Originally published on October 18, 2007
You probably capture a lot of data in your web or SaaS app, but how often do you mine that data for Actionable Business Intelligence; information you can use to solve business problems, such as slumping revenue, high client turnover, etc? It might be time to stop everything else you’re doing and go write some queries.
Below are some scenarios that I helped a SaaS company solve recently with information right at their fingertips.
If you have paying customers who aren’t using your system, find out why they aren’t actively using the system and fix it.
Ask them what you can do to make their experience better, what problems they are having, etc. If you do not, when their contract is up, or they get their next bill, there is a high probability they will no longer be paying customers. It is much easier and cheaper to keep these customers than it is to go find new ones.
If the majority of your system’s usage is from non-premium users, maybe you are giving away too much.
Contact those free users who are actively using the system and find out why they haven’t upgraded. If the answer is “I don’t need those premium features” then you are giving away too much. You can either reduce the feature set on the free version or introduce advertising within the free product.
The former might cause some problems with your users, but the reality is it has to be done. Tell them you are scaling back on the feature set in the free version but you would be happy to upgrade them to the premium version at a discount.
The latter can be implemented without making existing users too upset and would be one of the reasons someone would upgrade to the premium version; to get rid of those pesky ads. Remember, however, that if your user base is small, ads might not make up for the lost premium revenue.
If you have multiple people from the same company using your service, perhaps you could leverage that into a corporate account.
Those users may not even know the others in their office are using it. If you don’t feel you have enough users at that company for them to consider a corporate account, leverage the few users you do have to spread the word internally… give them an incentive to spread the word (free month for every new user, etc.).
This will quickly get you to that magical number you’ve conjured up that would give you confidence to sell to corporate. Alternatively, you might find that you have a large, un-related user base in certain cities, and that might be a great place to go for an early-adopter round table (with free pizza!) to get their feedback and to get them to spread the word for you.
If the usage of your system is very small or the majority of the users are not paying, perhaps you can use that data to justify reducing your overhead.
Do you need all that hardware at the co-lo if you are only getting 70 hits per day or do you really care if the freeloaders have to wait a second longer for processing to occur? This is difficult for tech-founders who might have a geek crush on their servers but could be enough to save a company with low revenues.
Finally, whether you are mining data or not, make sure to constantly solicit feedback from your early-adopter customers. It reminds them, and you, who exactly you are building your web service for.