time. At least six months to an year of work has to be invested before returns emerge. Don’t be impatient. Quality writing takes time. I can assure you that once you get the processes in place, the returns will be cumulative.

Organisations sometimes hire a writer or two and put them in charge of things like landing pages, blogs, whitepapers and in general, everything that needs to be written. This can work unto a certain extent, but the best way, in my opinion is to keep marketing and writing as separate activities, meaning that a content ‘marketer’ can look at growth, traffic and SEO while content ‘creators’ can concentrate on churning out stuff the target market wants to read. These are different things, and need completely different skill sets. This might delegate and encourage ownership in a clear, more efficient manner.

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3 companies who are doing content marketing in the right way

branches&creaturesAccording to Content Marketing Institute, 90% of the companies are using content marketing, however only one third of third of them are satisfied with the response that they get. According to DemandMetric, it is 62% cheaper than the traditional marketing.

Is content marketing an integral part of your startup? Are you pouring in hours of hard work and efforts to build a strong brand on the plinth of content marketing yet failing in some way to get the desired traction? Often it is beneficial to adopt strategies that made the existing brands the best in business rather than searching for never-before tried techniques.

In this article, lets learn from these 3 companies who do content marketing in the right way to build customer centric brands, increase the product users, signups and get established as thought leaders in their niche.

HubSpot – HubSpot is an inbound marketing and sales software started in 2006 with 3 employees, 3 customers that gained more than 10,000 customers, 668 employees and $77.6 million revenues in 2013. A feat almost impossible to achieve for a Business-to-Business enterprise.

How did they grow – HubSpot generates a huge amount of free content in form of e-books, webinars, blog articles and infographics that gets them millions of page views. The CMO at HubSpot Mike Volpe says that the inbound (organic) leads are converted twice more than the outbound (paid) leads. The strategy that worked wonders for them is that below each blog post is a free e-book or webinar based on that topic. The reader doesn’t have to look around for free resources, the relevant freebies are presented to him. So suppose I am reading an article on “How to create my Facebook business page”, at the bottom of the article is a call-to-action link to a free e-book on setting up the Facebook page and how to master all its features.

Key takeaway – HubSpot uses a range of educational, informative and actionable free content and free tools to help the potential customers. The content is separated into 3 categories – sales, marketing and agency to ensure that the content doesn’t mingle with the other niche and they allow their employees to create expert content for the blog.

Dollar Shave Club – Getting a sound footing in the shaving razor industry niche dominated by traditional honchos like Gillette and Procter and Gamble is a thought that would scare most of us. A four year old brand, Dollar Shave Club broke into this market with their own razor blades shipped to men on a subscription model using video content marketing to gain 12,000 customers within the first 2 days of their product launch. They now deliver razors and other men’s personal grooming products to more than 1.5 million happy customers who have a great relationship with the company.

How did they grow – Dollar Shave Club Wiki uses funny and entertaining videos to connect with their target audience and gain their attention. Their CEO Michael Dublin stares in each of these videos, they have no celebrity endorsements, they use such videos to launch a new product and their first video garnered 5 million views within the first 3 months. After understanding their audience’s pain points, they launch products to help the audience and speak in a humorous language that can be easily understood by even layman.

Key takeaway – Your content marketing doesn’t necessarily need a blog. First zero on the social networks where most of your audience is present, (in this case YouTube) and then adopt a content strategy that’ll attract the audience on each of these networks. Conveying your message in a humorous tone and with visual content has a better impact.

Buffer App – For the social media scheduling app Buffer, content marketing accounts for 70% of their daily signups. Each of their blog posts gets on an average 1900 shares! Buffer uses content marketing as their primary channel for growth, they’re known to have built their company on the platform of content marketing and guest blogging.

How did they grow – A blend of data-driven insights, curated content, storytelling and transparency has helped them catch attention of the target audience. Their content focusses mainly on making the job of their target audience (content crafters and marketers, digital marketers and social media marketers) easier. Their founder, Leo Widrich used guest posting to gain from 0-100,000 customers in the first year. Their blogs are an excellent example of content curation, which points to another fact – you don’t always have to reinvent the content creation wheel.

Key takeaway – Actionable, unique, thorough and detailed listicles that help your target audience simplify their task are always well-received by the users and audience. Guest posting unique and valuable content is far from being dead, it helps brands gain immense traction.

Content marketing doesn’t give instant rewards, it takes time to craft the best quality content, distribute it among the media sources, get attention of the target audience and gain the market leadership. When done consistently over a period of time, positive results start showing and it’ll help your brand scale up immensely.