Len madigan saas - 19 nov 2013 version finale
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Transcript of Len madigan saas - 19 nov 2013 version finale
SAAS : MODÈLE D'AFFAIRES ET PRICINGLen Madigan2013.11.19
2 ©2013 bolti systems Company Confidential
SaaS…
« En 2013, 82% des nouvelles entreprises dans
le domaine de logiciels appliquent le modèle
SaaS. »
3 ©2013 bolti systems Company Confidential
Objectifs – Aujourd’hui
• Elaborer un cadre ainsi que certains stratégies et métriques d’une entreprise « SaaS »
• Favoriser une échange entres les participants concernant leur propres objectifs et stratégies SaaS
4 ©2013 bolti systems Company Confidential
Bio - Len Madigan B.Comp.Sci., MBA
• SaaS Business and Operations Leader (2004-2012)• Business modelling and selling• Implementing, scaling and operating 24/7
• GM, North American Messaging – Nokia
• VP, Operations – OZ Communications• Revenues: 195% CAGR over 4 years• Subscribers: 8 million monthly active users• Hosted systems: 1B transactions processed per
month• Service availability: 99.95%
5 ©2013 bolti systems Company Confidential
Pricing
Trial vs. Freemium
Metrics
Getting Customers
Where to Begin?
Churn
Upselling
Product Offering
etc…
6 ©2013 bolti systems Company Confidential
1. Participant Worksheet
2. What to Sell
3. How to Acquire Customers
4. Pricing and Revenues
5. Group Discussion / Review of Worksheets
Agenda
7 ©2013 bolti systems Company Confidential
Credits
• The following sources were used to create content for this presentation and are excellent references for SaaS business planning:• Lean Analytics – A. Croll and B. Yoskovitz• Forentrepreneurs.com – D. Skok• The Entrepreneur’s Guide to Customer Development – B. Cooper and P.
Vlaskovits
1. Participant Worksheet
9 ©2013 bolti systems Company Confidential
GOAL OBJECTIVESteps on Staircase
STRATEGIESHow to Get There
Participant Work SheetNOTES
GOSPA Framework - Ref: Business Coach for Professionals.com
10 ©2013 bolti systems Company ConfidentialCopyright © 2013 Bolti Systems Inc.
10
Cause and EffectCredit: R. Ganoza
2. What to Sell
11 ©2013 bolti systems Company Confidential
Success !
80% of users say your service is “must-have” = Success
50% of users churn within a few months = Failure
“Get close to your customers” = Cliché
…. But it increases the chance of your customers staying
12 ©2013 bolti systems Company Confidential
What’s Wrong With This Picture?
“I need to work on my
virality”SaaS Manager
A: Nothing… if your customers are staying…
13 ©2013 bolti systems Company Confidential
Getting Customers Who Stay – Interview Them
Their Problems
Tell Your Story – Why It Matters
Have Them Rank Problems/Solutions
Find out About Related Problems
Their Purchasing Process
Steps
Criteria
ConcernsConcerns
14 ©2013 bolti systems Company Confidential
To Do #1 - Measure Responses Vs. Expectations
Problem
• % who have this need• % who are aware of having this need• % who have a related problem
Solution• % who try product• % willing to pay• % churn
Your Estimate Reality(What it has to be)
Do Not Build (too much)Until You
Know
15 ©2013 bolti systems Company Confidential
To Do #2 – Measure Usage
• See where value is• See how they get to
the value• Segment your
customers
Spend 20% of Development Effort Instrumenting Your Product
You Own the SaaS BoxLook At the Data Inside!
16 ©2013 bolti systems Company Confidential
Recap – What to Sell
Measure – Be Sure Customers Want Your Product
Build It
Measure Usage to Refine Offer
3. How to Acquire Customers
18 ©2013 bolti systems Company Confidential
Your View of the World
SEO
SEM
EM
CAMPAIGNS
VISITORS
TRIALS
CLOSED DEALS
ROI
Conversion %
Conversion %
Their View of the World
What’s the real cost?
What’s their uptime?
They want my credit card # ?
They’ll spam me
How secure is it?
Will I get locked in?
What’s the payback?
What if they get hacked?
How will we integrate it?
Ref: D. Skok, forentrepreneurs.com
19 ©2013 bolti systems Company Confidential
Don’t just organize a sales process (left hand side)
Organize your teams so they address the customer’s concerns
(right hand side)
How? Give Potential Customers:- ROI tool
- Testimonials- White Paper on security
- List of employee certifications- Access to Live Chat
etc.
20 ©2013 bolti systems Company Confidential
Who’s Knocking on Your Door?
20 % Serious EvaluatorsConvince them it’s the right
choice
20% Casual Evaluators
Turn Them Into Serious Evaluators
60% Curious VisitorsConvince them to evaluate
Source: Lean Analytics
21 ©2013 bolti systems Company Confidential
No Touch InsideSales
Channel Sales
Field Sales
Cust
omer
Acq
uisi
tion
Cost
(CAC
)Which Sales Model to Pick?
Pick a Sales Model that Aligns with Customer Buying Process
Not Only the One You Can Afford
22 ©2013 bolti systems Company Confidential
Recap – How to Acquire
Pick the “best” campaigns
Organize your teams to address customer concerns
Pick sales model that aligns with customer buying process
4. Pricing & Revenues
24 ©2013 bolti systems Company Confidential
Lifetime Value of Customer (LTV) & Customer Acquisition Cost (CAC)
• L Lifetime gross profit from customer
• Cost (lead gen & selling) to acquire the customer*=
Cost / # signed deals
LTV
CAC
*excludes selling mgmt and marketing
25 ©2013 bolti systems Company Confidential
Some CAC/LTV Drivers
LTVCAC
• Virality• Inbound mktg• Touch-less
conversion
• Field sales• Outbound
marketing
• Churn
• Scalable pricing• Upsell
Ref: D. Skok, forentrepreneurs.com
26 ©2013 bolti systems Company Confidential
Scalable Pricing – Getting More as You deliver more value
Starter ProEnterprise
Users
Features
Depth of Usage
• # transactions• # projects• # Gbytes• # calls to support line
Strategy: add Cross-sell
Axis
Freemium
Strategy: Allow self-upsell
Best In Class Companies…• Grow rev/customer by
20% per year
• Convert 0.6% of free users to paying (month)
• Convert 2.3% of paying users to a higher tier (month)
27 ©2013 bolti systems Company Confidential
28 ©2013 bolti systems Company Confidential
Monthly Recurring Revenue & Churn
Month 1 Month 2 Month 3 Month 4 Month 30
Bookings $ 10,000 $ 12,000 $ 14,000 $ 16,000 $70,000
MRR Added This Month $ 10,000 $ 12,000 $ 14,000 $ 16,000 $70,000
MRR Prior Months $ - $ 10,000 $ 21,750 $ 35,206 $910,076
Churn at 2.5% $ - -$ 250 -$ 544 -$ 880 -$22,753
Total MRR $ 10,000 $ 21,750 $ 35,206 $ 50,326 Monthly Churn / MRR Added ---- 2.1% 5.5% 32.5%
# of abandons during month# customers at beginning of month
CHURN
29 ©2013 bolti systems Company Confidential
Impact of Churn on Monthly Recurring Revenue
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 $-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
MRR at 2.5%MRR at 5%MRR at -2.5%
$1.827 M
$2.612 M
$7.439 M
MRR
5%
2.5%
-2.5%
Churn %
30 ©2013 bolti systems Company Confidential
Churn Strategies
• Strategy 1 - Track segments separately• Power users vs. casual users• Unpaid users vs. paying customers
• Strategy 2 - Measure churn at various intervals• Different root causes
• Strategy 3 - Keep churned users in mind • Consider nurturing them back to paid use • In event of feature or price changes
Source: Lean Analytics
31 ©2013 bolti systems Company Confidential
32 ©2013 bolti systems Company Confidential
Churn is a Lagging Indicator --Customer Engagement is a Good Predictor
• Strategy #1 – Use Customer Engagement metrics to identify and address at-risk customers• Not behaving as you’d expect• Blocked at a certain stage• Changing patterns
• Strategy #2 - Use Customer Engagement data to find “great” customers, then figure out:• Why are they behaving that way• How to get more of them
33 ©2013 bolti systems Company Confidential
Recap – Pricing and Revenues
Develop multi-axis pricing
Ensure LTV >> CAC
Implement Churn and Upsell strategies from Day 1
5. Group Discussion / Review of Worksheets