Archives for December 2015

Use Customer Success to Reduce Credit Card Failures

Another awesome article by Lincoln Murphy

Customer Success, done correctly, has the potential to impact your business in myriad positive ways; from customer retention to advocacy, and from account expansion to CAC Efficiency.

So when I got this question in the comments section of one of my churn rate posts and started to answer, it turned into a post all its own.

The question was: “How is it possible to keep churn rates under 3% when we have an average of 10-15% in failed payments from Stripe and PayPal? Or are failed payments not to be included in the total churn?”

There’s a lot going on in that question… and the answer is far from simple.

And while this post is about Credit Card failures – the lessons herein relate to any subscription company that takes credit card payments and for any SaaS company, whether they accept credit card payments or not.

At the core of this post is the notion that a failed payment doesn’t mean the customer has churned… yet. Let’s start from there.

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Upgrading Grandfathered Early Customers

Another awesome article by Lincoln Murphy

In my epic tome, the Pricing Strategy Framework for SaaS Startups, I mentioned that the price testing I recommend will result in some customers paying a different price from what you have now; and that this is okay.

Sometimes this “grandfathering” of customers happens because you’re explicit with those customers; “if you sign-up today you can lock this price in for as long as you’re a customer.”

Sometimes you’re less overt and this comes from testing prices, getting your pricing wrong and having to change it later, or going Freemium and deciding that’s a bad idea and having a large cohort of free customers.

No matter how you end up there, having a cohort of customers that are “grandfathered” into their price – that is, they are allowed to continue to use your product at the price they originally signed-up regardless of how that may differ from what they’d pay if they signed-up today – is certainly not uncommon.

Though, while not uncommon, grandfathered customers are often a source of frustration and management overhead and I want to explore a few ways we can upgrade those grandfathered customers in a way that’s a win for all parties.

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Pricing Strategy Framework for SaaS Startups

Another awesome article by Lincoln Murphy

Pricing doesn’t exist in a vacuum and is therefore not something you can tackle on its own.

Pricing is a function of marketing and determines, among other things, your market position. It also indicates – or is ideally derived from – the type of customer you want to do business with.

And of course in SaaS, pricing is tightly coupled to the product itself, which is different from other types of software and non-tech products where the price is decoupled from the product.

Which is why I can’t recall a time where a SaaS company came to me with a “pricing problem” and there wasn’t something else that was going on, too.

In fact, their “pricing problem” often had little to do with the actual “price” – the numbers – and more to do with pretty much everything else (chosen revenue model, customer segmentation, value proposition, marketing strategy, conversion optimization, etc.).

So, when those in an early-stage startup – or those bringing a new product to market within an existing company – ask me for help on pricing, I always say that you won’t get it perfect out of the gate, but you can get it as right as possible.

And then I give them a high-level pricing strategy framework, which I thought I’d document and share with you in this post.

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Qualifying Leads in a SaaS Free Trial

Another awesome article by Lincoln Murphy

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 set of questions because it indicates the person asking is starting to look at their Free Trial as a true sales pipeline; something more people and companies should do.

So I loved the question and I thought my answer was equally awesome (if I do say so myself), so I decided to expand on it a bit and share it with you, too.

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Archives for December 2015

Pricing Strategy Framework for SaaS Startups

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