Friday, May 22, 2009

SaaS Forum: Competing in a SaaS World

During the SaaS Forum on May 21st, Tod Loofbourrow, co-founder of Authoria, gave a terrific keynote to open the forum "Competing in a SaaS World -- Overcoming the Challenges to Deliver Successful Sales and Marketing Results." Tod spoke about the tricky nature of SaaS because of the cost structure and cash flow timing. The financial measures that are absolutely critical to watch include customer acquisition costs, gross margin per customer, lifetime value per customer, annual contract value per customer and churn (a measure of customer retention).He indicated that reaching 90% renewal rate is very good, and less that 85% requires work. The group then split into two tracks; marketing and sales.

I [Jim Geisman] followed the marketing track and heard Nancie Freitas, VPM of Constant Contact, speak on how customer-centric focus is essential. The customer centric focus starts at the top and can be reinforced by training and incentives. Imperative to the approach is listening to customers' wants. Ideally you should be implementing these wants in frequent new releases (Constant Contact does 6 new releases per year). By watching and tracking customers' behavior and use of features, you will be enabled to eliminate features that detract and add features that delight. A proactive outreach approach is also very important; by helping customers be successful with their initial use of the product you will be converting more trials to subscriptions. View Nancy's Presentation

Brian Zanghi, CEO at Kadient, spoke about taking customers through the transition from a perpetual license hosted on-premise to a subscription license delivered via SaaS. In order to retain customers this transition needs to be managed very carefully. Coordination between sales and marketing is imperative during this process. The sales pitch must be tailored by closely watching the behavior of the prospect. "Sales compensation is the key issue here; reward the behavior you want. Sales folks are coin operated."
View Brian's Presentation

The presentations were followed by a roundtable discussion. A lot of knowledge was shared during this roundtable discussion about the impact of SaaS on marketing and sales. Many agreed that there is a strong link needed between these two groups. It is important to always remember that a lead isn't a lead until it is accepted by sales.

In regards to the SaaS marketing... traditional marcom marketers do not have the right skill sets, they are too focused on print and tradeshows. Direct marketers have a more suitable skill set. Always keep in mind such tools as RSS, Twitter and blogs as tools to attract customers and influencer visibility.

In regards to SaaS sales... free trials need to be long enough to use the customer's data to prove the application value. Some applications simply are not "trial-able."

My closing thought is to remember useful tools are SEO like Hubspot and Google analytics and Lead qualification like Vtrenz/SilverPop; useless activities include renting lists, print ads, general tradeshows, and tchotchkes.

Post contributed by Jim Geisman, MassTLC SaaS Cluster co-chair; Software Pricing Partners

Join MassTLC's Software as a Service Cluster community for the SaaS Summit follow-up event: SaaS Breakfast Seminar: Increasing Renewal Rates to Maximize your Company's Growth and Success, on June 23rd at IBM in Waltham.

No comments: