Len madigan saas - 19 nov 2013 version finale

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Len madigan saas - 19 nov 2013 version finale

  1. 1. SAAS : MODÈLE D'AFFAIRES ET PRICING Len Madigan 2013.11.19
  2. 2. SaaS… « En 2013, 82% des nouvelles entreprises dans le domaine de logiciels appliquent le modèle SaaS. » 2 ©2013 bolti systems Company Confidential
  3. 3. Objectifs – Aujourd’hui • Elaborer un cadre ainsi que certains stratégies et métriques d’une entreprise « SaaS » • Favoriser une échange entres les participants concernant leur propres objectifs et stratégies SaaS 3 ©2013 bolti systems Company Confidential
  4. 4. Bio - Len Madigan B.Comp.Sci., MBA • SaaS Business and Operations Leader (2004-2012) • Business modelling and selling • Implementing, scaling and operating 24/7 • GM, North American Messaging – Nokia • VP, Operations – OZ Communications • • • • 4 Revenues: Subscribers: Hosted systems: Service availability: ©2013 bolti systems Company Confidential 195% CAGR over 4 years 8 million monthly active users 1B transactions processed per month 99.95%
  5. 5. Where to Begin? Product Offering Pricing Getting Customers Trial vs. Freemium Churn Metrics etc… 5 ©2013 bolti systems Company Confidential Upselling
  6. 6. Agenda 1. 2. Pricing and Revenues 5. Company Confidential How to Acquire Customers 4. ©2013 bolti systems What to Sell 3. 6 Participant Worksheet Group Discussion / Review of Worksheets
  7. 7. Credits • The following sources were used to create content for this presentation and are excellent references for SaaS business planning: • Lean Analytics – A. Croll and B. Yoskovitz • Forentrepreneurs.com – D. Skok • The Entrepreneur’s Guide to Customer Development – B. Cooper and P. Vlaskovits 7 ©2013 bolti systems Company Confidential
  8. 8. 1. Participant Worksheet
  9. 9. Participant Work Sheet GOAL OBJECTIVE Steps on Staircase GOSPA Framework - Ref: Business Coach for Professionals.com 9 ©2013 bolti systems Company Confidential STRATEGIES How to Get There NOTES
  10. 10. 2. What to Sell Cause and Effect Copyright © 2013 Bolti 10 ©2013 bolti systems Company Confidential 10 Credit: R. Ganoza
  11. 11. Success ! 80% of users say your service is “must-have” = Success 50% of users churn within a few months = Failure “Get close to your customers” = Cliché …. But it increases the chance of your customers staying 11 ©2013 bolti systems Company Confidential
  12. 12. What’s Wrong With This Picture? “I need to work on my virality” SaaS Manager A: Nothing… if your customers are staying… 12 ©2013 bolti systems Company Confidential
  13. 13. Getting Customers Who Stay – Interview Them Tell Your Story – Why It Matters Their Problems Have Them Rank Problems/Solutions Find out About Related Problems Steps Their Purchasing Process Criteria Concerns Concerns 13 ©2013 bolti systems Company Confidential
  14. 14. To Do #1 - Measure Responses Vs. Expectations Your Estimate (What it has to be) Problem • % who have this need • % who are aware of having this need • % who have a related problem Solution • % who try product • % willing to pay • % churn 14 ©2013 bolti systems Company Confidential Reality Do Not Build (too much) Until You Know
  15. 15. To Do #2 – Measure Usage Spend 20% of Development Effort Instrumenting Your Product • See where value is • See how they get to the value • Segment your customers You Own the SaaS Box Look At the Data Inside! 15 ©2013 bolti systems Company Confidential
  16. 16. Recap – What to Sell Measure – Be Sure Customers Want Your Product Build It Measure Usage to Refine Offer 16 ©2013 bolti systems Company Confidential
  17. 17. 3. How to Acquire Customers
  18. 18. Your View of the World Their View of the World CAMPAIGNS S E O S E M What’s the real cost? E M What’s their uptime? ROI VISITORS They want my credit card # ? They’ll spam me How secure is it? TRIALS Conversion % Will I get locked in? What’s the payback? What if they get hacked? CLOSED DEALS Conversion % How will we integrate it? Ref: D. Skok, forentrepreneurs.com 18 ©2013 bolti systems Company Confidential
  19. 19. Don’t just organize a sales process (left hand side) Organize your teams so they address the customer’s concerns (right hand side) How? Give Potential Customers: - ROI tool - Testimonials - White Paper on security - List of employee certifications - Access to Live Chat etc. 19 ©2013 bolti systems Company Confidential
  20. 20. Who’s Knocking on Your Door? 20 % Serious Evaluators 20% Casual Evaluators Convince them it’s the right choice Turn Them Into Serious Evaluators Convince them to evaluate 60% Curious Visitors Source: Lean Analytics 20 ©2013 bolti systems Company Confidential
  21. 21. Customer Acquisition Cost (CAC) Which Sales Model to Pick? Pick a Sales Model that Aligns with Customer Buying Process Not Only the One You Can Afford No Touch 21 ©2013 bolti systems Company Confidential Inside Sales Channel Sales Field Sales
  22. 22. Recap – How to Acquire Pick the “best” campaigns Organize your teams to address customer concerns Pick sales model that aligns with customer buying process 22 ©2013 bolti systems Company Confidential
  23. 23. 4. Pricing & Revenues
  24. 24. Lifetime Value of Customer (LTV) & Customer Acquisition Cost (CAC) • LTV L Lifetime gross profit from customer CAC Cost (lead gen & selling) to acquire the customer* = Cost / # signed deals *excludes selling mgmt and marketing 24 ©2013 bolti systems Company Confidential
  25. 25. Some CAC/LTV Drivers • Virality • Inbound mktg • Touch-less conversion CAC • Churn LTV • Field sales • Outbound marketing • Scalable pricing • Upsell Ref: D. Skok, forentrepreneurs.com 25 ©2013 bolti systems Company Confidential
  26. 26. Scalable Pricing – Getting More as You deliver more value Best In Class Companies… • Grow rev/customer by 20% per year Users Strategy: add Cross-sell Axis • Convert 0.6% of free users to paying (month) Strategy: Allow self-upsell Freemium Starter Enterprise Pro Features Depth of Usage 26 ©2013 bolti systems Company Confidential • • • • # transactions # projects # Gbytes # calls to support line • Convert 2.3% of paying users to a higher tier (month)
  27. 27. 27 ©2013 bolti systems Company Confidential
  28. 28. Monthly Recurring Revenue & Churn CHURN # of abandons during month # customers at beginning of month Month 1 Month 2 Month 3 Month 4 Month 30 Bookings 10,000 $ 12,000 $ 14,000 $ 16,000 $70,000 MRR Added This Month $ 10,000 $ 12,000 $ 14,000 $ 16,000 $70,000 MRR Prior Months $ - $ 10,000 $ 21,750 $ 35,206 $910,076 Churn at 2.5% $ - -$ 250 -$ 544 -$ 880 -$22,753 Total MRR Monthly Churn / MRR Added 28 $ $ $ 21,750 $ 35,206 $ 50,326 ©2013 bolti systems Company Confidential 10,000 ---- 2.1% 5.5% 32.5%
  29. 29. Impact of Churn on Monthly Recurring Revenue Churn % $8,000,000 -2.5% MRR $7.439 M $7,000,000 $6,000,000 $5,000,000 MRR at 2.5% $4,000,000 MRR at 5% MRR at -2.5% $3,000,000 2.5% $2.612 M 5% $1.827 M $2,000,000 $1,000,000 $1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 29 ©2013 bolti systems Company Confidential
  30. 30. Churn Strategies • Strategy 1 - Track segments separately • Power users vs. casual users • Unpaid users vs. paying customers • Strategy 2 - Measure churn at various intervals • Different root causes • Strategy 3 - Keep churned users in mind • Consider nurturing them back to paid use • In event of feature or price changes Source: Lean Analytics 30 ©2013 bolti systems Company Confidential
  31. 31. 31 ©2013 bolti systems Company Confidential
  32. 32. Churn is a Lagging Indicator -Customer Engagement is a Good Predictor • Strategy #1 – Use Customer Engagement metrics to identify and address at-risk customers • Not behaving as you’d expect • Blocked at a certain stage • Changing patterns • Strategy #2 - Use Customer Engagement data to find “great” customers, then figure out: • Why are they behaving that way • How to get more of them 32 ©2013 bolti systems Company Confidential
  33. 33. Recap – Pricing and Revenues Develop multi-axis pricing Ensure LTV >> CAC Implement Churn and Upsell strategies from Day 1 33 ©2013 bolti systems Company Confidential
  34. 34. 5. Group Discussion / Review of Worksheets
  35. 35. Merci len.madigan@bolti.com (514) 262-8756 www.bolti.com

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