The beauty of adopting a SaaS framework is that you have a vast scope of experimentation. While it’s good to make use of the usual metrics to measure the experimentations, it’s more important to first know what you want to achieve. For Statusbrew, small changes in various stages of our working helped us see astonishing results. Because we defined our own definitions of success as per our vision and structure, it helped us get much more realistic results and grow faster.
DISCLAIMER: We’re sharing what we learned in our journey from $20K to $100K MRR. While these might not be the perfect for everyone, it can surely give you an idea of how small changes can create big differences.
1. How We Controlled Our Customer Churn
Success depends on not just getting customers, but first on keeping the current over time. A lot of time and money is spent on acquiring new customers, so our first goal is to have our customers stick around for as long as possible. For this, we make sure our Churn Rate stays low. We took a number of steps in last few months in this context. We started by redesigning our cancellation page, which now makes it mandatory to choose or provide a reason for cancellation. This helped us know what caused the churn and we knew where to start at when following up with the churned customers. Besides, Live Chat integrations empowered our Customer Success team to reach out to the customers and vice versa, to solve their problems in real time. With all these efforts, we were able to successfully reduce our Churn Rate by 20%.
2. Identifying The Right Leads To Target
Every new Sign-up we get is eyed by our Sales team. We started tracking their usage pattern. There are many tools that can help you do that (we chose Intercom) with which we continuously observe the way various users use our product and try to find Sales Qualified Leads from those users. The sales team makes it a point to provide at least 30% of the daily leads with a 7-day trial.
Keeping the trials short has its own perks. A shorter trial period would hasten the users to explore our services quickly. This also helps in keeping each Sales cycle short. During the trial period, our Customer Success team stays in touch with the users, helping them explore all the features and more importantly keeping them satisfied. While observing their usage patterns, if required, in some cases extend the free trial by another 7 days.
3. Maximizing The Trial Conversions & Aiming The 50%
We don't have a trial option on our landing page because our product is evolving. To really understand what we are building is liked by our Customers, we started with an idea to find the customers that will pay for our product. After we build our Persona, we started to calculate, if and when they land on our product, what is the chance they will pay for it. We then start to add the trial option for users who have 50% chance to pay provided they get the trial.
Rather than sticking to giving a fixed number of trials each time, what’s more important is to get the conversion rate right. If we are able to convert 50% of our users after trial, we know what our next goal should be. Get users of the same Persona. We make sure, if not all, at least 50% of them are converted because we set a value on everything, from the sales team to the marketing team. This is necessary keeping in mind our investment in the Sales and Marketing framework. So, more the conversions, the more we are able to justify our Customer Acquisition Cost.
4. Understanding The Payback Period
Converting a Lead to a Customer is just the start of a long journey. As mentioned in 1st point, it’s more important to keep the customers with you for as long as possible. Here’s comes in the Payback Period. It’s the actual duration for which a user needs to stay and pay after which it is profitable to the company. This duration according to the industry standards varies somewhere between 9-12 months and this is why it’s so important to make the customers stay. Because customer retention is the key to success in SaaS, we had to build a new team altogether to take care of it. We call it Customer Success team.
5. How To Ensure The Customer Succeeds
We built our Customer Success Team. Their sole responsibility is to keep the premium customers happy. The happier the customers are, the more likely they’ll want to continue with you. These are the customers who’ll slowly start connect with and identify your product as a brand, advocate it, help you build a great community. With this team, our customers have a point-of-contact that is dedicated to their success throughout their entire lifecycle with our product. Besides, we were able to understand the needs of our customers and build a product they would love. We measure Customer Success Team’s performance on the customer retention and satisfaction rate, renewal revenue, up-sells/cross-sells along with their ability to perform all this at the efficient speed.
Our Next Target $1 Million MRR
After $100k MRR, our next target is to hit $1M MRR. For this, we need to repeat our framework for sales, customer success and support and also build a marketing framework to get a consistent stream of leads for salespeople.
From Lead Generation to Customer Success, be obsessed at optimizing and measuring at each step of the acquisition funnel. We are lucky that the SaaS world provides with so many data points that are a guide to many unknowns. They provide a picture of customer behavior, buying intentions, churn signals and growth trends. They show the strength and weakness of a business. Define your own metrics. Listen to them. Ask the right questions and make better decisions based on the answers. This builds a constant cycle of learning and improvement.
We would love to know what you think about our way of measuring our success and if you have a great example of a successful experimentation that worked for you, please tell us in the comments below. Let’s grow together.