Using customer analytics to increase saas revenue

Customer Analytics toIncrease SaaS RevenuesGuy Nirpaz, CEO & FounderTOTANGOguy@totango.com@guynirpaz

SaaS Model Characteristics

Characteristics of a SaaS BusinessFind & Run Model – SaaS should be easily found („get found‟) – No physical barriers to value realizationSmooth Customer Experience – Frictionless customer engagement processes Customer Driven Model – User DrivenSelf – Service… – Evaluation… – Pace…

The Financials…CLTV > CACCustomer Success Marketing & Sales

Majority (87%) of SaaS executives regularly track “CAC related” 1 metrics, with a large percentage (58%) adding or planning to add tracking of “CLTV related” metrics in the next year. Executives at SaaS companies regularly monitor the following metrics: 59% 54% 56% 56% 44% CAC Related CLTV Related Website Unique New Signups Conversion Rate Life Time Value Churn Rates Visitors (Trial to Paying) Plan to track in the next 12 month: 58% 19%5 CAC Related CLTV Related

Customer Engagement CycleMeasure Cust. Analyze Business Proactively Engage Engagement Context

Grow Conversion Rates

SaaS Sales ModelsNo Touch No sales team. Customer self-service37Signals Yammer MailChimpLow Touch Inside sales team + Inbound marketingZendesk Hubspot BoxHigh Touch Enterprise salesJive software Taleo PanayaHybrid Models Mix & match

Low Touch Sales - RealityHigh volume of leadsFrom Inbound marketing activitiesHigh rate of low quality leads75%+ is not uncommonShort staffed teamSales-rep responsible for hundreds of new trialsFocus on opportunities that matterUse conversion data to drive contact priority

3 Things to look at… Conversion RateOverall 2.4% 282 out of 11,332 Signup (11,332) Actively Evaluating Converted (282) a (2,136) Conversion RateActivelyEvaluating 13.2% 282 out of 2,136

Considerations…Calculate conversion after accountshad enough time to convert Signups• Time-based: after trial period passed (11,332)• Freemium: (more complicated) A] understand mean conversion time B] conversion analysis by cohort Actively Evaluating ConvertedWho is “Actively Evaluating?” (2,136) (282)• Demonstrating “buying intent” by trying out the SaaS offering• Measuring can be tricky: A] Return visits B] Activated account C] Specific functionality used

Conversion Signals Conversion RateEntire Population 2.4% 2.4% of ALL trials in May converted (282 out of 11,332) 282 out of 11,332 A smaller segment of the population (2,136 trials) showed a Conversion Rate much higher conversion rate (13.1%). These are all the trials that were active on the service for at Evaluating 13.1% least 2 days. Nearly all converting trials (281 out of 282) exhibited this 281 out of 2,136 behavior Had more than 2 days of activity Conversion Rate An even smaller segment (309 trials) had a much higher Hot 29.7% conversion rate (nearly 30%) These are all trials that had 3 users join the trial account 92 out of 309 during the first 3 days of trial 3 users or more in first 3 days of trial

Who to contact? Who has the team contacted? Contact Rate Hot TOP PRIORITY Your best chance to make a sale! 41% Goal: 100% 129 out of 309 Contact Rate Evaluating HIGH PRIORITY 33% Goal: 100% 799 out of 2,136 Ideal contact target Contact RateEntire Population LOWER PRIORITY 19% 2,179 out of 11,332 Team‟s capacity

Ensure Customer Success

Customer Success - CLTVShorten Time to ValueIncrease Customer LoyaltyReduce chances of churn

Segment Based on MaturitySegment by MaturityNew Accounts – Minimize time to value – Ensure successful initial implementation – Monitor Growth and Expansion – TrainingMature Accounts – Ensure on going value – Exposure to new functionality – Sustained engagement – Look for growth opportunities

Examples

Constantly Increase Value

Higher Engagement = Higher ValueWhat product features are used the most? – Break down by account segment (free, basic, premium) – Break down by lifecycle/maturity (trial, onboarding, established)Proactive outreach to accounts with decline orincrease in usageDeep diagnostics into product area that are notresulting in engagement – Broken UX? Lacking documentation? Low value? – Supplement measurements with customer interviews (qualitative data)

Trial Onboarding Diagnostics: Example Entire Population 15.5% 621 out of 4,002 Conf. Basic Conf. Advance Invite Team Settings Settings Members 20.5% 549 out of 2,675 8.5% 216 out of 510 34.4% 262 out of 760 50% 35% 21%5%+ conversion when going 7%- conversion when going x2 conversion when invitingthrough basic config, but only through advanced config. team!50% of accounts do it. Improve UX Improve UX Optimize UX flow Hide functionality post-trial Tutorial / Marketing

Questions?

Contact Me Guy Nirpaz Email: guy@totango.com Follow: @guynirpaz Skype: guy.nirpaz www.totango.com blog.totango.com

Thank You!

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Using customer analytics to increase saas revenue

by Guy Nirpaz

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