Avijit Dutta – Dutch Uncles

Sales Growth in SaaS Product- The Scaling stages

Avijit Dutta — Fri, 19 Feb 2021 10:35:04 +0000

Explore the right conditions for change

There are three-stage of the sales funnel for a SaaS product, namely: Awareness, Education and Selection. In the awareness phase a potential customer discovers the existence of the product. He/she also becomes aware of the problem and the negative impacts of the problem going unsolved. In the education phase the SaaS marketer presents her product as a solution. Also, the prospect explores alternative solutions during education phase. In the selection phase the prospect selects a particular product and signs up for a trial.

However, the sales cycle doesn’t close here. A sale is closed only when the trial user converts into a paying customer. It happens at the end of a successful trial period with the customer upgrading to a paid plan.

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A sale is closed only when the trial user converts into a paying customer.

Beyond the stages of the sales funnel, there are three more phases of significance here: Onboarding, Impact and Growth.

Onboarding

Once a prospect signs up for a trial she is onboarded. It means creating an account for her business, setting up the system, data migration, integrations and user training, etc.

Impact

This is when a customer tastes an early success using the SaaS product. A quick fix solving a low hanging problem for the user is the key here. Impact is the result that the customer was looking for.

Growth

Customers buy a solution with a desired result. They don’t care much about how you solve the problem as long as you solve the problem within his budget and time. Growth happens in the form of an upgrade, renewal or referral when we have created a remarkable first experience (let’s call it RFE) for the user and solved a real problem he or she had.

Let’s have a quick look at a growth-matrix for a SaaS Product

In this 2X2 we have product features (existing, new) on horizontal axis and user type (existing, new) on another. When we sell the same feature to the same user, it is called renewal. When we sell the same feature to a new user, it is called re-selling. If we sell a new feature to an existing user, it is called upsell. Finally, if we sell a new feature to a new user, we might call it a cross-sell.

The typical growth journey of a SaaS product can be put into four stages:

Stage 1

It starts with onboarding some prospects in a target market as trial users, then creating an early impact to ensure renewal of these trial users into paid customers.

The goal here is to ‘recruit’, say, your first 100 users, iterate quickly through early versions to get closer to solving the right problem for the right person.

Stage 2

In this stage we sell the same product features to many other similar users (resell).

The goal here is to increase our reach to 1000s of customers and continue rapid learning and product innovation.

Stage 3

Till now if the product-market-fit is reached, the company ventures into developing extended features for the same customers hence gets into upselling.

By this time your offerings are getting matured. The goal here is to scale within the same domain, upsell new features. You might have up to a million users at this stage.

Stage 4

At this stage the company has more information about the market and the need for the end-users. Hence it might pivot or expand into adjacent markets by building a new product or a new feature for new customers.

The goal is to sustain growth and protect the business you have built through deliberating on all four levers of growth.

There are two necessary conditions for change for a SaaS Product:

Broaden your definition of a sales funnel from a three-step (awareness, education, selection) to a six-step (also onboarding, impact, growth) process.
Identify your growth stage (among the four described above) and align your sales and marketing team accordingly to create maximum sales using the four levers of growth (renew, re-sell, up sell & cross sell)

Read the three-step solution in overcoming the top five marketing challenges in SaaS industry.

The post Sales Growth in SaaS Product- The Scaling stages appeared first on Dutch Uncles.

How E-commerce Helps Small Businesses Go Global

Avijit Dutta — Fri, 12 Feb 2021 10:35:02 +0000

The Defining 90s

The year was 1991. The World Wide Web was introduced. Later in 1994 the first browser, Netscape was launched to access the internet effectively. These two innovations triggered mass adaptation of E-commerce back in the mid-1990s. In 1995 Bezos launched Amazon and later in 1998 Omidyar launched eBay. The world of retail was never the same again. E-commerce disrupted the traditional business models in retail. It not only took away a few barriers to entry but also eased out a couple of significant shortcomings in the traditional retail model resulting in a level playing field for an incumbent.

Who is This Article for?

In this article, we will identify a key factor among many others that drive growth in E-commerce from the perspective of SMBs who are selling through:
E-commerce marketplaces such as Amazon, Flipkart
Social commerce platforms such as Facebook marketplace, Meesho etc, or
its own E-commerce sites.

Why E-commerce?

Before we dig deeper into the growth factors let’s summarise the top three benefits of the E-commerce model comparing and contrasting it with traditional brick and mortar retail.

Discovery

E-commerce platforms allow a buyer to discover the merchandise of her preference like no other physical store can offer because of two reasons. First, the online nature of the catalogue allows a repository of unlimited inventory of items. This enables the discovery of even a niche or low-frequency purchase product to be available in the online store offering a high degree of variety to a buyer. Second, the instant search capability of an eCommerce platform allows the buyer to get to her preferred merchandise in a fraction of a second. Unlimited catalogue and an efficient search function make eCommerce format the king in the long tail of retail. There is a discovery of another kind that triggers purchase actions: price, a significant decision point for a buyer before making a purchase. E-commerce sites allow for easy comparison of merchandise within and across platforms (comparison sites). In traditional retail, this would require significant legwork.

Convenience

E-commerce happens remotely, from the comfort of our homes, offices or even while on the go through mobile commerce. The ease of discovery, ordering, payment, tracking delivery and customer support through chat, email, call 24×7 makes the customer truly the king from the perspective of convenience. Traditional retail doesn’t have such a degree of convenience.

Quality

Most E-commerce platforms and marketplaces have well-defined processes for grievance redressal, returns, refunds and disputes. Moreover, customers are encouraged to publicly rate and review every transaction on product quality, experience of after-purchase customer care to enable transparency and trust on the platform for both the seller and the buyer. This acts as social proof and fuels growth for the deserved one.

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Unlimited catalogue and an efficient search function make eCommerce format the king in the long tail of retail.

Challenges in Growing an E-commerce Business

Since E-commerce technology has lowered the barriers to entry of incumbents by creating a level playing field, the result is fierce competition among sellers. Though it is good news for the buyer, the seller struggles to earn the loyalty of buyers. The unlimited choices of sellers in front of the buyer coupled with instant price discovery have made the buyer extremely demanding on quality as well as price.

What’s concerning the sellers in this scenario you may ask? Such competition often ends in a price war amongst sellers. As we know a price war triggers a vicious cycle of lowering and further lowering of prices to beat the competition to secure orders until it becomes completely unviable.

Moreover, acquiring a new customer attracts a cost called a Customer Acquisition Cost (CAC). These are marketing expenses such as ads, offers & promotions associated with acquiring new customers. Now, the total estimated amount a customer will purchase in her (purchase) lifetime is called a Customer Lifetime Value or CLV. If CLV is significantly more than CAC, the seller is in good shape, otherwise, she has a reason to be concerned.

For a seller, the key question is as follows: How do we earn the loyalty of demanding, price-sensitive discount shoppers? How do we acquire and retain customers?

Here are my thoughts on this. If the product you are selling is a commodity meaning the product does not offer any opportunity to make it unique, price will always be the dominant decision factor for purchase. In such a case a seller is left with few other levers such as prompt delivery, bulk discounts, great ordering and after sale experience etc. If your merchandise has some uniqueness or you can ethically make it appear unique you have created an advantage.

But whatever product you sell, the one factor you can not ignore is Customer Engagement.

Why Higher Customer Engagement Leads to Higher Growth

Customer Engagement can be defined as the degree of involvement your customers have with your brand. It is built through various ways, channels including social platforms through which your customers interact with your brand. Every interaction is an opportunity for the brand to build engagement.

Why care about this? Because customers who feel a higher engagement with your brand:

Come back for repeat purchases hence have a higher LTV,
Spread the word and refer others to your brand hence lower CAC, and
Are easy to retain. All these three means profitable organic growth.

A recent Gallup survey revealed “customers who are fully engaged represent a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer.”

So far, we realise that the one factor that fuels growth in ecommerce is customer engagement. How do we build it, you may ask? Let’s address this question.

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You don’t have to sell everything to anybody and everybody. By using storytelling, and a meaningful narrative you can find your niche.

Here are Seven Ways to Improve Customer Engagement Hence Growth

Step 1: Build an engaged customer base

1. People buy, first your story then your product
Therefore, build an overarching narrative of your brand. This is where you make the promise. This should answer questions such as why care about your brand? Why buy from you? Why now? Be consistent with the story you tell the world. Remember consistency builds trust. And trust leads to engagement. Therefore, content is key.

2. Deliver what you promise consistently
None likes to be short-changed. When we get what we were promised we build trust. When we get a little more than we expected we become a fan. Be authentic, transparent & ethical about your processes right from design, sourcing, manufacturing, packaging and distribution. These days people do care about sustainability and ethics in business.

3. Leverage the power of design
Design the language of the brand not only the processes. Use the power of design in crafting great discovery, onboarding, ordering, payment, and grievance redressal for the user and/or customer. Design for delight not just delivery. For example, if you are selling house paint don’t just sell the paint, help the user throughout the customer journey from discovery, selection, price before ordering the product.

4. Embed higher empathy in customers relationships and after-sales services
Every interaction of a customer with your systems, processes and people is an opportunity to invest into customer engagement. Hence it makes sense to revisit all such opportunities from order confirmation, to return & refund policies, aftersales and grievance redressal system to reflect empathy and fairness. Empower the customer relationship management team with proper training, and instil ownership. When not sure about facts give the customer the benefit of doubt.

Step 2: Guard what you have built

5. Put in place a robust risk management process. This should include online reputation risk management.
Now, that you have built a decent reputation and an engaged customer base take all the measures to protect it. Like a garden requires careful and caring eyes of a gardener your tribe needs to be taken care of and nurtured. Monitor the voice of customers in reviews, social media mentions, besides internal measures such as customer satisfaction scores and returns, refunds and other retention metrics. Have an ORM tool in place so that your team gets alerts on wherever someone mentions your brand in social media or the internet in general.

Step 3: Nurture your tribe

6. Build/find a tribe around your brand
Ecommerce enables the longtail of retail. Therefore, it is about finding your tribe. You don’t have to sell everything to anybody and everybody. By using storytelling, and a meaningful narrative you can find your niche. Once they come to you give them a reason to keep buying from you beyond obvious product usage. It could be a social cause, sustainability, a hobby or a special interest group etc. Contrary to the conventional belief, the more specific the narrative the better.

7. Pamper your tribe on every opportunity
People might come to you because of your narrative but they would not stay unless you deliver what you promise in your narrative. Deliver not once or twice but every day, consistently, incessantly. This will further reinforce your original narrative and trigger a virtuous cycle. As a result, more people will flock to your brand.

Time to time you have to share some reward to your tribe not as a lure to keep them with you but as a genuine appreciation of the trust they have put into your brand. You may personalise some offers using opportunities such as birthdays, and anniversaries just to give you an example. Be creative in keeping in touch with your community meaningfully through emails and social media. Do not spam them with generic promotions rather share something they might care about. And before you know, buying from you and being in your tribe would become a statement of meaning for the Buyers.

Summary

Ecommerce has brought in enormous value for the SMBs over the years. However, driving growth with ecommerce requires a thorough understanding of the underlying factors. By looking closely, we find that Customer Engagement is the single most significant driver of growth in this context. We further explored seven more important dimensions that would help us build, guard and nurture an engaged customer base.

The post How E-commerce Helps Small Businesses Go Global appeared first on Dutch Uncles.

Fast-Track Your Franchise Network to Embrace Growth

Avijit Dutta — Tue, 02 Feb 2021 10:35:02 +0000

Are you a business owner looking to scale your business through franchising? Are you a newbie franchisor concerned about your franchisee network delivering sub-par results in accelerating growth? Well, take heart, this article will throw some light for you to course-correct and fast-track your franchisee network in a four-step action plan.

Franchising business models have worked wonders for many brands across the world when it came to rapid scaling and achieving accelerated growth. In India, well-known brands, such as McDonalds, Subway, DTDC, Inxpress, Lenskart, The British Institute, Sanjeevani and Thomas Cook to name a few, have gained significant success in growth, especially in building visibility and establishing territorial market development.

A caveat: Prima facie franchising looks easy; however, it requires a careful strategy, intelligent tactics and flawless execution to achieve growth on a fast-track.

Before we delve into ‘fast-tracking’ let us cover some foundational ground and key concepts associated with ‘franchising’.

Franchise Model: The Basics

A franchise model works well for businesses that have tasted significant early success in establishing the brand by offering real value for customers in a given market. Once a business has grown past this stage the entrepreneur might explore franchising as a growth multiplier.

In a franchise business model, there are two sides, a franchisor and a franchisee. The franchisor is the business which owns the brand, the product and/or the business format. A franchisee is an individual who takes the rights over using the brand, product and/or the business format of the franchisor in a select location within a defined territory.

In this transaction, the franchisee pays the franchisor an initial royalty (ranging from a couple of lakhs to a few crores) as well as a share of the revenue from operating the business periodically. On the other hand, the franchisor shares the right to using the brand, trademark, products, business knowledge, processes as well as training and marketing assistance. However, marketing support might as well cost an additional 1-3% of revenue generated from the unit depending on the agreement.

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A franchise model works well for businesses that have tasted significant early success in establishing the brand by offering real value for customers in a given market.

Fast-track franchising to fast-track growth

Step1: Evaluate Your Business: Qualify your product and business model for franchising model

This is especially true for businesses adapting franchising for the first time. Please consider the following prompts to evaluate whether your product and/or business model suit the franchising model.

1. Have you achieved significant early success (e.g., revenue, customer base) with your product or service at least in a local market?

2. Can you establish with verifiable data that your customers recognise your brand as valuable?

3. Are you clear on what you want to franchise? Is it a product, a service, or a business format?

4. Have you standardised your product or service experience creating an identifiable, idiosyncratic experience for your customers?

5. Are your business operations & processes such as sourcing, packaging, after-sales, hiring, training & development etc standardised for repeatability and optimised for efficiency?

If your answers to any of the above is a weak ‘no’, rather not an emphatic ‘yes’ then you have more grounds to cover before you should consider franchising. A business which can be franchised requires a strong foothold in the five areas mentioned above.

Step2: Educate Yourself: Understand popular franchising business models

It’s time to take a deep dive into the underlying business models of various franchising models.

Let’s imagine we are a company owning a brand B, selling product P through our store S. We have some early success in a few locations in our town. People love our product and we are making a decent profit thanks to our efforts in standardising and optimizing our key processes. Now we want to accelerate growth. We now examine the options in front of us.

If we want to own and operate our new stores we have put in the investment into leasing or buying the stores as well as bear the cost of operating the store which includes inventory, salary, maintenance etc. In such a case the resource asks for expansion and therefore the financial risk is entirely on us. Is there an alternative, we may ask? Is there a way to fuel growth without requiring a lot of investment on our part?

Say, our business advisor recommended that we consider franchising. He also pointed out that there are three options we can explore.

Let’s take a dip into those with two key questions in mind: a) who owns the stores? and b) who operates the stores? We plot the ownership on the horizontal axis and operations on the vertical axis and the following 2X2 emerges.

FOFO Model

If the store is owned (or leased) and operated by the franchisee we have a FOFO model. This model is suitable if we have completely standardised and optimised our products and business processes ensuring predictable product quality and customer experience. Also, the reliance on the franchisee to maintain quality and process compliance is paramount because of limited controls on operations and direct contact with the end customer. It follows that we need a strong franchisee audit and compliance process to minimise our risk of reputation. The investment risk is borne by the franchisee. As a franchisor, we still have to do marketing for the store and the cost may be shared with the franchisee.

COFO Model

In this model, the company owns (or leases) the store but the operation is managed by the franchisee. Therefore, the risk of investment into the store is borne by the company. The requirement of product quality and process compliance still lies with the company.

FOCO Model

Finally, we have the FOCO model wherein the franchisee invests into the store real estate but the operations are performed by the company. In such a model the exposure of the franchisee is limited only to the investment part with no access to the operations of the store. It allows the company to have complete control over the quality of offerings. Many international service brands such as Thomas Cook use this model to expand to new countries and territories.

Few more models

A franchisee might take franchise for one single unit to begin with. This kind of franchising is called a single unit franchise. Once the first unit is successful, the same franchisee might take a second and third unit and thus becomes a multi-unit franchise. It might as well be for multiple locations within a city, multiple cities, even countries depending on the nature and market potential of the business.

All these various models are based on a) risk appetite, b) access to capital and c) confidence in deliberating control. Depending on the stage & maturity of the business the company chooses an appropriate one.

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A franchisee might take franchise for one single unit to begin with. This kind of franchising is called a single unit franchise. Once the first unit is successful, the same franchisee might take a second and third unit and thus becomes a multi-unit franchise.

Step3: Build Your Story: Create a strong narrative for ‘why’ your business requires franchising.

There may be several reasons why you might want to explore franchising. Here are a few key ones.

Access funds for growth

Growing a business requires resources. We may use funds raised through equity, a business loan or a network of franchise investors. Deploying equity or debt funds in expansion may not be the best route if we do not have assured flow of capital through successive equity rounds. We might as well decide to fund growth by a combination of equity capital and franchise investments reducing the ask to raise more funds through equity. This might be a cheaper way to fund growth.

Rapid scaling and territorial acquisition

Franchising allows for rapid scaling to multiple locations. The local entrepreneur who is taking your franchise knows the local market better than you do. Moreover, a franchisee will also do the heavy lifting (e.g., daily operations) for you for a particular market freeing up your bandwidth for focussing on product development and marketing.

Reduce risk

A franchise model is essentially a mechanism to share and/or transfer financial and market risk to participants. This way risk is decentralized and fragmented. Performance of one unit may not affect others. You can always close/shift a non-performing unit to other potential location without attracting a full share of the cost of failure.

Build a lean organisation & reduce cost

Franchising essentially means a transfer of risk through outsourcing a major chunk of ground operation through a mutual risk-reward structure. Because in most common franchising model’s unit operation is managed by the franchisee you don’t have to engage your resources in hiring and managing employees. This means you can create a lean organisational structure saving you costs and management bandwidth.

Two stories: Two categorically different whys

We need to build up one story that you tell yourself defining “your whys” as a franchisor, another for a potential franchisee defining “their whys”. Remember we all want to believe in a story. If we do this right, the acquisition of franchisees becomes easier.

Step 4: Design a replicable system: Ensure appropriate structural change in the organisation to fit rapid scaling, make it modular

In step 1 we had a list of qualifiers for suitability to the franchising model. Here we discuss organisational structure & operational procedures that facilitate deploying a franchising model.

Standardise brand identity, product, pricing & processes

If we scale a system that is not standardised, we end up with unpredictable business outcomes. Therefore, before we initiate franchising, we must standardise the brand identity, designs, brand communication, product offerings, pricing, and all the key processes from sourcing, inventory management, manufacturing, packaging, distribution etc.

Standardise quality management

Clearly define acceptable variations for all consumer-facing process outcomes along with OKRs. Then deploy an independent quality audit & compliance team empowered to ensure the desired customer experience. If we fail in this aspect, we become vulnerable to reputation risk. It is also prudent to have a central Online Reputation Management (ORM) measure in place.

Document key aspects of running a franchised unit

Have a brand manual defining brand identity, and communication, dos and don’ts for a franchisee. Have an Ops manual to elaborate on the key processes we have mapped for ensuring expected quality.

Onboarding, training, & development

Deploying a well-defined onboarding process with clearly defined KPIs and OKRs will set the right expectations from the get-go. This should include assistance on hiring and periodic training for employees of the franchisee. By being orderly we obviate possibilities of failure of a unit besides delivering a consistent customer experience across units.

Design an organisation clearly defining Centralised and De-centralised functions

To run a successful franchise network, we have to have some centralised functions such as branding, design, marketing, sourcing and distribution, product, customer relationship management, and quality assurance under the direct control of the company. Other functions like store operations, local BTL marketing, unit payroll etc could be decentralised and delegated to the franchisee. However, for every outsourced and decentralised process, we must have clearly defined OKRs and monitor those appropriately.

Have a financial model and strategy blueprint for each unit

A financial model must be defined with parameters for investments, fixed and variable costs, local market size, existing competitions etc. to evaluate the viability of the opportunity in the selected territory. It should define expected cash flows over years, payback period, overall profitability in medium to long term.

A strategy blueprint is overall planning from launch to exit (if desired) for the franchisee. It addresses key questions related to the launch, demand generation, and fulfilment.

Final thought

If we closely observe successful franchising businesses across the world, we will see that careful planning, a well-defined strategic blueprint and effective execution are common themes.

In this article, we have laid down four phases of franchising journey from the franchisor’s perspective. We start with evaluating our business for fitment to the franchising model. Then, we educate ourselves with all relevant franchising models to design an appropriate model for our business realities. Next, we build a story each for the franchisor and a potential franchisee. Finally, we design a replicable system for fast and reliable scaling.

The post Fast-Track Your Franchise Network to Embrace Growth appeared first on Dutch Uncles.

Proven Marketing Strategies for SaaS Products

Avijit Dutta — Fri, 29 Jan 2021 03:56:04 +0000

In the previous article, we listed the top five marketing challenges for SaaS companies to SMBs in India. To address these marketing failures, let’s discuss a series of proven marketing strategies.

There are three broad aspects to finding a solution to these challenges:

Finding the ideal customer
Narrating a compelling story (and making the promise), finally,
Serving them well (by living up to the promise)

The nine questions that will help you define your marketing strategies for SaaS companies

We will explore the topic with nine key questions.

Who is your ideal customer? Who is a non-customer?

Define a buyer persona. Ask, who decides, who pays, who influences the buying decision. Who uses the product? These are not necessarily the same person. The SMB owner might be the person who pays but his manager could be the decision-maker whereas the executive who is going to use the application is the influencer. Having clarity on the buying ecosystem and the stakeholders in the buying journey would help in deciding the right approach, language, tone and channel for marketing communication.

As a necessary corollary also define who is a non-customer. Define the qualifier and the thresholds well in advance. This will help the sales team qualify a suspect into a prospect quickly saving invaluable time. Remember every minute spent with one prospect is a minute less spent with another. Therefore, it is pertinent that we qualify our leads well and efficiently to optimize opportunity cost.

Here’s a little tip: It might make more sense to go after people who have a real ‘pain’ not only a ‘fit’ for your product. In other words, sell the pain-killers first, vitamins later.

Let’s define our target SMB segment little more granularly with this light.
We will use two dimensions, number of employees and annual recurring revenue (ARR) for this purpose.

Small enterprise: #Employees < 100 and ARR< $50Mn
Medium enterprise: 100 < #Employees < 1000 and $50Mn Large enterprise: #Employees > 1000 and ARR> $1Bn

Different folks, different strokes!

The goals, challenges and risk profiles of these three segments are different therefore we need different marketing strategies. Few differences between the SMBs and Large Enterprises are the following:

Business goals for SMBs are more tactical and short term whereas those for a large enterprise are often strategic.

The risk appetite of SMBs is lower than their Larger counterparts.

Appetite for Time-To-Value (TTV) for an SMB is short whereas large enterprises might wait longer to realize ROI.

Typical challenges with the SMBs are low growth, low productivity and sub-optimal or non-existent processes whereas large enterprises face challenges that come from becoming large. These are slow decision making, higher compliance, lower margin etc.

Where do they hang out? What are the right channels to reach them?

A lot about finding value is in answering the question, where to fish? The ocean is vast, wide and open. The coastline goes on miles after miles. However, we can put our net in a select location at a time. Therefore, if I am looking at catching shrimps I must be in that part of the ocean where the climate supports breeding of shrimps.

Therefore, it’s crucial that you validate your knowledge of places your ideal customer’s hangout, physically, and virtually. Then you will know how to reach them, what tools you need and what is the right time of the day to reach them. You will know whether a google ad campaign of social media marketing strategies would fetch results or you need feet-on-street in physical market places to get your customers onboarded. Please notice these aspects also define how many employees you need in order to scale. It has a direct impact on your cost structure and hence unit economics.

How do I make answering question 1 & 2 above a scalable and reliable process?

Short answer, by building a Sales Engine. Having a bullet proof sales process is the mandate. We should treat sales as a science. Take out idiosyncrasies from the sales process by standardizing the interactions without wiping out the potential for personal touch in the sales communication. If your process requires a lot of manpower to scale then rethink. There must be something we are doing inefficiently. Think marketing automation, self-guided low-touch onboarding and grievance redressal such as chatbots, a well written FAQ etc.

Why should we care about having a story, you ask? Because there is no better way to connect to a human than telling a story that resonates. We have been using stories since eternity to inspire ourselves to shape opinions, take actions, help navigate the world or recover from a painful memory. We all tell ourselves a story that we believe. So, your product must also have a story. Let’s explore a few questions that might help finalize our marketing and sales communications story.

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Business goals for SMBs are more tactical and short term whereas those for a large enterprise are often strategic.

- Avijit Dutta

What is the ‘pain’ of our product solves? Are users aware of the pain? The marketing strategies to solve them now?

It’s a no brainer that our marketing strategies should clearly communicate the problem we are trying to solve. If you are solving a problem that is obvious such as a procurement system that optimizes sourcing or a simple CRM for a small business, your product might resonate with an SMB owner. However, if you are selling a marketing automation product or an operations process optimization solution it might be less obvious to a typical SMB owner profile. He might require a fair bit of educating before he realizes that he has this problem.

In the article, 5 reasons why SaaS marketing fails, we have explored a typical SMB user profile. A unique challenge with an Indian SMB owner is that he is not likely to be active on the internet and social media. However, the younger generation of an SMB household is active on social media. Can we take their help to reach their parents? Should our social media ads target these younger household members rather than their parents? These are hypotheses waiting to be tested.

If the business owner is aware of the problem, he might have a temporary hack, a ‘jugaad’ that is holding the fort for him and he might be unwilling to spend additional resources to avail a ‘proper’ long term solution. This brings us to the mindset challenges we discussed in our previous article. It is pertinent that we have appropriate response to such objections.

Why would they care about our marketing strategies? What are the impacts of their inaction? What is the ‘real’ cost of inaction? Does spending on such a solution make sense?

The mindset of change resistance, technology aversion, lack of vision and unwillingness to add another cost are some of the resistance we have to deal with in selling our SaaS solution to an SMB owner. Educate, educate, educate. That’s the watchword. Awareness and education should be at the core of our marketing content strategy.

When faced with change resistance it is often useful to highlight the impacts of not availing the solution. It might be decreasing revenue, uncertain profitability, low productivity etc. The impacts of inaction could trigger a FOMO (fear of missing out) response and change the mindset of the user to try out the product.

Finally, our marketing strategies must address the ROI question as objectively as possible. If we are able to quantify the outcomes, relate those to a business KPI such as potential cost-saving or productivity gain or better conversion rates, etc. and back it up with relevant case studies, verifiable testimonials and social proof we can pull the customer out of his concerns into the zone of the excitement of trying out a new and novel solution embracing change.

What motivates them to take action? Why implement these marketing strategies now?

Nothing else motivates people more than a desire to remove the pain. So, the marketing content must subtly but repeatedly speak about the most significant pain the product is solving. It could be low sales, high cost due to a productivity blind spot etc.

How do you create a sense of urgency for taking action? Highlight the value erosion linked to time. Put an estimate to the real cost of inaction and help the customer see the bigger picture.

Finally, make it easy for a new user to try out your product. Once he is on trial solve a low hanging pain for him and let the experience speak for itself.

What’s the role of content in your business?

Well-written marketing communication or a sales script produces an authentic dialogue between your customer and your band. It establishes the context and addresses the most crucial reservations of a user/buyer from using your product. Content is king. There’s an old saying about the companies of the new economy that every company is a media company.

Here’s a little tip: In the book, The Science of Selling the author talks about six choices involved in any sales decision. The idea is to help your prospect make these six choices progressively and arrive at a solution that you are offering. That’s how you pitch.

Why change? Why now? Why in your customer’s industry? Why your customer’s company? Why your customer’s product? Why spend? This is how you arrive at a promise they can’t say ‘no’. When a user signs up for a free trial your actual work has only begun. A SaaS sales cycle is not complete until a trial user upgrades to a paid plan.

The onboarding and customer success team may not be part of the sales organization in many SaaS organizations but this is where the marbles slip off the hands. We must not celebrate too early by looking at an uptick in number of trial users. The key to retention and ‘real’ sales closure is in creating a Remarkable First Experience, let’s call it REF. A sales engine that produces REF gets referrals and hence a low or no cost growth.

How do you create a Remarkable First Experience (REF)?

Remember at this stage (sign up for trial) a user is trying to form an opinion of your product. A trial is an opportunity. We must use it to give our user a reason to celebrate her decision to try our product. The only way to do so is to create a remarkable first experience. This should include a smooth onboarding process that makes her feel welcomed and a quick win solving a low hanging real ‘pain’ point. These two will undoubtedly validate his decision to buy your product.

Are you tracking the right metrics? Are you using data for growth?

Often as a SaaS-preneur, we end up tracking only the most obvious metrics. Because finding a product-market-fit is iterative, timely feedback and learning insights from early activities decide success or failure for a venture. Therefore, we must go beyond the obvious.

Volume metrics such as number of downloads, subscription revenue, Monthly Active Users (MAU), Daily Active Users (DAU), number of uninstalls are one-dimensional metrics. These give us a snapshot of the past. Nothing more nothing less. Whereas metrics such as a conversion rate, churn in percentage gives us a little more information about user behaviour. These are two-dimensional metrics.

Then we have some vanity metrics which don’t serve anyone in reality such as likes and shares on Facebook, Instagram, followers on social media pages etc. Tracking these are not enough. It is not unusual to plot some of these metrics over a timeline and see how user behaviour has changed over time. These are third-dimensional metrics. And most stop there.

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Often as a SaaS-preneur we end up tracking only the most obvious metrics.

- Avijit Dutta

Can we go further with the data the product is generating? Yes, we can, and we must. For example, a cohort analysis can give you more insights into retention behaviour rather than just tracking churn on a timeline. In a cohort analysis a particular subset of users (say who downloaded your app in Jan) are tracked over the months instead of clubbing all users as one. It gives insights into how user behaviours have changed from cohort to cohort over time. It allows the entrepreneur to narrow down performance of a particular growth campaign, or product update objectively.

You may also build your own interesting 2×2 matrices. Let’s say we want to optimize our sales and marketing funnel by assessing our efforts. In a particular month we have 1000 prospects, 300 demos and 100 signups for trial products. So, the Show Rate (CR1) is 300/1000 i.e., 30%, the Win Rate (CR2) is 100/300 i.e., 33.33%. This is obvious. But let’s build a 2X2 with these data.

Campaign A has a higher show rate meaning more people took the demo but low win rate meaning either the performance of the demo wasn’t good or our product doesn’t match their expectations. So, feedback goes to the demo and product team.

Campaign D has a low show rate but a higher win rate, meaning the targeting was right and the sales demo team also did a great job. However, we need to follow up with this cohort of prospects for showing up for a demo.

Campaign C is a clear winner with high show rate as well as high win rate. It means the targeting, channel and product-fit is just right.

This is an example of a four-dimensional analysis.

You may go further to five-dimensional analysis if you trace the same 2×2 over time, say weekly or monthly. You may also create cohorts for your sales team at team leader level and analyze and compare their performance with respect to each other.

Here’s a little tip:

In the early phase of a product, launch runs your company like a collection of projects driving well-defined growth initiatives. Every project should have a start and end with a clearly defined hypothesis to test within the defined time frame (maybe in weeks) with a defined measurable success criterion. Then be vigilant on the data these efforts are generating. And, of course, go beyond the obvious and invent the metric you need.

In summary, it is apparent that if we are able to address these nine key questions above with the right mindset and take the suggested initiatives, we won’t have to worry much about the switching tendencies of the customer. Let’s understand that switching is a ‘cost’ to the customer hence she is not likely to indulge in switching from your product if you don’t give her a reason. We must ensure the product, as well as the system architecture, are interoperable enabling quick migration in case the client wishes so. These marketing strategies signal our values of customer centricity (keeping customer’s interest first) and our confidence in the product and the experience we are offering to the market.

The post Proven Marketing Strategies for SaaS Products appeared first on Dutch Uncles.

5 Reasons Why SaaS Marketing Fails

Avijit Dutta — Tue, 19 Jan 2021 16:08:21 +0000

Benefits of adapting to SaaS are evident, then why is it so hard to market SaaS products to traditional Indian businessmen.

SaaS industry is promising a great deal of growth. By 2025 the SaaS opportunity, only within the SMB (Small and Medium Business) segment, is estimated to be US $5-10Bn. Moreover, as per NAASCOM, there is significant uptick in interest among the SMBs for SAAS products. Astonishingly, these opportunities are proving latent to potential customers in India. Sample this: India has 6 SAAS unicorns with Annual Recurring Revenue (ARR) more than $1Bn. However, 60% of their revenue comes from the global market. 70% of the Indian SaaS companies (with ARR>$50Mn) have built products for both SMB as well as enterprises. The question arises- Why, in spite of interest, India’s overlooking the use of SaaS? A clear explanation lies in understanding the marketing fails of SaaS.

It seems that there is a slow adaption of SaaS products by Indian companies, especially the Small and Medium Businesses (SMBs). If the apparent benefits of adapting to SaaS are evident, then why is it so hard to market SaaS products to traditional Indian businessmen? To explore the top five challenges in marketing SaaS products to SMBs in India, one needs to dissect the selling process.

How a SaaS product is sold?

The whole idea of marketing and sales of a SaaS product starts from a) identifying a suspect b) converting her into a prospect, and finally c) into a paying customer. It happens through the following phases of development:

Awareness

Education

Selection

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A great first experience is the mandate for a successful closure. The post-trial period is a good indicator of that.

Awareness

Many times an SMB owner might not be aware of the problem he/she is having. This is particularly true for traditional businesses because they have been doing the same work for generations manually and might have developed a blind spot to recognize the need for process improvement through automation or digitization. Therefore, having the awareness of a problem is the foremost requirement in the buyer’s journey. Awareness of a problem provides the motivation required for searching for a solution.

Education

In this phase, a buyer is exploring how others are solving a similar problem that he/she is facing. In this state of mind, the buyer is ready for learning about various possible solutions including SaaS products in the market. This is the right phase for prospecting these buyers.

Selection

Once the buyer has acquired information about competing products and existing solutions relevant to him or her, a purchase or rejection decision is made. In large companies, this decision making might take longer because of the involvement of multiple stakeholders. However, for SMBs, this is fairly quick because typically the owner of the business takes a call.

5 reasons behind marketing fails for SaaS

#1 Poor Discoverability:

Incorrect Prospecting

Any product is a solution to a problem. The person facing the problem has to know that the solution exists. Therefore, SaaS product companies have to be visible to their target customers. One way to do this is by going where your customers are. In the digital world, that means being present in the relevant social media forums and platforms. The challenge with many traditional SMB businessmen is that they are not very familiar to the online platforms. So, a pertinent question to ask is: Is the marketing communication reaching the right set of audience?

Poorly executed Go-To-Market (GTM) strategy

At the early stage of the venture, SaaS entrepreneurs may not have the resources and the know-how to reach to his/her target customers. Moreover, a typical SaaS Founder is more of a tech genius than a marketing person. Hence, instead of building a well-researched go-to-market strategy, they rely on run-of-the-mill digital marketing agencies and their standard marketing approaches for user acquisition. A poorly articulated, poorly executed and ill-measured marketing strategy invariably results into sub-par outcome.

Not measuring right marketing metrics

Marketing is an iterative process. We never know at the beginning what strategy and/or tactics will work. Therefore, the only way to get to a strategy that works is to start with one, measure the right metrics and refine approaches based on the insights gathered in the previous run.

Language of marketing communication

Lastly, focus on the language. As per Indian constitution, there are 22 regional languages in India. Though English is an official language in the country, not many SMB business owners are comfortable in that language, especially the ones from tier 2 or tier 3 cities and townships. Having the entire marketing communication in English obviates a large section of the SMB business owners out of the marketing funnel.

#2 Mindset of SMB:

Let us assume a buyer persona from the SMB segment- A male, in his fifties, operating from a tier-2 or tier-3 city running a traditional business relying on manual processes. It is likely that he has experienced digital technology only recently with an upgrade from his feature to a smart phone that too when his daughter insisted. He might have a couple of computers being used by his employees or his son who helps him in the business. This man has spent his youth watching only two channels on television (Doordarshan), a couple on radio (AIR), and perhaps only Ambassador/Alto as a fancy car on the road. It is his entrepreneurial spirit, grit and hard work that have got him to where he is today i.e., owning a decently sized business and even providing livelihood to others in his small town. There’s no wonder he counts every dime and never spends without ROI.

On the other hand, a SaaS start-up Founder is university educated, likely a technology graduate who started to code at the age of 15, has the most advanced and most expensive gadgets for work and entertainment. He follows Elon Mask as his unofficial mentor, knows all the venture capital partners by heart, believes in the potential of the India story and a dreamer who wants to become a millionaire before his next birthday.

The challenge is to build a bridge between these two, bring them on the same page to solve the same problem. The gap in the mindsets is huge. On one side we have fear of technology, resistance to change, convenience of business as usual, sometimes even a lack of vision. On the other side there is impatience to embrace the ‘logical’ next step of using technology and open the door to exuberance of productivity, and growth.

Roadblocks:

Fear of technology

Lack of vision: Unable to see value/benefit

Change resistance, preference to business as usual

Price sensitivity, e.g., Obsession with ‘free’

#3 Switching Cost & customer lock-in:

A switching cost is the cost or effort a user needs to put-in to change the service provider. For example, if you are using a service provider ‘A’ for your mobile connection and later you want to switch to another service provider ‘B’ for whatever reason, how easy or difficult it is for you to migrate, defines the switching cost in this context. If there is no number portability, changing your service provider would mean you have to give away your number which may not be a preference. In that context switching cost would be high and you might be locked-in to service provider ‘A’ until you are willing to let go your number. Making number portability mandatory (by regulation, e.g., TRAI) reduces this switching cost to a great extent.

Now the question is, should a SaaS product have a low or high switching cost.

Failing to build trust, loyalty

If the switching cost is high, you can expect to lock-in your customers ensuring stability in revenue. However, your customers may not be as happy because they would be bound to your service even if they have reasons to leave. Hence, they might not subscribe to your service in the first place.

Difficulties locking-in users

If the switching cost is low, customers can feel more empowered and might take your services because they know they can leave if they are not happy later, without many repercussions. It is important to note that your customers will definitely leave if they are not happy with services.

Crowding of market (buyer’s market)

When it comes to competition, there is a dichotomy: if there is no other player in your chosen market probably that market is a myth, if there are a lot of players in the market maybe you are late. Many a times marketing efforts fail because we are solving nobody’s problem, other times we might be solving a problem that has been solved a million times before. In both cases marketing fails to acquire paid users.

#4 Limited interoperability

Portability is the ability to transfer data from one cloud service provider to another without much hassle. Interoperability on the other hand is the capability of the system components (such as application software, storage, security, etc) to function seamlessly in a new cloud environment.

In most cases, data migration is not very cumbersome these days. However, if the SaaS platform being used is not interoperable, customers using the platform for some time may be locked-in even if they want to move to a new cloud service. As discussed in the previous section, customers don’t like losing control over their choice of SaaS service providers. Therefore, well-informed customers will shy away from your SaaS product if they find out that your system has limited interoperability and may not suit their requirements in the long run.

The architecture of the entire SaaS delivery model of the SaaS product is crucial in customer retention. Even if you may get success in getting the customer to trial, he is less likely to renew when he figures out such limitations.

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A typical SaaS Founder is more of a tech genius than a marketing person.

#5 Poor Integration support:

Information and data security are a pertinent concern when using a SaaS platform. Many clients might want to keep the most sensitive data in a private cloud. There may also be some existing applications (in-house or external) the customer might want to continue to use besides the new SaaS product. This invariably leads to a requirement for system integrations for the new SaaS product to be functional for the SMB customer.

Therefore, a great first experience is the mandate for a successful closure. The post-trial period is a good indicator of that. One must deliver a great first experience so that the user converts in to a paid customer after trial period.

Impact of Marketing Fails on SaaS product

When these challenges in marketing and sales are not addresses properly, the SaaS start-up gets a lower ROI on the marketing spend. Customer acquisition cost (CAC) goes up and may become unjustifiable because of lower customer lifetime value (CLTV). Because of lower traction on user acquisition and poor unit economics (money made on every sales) investors might lose confidence on the product, market, or the team. As a result, the start-up might fold prematurely.

For a marketer (CMO/an Agency), it means that they would lose the account because the result they produced did not justify the exuberant fees they charge. They also tend to lose their position of thought leadership and brand value in the market.

The SMB customer who tried his hands at using technology for the first time gets a wrong impression of the usefulness of technology and might slip back to his position of change resistance and comfort of business as usual. Instead of becoming a cheerleader and evangelist for embracing new technology and SaaS products he becomes a naysayer in his network because he had a sub-par experience dealing with it. It might spoil the market for a similar SaaS product and elongate the technology adaptation in a segment which is already sluggish in embracing change.

So, what’s next then?

Well, the India SMB opportunity is a humongous one and the formal economy is only a fraction of the informal and semi-formal SMB economy. Undoubtedly, the benefits of technology adaptation for the SMB are evident. SMBs who would not embrace the change will remain small forever (if not shrunk to non-existence). SaaS entrepreneurs building solutions for SMBs in India would thrive only if they take a holistic approach. After all, problem-solving requires an integrated effort by designers, technology experts, and marketers in order to reach the holy grail of innovation, a product-market-fit.

The industry is brimming with opportunities and businesses are emerging. Sooner or later, someone is going to solve these problems. Are you going to be the one?

Read more on our website on topics like Just out of College? You Are Not Too Young to Start: Studentpreneur.

The post 5 Reasons Why SaaS Marketing Fails appeared first on Dutch Uncles.

First Step to Generate Leads: Key Perspectives You Can’t Miss

Avijit Dutta — Sat, 16 Jan 2021 09:19:54 +0000

The Demand Generation Context

Lead generation is a process, a set of activities required to fill the top of a marketing funnel. It is the process through which a ‘suspect’ is converted into a ‘prospect’. By definition, a suspect is a person or an entity who is outside the sales funnel but who essentially emits some signals (such as visiting your website, downloading content, sharing email and phone number, etc.) that (s)he might conform to our target audience. However, we have to validate our assumption and qualify a suspect into a ‘prospect’. Before we get to the challenges to generate leads there are three more questions, we need to clarify in order to establish the market segment your product can be categorised. Those are:

What is your average revenue per account per annum (ARPA)?
How many accounts do you need to create $100Mn in ARR?
Who is your target customer? Is it a retail user, an SMB or an Enterprise?

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Lead generation is a process, a set of activities required to fill the top of a marketing funnel. It is the process through which a ‘suspect’ is converted into a ‘prospect’.

**Christoph Janz of Point Nine Capital described 8 following types of products:**

1. A microbe: charging $1 a year per account to 100 Mn users e.g., WhatsApp
2. A fly: charging $10 a year per account to 10 Mn users, e.g., Yelp, Brainly
3. A mouse: charging $100 a year per account to 1 Mn users, e.g., Evernote, Mailchimp
4. A rabbit: charging $1K a year per account to 100K users, e.g., Shopify, Kajabi
5. A deer: charging $10K a year per account to 10K users, e.g.,Hubspot, Atlassian
6. An elephant: charging $100K a year per account, e.g., Salesforce, Demandware
7. A brontosaurus: charging $1M a year per account, e.g., Veeva, Workday, and
8. A whale: charging $100M a year per account, e.g., Palantir

Most SaaS companies selling to SMBs start as a rabbit and try to become a deer over time. A rabbit requires an automated no-touch sales process whereas a deer would need an inside sales organisation. For those who do not know the difference, an inside sales organisation has Sales Reps (SDRs) who sell to inbound leads remotely over call and a demo over the internet. A low-touch or no-touch sales process avoids using a human to close sales. The reason is that the LTV coming from the low-ticket size does not permit the availing cost of a sales team. The elephants, brontosaurus and the whale fall under the domain of hardcore enterprise sales with a longer sales cycle and requirement of face-to-face dedicated sales executives (ABS, Account-Based Sales).

Which Segment Does Your Product Appeal To?

From the above discussion three different market segments emerge:

1. B2C: Individual users, low ticket, high volume: microbe, fly, mouse
2. SMB: Small & medium business owners, moderate ticket size, medium volume: rabbit and deer
3. Enterprise: Large enterprises, high ticket size, low volume: elephant, brontosaurus and whales

With this context, let us attempt to understand the challenges to generate leads as these three different segments of users carry different procurement mindsets since they follow different decision-making processes.

Usually, all these companies would use a combination of the following channels to generate leads. Let’s delve deeper into these channels for lead generation before discussing common challenges faced in respective channels

Common Channels To Generate Leads

Content Marketing

People connect with stories. And where do we look for stories? The answer is obvious, the internet, especially social media. People on an average check their smartphone about 150 times a day. These are opportunities to grab attention. And nothing works more than a well-crafted story i.e., content in the form of a video, gif, meme, blog, vlog etc. Content marketing is one of the key pillars of marketing today.

Influencer Marketing (paid)

You have a group of followers (tiny or big) in the real world. However, you can’t broadcast a message to these people instantly if you so desire. But the social networks on the internet have made it possible for anybody to communicate to his or her captive audience on the network instantly. Power to people, you might think. Therefore, every person in a network is a micro-influencer. The celebrities such as a film star, a singer, or a sports star might have influence over millions whereas a local influencer might have influence over a few thousands. The difference is in degree not in quality.

This phenomenon of networking clubbed with our innate human bias for a recommendation from a known, likable face have created a new form of marketing, influencer marketing. Today you can pay selected (micro-)influencers to endorse your product on his or her social network and generate (micro-)visibility which in turn generate leads for your product.

Search Engine Optimisation (organic)

When you publish your website, search engines such as Google sends a crawler program to your website. The crawler picks up keywords from your webpages and indexes those in the google search algorithm. Based on several qualifying criteria that google changes from time to time a rank is generated for your website for certain keywords. This entire ranking process is unpaid or organic because google doesn’t take money from you to do this work. It takes some time before you can expect good results from such SEO efforts. However, a higher organic ranking on certain keywords that are relevant for you increases visibility organically and helps your brand establish its authority. SEO should be there in the long-term marketing strategy of your product and brand.

Search Engine Marketing (Paid)

This is the bidding marketplace where you bid an amount for certain keywords in google search. You get instant results in higher ranks within the paid-search listing hence get a share of attention from your target audience. Search engines are a two-sided network where on one side the ‘free’ users share their ‘intent’ with google in terms of the search keywords and google indexes those search terms and sells those to the willing bidders on the other side of the network and make money in the process.

Email Marketing

Email marketing, if done well can be called one of the forever green pastures for your brand. In this you build a well curated list of emails collected from the internet traffic you get (either organically or through paid marketing) on your landing page in exchange of offering some value to them (e.g., an eBook, information, access to your basic product etc). These are usually people who self-select to opt-in your list of email followers therefore can be a very relevant, effective and sticky audience. Once your list grows to a significant number you may plan sending them occasional updates of your activities along with product promotions.

Social Media Marketing

Social media marketing helps you to build a funnel in the selected social networks such as Facebook, Instagram, twitter etc. It has both organic and paid options just as in search engine platforms. These efforts are a must for building a recall of your brand and continuously engaging with your target audience. It can also help you build your own community of earnest followers through groups and pages. You may also use a technique called retargeting to follow along a prospect who showed some interest in your content across the social media.

Affiliate Marketing

This is a performance driven reward system that rewards the source (read affiliate marketer) for bridging a lead into seller’s funnel. It can also be linked to final sales rather than just providing a lead. There are affiliate networks that consist of influencers, bloggers, large media sites that help capture a lead and redirect them to the seller’s website.

Structures Of The Sales Organizations

There can be another lens to view these channels and the lead these channels generate.

Based on the effort to generate the leads, say we create a 2×2 matrix. The x-axis is divided into inbound and outbound. Inbound means the prospects discover the product online and call/reach the company sales executive, whereas outbound means the company sales executives call the prospects/leads generated through other marketing campaigns. On the Y-axis we plot the type of leads: organic, if the leads come through non-paid sources such as word-of-mouth, organic search (SEO) etc. and paid, if the leads come through paid marketing sources such as google paid search (SEM), influencer marketing (paid) etc.

No-touch: B2C

In this segment, the LTV is too low to allow for a large spend on customer acquisition. We can’t even afford a human closing a sale. Therefore, automation is the only way. Moreover, the expectation is to generate leads which are organic rather than paid over a period of time making the low lifetime value justified in the business model.

For example, nobody from Facebook came and sold you an account, you got sold yourself. Though you might feel you are not ‘paying’ any money to them. But the fact is you are paying in another currency, your ‘attention’. That’s what Facebook sells on the other side of the network, to the advertisers who want to catch your attention.

Google follows a similar business model. When you sign up for Gmail you don’t pay in the basic plan but when you use google search you share your ‘intent’ with google and google sells your ‘intent’ (read search terms, keywords) to millions of willing bidders on the other side of the ‘screen’. That’s how they make money.

It’s the continued ‘presence’ of users like yourself on the network that makes these two-sided platforms ‘valuable’. Therefore, they will go to any extent to get your ‘attention’ and keep you ‘hooked’ to their screen, if possible, forever.

Inside-sales: Medium ticket B2C & SMB

In some sectors, the sales ticket size is usually moderate, not too small nor too large. In such a case we can afford to spend some budget on what we call an Inside Sales organisation. In such a case online marketing is considered to generate leads, however, there will be a group of sales executives who would call these leads to close the sales over the phone or the internet.

Imagine an insurance agent selling your car insurance. She is going to call you before your renewal date and try to sell you an insurance product. You will never meet her in person. This kind of a sales effort is a low-touch sale more formally called an Inside Sales. It is called ‘Inside’ because the sale executives would never go outside the office to sell the product. The entire sale happens remotely.

The cost of customer acquisition here is higher than that of no-touch sales but this higher cost is justified by the higher ticket size and higher margin of the product, say, the insurance premium.

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In this article we have set the context of digital marketing with respect to the nature of the business, and pricing of products.

Enterprise Sales: Enterprise

Finally, we come to the large ticket contracts which are sold to large enterprises. These are large annual contracts for build-operate models. Often the deal size goes into tens of millions of dollars. Of Course, the time to close such deals are longer, there are many people involved in such a purchase, therefore, such sales require a lot of human contacts, face-to-face meetings, requirement gathering, proposals, counter proposals etc.

Think of companies such as TCS, Wipro’s of the world in the software domain, GE, Bosch’s of the world in the manufacturing domain.

The customer acquisition cost in such a sales structure is very high and the high-ticket sales justify those. Leads are generated mainly through outbound activities, be it paid or organic using a strategy called Account Based Marketing (ABM).

In this article we have set the context of digital marketing with respect to the nature of the business, and pricing of products. We have logically deduced three different segments (B2C, SMB & Enterprise) in the market for such products. We have also explored their uniqueness and deliberated on the kind of sales strategy appropriate for each segment. This article sets the context well for the next topic we want to cover next. We will discuss the top 9 lead generation challenges and possible solutions in the upcoming article, so stay tuned.

The post First Step to Generate Leads: Key Perspectives You Can’t Miss appeared first on Dutch Uncles.

9 Lead Generation Challenges and How to Solve Them

Avijit Dutta — Sat, 16 Jan 2021 08:18:14 +0000

In the article- First Step to Generate Leads: Key Perspectives You Can’t Miss -we have set the context within which any digital marketing efforts play out. We have also identified three different segments of sellers based on the effort they can afford vis-a-vis the LTV they stand to gain in their respective business models. We have also drawn three different kinds of sales organisations that are required to address these three very different needs. In this, we will discuss about how to solve commonly faced lead generation challenges.

The three segments of sellers and successively three different kinds of sales organisations were:

1. No-touch lead generation for B2C
2. Low-touch inside sales for SMB
3. High-touch enterprise lead generation for large enterprises.

Here are the top nine lead generation challenges across these three categories.

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Every company should realise, no matter what is their end product or service, they are in a media business.

Top 9 Lead Generation Challenges

No-touch Lead Generation (B2C)

1. 1. 1. Poor content on website, landing page, blog, vlog
    2. High bounce rate
    3. Improper targeting
    4. Low or no virality in content

Low-touch Inside Sales Lead Generation (SMB)

1. 1. 1. Calls going unanswered
    2. No show for demo
    3. Unable to reach a decision-maker

High-touch Enterprise Lead Generation (Enterprise)

1. 1. Unable to reach a decision-maker
  2. Inability to establish credibility as a thought leader

No-Touch Lead Generation (B2C): Poor Content On Website, Landing Page, Blog, Vlog

Every company should realise, no matter what is their end product or service, they are in a media business. By that, I mean having a great product will not be enough for the incumbent to win in a given market. A good product is a ‘given’ in today’s marketplace. What is equally important is how, where and from whom your end-users discover you and your product.

With penetration of broadband and now 5G networks, expectations of customers are way beyond just a good product. Even the buying experience is part of the deal. Therefore, content rules the game. Your digital assets such as your website, campaign landing pages, product landing pages, content on social media, YouTube etc have become too ‘expensive’ to be ignored. Let’s discuss a few common mistakes vis-a-vis the best practices around such components of a lead machine.

- - Website content should be communicating the value proposition clearly and succinctly without triggering a doubt in the minds of a reader. Omit all the superfluous words. Cover the problem your product is solving, and for whom. Then answer this question why you? Take some time to differentiate from the other players in the market and justify your claim by using social proofs such as verifiable testimonials (consider G2.com) of satisfied customers.
  - Landing Pages should be optimised for intent. The content and design on the landing page should be commensurate with those in your website as well as other social media. Your brand identity and voice should serve as a guide. The form is the key element in a landing page. Have great design and text that appeal to prospects to share information. You may consider 3rd party SaaS products such as leadformly.com, unbounce.com etc. if you struggle with aesthetic design.
  - On Social media platforms such as Facebook, Instagram, Twitter and Q&A forums such as Quora, Yahoo answers you should be prompt in response. Your messages on these platforms create engagement with your audience. Use these opportunities to consolidate your brand story, voice, themes and values. Use marketing automation platforms (HubSpot, Hootsuite, etc) to manage all social handles from a single source of truth. Moreover, social media management serves as a lever for managing the online reputation of your brand (ORM). Consider tools such as Google Alerts, Social Mention, Trakur etc.
  - Vlogs / Podcasts / Blogs serve many purposes for a brand. It can drive engagement, help build a community, establish the brand as a thought leader besides being a point of talk in the town hence bringing in a share of the attention of your target users. In other words, these are lead generating machines that ask very little in return. Only ask is the regular posting of relevant and valuable content without sounding salesy. Offer people genuine value and they offer you word-of-mouth.

No-Touch Lead Generation (B2C): High Bounce Rate

If you are spending a lot of marketing dollars on getting traffic on your landing page but the bounce rate is way too high, think about what you are promising on your marketing hooks (e.g., social media bytes, paid marketing copy etc) and what the landing page has to offer. Your content communication on all the platforms has to be in sync.

There could be other reasons for low conversion on a landing page, some of those are technical some are related to design and communication. You may want to take help from other SaaS platforms who have solved specific problems in the value chain. For example, if you can’t design a great lead form it makes sense to get it done from places such as leadformly.com who focus only on building great forms that increase conversion.

No-Touch Lead Generation (B2C): Improper Targeting

Today, digital marketing tools allow us to target for the niches without spending too much. This was not the case earlier. Today you may reach a super idiosyncratic audience (meaning, say, a group of people with rare taste) easily without incurring a lot of cost, making your niche product a viable one. This was unthinkable ten years back. The market only had hits and misses. Today we have hits and niches. The point of sharing all these is that no market is too small today if you can target them well. You have to unmistakably pin down where in the long tail of the market your offerings exist.

Another common mistake committed in digital funnel building tactics is to become greedy in attracting a lot of people. If you use too broad keywords in your targeting filters which eventually end up in putting a lot of irrelevant ‘leads’ in the funnel eventually increase the cost per acquisition often to unsustainable levels. Therefore, adopt a mindset of experimentations and iterate through your selection of keywords to arrive at those few razor-sharp keywords that ensure winning paid customers.

No-Touch Lead Generation (B2C): Low Or No Virality In Content

One unmistakable feature of some of the most successful brands in this segment is the ability to develop viral content consistently. The logic is fairly simple. Since the LTV does not allow for a lot of spend on customer acquisition, there has to be some other lever for growth. Viral content serves that role exceedingly well.

However, there is a catch, virality is often unpredictable or at least so is common knowledge. Having said that if your content research is thorough you should be able to find a fuzzy zone of content that is likely to go viral if executed well and in time. Things go viral for many reasons but let me offer the top two: they tickle your funny bone for no good reason, or they offer outstanding value at unthinkable price or no price. Therefore, you may want to keep some effort in that direction so that your content strategy increases your odds of hitting a jackpot once in a while.

Low-Touch Inside Sales Lead Generation (SMB): Calls Going Unanswered

You got a lead from your online campaign. The prospect has shared his email and phone number. However, she doesn’t respond to further nudges like a phone call, SMS, email etc. You seem to have caught a ‘dead-fish’, or is it?

There may be many reasons why a person is not taking or returning a call. Your number may be listed as spam on true caller, she may be busy, she might not notice that you called or she might not be simply interested in your product but only the information she gathered by sharing her email and phone number.

The solution may lie in automation. You might want to put her on decently spaced (not 5 calls in a day, maybe 1 call in alternate days for three times before you disqualify the lead) automated voice calls with an option to connect to a real human. You might send her a nice short and crisp email with some additional value (like a newsletter, an eBook, some lucky draw, etc) and hope she comes back. Many won’t but those who would are likely to be more qualified leads.

Low-Touch Inside Sales Lead Generation (SMB): No Show For Demo

If your product requires a demo before sale then you know how maddening scheduling and calendar management can become for your sales reps.

Firstly, delegate the scheduling task to the lead by using platforms such as Calendly with pre-decided slots for each of your sales reps. This will save an enormous amount of time for the sales reps so that they can focus on the ones who are investing their times on the demo.

Don’t forget to send automated reminders for the upcoming demo. Take these opportunities (reminder notifications) to pep the prospect up by giving more content that invokes curiosity in attending your product demo.

If somebody has not shown up for a demo even after you have applied all the previously mentioned tactics, you may put them on an automated email list for follow up for a reasonable duration and forget about her till she returns. In all these communications, show empathy, personalise your message and offer genuine value. Again, content is king here. It is not what you reach out to people with but how you reach out ensures response.

Low-Touch Inside Sales Lead Generation (SMB): Unable To Reach A Decision-Maker

It might so happen to an inside sales team that the prospect took a demo, showed interest in following up the deal but then takes forever to close. These are signals that she might not be the decision maker in the organisation. She might have forwarded the proposal to her manager or the business owner, in case of an SMB and then nothing happens. How do you avoid such traps?

If you find yourself in such a situation, then pause and go back to your SQL questionnaire (Sales Qualified Lead). If you are wondering what such a questionnaire is, time to buckle up and make one. When a sales rep gets a marketing qualified lead (MQL), the first thing she does is run the lead through a series of qualification which validates that they have a need that can be served by your product, you know who is the decision maker and who is the influencer/user in the organisation, and most importantly you are including the decision maker in your demo.

If you don’t follow this process it is extremely likely that the sales will take a very long time to close, if at all. So, be alert in the early phase of lead qualification to save time and energy later.

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If you are wondering what a questionnaire is, time to buckle up and make one.

High-Touch Enterprise Lead Generation (Enterprise): Unable To Reach A Decision-Maker

Most things mentioned in 2.c above applied here. Additionally, in case of a large enterprise, the approval hierarchy might be even longer and you might have to give the same demo to multiple people.

To save time you might deploy an asynchronous sales tactic, especially these days where everything is remote it is not necessary that all the decision makers are in the same room at the same time. In that, the sales rep shares some documentation and preferably a recorded video demo with the prospects. They can review/watch it in their own time (therefore asynchronously), note their questions and you may take their questions or objections on a separate call.

This structure along with a meticulously planned content is much more likely to yield you results.

High-Touch Enterprise Lead Generation (Enterprise): Inability To Establish Credibility As A Thought Leader

To an enterprise client coming out as a thought leader in your own product niche plays a significant role in sales closure. The ticket size is high, the reliability on your product is also high hence the impact of a failure or things going wrong is significant for the enterprise. For these reasons enterprise buyers always look for established service providers with proven history of performance. The way they assess these are through peer reviews, validations by other larger enterprises (social proof) and the seller’s position in the market in terms of thought leadership within the product niche.

In such high-ticket sales, it is even more important to include in communications detailed case studies with previous clients, white papers, any IP, patents etc related to the product niche well documented.

In Summary

In these two articles we have explored the context of digital marketing with a focus on lead generation, we have articulated the top channels for digital outreach, we have logically segmented the market as per three dominant sales organisational structures, and finally we have discussed top nine challenges in lead generation across the three sales organisational structures and explored few logical solutions for same.

The post 9 Lead Generation Challenges and How to Solve Them appeared first on Dutch Uncles.

SaaS vs Legacy: Why Businesses Opt for Software as a Service?

Avijit Dutta — Sat, 16 Jan 2021 08:10:41 +0000

A business is synonymous with a solution; something that solves a problem. For instance, an organization such as Hindustan Unilever offers a plethora of products to solve domestic chores for homemakers. On the other hand, a consulting company such as PwC offers expertise in a variety of areas solving business problems to C-suit executives and business leaders. But who solves business challenges (such as driving revenue, reducing cost, etc.) of these organizations? From legacy system to cloud based SaaS (Software as a Service) solutions, all enterprises depend on technology solutions.

What Is Legacy System?

Traditionally large organizations have been using IT and software solutions for solving their day-to-day business challenges and offer superior customer experiences in order to stay competitive in the selected market. These large companies had access to required resources and finances to build and deploy IT solutions that augment their competitive positioning in the market.

Let us have a closer look at the architecture of such a solution.

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Traditionally large organizations have been using IT and software solutions for solving their day-to-day business challenges and offer superior customer experiences in order to stay competitive.

How Legacy System Addressed The Need For A Tech Solution?

Assume that we are running a retail store in a local marketplace. In order to manage this business, we have to consider answering few questions under the following five broad areas:

What problem are we solving?

A local retail store solves the problem of accessing daily household products like snacks, grocery, dairy, toiletries etc to busy homemakers.

What solution do we offer? What are we selling?

Apart from the products available at our store, what else can we offer? We might also accept orders on call, on WhatsApp, or online. There might be facilities for credit, payment options ranging from cash to credit card or e-wallets. There might also be an option for home delivery free of charge if the order value crosses some amount. All these ‘other’ things that we offer at the store, makes the buying from this store a convenient or even pleasurable ‘experience’ for the end customer.

How do we acquire, retain and grow our customer base?

Who are our target customers? How much do we need to know about them? Why would they buy from us? Is it convenience, is it price, is it quality? What are we promising to our customers?

How are we going to live up to our promises to our customers?

How much inventory should we stock a tour store so that a buyer will never go empty handed? How many employees do I need? How do we manage conflicts with customers? How do we manage returns, refunds, disputes? If we can deliver what we promised every time we build a strong ‘trust’ factor with our customers. This is called brand equity. Brand equity helps us retain and grow the customer base.

Are we making money by doing what we are doing?

We need to know whether our costs and revenue structure can hold up a positive unit economics. It simply means when we spend a rupee in our business do, we earn more than a rupee or not.

This brings us to the requirements of tracking revenue (through sales, account receivables and cash flow) and cost factors (such as inventory positions, account payables such as salaries, rent, tax liabilities, travel and admin expenses, marketing & promotions, etc.) in our business.

We can categorize the above questions into following broad areas:

1. 1. Product management
  2. Branding and Marketing
  3. Sourcing and Supply Chain Management (SCM)
  4. Customer Relationship Management (CRM)
  5. Sales & Revenue Management (SRM)
  6. Human Resource Management (HRM)
  7. Finance and Treasury Management
  8. Reporting and Insights
  9. Strategy, and finally
  10. Technology/IT

Large companies would put together an IT infrastructure on premise to address some of these questions. There are two dimensions to such a solution:

Process standardization and automation

It is implemented using an IT system. The outcome could be a fail-safe business process optimized for time and quality.

Data

This is generated through the use of the system. Depending on the nature of the transactions, the volume, velocity and variety of data could be significantly large requiring proper handling and care. In the above example of managing a retail store, such data can constitute information related to customers, products, sales transactions, stock and employees to name a few. It is not unusual for businesses to generate gigabytes to terabytes of data on a daily basis.

These mandate the organizations to build and maintain an IT infrastructure with adequate data security, and privacy compliance. This not only leads to significant additional cost but also building IT capabilities. Most of the times these required new skills fall outside the core competencies of the organization.

So, what choice do these companies have?

In early days of the IT trade, large software companies would build the solutions for these companies through signing large annual contracts. Besides paying to the software services companies, these organizations had to invest in IT infrastructure (server, storage). This is called a legacy solution. Though it was costly but the companies would keep control of their own data (customer, transaction, employees, vendors etc) with themselves.

Why Software As A Service Wins Over Legacy System?

Since the year 2000, with the development of cloud infrastructure technologies, a new breed of companies has popped up in the market. They would invest into the cloud infrastructure and provide a standardized solution to specific business areas such as payment, storage, ordering, invoicing, human resource, etc. Their customers would only pay per use of the features built into a product that is accessed through APIs (Application Programming Interface) and/or a cloud-based application. This model of software delivery is called Software as a Service (SaaS).

SaaS is a software delivery and distribution model wherein a consumer (b2b or b2c) can access a specific service on-demand over the internet through an application built by a third-party solution provider and hosted on the cloud.

There are some robust benefits of the Software as a Service model:

1. Lower cost: pay-per-use
2. No hardware installations required: auto updates over the internet
3. No upfront investment into infrastructure
4. Plug and play solution: no technical knowledge required
5. Encourage collaboration amongst players: Build your solution on top of existing SaaS solutions through APIs
6. Quicker time-to-market

However, to be a successful Software as a Service company, the enterprise needs to ensure:

1. Data security: Since data security is in the hands of the SaaS company, one should ensure their information security measures are reliable.
2. System reliability: The SaaS enterprise must make sure that their processes are robust.

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The primary challenge for Indian SaaS companies is to penetrate the segment is marketing.

Types Of SaaS Products

Horizontal SaaS

A horizontal SaaS is relevant to multiple industries for the same function or use case. For example, a payment SaaS such as Paytm or PhonePe facilitates online payments for merchants across several industries such as restaurants, grocery, retail, etc. Other examples of horizontal SaaS could be human resource information system or HRIS that manages HR and people related functions across industries (e.g., SumHR), a Customer Relationship Management (CRM) SaaS that manages customer concerns across industries (e.g., Zoho CRM), a video conferencing SaaS such as Zoom, a productivity and collaboration SaaS such as Slack and so on.

Vertical SaaS

A vertical SaaS offers solutions for a particular industry in multiple functions. For example, Shopify, an ecommerce SaaS platform offers end-to-end functions from hosting the website, designs, cataloguing, pricing, ordering and payment for e-commerce business. Few other examples are Katerra for the construction industry, Veeva for life sciences and Guidewire for the insurance sector.

How Far Along Has Software As A Service Come?

The total addressable market (TAM) for SaaS products globally would be $400Bn by 2025. In the past 20 years, Software as a Service has become a real phenomenon across the tech world.

Currently, the Americans lead with 60% market share whereas Indian SaaS companies have 6% of the global SaaS market. There are hundred plus SaaS unicorns (Annual Recurring Revenue, ARR>$1Bn) across the world, six of those are Indian.

In the past ten years 400+ Indian SaaS companies have attracted over $10 Bn in Venture Capital funding. According to NASSCOM report 2020, 38 of these have an ARR of over $1Mn. Indian software engineers cost a fifth to those in the US. India has a wide variety of untested use cases that can be a breeding ground for innovation.

Software as a Service is a successful business model across the world including in emerging markets such as India. NASSCOM 2020 report on SaaS indicates that there is a significant adaptation of SaaS by Indian SMBs (Small and Medium Businesses) in recent past. The total addressable market within Indian SMB is estimated to be US $5-10Bn by 2025.

What Does It Mean For Small And Medium Businesses (SMB) In India?

- - SMBs who would adapt quickly to SaaS technologies are more likely to have a robust, reliable, efficient product and service offerings to their customers.
  - Embracing technology would modernize the traditional businesses with higher likelihood of creating superior customer experience.
  - SMBs and traditional businesses would be better prepared to face and even fend off emerging competition from VC backed, well-funded, burn-based business models often deployed by start-ups.

What Does It Mean For Indian SaaS Companies?

- - The Indian SMB opportunity is too large to ignore.
  - The primary challenge to penetrate this segment is marketing. It is pertinent we address the traditional mindsets of SMB owners while pitching our solution because the demand in embracing Software as a Service is not only about spending money but also a deep-rooted behavioural change.

The post SaaS vs Legacy: Why Businesses Opt for Software as a Service? appeared first on Dutch Uncles.