📕The tradeoff of SaaS discounts; Building your keyword pyramid; 2021 marketing planning...
The hot topic of the summer in SaaS has been the digital transformation that nearly all companies are being forced to make due to the pandemic. However, as early Q2 numbers start to emerge, we aren’t really seeing the massive revenue growth anticipated for SaaS companies.
In a recent interview with TechCrunch, Redpoint veteran Jammin Ball points out this is likely because the transformation is happening at a slower rate than anticipated. Companies are fearful and being more conservative with their spend, so while they know software will reduce their costs and be necessary in the long-run, the upfront (and switching) cost is making them pause.
🌟 We’re seeing more companies look for ways to pair their net promoter scores with additional KPIs, and for good reason. NPS is solid for gauging sentiment, but it’s not going to diagnose problems or give you the detailed explanations needed to improve your business. The type of KPIs you’ll want to zoom in on are ones that measure real action. Openview thinks a good metric to start with is referral business and suggests looking at how those accounts perform and the average number of referrals per customer. A slightly amended version of NPS we like is asking customers how upset they would be if they could no longer use your product. There’s really no better qualitative way to measure product stickiness and identify potential red flag customers.
🔺 Just because a keyword has a high search volume doesn’t mean it’s the best one for you to target. Think of keyword groupings as a pyramid, with the smallest triangle at the top representing the lowest volume keywords, and the largest one at the base as the highest volume. Generally speaking, the level of buyer intent for these groupings is inverted – lower-volume keywords include brand and solution terms and have a stronger buyer intent than the general terms which make up many higher-volume keywords. For B2B SaaS companies, the most valuable keywords will be problem terms (in the middle of the pyramid), which highlight the pain point of your prospective audience. If your ultimate goal is to drive conversions, this is the spot to target.
🌊 If the past year has taught us anything, it's that plans can (and most likely will) change in a heartbeat. With Q4 on the horizon, marketing teams are beginning to shift their focus to 2021 and we see many trying to do the impossible – plan for the unknown. Instead of attempting to guess exactly what will happen, you’re better off focusing on how you can be ready when things do inevitably change. The mantra of optimization over transformation (basically doing more with less) with your campaigns is a must, as CFOs will be quick to trim any extra fat in your spend. You can also get ahead now by comparing your pre-COVID and current benchmarks to understand exactly the level impact you saw, and what channels and tactics remained successful during that time.
💸 Pricing discounts can help you close deals and increase MRR in the short term, but if you go overboard with them, prepare for dips in both your LTV and retention rates. This is because customers who come in on discounts clearly have a lower willingness to pay, and are more likely to abandon ship when their discount expires. You never want to offer deep and endless discounts because you’re basically conditioning customers and your team to devalue your product. If you do find yourself needing to lean on discounts to get many deals across the line, you should probably revisit your core value proposition and make sure your marketing is targeting the buyer persona who finds the most value in what you do.
🐙 We caught a recent episode of the SaaStock podcast which featured Jeff Titterton, CMO at Zendesk, where he discussed how Zendesk transitioned to becoming a multi-product company. One of the biggest challenges he had in that process was balancing its product development resources. You can’t half-ass a new product, so part of your team should be totally focused on it, but it’s even more important that you keep key folks on your core offering so the new product doesn’t negatively impact your business. If you can't devote enough resources to the new project without impacting your bread and butter, you might want to push pause on the idea or lengthen out your build timeline.