Turning SaaS Buyers into Satisfied Users

If you subscribe to a software-as-a-service (SaaS) solution, in most cases you can quit whenever you want.*

That's great for SaaS customers, but not so great for SaaS providers.

It puts a special burden on providers:  They need to be sure that the folks buying their solution are actually using their solution.

If buyers don't become satisfied users, they'll eventually leave.  The result: attrition, slower growth, higher customer acquisition costs, and other bad things.  (See "SaaS Renewals and the Multiplier Effect").

In this short video, produced with the good folks at Openview Labs, I talk through 3 ways that SaaS providers can turn buyers into users. 

*We'll talk about long-term contracts some other time.

Creative Commons License

This work by Peter Cohen, SaaS Marketing Strategy Advisors is licensed under a Creative Commons Attribution 3.0 Unported License. Images obtained via iCLIPART.com.

Get your SaaS customers off to a healthy start

I recently switched to a new health club. It's better maintained, friendlier, and less crowded than my old club. I also like that there's no up-front membership fee, just a monthly subscription.

But making a change from my well-worn routine, set in place over 12 years, could have been a difficult jump. New location, new equipment, new people.

But all worked out well. Here's why.

On my first visit to the new club, the manager introduced himself, gave me a card with his contact information on it, and introduced me to an assistant manager who was at the front desk.

Then the manager showed me through the facility. He explained how to sign up for spin classes, where to find the jump ropes, and how to adjust the steam room controls.

Finally, he introduced me to a trainer to set me up with a workout regimen. We didn't go through every elliptical trainer, Bosu ball, and Cybex machine in the club, but the trainer put in place a basic program for me.

Renewals are vital for both health clubs and SaaS companies

Health clubs, like software-as-a-service (SaaS) businesses, depend on renewals. And the customer's first experience with the service - the on-boarding process - is critical. Get off to a good start and it's much easier to retain customers.

How did my new health club get this right and how can SaaS companies do the same?

Create a connection to a person with responsibility

On my first visit as a paying customer, I was introduced to the club manager, his assistant, and I knew how to reach them. I now had a direct connection to someone I could talk to with suggestions, complaints, or compliments.

It also works for SaaS companies. Let the customer know who they should talk to with any issues related to the service. It might be one person or it might be two or three (for example. one for support, one for billing, etc.) but try to make a direct connection. A simple letter - "Thank you for becoming a customer. If you need anything, ask me." - can suffice.

Help the customers help themselves

The manager showed me around the club and offered specific instructions on how to take care of basic tasks myself. Of course, I'd had a tour before I signed up, but he walked me through again, this time providing more detail on where things are and how things work.

SaaS companies should do the same. Help new customers to find their way around the service. Walk them through the basics, so the next time they'll have the knowledge to manage it themselves. Better yet, they'll have the confidence to explore further and find new features on their own. A written guide on how to take the first steps, with lots of screen shots, can be helpful.

Deliver immediate value

On my first visit to the health club as a paying customer, a personal trainer got me started on a basic routine. She showed me how to use a few basic machines, adjusted the seats properly, and set a "don't hurt yourself" weight. She even wrote it down for me on "Personalized Workout" tracking sheet. This wasn't a $60 per hour personal training session... it was just part of the welcome process. Following that session, though, I had an established commitment to a new routine.

Likewise, SaaS companies should concentrate on getting their new customers to start to actually use the service. Make sure they know how to login. Help them enter data and walk them through a few basic tasks. Get them using the product and make it part of their routine.

Getting customers successfully on-board is critical to health clubs and SaaS companies. A positive initial experience likely means happy customers. And happy customers means more renewals. (See more on why retention is critical: "SaaS renewals and the multiplier effect")

By the way, on my 3-times per week visits to the health club, I've been making good use of the steam room. The spin class... not so much.

Creative Commons License

This work by Peter Cohen, SaaS Marketing Strategy Advisors is licensed under a Creative Commons Attribution 3.0 Unported License.

Tired brains are bad for SaaS

Thinking too hard can tire out your brain.

Research has shown that our brains can suffer from "decision fatigue" after strenuous mental exercise. It's similar to the way our muscles get tired after strenuous physical exercise.

Experiments conducted at German automobile dealerships put prospective customers through a kind of mental decathlon. They asked them to choose among four choices of gearshift knobs,13 choices of wheel rims, 25 engine and gearbox configurations, and 56 color options. After being forced to make a string of decisions, the subjects/ customers succumbed to "decision fatigue" and opted for the default option. They lost much of their capacity to make choices.

Too many choices can be exhausting, and the customer quickly opts for the path of least resistance. That may mean choosing a default option or it may mean choosing to do nothing.

What applies to cars, applies to SaaS too

When prospective customers' brains are tired, it's more difficult to sell automobiles. It's also more difficult to sell technology solutions.

That's a special problem for SaaS solutions, when it's critically important to acquire customers quickly and cost-efficiently. Anything that impedes purchases is a SaaS business killer.

What hoops have you set up?

What kind of decisions do you force your prospective customers to make? How many hoops do you ask them to jump through?

Walk through the process yourself - from start to finish - and count how many decision points your prospects confront. Often we're asking them to navigate through a tortuous labyrinth of options,... even before they buy anything:

  • Which of our solutions is most appropriate for your company?
  • Which version is the best fit?
  • How many seats will you need?
  • Would you prefer the free trial or the freemium version?
  • Which payment plan works best for you?
  • How long would you like to subscribe for?
  • Would you like paper or plastic? (OK I don't actually see that one very often for SaaS solutions.)

I agree that there's a legitimate desire to steer the prospect to the best solution to meet their particular needs. But be careful to balance that against the real danger of tiring them out. And offer default options when possible.

Very few exhausted and frustrated prospects become profitable and satisfied customers.

Creative Commons License

This work by Peter Cohen, SaaS Marketing Strategy Advisors is licensed under a Creative Commons Attribution 3.0 Unported License.