Showing posts with label MRR. Show all posts
Showing posts with label MRR. Show all posts

Sunday 3 October 2021

SaaS Onboarding & Payment Collection

Overview:  Selling a SaaS generally can be split into B2C and B2B.  Both SaaS models require the ability to onboard a customer and collect the payments for the service.  And to do this a website /Content Management System is need to allow the customer to trial, buy, purchase add-on and collect recurring revenue.

B2C SaaS (small to large):  You need "brochureware", web pages that show the service and allow the user to purchase.   As I generally sell SaaS software, and B2C is often 1 off or pay as you need, I'd recommend Shopify, there are add-ons for selling digital goods.  You can always use marketplaces like amazon or eBay also.  WooCommerce (integrates with WordPress), BigCommenrce, Magento, Wix, SquareSpace can be used for selling physical goods but need some thought and add-ons for digital goods.  All the options are not great at Monthly Recurring Revenue (MRR) e.g. Netflix, or ARR (annual, e.g. Grammarly, Blinkist) billing, or "pay as you consume" also referred to as "metered billing" or "pay-as-you-go pricing" (Uber, AWS, Twilio, Stripe, Azure, GCP) revenue models.  Pay-as-you-go pricing has variable costs but allows your to reduce the cost to your customer by only charging them for what they use.

Update 2022/06/24: Webflow is a great tool for semi web literate developers to build websites.  UI drag and drop experience.  In the Wix space but you drag vs choosing a template.  I've used it to generate clean semantically correct HTML/CSS to implement in a custom developed SPA solution.  Always consider Webflow, it has checkout and can easily integrate with Shopify and Zapier for simple workflows.  Has free SSL and you can host on their platform.  Priced per website but reasonable with various options.

There are plenty of add-ons but in the Shopify world it's bring in an add-on and a few moving pieces.  For a medium sized SaaS selling MMR solutions, the overhead of setting up and managing the processes is fairly steep.  As the business gets bigger, it's worth the integration or using a dedicated solution like ChargeBee.

B2B SaaS: Could use any revenue model but it is best if your product lends itself to subscription-based selling.  e.g. Office 365, Workday, Legal practice management software to manage clients and work for law firm.  For small SaaS startups selling digital services use a solution like ChargeBee (low end) or Paddle (top end).  You can use anything in-between and addons to get a solution but for the price, setup, expansion as a general rule ChargeBee is good:

  1. Recurly
  2. Chargify
  3. Zuora
  4. Chargify
  5. Stripe
  6. Billby (Good for startups)
  7. ChargeBee (Good for startups)
  8. Bill.com for Accounts payable and receivable.
In the UK, we need direct debits often setup, you can look at something like Bottomline PTX.  I also like recharge.

Privacy Management: OneTrust provides a good configurable SaaS service for cookies and privacy.  If not built into your CMS/platform, then OneTrust is an option.
Pay-as-you-go/metered billing:  You pay based on consumption of services you owed x for the last 30 days e.g. AWS, Azure.  I try to stay away from this model as it's normally difficult to understand and customers in SaaS as a general rule don't like complex unknown pricing models.

Traditional:  Basically, pay as you buy a license.  So you get a perpetual license.  Akin to physical shopping but for digital goods.  Shopify is perfect for this model with a digital download add-on.  E.g. bjjfanatics.com

SME SaaS Business Checklist:

  1. Where you you selling, physical vs virtual
  2. Subscription or 1 off payments (account maintenance), trials, upgrade, upsell and cross selling.  Autorenewals.
  3. Jurisdictions (Tax, VAT, shipping, currency)
  4. Cost (fees, what's included, percentage of sales, growth)
  5. Support (Tech touch, Low touch e.g. email vs 24 hrs phone support, is this subscription based)
  6. Retention (Churn, New, Length of time for customers, support churn warnings, unsubscribing).
  7. Does my billing/subscription allow me to sell on web, native mobile, marketplaces.
Methods to set the SaaS price:
  1. Value based pricing - set the price based on the value the customer saves/gets
  2. Cost plus pricing - your cost plus markup
  3. Competitor pricing - what our our competitors charging
  4. Art of adjustment pricing - set a price see how much demand, change price how does it affect demand, MRR and total expected revenue.
Metrics to capture in SaaS Sales:
  1. MRR
  2. ARR
  3. CLV (Customer lifetime value)
  4. Churn rate
  5. Cost of Customer Acquisition

Marketinghttps://sproutsocial.com/

Support:  It's important to minimize human support effort, automating as much as possible is key.  Bots, knowledge articles that are easy to find are awesome.  Coveo does a nice job of setup for community channels.

User tracking:  Google analytics is pretty good for getting stats.  I do like a new tool to me Pendo which is expensive but extremely powerful.  Pendo's main 2 features for me are user interaction/how they use the site, and providing help tips/Guides are html injected into applications.



Sunday 7 March 2021

SaaS Product Customer Experience - level 101 Thoughts

Overview: With SaaS products is is easy for our customers to leave.  We need to reduce turnover/churn and technology can help to deliver great Customer Experience (CX).  CX is closely coupled with Customer Success.


Topics to Review:
  1. SLA's & OLA's
  2. Pricing: 
    1. per seat (subscription), 
    2. flat usage or 
    3. usage model (pay as you go).  
    4. Always keep it simple.   In B2B SaaS pricing keep it simple, aim for MMR, that clients understand for cost forecasting.  Make it easy to buy, increase/upsell and leave.  It's amazing how many companies try to hide the sale to reduce churn.  Build good products and service don't try hide exit so stop loosing customers, it's pointless and a poor long term strategy.  
    5. Tiered pricing is good, but keep it simple.  Try stick to 1 form of pricing, its aweful for the customer to have base usage costs and then some crazy secondary model to figure out and explain in the purchasing process.
    6. Companies want Monthly Recurring Revenue (MRR) or ARR and the ability to up sell later.  It depends on the nature of the business and product but monthly should be the default goal especially for B2B SaaS.
    7. Offer a free trial for E2E fairly long is not a bad idea depending on the product.  Two weeks is a rough starting point.  Less if you need them engaged quickly or even several months to get real value.  I tend to find E2E customers with free software don't tend to use it unless their is a limited time.  So I'd always limit to 1 month for a free trial. you can always extend.
    8. Freemium version may be useful (unlimited time) and generally are not applicable to B2B/E2E SaaS models.
  3. Service Status Page - Microsoft do a great job at showing status pages for their services.
  4. Incident Management - Convert into knowledge base both internally and customer facing.  Sales and customer management information alignment.  Find a customer, see their past requests, help reduce churn. service now incident management,   Generally, go for tech touch for interaction over low touch or even high touch.  In E2E, large customers want good tech touch but will require high touch, specifically around customization.  Beware the small customer demanding high touch for their "future potential growth/usage".
  5. Content - product documentation, community forum, online knowledge base, ability to have a good search to cross all the channels (think Coveo), support chat bots, live conversations with support.
  6. Certifications, "gamification" useful for building a community. 
  7. Communicate new features, educate support, educate sales and evangelists and clients.  Training and consultancy.  Monitor communication, use Sentiment Analysis.
  8. Support level i.e. free support may not allow phone conversations and not have an SLA whereas premium support may offer 24 hour production issue resolution with money back guarantees.  Example: Azure Support Plans.  Phone is expensive for support, do we offer this 24/7 and having good support is costly.  People are becoming more familiar with digital self service.  It is also a good idea to have a  warm hand-off from automation to a person.
Getting your processes correct and clear is key to your Digital customer experience (CX).  Key areas to consider: 
  • Advertising/attracting clients, converting leads to clients;
  • Trials and paying (make it easy, cost effective, billing) - customer must understand what they are paying for;
  • First time user experience (easy good experience the client can use);
  • Habitual users (once use to the system, do my users have the best experience - get usage telemetry); and
  • Support (levels of support, chat bots, email, call support).
Thoughts: SaaS world changes so quickly these days, great customer experience and support are more important than ever.  An interesting idea I heard, "You can loose a customer on price or customer service, you will only win them back thru customer service".  (KYC) Know Your Customer to ensure you can delight your customer and comply with AML rules.  Get one step ahead, try understand your customers concerns early.

There is a great book that has been around for a few years on Customer Success by Nick Mehta, Dan Steinman, and Lincoln Murphy.  How innovative companies are reducing churn and growing recurring revenue.