You see, Jerry owns a custom software dev shop that spun-out a web app they used internally for managing parts of their business as SaaS.
He was stressed – to say the least – since his SaaS product hadn’t taken off like he wanted.
In fact… to say he was completely frustrated with his progress would be an understatement.
I mean he was fed up, man… the original “had it up to here.”
But we figured out what was wrong, and now Jerry is a happy man.
A Broken, Leaky SaaS Sales Funnel
Jerry told me that he didn’t know what was wrong…
…he kept “optimizing” the marketing site, the on-boarding and engagement process, kept running and testing new ads on BuySellAds, he even created an email course for those who weren’t ready to buy yet so he could nurture them.
He was doing everything he’s supposed to do, right?
So where are the freakin’ paying customers!?!?!
It turns out he wasn’t without “traction”… people were signing up for his Free Trial, and some were even becoming “active” users.
But no paid conversions. Nothing. Nathin. Nada.
In fact, because of that, whenever he would get a sign-up for his Free Trial it was more frustrating than something to celebrate.
All of these people trying his stuff and not converting to paying customers… that’s it!
Punishing Prospects Won’t Help Conversions!
Jerry told me that he was done messing around and it was time to get serious with his Free Trial conversions.
First… no more 30-day free trials for you… he was going to take it down to 7 days!
Oh… and you have the audacity to want to evaluate his software without a credit card? No way, son. Not anymore!
Time to put up that Credit Card wall!
Yep, he basically wanted to trap people and make them have to actively cancel the subscription and payments if they wanted out.
Knee-jerk reaction to low Free Trial-to-paid conversions: reduce trial time & require a Credit Card to start. You sure that's the best move?— Lincoln Murphy (@lincolnmurphy) August 1, 2013
So I let him vent a bit, get a lot of stuff off his chest, then I told him those were 100% the wrong things to do and would likely result in even fewer people trying his product (there wasn’t a whole lot of downward potential, but it was there).
Okay… so he’s calm. But where do we go from here?
Who’s Your Ideal Customer?
I’ve talked at length before about the need to define an ideal customer, but it often falls on ears that don’t want to hear that you need to do that, and Jerry was exactly like everyone else.
But I asked him to just humor me for a minute and talk about who he thought his ideal customer for this SaaS app was.
And by Ideal Customer, I mean the type of customer who would immediately see the value in this product and who – once they started – would quickly start to realize value from the offering.
It was amazing… Jerry went from frustrated to speaking passionately as he described who would benefit from this product.
He said his Ideal Customer was just like his software development company: a specific range of employees, adherence to certain methodologies, working with certain types of customers in certain ways, etc.
That criteria would yield a customer that instantly understood the value of the SaaS app, would quickly realize value once they started using it, and would continue to realize value for years to come.
Oh, and it didn’t hurt that he figured these would also be the most profitable customers, stay the longest, etc.
What really helped this process along though, was another exercise…
Who’s the Wrong Customer?
- Who won’t see the value in your offering?
- Who won’t recognize value quickly once they are in the app?
- Who will need lots of help and support?
- Who is the functionality and feature set – current and planned – of this offering simply not a good fit for?
And then it hit him like a ton of bricks…
The Wrong Customers are Signing-Up!
He realized as he was describing his ‘wrong customers’ that those are exactly the people that are signing up for his product!
Even more, he realized that those are the ones he’s been targeting inadvertently with his advertising.
And since his marketing site doesn’t clearly state who the product is for – and in the process who it isn’t for – it isn’t until they get into the app that they realize it isn’t for them…
… and then – of course – they don’t convert.
Putting up a Credit Card wall or reducing the Free Trial length to 7 days would not fix that. In fact, the CC-wall would probably just irritate people who thought it was for them and quickly realized it wasn’t.
Ugh… and for those who got charged – forced continuity – this would leave a very bad taste in their mouth, right?
Due to this exercise, he realized that he’s actively attracting people from the “wrong customer” bucket and those in the “ideal customer” category, well, they’re nowhere to be found!
He was like “wow… so much time and money wasted!”
But I quickly steered us back on track; who cares what’s happened in the past… all we can do is move forward.
And to do that, we’ll…
Optimize the SaaS Sales Funnel the Right Way
Moving forward for Jerry means keeping his “ideal customer” definition in mind in as he develops every aspect of his SaaS sales funnel.
It also meant that – with his “Ideal Customer” definition in mind – I could review his Sales Funnel and look for the bottlenecks, barriers, and other blunders that are going to hinder his customer acquisition efforts.
Having the additional context of his ideal customers and their expected or known behaviors helps me look at the Sales Funnel from the correct POV and not just mine as a “SaaS expert.”