On the recent bi-weekly mastermind call with SaaS experts and mentors I interviewed Ryan Cahill about the go-to-market strategy. Ryan is passionate about helping SaaS companies design, optimize and execute their sales and marketing strategies. He spent the last decade in the SaaS world working with different industry leaders. He has also consulted for hundreds of subscription startups, executives and entrepreneurs. Ryan talks about the science of growth and where that is going to fit with post-product market fit. Go-to-market is the strategy that you use to acquire new customers or expand on the ones you have. In the diagram below, the left-hand side represents the number of customers or we’ll say users in this example and across the bottom is going to be the value of your product or service and so this can be in monthly or annual recurring dollars but we will be using annual for this example. In most organizations as the price point goes up, the number of people that can afford the product goes down. Product Led Growth (PLG) Inside Sales (IS) 2 or more stage process 3 stage process One to one sales Where your product or service is in the spectrum of cost of product will dictate the type of strategy you are applying. After you have understood the strategy you need to apply for your product or service, you need to figure out how to replicate success. Right now you need to start thinking about who the person you’re generally going to be selling to and focus your strategy on what is going to empower them the most. What’s happened over the last handful of years, is we don’t convince people to buy anymore but sometimes we think we do. The reality is, if they’re talking to you, they had already considered doing something different. It’s really a buyer centric market. The way you want to think about your go to market is how do I help someone buy versus convince them to buy and companies that do that are very successful. The Amazons of this world succeed because they make the customer experience so powerful and easy, you need to do that with your go to market approach as well. While it is an oversimplification, there are only 7 metrics you need to pay attention to in order to diagnose if what you are doing is working efficiently and how to make it more efficient over time. On the left hand of the diagram you have prospects. Prospects MQL The MQL will be called conversion rate one (CR1). The MQL is a qualification metric for the performance of your marketing. If this rate grows over time, it means you are doing a better job at targeting your customer base, and a better job of converting them to be interested to engage. If you have 1000 people on your email list, and every month 10-30 of them become leads, you now can measure how good you are at engaging them via email. You need to measure the performance of different channels such as social media platforms. When you engage with folks, it is important to understand why they engaged with your brand, why they became a customer and how you can find more of these people. You need to do some deep analysis to define who it is you’re talking to, and how they want to be interacted with, and then marry that into your product or service and all your communications. The head of sales doesn’t think in a similar way to the head of marketing, or the head of human resources or a CFO or developer, they all think differently and you need to talk differently to those audiences. A technical audience does not want flowery language, they want specifics, they want details, they want examples. A marketer on the other hand thinks about emotional things, they want to be talked to in an emotional language, so you’ have to interact differently. One of the biggest challenges with most websites is they are self-serving, they don’t talk to the customer, they don’t talk about the customer. They don’t talk about the customers’ problems, they brag about their product and people don’t want to hear that. Your job is to connect the dots between your audience pain and your solution. Sales Qualified Lead (SQL) The difference between CR1 and CR2 is now they are willing to engage in the sales process. At this point based on what you’ve said, and shared so far, someone is willing to evaluate your possible solution for their company. If this rate is doing well then the people you are attracting will also happen to be in the market. If the people you are attracting are not engaging, you need to go back and look at the messaging that you are doing, and figure out a way to identify when someone has a need. Use every engagement to learn from your customer even if they don’t buy from you. What was it that got them willing to engage with you in the sales process right now? Do they have a contract expiration coming up with their existing provider? Did they have enough pain where they just couldn’t take it anymore? A lot of people get distracted when someone’s like, Oh, I’m interested, interested and ready to buy or not are the same thing. You need to make sure that they are ready to buy in the timeframe that you think is reasonable for your business so that you don’t spend a lot of cycles and energy on people that aren’t willing to sign right now because you need that revenue. If you have, let’s say, a $30,000 product a year, a $30,000 product, you should be closing somewhere in the neighborhood of one out of four or one out of five of these deals. If you sell a $5000 to $10,000 product, one out of five is pretty decent. If you sell a couple thousand dollar product, you know, maybe one out of six. As you do more volume, the numbers go down a bit. If you sell an $100,000 product, you should be closing one out of three. You got to be very, very disciplined here because a lot of time, money and energy is spent in the sales process and if you don’t actually close them, you don’t get any return. You need to think about nurturing differently for those types of things in general nurturing. nurturing a trial should be different than nurturing someone who came through a Contact Us form or downloaded a white paper, people should be engaged in a unique way that represents really what they’re doing. Trial nurturing is often helping them see the value of the solution, whereas general nurturing is just helping them be aware of what you bring to the table. The next thing you need to be measuring is time. How long does it take someone to engage with you in a sales motion? The reason is some of that now becomes your front to back sale timeframe. If you have to market nurture them for a couple weeks, if you have to engage them for a couple weeks and sell them for a couple weeks, you now know how long it takes for you to move someone through the process where you start to get money, and you can back your way out into that. If you’re starting today, you know that about this amount of time is required before you can get your first next sale. As you start modeling that out for your business, that’ll start to give you an indication of the kind of lead time that you need to get that revenue engine going. There are three more things you need to pay attention to at the back of the business. Conversion Rate 5 The first one is CR5 which is the onboarding time frame and conversion rate. Do you churn people out before they ever go live, because that gives you an indication of the experience of that process is probably not ideal. It also gives you a really key indicator for the customer because what happens up until that point is the customer has not received any value yet? As the buyers go through a sales process, they don’t get anything out of that. They don’t actually get value, even at the sale. They get value once the product is live and working and doing something for them and their company. This is the implementation or onboarding process. The go live process until the customer gets up to speed using your tool. Conversion Rate 6 The next stage is CR6 which is basically renewal. If you sell a month to month it would be every month. If it is an annual contract or multi-year contract it will be contract one to contract one. It is the number of people that have used your product and decide to continue the relationship for a longer period of time. Conversion Rate 7 For your SaaS company to be really successful you need to have more things to sell, if you think of salesforce or any large SaaS organization, they have a huge portfolio of things that they can sell to their client base and that is where the majority of their revenue comes from. As you start to mature as a business, you want to start thinking about how you can get more licenses, maybe a usage fee, maybe new modules to increase revenue. How small companies can utilize this method Regardless of the size of your organization, you need to know these answers and you need to measure this type of transitions whether you have 20 customers or 2000 customers because if you don’t know why someone does something then you can’t replicate success and you can’t make it any better. If you don’t know why your customer took an extra month to implement your product then it will be difficult to make the implementation better. The biggest mistake most SaaS founders make regardless of their company size is they can’t answer this question. Why did the last company that you sold buy from you, you need to know the answer in their words and not what you think? If you don’t know the answer to that then it will be tough to find more of them or speak to the things that they are trying to solve. Fortunately, nowadays there are special communities for bootstrapped SaaS founders where they can connect with other fellows founders to consider the urgent issues and get the help to accelerate growth for their SaaS business. Ryan shares some other tips that SaaS companies can benefit from One of the biggest dangers most small companies face is that they go too broad too fast. If you are going after everyone under the sun, it’s very difficult for you to get better, because you don’t have a sample size large enough and you don’t have enough consistency in what you are doing to know actually what’s working and what’s not. Resources from https://www.natalieluneva.com/saas-go-to-market-strategy-modeling-the-science-of-growth-2020/
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Below I list SaaS metrics that software companies need to keep track of. I bet that majority of founders don’t know about at least one metric on the list. This post comes after I interview Ben Murray during my bi-weekly SaaS Boss Masterminds. Watch highlights from that session:
While some metrics are more important on various stages of your SaaS company, it’s important that you know what those metrics are and how and what it takes to calculate them. So without further ado, let’s discuss these metrics.
Now, one thing needs mentioning. There are many more SaaS metrics that we could’ve or maybe should’ve covered. But we skipped as they can be a bit complicated and put you off really easily. With that said, we need to tell you one more thing. All of the above-mentioned metrics may not fit for your SaaS company in your particular situation. For example, if you’re just starting, you will not get to use Churn rate, Cohort, Time of Recovery, and other metrics. This is simply because your won’t have enough data. But you can collect it over time, and Year 2 you can start calculating those metrics. What gets measured gets improved. Which metric(s) will you start measuring? from https://www.natalieluneva.com/saas-metrics/ I asked Anna Grigoryan, the writer behind the Engineering Growth newsletter. to share 6 communities that will give your SaaS product a boost. These communities will help you during the product development and launch stages and will provide much needed peer and community support.
Back in the day, having a technical cofounder, or the “tech person” on any startup team was a must-have. VCs wouldn’t take you seriously without one. You literally couldn’t have a product if you didn’t have a software engineer on your team. Many startups failed because they were not fast enough on the iteration cycle and couldn’t respond to their customers’ demands on time with the right solutions. Well, we’re in 2020 now, and aside the year being a total mess, it’s also the blooming spring for the no-code movement. With tools like Airtable, Coda, Zapier, Webflow, Memberstack, you can build a full-blown two-sided marketplace without having to think about authorization, hosting and the gist like that. Makerpad is a paid community for people who want to learn about no code stack. They have a great community and love to spice up the day to day activities with events like hackathons, online boot camps and all. Also, you can hire no-code developers. A truly all-in-one experience for getting to know the no-code side of engineering. They also have a no-code VC, which is investing in early-stage startups who use no-code tools to bootstrap. So you have all the shots in your hands.
Now that with the use of no-code toolset, you can build your platform on your own, you need to understand what to build. How to determine your MVP scope? How to define your iteration cycles? How to manage the customers’ feedback and add new features? These are very simple but, at the same time, tough questions, both for the first time founders and even seasoned experts. Product management and product-centric mindset are here to help you determine the answers to those questions. If there was one place I would recommend to take a membership, it would be the ProductmanagementHQ. You can get a lot of valuable connections with the product managers of successful startups, participate in the AMA sessions, get your questions answered live, and without any additional “just get to know your audience” stuff.
Okay, so you built your product, you have the action plan for your future changes and features. Great! Now the hardest part, try to sell it. How many email marketing services do you know? Mailchimp and Convertkit can come to mind. However, last time I checked (and yes, I sometimes out of sheer curiosity do these kinds of masochistic things ? ) there were 160+ email marketing services. 160 Carl! They all have relatively the same features distributed over 2 or 3 pricing plans (the limit for email sending, scheduling emails, email archive, an API that claims that the emails are not going to spam). Each of them is solving a problem for a specific industry or niche.. Well, how do you stand out in the 160 competitors? There are many ways, and Demand curve is here to help you determine the zillions of options you have in your hands. They are, I believe, the most prominent marketing community out there. You can register and buy one of their courses, which will grant you access to the community automatically, or sign up for a waiting list, in this case, you’ll get in maybe in a week or two. From my experience, their review of my landing pages and sign up forms from their members were hands down the best one yet.
I’ve been working freelance for two years now, and also I’ve been doing solo projects for 6 months. This kind of lifestyle has great days and low days. As a first time founder, especially if you are flying solo like me, you can have those moments when you feel incredibly isolated and lonely. It doesn’t mean you don’t have a supportive family and friends, it’s just sometimes it’s tough to do things alone. Leapers is the community I didn’t know I needed until I found it on Twitter. Their primary focus is to help freelancers and solo founders to keep in check with their mental health, support each other and be helpful during those lonely times. This is a place where you can come and rant about your shady customer or wrong sales funnel, and here you can also find great collaboration opportunities. Being solo is possible, and I’m here to tell you that you definitely can do anything you want alone, but it doesn’t have to be sad and lonely. Check out their mental health guides, and you’ll see why I love them.
Someone described this community as “Tweeter meets ProductHunt.” There’s no better way to put it. Created and maintained by the ProductHunt team, this platform is here to open the tool- stacks of people. Do you want to know which CRM is used by Producthunt founder, want to know why people don’t like a specific product? How are they using the to-do apps? What books about productivity are the best? Do you want to know other people’s stack?
Founders that are building something new must visit this platform to see the “ugly truth” of how people are using the most popular products. If you check out the Airtable page, you can see the variety of opinions and use cases. What a place to collect information about your users’ habits?
Here are just a few ways to use Yourstack:
Worth the try, for sure!
This community is yet another one where you can find support. This time it’s for full-time independent makers. Here you can register your product and build it in public. This is a place to display your tasks, your progress and lows. Here are the most proactive people who are genuinely helping with feedback and support. Something is fascinating about building your product in front of 500+ founders, and it’s a truly transformative experience to attempt something like this. Hope these 6 communities will be helpful to all indie hackers out there! Check out more about what my friend Anna at Engineering Growth is doing and subscribe to her newsletter here. from https://www.natalieluneva.com/6-communities-for-your-saas/ In 2019 I consumed lots of books, so much that it turned out that I consumed 1 book per week without even noticing it. I keep track of all books I’ve read and would like to read in Goodreads (highly recommended to anyone). Here is a list of 10 books that I would highly recommend to any entrepreneur in no particular order. from https://www.natalieluneva.com/blog/i-consumed-54-books-in-2019-here-are-the-top-10-id-highly-recommend/ |
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Natalie Luneva is a growth and leadership coach for SaaS founders. She worked with over one hundred companies. Drawing from her 10+ years of marketing and team leadership experience, Natalie helps bootstrapped SaaS founders scale their startups, get unstuck and grow as successful leaders. ArchivesNo Archives Categories |