Customer Acquisition and Churn Reduction Consulting
As a Strategic Consultant, I have worked with the Executive Teams of many Enterprise Software and Independent Software Vendors (ISV) to develop strategies for becoming Software-as-a-Service (SaaS) and Cloud Services vendors.
…and I must say that I’ve come to what I consider to be a shocking conclusion:
Far too many people think the Cloud is magic.
The most concise definition of Transactional Email I could find (after a 7 second Google search) is:
Email primarily containing information about current or prior business dealings, such as confirmation of a sale, a registration number, an invoice, or an opt-in or opt-out confirmation. Contrast this with “marketing email.”
Transactional emails are those created by the application – based off of a template setup by a human, of course – and this differs from marketing emails – like newsletters and auto-responders – that you’d send with tools like Sendloop or GetResponse.
For SaaS & Web App vendors, transactional email often contains project status updates, analysis results, login credentials, etc. and can be sent on-demand or scheduled to send weekly, daily, or even multiple times per day.
As a SaaS vendor, you know these emails are super important for you to communicate with your customers and drive further engagement with your app.
What you may not know – or hadn’t thought about before – is that they are good for two other SUPER IMPORTANT things:
This post was inspired by the following tweet where Stu expressed frustration with his Transactional Email messages getting marked as spam:
@stulogy might indicate your emails aren’t wanted. Ensure they’re EXPECTED by & valuable to users, have clear CTA & can be turned off in app
— Lincoln Murphy (@lincolnmurphy) July 25, 2012
My response was a bit terse so I thought I’d expand on it a bit.
Okay, before going any further, I have to say there are some prerequisites for the following to make a difference; you have to get your email delivered. 37 Signals built their own infrastructure and got 99.3% delivery, but most sane SaaS & Web App companies leverage a credible email delivery service like one of these:
For instance, a company that came to me for help improving their Free Trial conversion rates had only 50% deliverability (and thus far fewer than 50% of their Free Trial signups activated!) and it was due 100% to them sending through their own poorly managed SMTP server; that changed overnight by moving to a qualified transactional email service provider.
Okay, so assuming your messages are actually making it to the recipients’ email system, it is very likely your Transactional Email messages are being marked as spam because your customers/users don’t want or need them. That might mean that you’re sending emails about things that – quite simply – they don’t care about, don’t need, didn’t expect, or frankly don’t want.
So, know why you’re sending the emails. The is always the first question I’d ask in this situation; why are you sending the messages you’re sending? What is the customer story-driven hypothesis that you’re testing? Getting them marked as spam is probably a good indication that you should mark that hypothesis as false and pivot.
A good place to start is to assume your customers/users just don’t want the emails you are sending. So, ask them what they want and how frequently they want them. Yes, some will lie to you or say “I hate all email, ever… everything email is spam and I love Inbox Zero”… cool. Cool. Don’t listen to people like that. Listen to the normal people – paying customers. Use good Customer Development techniques here and create emails that your customers / users actually want.
Let ‘em know they’ll get emails from you. Don’t hide it or surprise them. If you fail to let them know they’ll get emails from you, best case, some won’t get the emails because their system will mark them as spam for them. Worst case, the customer won’t expect it and mark them as spam themselves. Not properly managing expectations of users and customers is the #1 failure of just about every SaaS or Web App company in the world.
This goes far beyond just email, too. But in this context, just tell ‘em they’ll get emails from you daily (or whatever) and that those will contain something awesome for them. Make them look forward to those emails. But just telling them they’ll get email from you might keep your messages out of the spam trap.
Give them control. While I want everyone to get the Transactional Emails generated by my awesome app, it’s true that I’d rather have a few customers / users turn off their daily notifications than have them mark them as spam and bring down my sender score. If I’ve done my job, the vast majority will still want – and look forward to – the frequent updates because they’re super valuable.
But let’s be clear, those who opt-out of the “daily update” style Transactional Email messages will still need to receive receipts/invoices, security, credential resets, etc. so as they’re “opting-out” of those other messages, make it clear that they’ll still get some email from you, though infrequently.
If you’ve been in-market at least 6 months and are curious how we could Accelerate your Profitable Growth – perhaps by optimizing your Free Trial or increasing Customer Retention – contact me and we’ll setup a time to discuss your options for moving your company forward.
- Lincoln
(972) 200-9317
When it comes to your SaaS free trial, complicated isn’t cool…it kills conversions!
Confused minds don’t buy… they bounce, and take the money that you spent to get them to your site and their lifetime value as a customer with ‘em!
Look at your SaaS sales funnel, your Free Trial sign-up process, their first in-app experience, etc.
If anything in there isn’t 100%, absolutely clear – and you happen to rely on an e-commerce/self-service signup process for your web app – you’re losing sales. Period.
Look, it doesn’t matter if your product does 3,574 things… pick the absolute minimum number of things required to get your prospective customer using – then invested in – your product and create an experience that moves prospects in that direction.
If you’re afraid people won’t see all 3,574 awesome features when they come in to “kick the tires” or “evaluate” your SaaS offering if you guide them through just a small subset of those things, let me assure you…
… if you let them fend for themselves in some elaborate dashboard with zero guidance, they won’t see all 3,574 things… in fact, they won’t see any because they’ll get confused or overwhelmed, leave … and never come back!
So how do you avoid this problem and increase Engagement with your Free Trial user (prospect) so they’ll convert?
Once you have the list of activities that leads the prospect from sign-up to Investment (remember, once they’re invested – time, resources, etc. – converting to a paying customer is a no-brainer), continue to refine the number of steps/amount of time required to become invested downward.
Once you have it well refined (and after another refinement pass or two), all of your effort should be to move the user through the required steps to become invested.
If they quit before finishing those steps, send emails to encourage the completion of those steps (do it right; make it about them, not just completing some arbitrary step you’d like them to do).
Or when they log back into your App, don’t take them back to a generic “dashboard” – take them to the step they need to finish.
If they can still click back to the dashboard, put a visual reminder that stays with them at all times reminding them that they need to finish that step (but remind them WHY they should do it by making it a value-based message that is all about them!).
You are in full control of the Free Trial and first in-app experience of your users… if they are confused, don’t get it, can’t make it work, or bounce… … it’s all your fault.
But since it is your fault, you can fix it!
If you’ve been in-market at least 6 months and are curious how we could Accelerate your Profitable Growth – perhaps by optimizing your Free Trial – email me and we’ll setup a time to discuss your options for moving your company forward.
- Lincoln
There is no such thing as an “inactive user” in a SaaS free trial.
You can’t be a “user” if you aren’t “using,” right? Makes sense.
I think we get confused because in software the “user” connotation comes from the fact that a user is literally someone for whom an access account has been created.
Even for SaaS vendors, when the person signs-up for our app, they technically become a USER within our system through provisioning.
So, instead of saying all “users” aren’t created equal, I just don’t consider someone who only created an account to be a user.
Problem solved.
But that kind of shoots down your “we signed up 100 users today!” vanity metric, huh?
Look, of course you need to track how many people sign-up for your Free Trial, but you must do it in context…
… and that context is in the entire sales process.
100 people sign-up for your Free Trial, 95 convert to paying customers… cool.
100 people sign-up for your Free Trial, 5 convert to paying customers… something is wrong.
So, the number of Free Trial sign-ups clearly doesn’t matter on it’s own… it’s what’s happening between the sign-up and conversion steps that the real context lies.
In the context of a Free Trial, we cannot consider anyone who is not actively using the system to be a user.
They’re either using, or not.
If they aren’t actively using, they’re not trying your product.
They aren’t engaged.
They aren’t investing their time, effort, and resources in your product.
Those who aren’t active users are wasted advertising money… you paid to get them to your site and get them signed-up, only to lose them.
Those who aren’t active users are wasted resources… at the very least, you built an app you’d like people to pay to use, right?
Those who aren’t active users are wasted effort… see above.
Even worse – because of the effect it can have on your strategy – is that those who are not active users are the source of mis-placed enthusiasm and optimism (“look how many signed-up today!”).
But how do you define an active user?
Well, at the most basic level a User is someone who is actively *using* something… in this case, that something is your product.
If they aren’t using it, they aren’t a user… I already said that.
This is an important perspective / mindset to embrace, but we need to go further.
There are different levels of use that you need to measure to ensure proper engagement in your Free Trial.
Proper Engagement in your Free Trial is what leads a user to convert to a paid customer.
Here’s a post where I talk about Engagement in Free Trials and how the lack of engagement kills Free Trial success.
So, an Engaged User is what you should be focused on developing in your Free Trial…
…that’s a metric that will be directly correlated with revenue, which is what we want.
But just like all Users aren’t created equal, non-users also aren’t created equal.
Two types of “non-users” that you need to be aware of are:
Do you know how many people sign-up but never login?
Do you know how many people sign-up, login once, but never come back?
The question is… why do they bounce so quick? We can’t assume every single sign-up was just messing with you, right?
Maybe they know your product can do something… maybe they’re sure your product can do something… but they can’t figure it out, so they leave.
Then they might come back later to try again, can’t figure it out, and leave again.
Yeah, they bounce, but it will be after a few attempts.
They “wannabe” a customer of yours but you didn’t design your Free Trial experience to make that happen. That’s your fault (luckily you can fix it, though).
So, do you know how many people login more than once but don’t do anything? You might want to keep track of that.
Now there are lots of ways to deal with these types of non-users and I’m happy to setup a time to discuss the ways that make sense for you and your SaaS product.
No matter what, from now on, when someone signs-up for your Free Trial, remember… that’s just the beginning!
Celebrate that your front-end conversion is working, ring a bell, self-high five, whatever you need to do, but quickly move on to engage them, because the work has just started, my friend.
But keep in mind that your Free Trial is the one – and often only – part of the “sales funnel” that you have any real control over.
Wield that control like the mighty sword that it is!
There is only one of me, so I can only help a limited number of SaaS providers at any one time. But if you’re serious about finally turning your SaaS Free Trial into a customer-acquisition machine, email me with the details of your situation and I’ll get back to you to setup a meeting.
- Lincoln
