Here are my Top 10:
1. “Easily consumable and user-initiated.”
Say that term, then repeat. All client experiences, including software trials, sales, on-boarding, training, expansion of product usage and support, should all be done through the lens of being – say it with me – easily consumable and user-initiated.
Prospects and clients should be able to interface as much or as little with you as they desire. Tools, information, flexibility should all be at their fingertips. Allow them to experience all aspects of your SaaS offering in a way that is painless, unobtrusive, easily accessible and available on their terms.
2. Hold off on the elephant hunt.Too many new SaaS companies are looking for the big win with big Fortune 500 companies. By definition, selling to the big elephants requires long sales cycles, and a significant cost of sale to close those large deals. Meanwhile, they are burning through a lot of cash trying to get the deal closed. Unless you are well funded – which most aren’t today – this will spell trouble.
I remember in a past-life where we were getting 100s of leads, but none from Fortune 500 companies. The VP Sales famously (infamously?) stated, ”These are the who’s who, of who cares.”
Wrong. Those non-Fortune 500 companies are the ones that are actually interested in your solution.
Needless to say, putting too much effort into selling to elephants nearly bankrupted the company. After this change in tactics, and increasing the frequency of inside sales with smaller deals, this change in tactics is what kept the company afloat long enough to get to an exit.
Consider the strategy of salesforce.com that started out selling to small- and medium-sized businesses. It was not until they started to have a larger mass of users, from hundreds of smaller firms, that they became appealing to the larger enterprises because they were able to prove that they could handle a large volume of users.
3. Configure, don’t customize.
Customizing a solution within a SaaS-based delivery model will make it very challenging to scale because upgrades and updates to software, documentation, and training material become very difficult and costly to do. Instead, allow configurations, which do not change the core product, yet provide some tailoring to specific client needs and workflows.
4. Marketing can close deals.
If your software has the easily-consumable and user-initiated ability to have prospects try, test, and ultimately buy, then it becomes all about conversion from lead generation to the purchase. Make this an expectation and incent marketing to close deals.
5. Understand your cost of sale.Marketing, inside sales (over the phone) and outside sales (in-person) can all close deals. Each of those sales tactics has significant cost-of-sale implications with marketing having the lowest impact, while outside sales traditionally bring in the highest sales.
Given each method of sales, makes sure it maps well to the appropriate deal size. For example, it would make little sense to have an expensive outside sales cost attached to a $10,000 deal. Push smaller deal sizes to the appropriate bucket.
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6. Understand usage rates.Most SaaS solutions are easy to acquire and use; however, this also makes them easy to remove and replace. For this reason, it is critical to understand adoption and usage rates so that you can intervene if they drop.
Sadly, most SaaS companies have minimal useful usage data, yet it is absolutely critical, for many reasons, to have great detail in how, what and how often an individual customer uses specific features and the application as a whole.
7. Have a ‘Customer Success Playbook.’
Often driven by a customer success management team, it is critical to have clear objectives and outline the outcomes you need to achieve with your customers at different phases of the subscription lifecycle.
For example, phase one of a lifecycle often is centered around user adoption and usage – you should have a consistent and scalable approach to customer interactions that supports, facilitates and ideally accelerates your customer’s usage of your software.
Phase two of the lifecycle might have business value attainment as the key desired outcome, where there are actions taken to ensure and validate that the customer is achieving – or trending towards achieving – the key business objectives that drove them to buy your solution in the first place.
Other phases may have objectives such as solidifying the customer as a reference account, or identifying growth opportunities. The final phase will likely be the desired outcome of securing customer renewal of your software.
It is very important that each CSM on your team is working to accomplish the same outcomes for each phase of the subscription lifecycle, and that your overall approach to your customers is consistent from one CSM to the next. A customer success playbook will go a long way to accomplish this.
8. Don’t be an island.As stated earlier, SaaS applications are relatively easy to replace – therefore you need to make it harder to do so. A great way to do this is to ensure you are not an isolated solution but rather a solution that integrates (via web services, APIs etc.) or is somehow interdependent with other solutions commonly used by your client base.
Make sure your solution is intertwined with the greater ecosystem of products that your clients use. There is strength in numbers.
9. Broaden the impact of your SaaS solution through services.Provide service offerings to complement your solution. These services should focus on increasing your “stickiness” with your clients by focusing on securing adoption or interfacing/integrating with complmentary solutions used by your clients or otherwise augments your overall business value. Where possible, make your solution user-initiated and easily consumable.
10. Make client retention a corporate mantra.Churn kills. This is a well-documented truth. While sales are trying to close deals or expand business, your entire company should be focused and incented on client retention.
Sales, marketing, support services, finance, product management and development all have important roles in client retention. This is not just the concern of your client support group. Do not let all the other impacting departments off the hook. Instead, hold them accountable for their part in client retention.
Understanding these 10 foundational principles can be crucial as you navigate the path to success in your amazing SaaS journey.