By Ankur Tiwari on 13-05-2020Follow @Ankurt04
Today I'm introducing an end-to-end user engagement ecosystem for sustainable growth of your SaaS business.
This post is a part of the Organic SaaS Growth newsletter. Subscribe here.
If you are in the SaaS business, chances are you hear the following terms every day:
low traffic, low conversions, fewer users, high support tickets, low NPS, and high churn (or low retention).
You are not alone; these are real business problems.
They hurt your growth machine and bring down profitability.
For example, this SaaS benchmarking report says that if the retention rate is less than 90%, your business is likely a slow-growth business.
These problems may look independent of each other, but they have a single root cause.
Without solving the root cause, a solution to any one of these problems may cause another problem.
Going after the root cause will bring synergy in your actions and solve all the problems for good.
That root cause is ‘low engagement.’
Low traffic: People don’t click on your article links because the headline does not engage them.
Low conversion: Blog readers do not signup because the content does not engage them. Visitors do not convert because the landing page copy does not engage them.
High support tickets: The product, the help docs, and the community do not engage active users. Customers can’t stop raising support tickets, and you spend more on hiring support people.
Low NPS: Customer satisfaction is low because the support team does not engage them.
High churn: Without enough engagement, users feel no one is hearing them and leave.
When you engage your customers, they understand and accept your limitations. They keep using the product even if it lacks critical features.
For example, I code quite a lot in Python and use PythonAnywhere for hosting. They do not support asynchronous tasks, but their support team is a rockstar, always ready to help. For this reason, I continue to use it with a high satisfaction level.
One thing I have learned from my interactions with the PythonAnywhere team is that you have to build user satisfaction within the DNA of your business.
Your product, design, growth, support, and sales processes should have a high user engagement as a critical metric.
And to make it work, you have to systematize the user engagement.
For only systems scale.
If you have a terrible experience with a business — either the product or service was bad, or an employee misbehaved, or you had to wait in line for long, your mental imagery of that entire business turns negative.
The same is the case with your customers too.
Customers usually do not differentiate between various functions of a business. For them, experience with the company as a whole matter.
Therefore you can not limit yourself to improving a few things. You should build an end-to-end experience for your customers — a complete ecosystem.
Your ecosystem should engage everyone:
Specifically, you need a clear engagement strategy at each stage of a user’s lifecycle.
For each stage, ask yourself, “how can I delightfully engage the audience more and more?”
Because some engagements are irritating.
I once raised a ticket from my Zoom account. Zoom’s support team resolve the issue in two days but kept sending me emails after emails for almost a month asking for feedback.
I think I still receive those emails.
To build an end-to-end engagement system, you should think about your business as a machine — one giant machine with various moving parts. Every part should function properly.
Here is an example:
Did you see the blueprint of an end-to-end engagement ecosystem in this example?
I hope you did.
Such a system makes you omnipresent.
It enables you to engage your users quickly.
However, some engagements are more profitable than others.
This brings us to another crucial point.
Engaging a first-time visitor for newsletter opt-in is very different from engaging a paid user for renewal.
To convert a first-time prospect into a trial user, you might have to create a bottom-of-the-funnel blog post, a smooth migration feature, and a ‘no credit card required’ signup process.
But you can convert a free trial user to a paid user by offering a 30% discount at the end of the trial period.
As the user progress on the ‘user lifecycle,’ her trust in the business builds up, making it easy for you to engage and convert her into a paying user.
Users who have signed up for your email list, have used your free trial and watched your webinar are far more valuable than the ones who have just landed on your website today.
This means to get the highest ROI, you should allocate more resources in converting more engaged users.
If you spend $1 to bring a new visitor to your website, then you can probably spend $30 to convert a paying user from a monthly plan to an annual plan.
You can divide the cost to acquire a customer into multiple parts and spend it progressively. Start small, and as the user’s engagement with your ecosystem increases, spend more on converting her.
For example, here is a strategy:
If you follow such a process, you will rely on organic methods to bring a user to your ecosystem and engage her with your product. You will use the biggest part of the acquisition cost only when the user is fully engaged, thus maximizing your ROI.
In the curiosity framework, I had discussed the Grammarly’s strategy to entice and convert free users to paying ones. Remember, I upgraded to the paid plan based on the product features. Grammarly didn’t spend anything on this conversion.
I enjoyed using Grammarly but didn’t renew the subscription at the end of the first month. I wanted to see their engagement strategy for churned users.
Nothing happened for four days, but on the fifth day, I received an email from Grammarly offering me a discount of $64.95 on an annual subscription.
A 46% discount on the annual subscription of $139.95.
This offer was valid only for 24 hours. I didn’t check my email for the whole day and missed the offer.
I opened this email two days later, clicked on the link, but the offer had expired by then.
I want to assume here that Grammarly logged this event in its data system.
Because two days later, they sent me another email. This time, offering me a 50% discount on the annual subscription.
And kept the offer valid for a week!
As you must have guessed, I have subscribed to their annual plan. ✌️
Here are the key takeaways from this:
Ever wonder what made a new user register? What are her emotional triggers, and how to engage her further?
For a registered user, you can analyze session logs, send surveys, and track her support tickets to create a customized engagement.
However, before registration, there is a limit to which you can customize the engagement.
One good way that I have come across is to use the lead-conversion attribution model.
Here is what you should do:
This will lead to an Alpha Engagement:
Subscribers will feel that you understand them and will be drawn to you.
You will gain deeper insights into your audience’s likes and dislikes.
That’s all I wanted to discuss today on user engagement. I welcome your suggestions, questions and feedback.
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