At Google, the director of my team repeated a management mantra to us quite often. “Manage yourself out of a job; make yourself redundant”, she would say. “Empower your people and then get out of the way.” Our director was a terrific team builder. Before Google, she founded a startup where she learned to build a company. When she told us her mantra, she was sharing her learnings with us.
There’s a force in mobile app distribution that isn’t talked about much despite its magnitude: mobile social networks. Mobile social nets are becoming the predominant mobile app paid discovery/distribution platforms.
How big is this force? Line, the Japanese mobile messenger with more than 200M users is on a $400M run rate, 60% of which is derived from app distribution. Kakao Talk will pay out about $600M to developers this year - which is about 10% of iTunes global developer payout in 2012.
There’s a concept in computer programming called operator overloading that neatly describes the current Series A investment market. Overloading means using the same code for two very different purposes depending on inputs. For example, a programmer could redefine the + function so that instead of adding two numbers, the function would multiply the numbers if one of the numbers was negative. Overloading can create lots of confusion in programming because the same function name can return very different results.
What’s the stronger driver of SaaS company growth: customer acquisition or customer lifetime value? The answer is yes. Rapid, sustainable SaaS growth is equal parts customer acquisition and customer lifetime value. Simply multiply these two numbers and you get your SaaS growth ceiling, the most revenue your SaaS business can ever achieve. Period. The end. If you want to change your future, you have to change one of these numbers. However, most SaaS marketing professionals think their job ends at purchase. In SaaS, the intital purchase is only the first of many. Keeping each and every customer around longer and making the most of the business relationship along the way has as much impact on SaaS company growth as acquiring more customers. Therefore, good SaaS marketing lasts a customer lifetime.
This is the third post in a series that paves the path to sustainable SaaS growth. The first post in this series introduced the three fundamental levers of SaaS growth: customer acquisition, customer lifetime value and viral customer network effects. This installment explores the second lever and provides three proven SaaS marketing strategies to drive SaaS growth by maximizing customer lifetime value.
Two Views of Customer Lifetime Value
There are two sides to every purchase: buyer and seller. Maximizing customer lifetime value isn’t something you do to a customer, it’s something you do for a customer. In SaaS, customer lifetime value is often expressed as average recurring revenue times the average customer lifetime (one divided by percentage churn rate), however, this is only the sellers side of the coin. When thinking about what you can do to maximize customer lifetime value, it is a good habit to think about it from your customer’s point-of-view. For example, reducing churn means giving your customer a reason to stick around, while upselling and cross-selling mean solving more problems, incresing satisfaction, and providing greater ROI. Getting paid is just an end to the means.
SaaS Marketing Strategy #5 | Reduce Churn
There is only one SaaS marketing strategy to reduce churn: Continue reading "SaaS Marketing | Maximizing Customer Lifetime Value"
I’ve been promoting my Twitter account since October 2012 in effort to better understand social media content marketing and to promote that great vanity metric, Twitter follower count. At the outset, I promoted my account and links to blog posts. I prize followers more than one time visits to a blog, because the long term marketing relationship provides many chances to bring someone to my blog. Promoting links sends traffic to a single blog post, but doesn’t convert to followers with a very high rate.
How much should your SaaS startup spend on sales and marketing? I’ve written about using unit economics and lead funnel performance to answer this question. Emulating the patterns of successful SaaS companies is another technique. There are about 34 publicly traded SaaS companies that have published their revenue and sales & marketing expenses. Though their revenue growth rates are each unique, the sales and marketing spend patterns are quite similar. The revenue ramps of public SaaS companies follow the familiar exponential growth path.
This question was originally posted on Quora and I had responded. I am expanding on that answer in this post.
As companies push firmly into a SaaS delivery model, providing ability to do a trial/evaluation has become table stakes. In the new world order of technology procurement, buyers are more educated and prefer to touch-and-feel the technology before they even engage with the vendor. Gone are the days when salespeople used their relationship, pushed products to companies. Buyers usually would do all the upfront analysis and prefer talking to sales guys only to close the deal. This applies most industries now – technology, real estate, automobiles. The only exception to this might be the pharmaceutical industry where a pharma company “educates” the doctors into prescribing their solution. We all know how that works. Anyway I digress.
Technology world has, belatedly, moved all-in to a try-before-you-buy model. It is probably the
Continue reading "Can I have a trial please…"
Product and engineering teams are inseparable and at the core of most startups. One degree removed, sales and customer support teams ply the voice of the customer to influence product and eng. Of the five teams in a startup, marketing teams tend to have the least influence because traditional product marketers must influence others to enact change.
Marketing works with product and engineering to update branding and communication within the product.
A team of founders who had just made their first their first hire asked me about culture and on boarding. How do they go about managing people? How do they maintain the values of the business? The underlying question of successful management is: How can founders lead and learn at the same time?
I think a bastardized version Tolstoy’s well-worn refrain is apt: Happy teams are all alike; every unhappy team is unhappy in its own way.
For bloggers and content marketers, choosing the right content syndication tools to distribute posts is critical to developing an audience. The author/marketer must balance four attributes: distribution, measurement, retention and brand. Table 1: Balancing Syndication Tools Attributes Channel Distribution Measurement Retention Brand RSS Poor: only one subscriber Poor: volatile metrics Good but declining So so: controlled by RSS reader Email Poor: only one subscriber, double-opt in Poor: limited engagement stats Poor: Low unsubscribe rates; GMail filtering decreases visibliity Good: total control over UI Content Hubs Great: siphon site traffic, new readers Good: proprietary tools or GA Poor: often lacking follow or subscribe mechanisms Poor: limited control over UI Social Media Volatile: dependent on the audience but huge upside potential Great: use traditional web analytics plus follower data plus retweet So so: follower model creates 2 way relationship; no way to assure delivery Good: customize profile + traffic goes to website Continue reading "Choosing a Content Marketing Strategy for Your Startup"