Friday, May 4, 2018

Bad Customers Can Kill Your SaaS Business


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Everybody’s got a story about bad customers.  In case you can’t get your fill, a Google search on “customers from hell” fetched 33,100,000 results.

These customers can be infuriating, frustrating, and just plain rude.

But if you’re a software-as-a-service (SaaS) company, bad customers can be much worse than that.  They can be downright dangerous.

No way to recover your costs

For one thing, these bad customers are likely to cost you money, not make you money. 

They may be more difficult right from the start, so they’ll cost you a lot of extra sales time and resources to close them.  They’ll ask for yet another demo, another extension on the free trial, another presentation, another reference, another something or other that will tie up your team.

But soon after the extra effort to finally close the deal, many of these difficult customers will find they’re really not satisfied with the solution.  For whatever reason – functionality, support, price, etc. – they’ll drop their subscription.

And they’ll drop it way too soon for you to recover your higher acquisition costs.  If you paid $1000 to win them, and they only stuck around to pay $100 in subscription fees… well, that’s not a formula for SaaS success. 

Drag you away from a standard product

The other dangerous thing bad customers will do is to drag you away from a single, standard SaaS solution.

They’ll ask for additional features that may not be on your product development roadmap.

They’ll ask for special support terms.

They’ll ask for non-standard deployment efforts.

That’s not how SaaS works… or at least not how it works successfully.  You need to develop, market, sell, and support a relatively standard solution.

There’s no problem configuring the solution to fit a particular customer.  But “customization,” altering the core product and practices, is a bad word in the SaaS world.

Deviating from the standard means problems and extra costs for development, marketing, sales, deployment, training, and support.

Avoiding bad customers

I wish could provide a surefire way to avoid bad customers entirely.  Sorry, no can do.

But I will offer a couple recommendations that should help.


Be clear in your message.  You should make it as plain as possible who your solution is for and what problem it solves.  Prospects should have a crystal-clear understanding of how you can help… or not. 

And the more consistently and plainly you can convey this, the less likely the “wrong” prospect will want to engage with you.      

Identify the outliers early on.  The earlier in the sales process you’re able to identify people that won’t be a good fit for your solution, the better.  However it is that you assess prospects – web forms, phone calls, in-person meetings, etc. – have your radar tuned to those that fall outside your target market. 

Of course, you’re most eager to find areas where you can help the prospect and eventually sell them something.  But it’s just as important to quickly recognize those you can’t help. 

Those that aren’t a good fit just aren’t worth pursuing. 

Tuesday, April 3, 2018

3 ways to fail at lead generation

When the lead generation effort is failing and we’re trying to fix it, we marketing pros usually head
right into the weeds.
 
  • Are there too many characters in the subject lines?
  • Should we add more long-tail keywords?
  • Is the call-to-action button the wrong shade of green? 

It’s not that those details don’t matter at all.  At high volumes, they could matter a lot.

But for many software-as-a-service (SaaS) providers, focusing on those details is a distraction.  We're looking in the wrong places.

When lead generation is failing, it’s usually other reasons that are to blame.

It’s unclear who should buy the solution

Too often, it’s not at all clear who should be buying the solution.  The people who visit the website,
receive an email, or find their way to our blog are left wondering, “Is this solution meant for me?”

It should be crystal clear in all communications WHO should be using the product.  Don’t expect the reader to work hard to figure that out on their own.

And the more specific the better.  Identifying the target user as “B2B companies” or “financial services firms” includes a broad audience.

But if we narrow the description to something more specific – e.g. “life insurance carriers,” or “independent financial planning professionals with more than 100 clients” – prospective customers are much more likely to respond.  It's easy for them to see that the solution is designed just for them. (See "Let Your Prospective Customers Know 'This Solution is for You.'")

It’s unclear what problem we solve

Sometimes the audience has no idea what problem we solve for them.  We’re over-eager to talk about features, features, and more features, but it’s not at all clear why any of them matter to the prospective customer.

In most organizations, the people evaluating the SaaS solution care about growing revenues, cutting costs, increasing productivity, reducing risk, or some other essential business goal.  We need to make a case that that is precisely what the solution can do for them.  Our marketing messages should clearly identify the problem and explain how our solution eliminates it.

Even better if we make the case that the solution solves an urgent problem, one that cannot be ignored or put off while they deal with more important priorities.  The audience we’re trying to reach are busy people; they only have time to focus on urgent problems.   

We’re not where the prospects are looking

While we may be fixated on optimizing our Facebook ads or tweaking our Twitter promotions, that may not matter at all to our target audience.  It just may be that they’re not looking for solutions on Facebook or Twitter.

We can make the same mistake with events, mailing lists, or publications that don’t get us in front of real prospects.  The problem isn’t with the message, the copy, or the call-to-action.  

The problem is that those channels aren’t where our prospects are looking.  They don't see us.

One way to know where prospects are looking for solutions like yours:  ask them.  New customers will usually tell you where they went looking and how they found you.  (See "Listen to your customers.")



I'm not saying don't sweat the details of SEO, pay-per-click, PR, social media campaigns, or any other technique you're using to build visibility and generate leads.  But before you get too deep into the weeds, don’t miss the big issues.

Friday, March 2, 2018

Have your prospects gone missing, or just hibernating?

Here’s a sorry fact:  most of your prospective customers won’t end up buying your software-as-a- 
service (SaaS) solution.

Lots of folks who should buy it, won’t buy it.  They have a problem you can solve.  But instead of fixing it, they’ll stick with the poor system they already have.

Others won’t buy your solution because they’ve never heard of you.  Or they’ve found another option that fits their needs, and they feel there’s no need to look any further.

There are even some prospects that do know you and they do see that your solution would help them… but they just won’t get around to buying. 

These people have visited your website, opened your emails, read your white papers, sat through a demo, even talked with your sales people about pricing.  They’ve been in your pipeline for 90 days, 180 days, maybe a full year, but they’ve still not converted into paying customers.

You might figure that these prospects have gone missing.  Despite all you’ve been through with them, no way, no how will they ever buy.

But you may be wrong about that.  Perhaps they’re not truly gone; they’re just hibernating.

Reviving the hibernating prospects

Which is to say that with a bit of effort, some of them can be revived. 

For some of these hibernating prospects, other priorities interrupted them.  While they may have been eagerly evaluating your solution six months ago, more important issues got in the way.  (See “Your prospect has a day job.”)

At some point, whatever it is that prompted them to look at your solution in the first place may make its way to the top of their to-do list once again.

Your job as marketers is to be sure that you and your solution are still in front of that prospect when that time comes.  When they get around to focusing again on the problem, and they start to think about a solution, you want to be top-of-mind. 

Even better, you can do your part to push your solution higher up on the priorities list.  Make it clear to the prospect that the problem they’re living with deserves urgent attention and there’s a cost to ignoring it or pushing it to the back-burner. 

Every day they put off solving it is costly to their organization: wasted money, lost time, added risk, lost opportunities, and other bad outcomes.  (See “Your toughest competitor…inertia.”)

Be smart about the cost

Of course, you want to be careful about the costs of these efforts to revive hibernating prospects.  Using sales professionals to stay in touch can be expensive.

But offering them educational papers, inviting them to webinars, or showing them customer success stories can keep you on the prospect’s radar screen.  And the cost of keeping them on an email list is very low.

These communications should provide an easy way for the prospects to tell you they’re ready to re-engage.  And of course, you should also offer them an easy way to unsubscribe if they’re truly done with you.


Bottom line:  Don’t assume that prospects that you’ve not heard from in weeks, even months have gone completely cold.  They may just need a bit of attention and some heat to warm them up.