Don’t Mix SaaS Free Trial and Churn Metrics

Any metric that’s not acted on is a vanity metric, right? Sure, but that doesn’t cover every situation. Sometimes we measure things because we’re “supposed to” but honestly don’t know what to do once we have the result (add that to the list of things that are true but few people will admit publicly). It’s […]

SaaS Free Trial Conversion Rate Benchmarks

I’m frequently asked about SaaS Free Trial Conversion Rate Benchmarks; after being asked for the 97th time – this week – I decided to publish this post. First, a bit of a disclaimer. Benchmarks are neat… it’s cool to see how you stack up against other companies. Benchmarks are how some executives make decisions and […]

Churn is a Symptom, Not a Disease

Também disponível em Português por Mathias Luz Churn is when customers cancel their account, don’t renew their contract, or remain your customer but pay you less; the latter is referred to as “revenue churn” and includes discounts, down sells, etc. Now, many companies find out about Customer Success when searching for ways to reduce customer […]

7 Ways Customer Success drives Company Valuation

I’ve been saying for years that Customer Success is transformative; driving exponential value for both the vendor, as well as the customer. In fact, it’s that value growth for the customer that truly drives the value growth for the vendor. What goes around, comes around. And while the following is something I’ve shared with clients, […]

Customer Success: The Difference between Stretch and Bad-Fit Customers

What are the characteristics of a Bad-Fit Customer for your business? It’s great to know who your Ideal Customer is (my Ideal Customer Profile Framework is constantly updated), but it’s much easier – and I say required – to first identify the types of customers that are a bad fit and the characteristics that make […]

Two Ways to Reduce SaaS Cancellations

Fairy Tales have happy endings. That’s why they’re so popular; even if they include scary moments with monsters and evil blended family members, everything is pulled together nicely at the end when the naive protagonist is magically okay. In business, the same types of fairy tale exist, with one being that customers cancel their subscription […]

The Only Two Reasons Customers Churn

Churn is the antithesis of growth. When you lose a customer, in order to grow by one customer, you have to first replace that customer you lost, and then add a new customer. And when a customer leaves, they take the revenue they were paying you with them (often to a competitor!); but they also […]

You Have to Know why Your Customers Churn

When customers churn, that’s a problem. Even if their churn was “unavoidable” it still hurts. Churn hurts on several levels: from lowering revenue to hurting employee morale. And churn means something happened to the customer (out of business, acquired, etc.) or – and MUCH more likely – they didn’t achieve their Desired Outcome through their […]

Qualifying Leads in a SaaS Free Trial

I got this set of questions on Twitter: “Is there a certain level of activity during the free trial that is likely to predict conversion from free to paid? Also, how do other companies handle Sales vs. Marketing Qualified Leads (SQL vs. MQL) when it comes to Free Trials?” I thought that was an awesome […]

Reasonable SaaS Free Trial Conversion Rate

What’s a reasonable conversion rate from free trial to a paid customer? I get some form of this question from time to time and I’ve answered it several times over the years. Well, I got it again so it’s time to revisit this very simple question. As with most “simple questions” the question is easy to […]

Acceptable Churn Rate for Small Accounts

What drives a company to focus on Customer Success is changing. In the past, churn (or retention, depending upon how you look at things) was generally the catalyst. Once churn is under control, the catalyst changes to expansion; driving use, consumption, and revenue within existing accounts. And these days, startups are building Customer Success into […]

Success is Uncomfortable

I’ve talked before about holding customers accountable and how customer success isn’t about making customers happy. Sometimes you have to push customers out of their comfort zone and – if you’ll allow me to channel my inner Tony Robbins -progress is rarely made within our comfort zone That means moving toward success – whether for […]

The Risk (and Opportunity) in Stealing Customers

Picture it, São Paulo, Brazil, October 2015. After one of the sales and customer success workshops I did, a few of us went out for a snack – fried polenta sticks – and to talk shop… and the idea of Success Gaps came up. In particular, we talked about prospects that experienced Success Gaps with your competitor’s […]

A Foolproof Way to Get Testimonials Without Asking for Them

Personally, I’ve always found it difficult to ask for testimonials. It just doesn’t come naturally to me. In fact, one of the reasons I like doing calls on Clarity is that the platform closes the loop with the client for me, asking for a star rating and optional comments; to me, that part alone is […]

Success Milestones: The Path to the Customer’s Desired Outcome

I talk about Success Milestones all the time, not just in the context of Customer Success, but in the context of the overall success of my SaaS clients and the companies I work with. The concept of Success Milestones is a relatively simple one to grasp, but the power and the value of this way […]

This Customer Acquisition Mistake Can Kill your Growth

Também disponível em Português por Mathias Luz Can the customers you’re actively going after actually achieve success with your product or through their interactions with your company as things are today? If not, that’s a problem. The reasons they might not achieve success range from their readiness (they don’t have the necessary data or internal […]

Stop Using these Anti-Customer Terms

Ugh… isn’t dealing with customers that don’t get it and having to hold their hand along the way or check-in with them to make sure they’re okay, annoying? It’s so nice when you can hand ’em off to someone else, right? I hear that all the time from clients, on Clarity calls, and from companies […]

7 Reasons to Optimize your SaaS Free Trial

For SaaS vendors, the Purpose of a Free Trial is to create a customer. Period. If you don’t agree with that statement then you really won’t like pretty much everything else I’m going to say in this article. Free Trials are not for tire-kicking freeloaders – and if that’s what you’re getting in your free trial, […]

Desired Outcome is a Transformative Concept

Também disponível em Português por Mathias Luz One of the most powerful concepts I’ve ever come across in business is the idea of the customer’s Desired Outcome. And if you’re thinking “one of the most powerful concepts in business” seems like a pretty hefty charge, you’re right; this concept has transformational properties. When I first […]

The Seeds of Churn are Planted Early

“The Seeds of Churn are Planted Early” is a phrase I came up with in early 2013, published shortly thereafter, and have said and used many times since. I wanted to go on record with that – BTW, if you see the term’s use outside of my work or that of Gainsight’s, maybe send them this […]

5 Situations When Massive Churn is Just Fine

The mantra of “grow at all costs” – that seems to include acquiring wrong-fit customers (those who aren’t your Ideal Customers), churn be damned – has popped up several times lately and my reaction to it is two-fold. First, I immediately thought how stupid this is and how it flies in the face of everything […]

5 Lesser-Known Ways Churn Hurts your Company

The common refrain by SaaS experts that think business is just a math problem is that if a customer stays long enough to pay back the cost to acquire them (the metric is called Customer Acquisition Cost or CAC), they became a “profitable” customer (“unit economics” don’tcha know) and everything is great. Just do more of […]

Podcast: Getting Inside the Minds of Your SaaS Customers

How do you define success for your SaaS customers? While it sounds simple, it’s not. Success is only achieved when your customers reach their Desired Outcome by their interactions with your company. But first, you have to understand what it is that your customers want to achieve — and that can take some work. I […]

The Fiction that Friction Improves Customer Onboarding

A few months back an article was published that talked about how this popular brain training game (I can’t remember what it’s called) made their onboarding process MORE complex – not less – and increased their active users by 10%. While the article was very clear on when to add friction, most of the discussion […]

Customer Psychology and the Unexpected Power of Surveys

Surveys can be dangerous if used wrong, but can be super-powerful if used correctly! Whether it’s the Net Promoter System to gauge customer satisfaction, doing pre-launch customer development work for your startup, or one of the myriad methods we use to interact with and learn from our customers, prospects, and other people, surveys are by […]

How Social Proof Actually Works in Marketing

I’m not a psychologist, but I play one every day as I try to figure out why people (users, customers, visitors, etc.) do what they do… and how to get them to do more of what I want them to do. I spend a lot more time reading books about – and otherwise studying – human […]

Customer Success Starts at Sales Done Right

After getting a demo of their new product from their Chief Data Officer (Luke Deka) while I was in Poland, I was excited to catch-up with Greg Pietruszynski, CEO of Growbots, when I got back to San Francisco. We talked about lots of different topics, but the post that my friend Steli Efti from close.io […]

Achieve Network Effect on a Smaller Scale

I was talking to my friend Piotr Zaniewicz the other day about the importance of network effects on SaaS businesses. I mentioned how the common misconception around network effects is that, in order to achieve a real network effect (this is the reason some people say B2B SaaS can’t be “viral”), the level of critical […]

Podcast: Customer Success is the Foundation of Your Success

Micky from Kahuna Accounting sent me an email to share that they grew their B2B business from 0 customers/0 revenue to 180 customers and $40k/month ($480k Annually) in just over a year, and a major part of that was their use of the Ideal Customer Profile framework. So Micky wanted me to share with other […]

3 Secrets of High-Converting SaaS Free Trials

While just about every B2B SaaS company offers a Free Trial – especially those with self-service sales models – in my experience, the percentage of SaaS companies that feel their Free Trial is “successful” is fairly low. Disappointingly low, actually. And it absolutely doesn’t have to be that way and in this article I’ll show […]

How To Get Sales To Help Test your Ideal Customer Profile

I was talking to the CEO of a SaaS startup on Clarity about a dilemma many companies go through. They’ve decided it’s time to get deliberate about their progress and start testing their Ideal Customer Profile… but there’s a problem. They already have sales develop reps (SDRs) generating leads and account executives (AEs… aka sales people) closing […]

Stick Point: When Your SaaS Customer is Truly a Customer

In my recent article on accurately calculating your SaaS metrics, I mentioned how some customers shouldn’t be considered customers yet. I referred to the fact that there’s a “stick point” or that point in time in the early part of the customer lifecycle where – if a customer makes it that long – they’ll likely stay […]

Free Trials Do Not Devalue Your Enterprise SaaS

The CEO of a SaaS company reached out to me the other day and he had a very dangerous misconception that could seriously impact their potential as a company. I hope by talking about it here I can save more SaaS companies from falling into this trap. They sell to large customers and the dangerous misconception was that […]

4 Undercover Ways to Hack Social for More Sales

How often do you hear the term “Social Selling” and either can’t figure out what it actually means or just want to call shenanigans on it? You know you’re not going to close a six-figure deal on Twitter, right? That’s not reality. But that doesn’t mean that Twitter (or any social network) can’t be leveraged to accelerate […]

The Success Gap: A HUGE Opportunity You Haven’t Considered

There is often a gap between the functional completion of your product and the customer’s Desired Outcome. I call this the Success Gap. And this Success Gap that stands between what your product does and your customer’s Desired Outcome is a huge risk for you. It’s also a huge opportunity if you bridge the gap […]

Your SaaS Metrics Are Wrong if You Include These Customers

A user is someone that uses your SaaS product, right? Or is it someone that signed-up? Or someone that’s active? Or someone that logged in a few times? Hmm. Okay, so maybe defining a user is hard, but defining a customer is easy, right? A customer is someone that pays you for your product or […]

Active Users are a Vanity Metric

Active customers churn. And when they do we’re shocked and confused. How can this happen? Your customer was very active, logging-in several times in the last month. I think it’s fair to say that if Active customers churn, then “active” – as a customer “state” – clearly doesn’t equate to success. So if it doesn’t […]

CAC Strategy is the Key to Scaling your SaaS Company

Starting a SaaS company and scaling a SaaS company are two very different things. The same is true for “scaling” a SaaS company in the very early days vs. scaling a SaaS company through the growth phase. And since every company is different and experiences those “phases” at different times in different ways, you have […]