Software as a service is growing fast and becoming insanely popular for startups and entrepreneurs. When it comes to measuring the success of SaaS, there really are 2 important metrics to take into account: Customer Acquisition Cost and Customer Lifetime Value. In order to increase profits, SaaS companies need to minimize the CAC and maximize the CLV. Online software companies need to hang on to their customers as long as possible to ensure fast growth and prosperity.
CLV is what makes a SaaS company truly valuable, let’s take a look how we can help increase it.
You Need Something Special
In about any niche market you can think of, there is a huge amounts of players, but how many thought leaders? Probably one or two. Niches fill up really fast and if there is just 1 player in a niche market, it wont last long until competitors fill the field.
With every new entry, each company brings something to the market with it, but if that is about the same service originally offered by the players before them, it is not going to as useful, both in terms of both customer acquisition and sales. You have to offer something special, a unique value proposition that will differentiate from the rest of the market so that you do not become another part of the “grey area”.
Your job as marketers is to be able to find what our customers want and need and help our production team develop the product and deliver the value to our audience. The more unique your value proposition is, the longer will consumers stick with it. Here are a few questions to help you add value to your SaaS product:
- Is it innovative or the same old, but in a new box?
- Does it help the consumer?
- Is it user Friendly?
- Is there demand for it?
- Is the pricing and quality as good as competition?
- How good is your customer support?
- Is it easy to find help online?
Solve Problems for Your Consumers
The idea of delivering “service” is making the life of your consumers easier and more comfortable with the use of your product or service. People buy certain services, mainly because think that they will actually help them solve their problems they have with whatever the service is used for.
If you cannot deliver them problem solving and comfort, why would they buy from you? Think from their perspective for a second, would you buy a service that claims to solve a particular problem or make it more comfortable for you, but doesn’t really do that? Of course you wouldn’t, and the rest of the people are no different.
Create something valuable for your consumers and make sure that your product/service can ease their pain points. You can do that by carefully examining and understanding your buyer personas.
Establish Knowledge Centers
In order to increase customer loyalty and maximize the value that you provide your customers with, you need to create knowledge sharing centers for them. Its one thing to have a great product/service at your disposal, but completely another to know how to use it to its greatest strengths and advantages.
Customers may be aware that your service/product is top notch and people have achieved great success using it, but they might not be aware of how to actually use it best. Knowledge centers will help educate your customers, give them all the necessary information on how to become successful using your service, what are the main strengths and advantages, learn some useful tips, why should they use your service particularly in the vast market, etc.
Its very important to educate your customers about your product/service in order to maintain them. Otherwise they might get confused at some point and just switch to another company, which actually educates them on how to use the product.
Engage with Your Customers
The fact that there are no negative reactions to your service doenst necessarily mean that your consumers are happy. If they do not interact with you and you don’t hear anything from them, most probably something disappointed them and they moved on without you knowing.
Consumers are your most valuable possession, you have to cherish them. Engage with them constantly, via emails, social media, support forums and website comments. Be on the constant lookout to find and correct any problems, issues or objections or maybe add a feature that they might want.
Note that different consumers have different communications preferences and that is perfectly fine, you have to be available in any format they prefer. Maybe one of them likes communicating via regular mail, so send them a letter in that case. Make sure that you:
1. Provide simple user experience
2. Provide great customer support
3. Can anticipate some of their common questions and be ready with answers
4. Are reachable online 24/7
5. Deliver customer support via experts in the field, not novices
6. Solve their problems
7. Encourage users to communicate with each other and share experience
Don’t Dream, Grow
Make sure that you are not flying in the clouds and dreaming about growth hacking that you might see in the movies. Every business involves hard work, perseverance and dedication in order to prosper. Do your homework, hire the right people for the right tasks in both marketing and sales department and fund them to do their job properly.
A lot of that funding will need to go to marketing and customer support, since customers are your greatest position and you have to do everything to be able to maintain them for as long as possible.
Tell Your Story
Think of any great SaaS company for a second, any you wish. Besides knowing that they are incredibly rich and prosperous, do great marketing, are innovative and what not, they have something else in common. You know their stories, each one of them probably.
You can remember them telling how they created their business when they were young and how they became to be millionaires and they weren’t that great at the start right?
People want to hear your story. It creates an emotional engagement with your company and helps them decide whether they want to use your product/service or not.