Guy Nirpaz is the CEO and co-founder of Totango, which analyzes user actions on SaaS applications, providing sales teams invaluable information in qualifying prospects and prioritizing people to contact who are most likely to buy (or renew).
If you work at an SaaS (software as a service) company, it’s likely your revenue is driven by free trials and the rate at which those trials convert to paying customers. Finding ways to increase trial conversion rates is perhaps the best way to make a significant impact on new customer acquisition.
A good trial conversion rate is the ticket to success, but it’s not always clear how best to improve it. Below are five tips every SaaS company should keep in mind to help increase their trial conversion rate and increase user signups.
1. Measure Everything and Measure Correctly
You need to be measuring all the time and looking at the right metrics in order to improve trial conversion. Data and metrics are your friends. However, wrong metrics, or “vanity metrics,” may lead you to the wrong course of action.
For example, measuring a single “conversion rate” from trial signups to paying customers will not help you understand where issues exist (are you bringing in incorrect leads? Is the product value too vague to understand? Is the user experience too complex or difficult?).
2. Turn Leads Into Opportunities for Your Sales Team
The SaaS business increasingly relies on inbound marketing for lead generation, which creates the potential for unqualified leads. Unqualified leads are users that signup for a trial but have no intent to buy. Unqualified leads run the risk of overwhelming the (always short staffed) sales team and not allowing them to focus on interacting and closing deals.
Building an intelligent qualification process is crucial. You need to consider source marketing, demographics and anything else obtained from the lead capture process. You can identify true buying intent by looking at the behavior of the user on the SaaS application. This is often a key indicator of how seriously they are evaluating the service. Start off with something that makes sense and constantly measure and improve your qualification criteria. In the end, you should look at the percentage of qualified leads that convert as your best metric.
3. Monitor Contact Rates
You may have many trial accounts and a sales team that is meant to facilitate their buying process, but is your team effective? The answer lies in two key metrics:
Contact rate: The percentage of (qualified) leads that your sales team is able to contact.
Contact conversion: The percentage of those contacted that end up converting to paying customers.
Contact rate tells you if your team is capable of dealing with the in-flow of new opportunities. A low rate may indicate they are short staffed or using improper tools to help them connect. Contact conversion shows how effective they are in their interactions. A low rate may indicate improper training or incorrect practices.
4. Remove Friction from Your Processes
New users engage with your service to address a business or personal need they have. The experience you build for them should aim to remove any friction that delays his or her ability to fulfill that need.
For an ecommerce website, this can be relatively simple. In a complex SaaS product, however, the challenge is much greater. One indicator is how many of those trials activate, meaning, the ability of users to actually get their accounts up and running with ease. In this context, “activate” is not just about creating a trial account, but whether a user can take steps to reach the underlying value.
5. Understand the End User and Improve
It’s best to look at your trial and the way prospects are evaluating your service in a granular way. Do they understand the value? Can they easily get to an activity? Tracking this makes it easier to identify the missing element that could make more people convert. Even though it can be difficult to get feedback from users, this data will help you analyze their behavior and indentify points to improve.
By understanding what parts of your product your users use and value the most, you can make sure you invest your product development resources correctly and tailor your messaging to highlight those areas.
Image courtesy of iStockphoto, Jirsak
More About: analytics, business, SaaSFor more Business & Marketing coverage:Follow Mashable Business & Marketing on TwitterBecome a Fan on FacebookSubscribe to the Business & Marketing channelDownload our free apps for Android, Mac, iPhone and iPad
Posted on Wed, 10 Aug 2011 17:59:35 +0000 at http://feeds.mashable.com/~r/Mashable/~3/8YF3QPhUeJY/
Comments: http://mashable.com/2011/08/10/saas-conversion-tips/#comments
If you work at an SaaS (software as a service) company, it’s likely your revenue is driven by free trials and the rate at which those trials convert to paying customers. Finding ways to increase trial conversion rates is perhaps the best way to make a significant impact on new customer acquisition.
A good trial conversion rate is the ticket to success, but it’s not always clear how best to improve it. Below are five tips every SaaS company should keep in mind to help increase their trial conversion rate and increase user signups.
1. Measure Everything and Measure Correctly
You need to be measuring all the time and looking at the right metrics in order to improve trial conversion. Data and metrics are your friends. However, wrong metrics, or “vanity metrics,” may lead you to the wrong course of action.
For example, measuring a single “conversion rate” from trial signups to paying customers will not help you understand where issues exist (are you bringing in incorrect leads? Is the product value too vague to understand? Is the user experience too complex or difficult?).
2. Turn Leads Into Opportunities for Your Sales Team
The SaaS business increasingly relies on inbound marketing for lead generation, which creates the potential for unqualified leads. Unqualified leads are users that signup for a trial but have no intent to buy. Unqualified leads run the risk of overwhelming the (always short staffed) sales team and not allowing them to focus on interacting and closing deals.
Building an intelligent qualification process is crucial. You need to consider source marketing, demographics and anything else obtained from the lead capture process. You can identify true buying intent by looking at the behavior of the user on the SaaS application. This is often a key indicator of how seriously they are evaluating the service. Start off with something that makes sense and constantly measure and improve your qualification criteria. In the end, you should look at the percentage of qualified leads that convert as your best metric.
3. Monitor Contact Rates
You may have many trial accounts and a sales team that is meant to facilitate their buying process, but is your team effective? The answer lies in two key metrics:
Contact rate: The percentage of (qualified) leads that your sales team is able to contact.
Contact conversion: The percentage of those contacted that end up converting to paying customers.
Contact rate tells you if your team is capable of dealing with the in-flow of new opportunities. A low rate may indicate they are short staffed or using improper tools to help them connect. Contact conversion shows how effective they are in their interactions. A low rate may indicate improper training or incorrect practices.
4. Remove Friction from Your Processes
New users engage with your service to address a business or personal need they have. The experience you build for them should aim to remove any friction that delays his or her ability to fulfill that need.
For an ecommerce website, this can be relatively simple. In a complex SaaS product, however, the challenge is much greater. One indicator is how many of those trials activate, meaning, the ability of users to actually get their accounts up and running with ease. In this context, “activate” is not just about creating a trial account, but whether a user can take steps to reach the underlying value.
5. Understand the End User and Improve
It’s best to look at your trial and the way prospects are evaluating your service in a granular way. Do they understand the value? Can they easily get to an activity? Tracking this makes it easier to identify the missing element that could make more people convert. Even though it can be difficult to get feedback from users, this data will help you analyze their behavior and indentify points to improve.
By understanding what parts of your product your users use and value the most, you can make sure you invest your product development resources correctly and tailor your messaging to highlight those areas.
Image courtesy of iStockphoto, Jirsak
More About: analytics, business, SaaSFor more Business & Marketing coverage:Follow Mashable Business & Marketing on TwitterBecome a Fan on FacebookSubscribe to the Business & Marketing channelDownload our free apps for Android, Mac, iPhone and iPad
Posted on Wed, 10 Aug 2011 17:59:35 +0000 at http://feeds.mashable.com/~r/Mashable/~3/8YF3QPhUeJY/
Comments: http://mashable.com/2011/08/10/saas-conversion-tips/#comments
