Pixels and Clicks

So you want to onboard enterprise SaaS users without losing your sanity? Do this

Bhaskar Sarma

If you are a SaaS company already selling to individual customers and SMBs how different would it be if you had to sell to enterprises?

Will you be able to fit into the enterprise IT stack, deliver the same results that you have demonstrated for your smaller users with the same basic featureset?

Or is it a fool’s errand?

Let’s find out.

To understand how different small businesses are from enterprises think about a NASCAR and an F1 race.

According to Top Gear,

F1 cars are made in labs by white coated mad scientists. NASCARs are knocked up in medieval foundries by men with mallets…NASCAR has hammers and spanners, an F1 driver can tune his car on the go…When an F1 driver brakes…his body is tormented by a force of 5g. Brake discs are made by firing carbon atoms at a cobweb of rayon…Over in NASCAR they make do with slabs of cast iron….if NASCAR is the Big Bang F1 is particle physics.

At its most fundamental level selling a SaaS product is the same whether to an individual or to an enterprise. You have to identify your ideal customer, demonstrate that you product has value, remove risk, and make it easy to use.

But when you get down to brass tacks the differences are akin to a NASCAR vs.F1 race.

Here’s what I see the difference is between them (H/t to Steli Efti for his insightful Quora answer)

Selling SaaS to Enterprises vs Startups/SMB

There is a lot of overlap and a number of products straddle both categories (Dropbox is a great example). Then there are outliers like Slack which grew virally in enterprises without needing a single sales person.

When you are selling to an enterprise focus on delivering the solution, and not whether you are a software company or even a SaaS company.

So does that mean that you need to throw out automation and do everything manually when onboarding enterprise customers?

Hardly.

All you need is a bit more of the human touch.

The problems with onboarding enterprises

When you are selling to enterprises there are two types of solutions. Onboarding for one is comparatively easier that the other, at least in the initial stages.

Non-core /4-5 figure SaaS apps

If you are selling a product that sits at one corner of the enterprise IT stack you have got a very strong tailwind which goes by shadow IT.

From Techcrunch

…the IT department at a typical enterprise is staring at a mind-numbing list of IT project requests from employees and business units…

To manage this endless to-do list, the IT department logically arranges requests by how significantly they impact their bottom line, or by whichever metric matters most to the business at that specific moment. The “winners” tend to be technology projects that boost sales or improve the customer experience. Less fortunate are more internally facing requests, such as a solution to streamline logistics.

This means that employees of business units are finding out third party apps (Slack, Dropbox, Basecamp etc) to fill in the gap, unbeknownst to IT. This phenomenon called shadow IT and despite strong initial resistance most enterprise CIOs have made their peace with it.

A study by Cisco has some encouraging news for SaaS startups seeking to sell productivity, logistics, project management and other such solutions to business units in enterprises. According to it:

Because the biggest issue with using unauthorized third party apps is security IT departments are working with business units to set parameters and institute data governance mechanisms so that the risk of data loss is minimized.

As an enterprise SaaS startup your job would be to demonstrate that your product is compliant with your prospect’s data governance and security policies.

That is the only additional major hurdle you have to cross while selling such an app. For, when you are selling to individual business units, and when your order size is in the four or low 5 figures you may not have to go through the slow moving bureaucracy.

To you the business unit might look like an SMB with the business unit head taking on the role of the CEO. Convince them, and you are almost there. If you get in you can use the land and expand strategy to acquire other customers inside the enterprise, as Yammer did.

Core/Expensive SaaS apps

What if your app deals with the core technology backbone in the enterprise, like a data management and collaboration tool like Box? Or a cloud-based security tool like OpenDNS?

Or what if the order size goes into six or seven figures which could only be approved by the board?

The challenges around user onboarding increase dramatically!!

You need to change your entire mindset and also focus on the big picture of how your product will fit into the medium and long term roadmap of the enterprise.

This is what Aaron Levie of Box says when talking of moving from a peripheral app used by individual managers and small teams to being a part of the strategic enterprise IT stack with ARR (annual recurring revenue) of $250m.

In the consumer model, the expectation is that maybe the customer’s not right and you could just build whatever product you want. It’s because you can be your best consumer.

In the enterprise model, the biggest challenge is that you can’t necessarily be your best customer. You don’t know what it’s like to be on an oil rig trying to pull up mission critical documentation.We don’t know what it’s like to be in a hospital and you’re spending most of your time in an electronic health records system and you need to pull up a medical image.

Unless you actually get out and see what people are doing, how they are thinking about IT, you can’t make the best prog decisions for your customers.

And that’s just the start of a long arduous climb. Even when you have figured out the feature set there is a whole host of legal, compliance, and risk related hurdles that your product has to clear.

This quote from the same interview is telling

For, let’s say, a year, all of the time around auditing, testing, selling, marketing to GE is unprofitable. We’re just praying every night that GE comes onboard and agrees with our strategy and then converts.

One year!! And there’s no guarantee that you would get the client on board. Even if you passed through this stage, and even if the pilot project showed promising results you are still in the woods.

And that’s not the worst part. Because every enterprise has their own security policies all this work will have to be repeated all over again, with the same uncertainty around conversion every time you approach another enterprise client.

Here are two stories from Steli Efti from Close.io on how enterprise sales can go south in multiple ways.

This is what happened with him at Google after a senior exec saw their solution, became a raving fan and signed on for a pilot

…we assumed that since they were paying for the software and the pilot their team would make sure to get maximum benefit from it and turn the pilot into a success…

..top-management pushed the execution down to a project manager. And that project manager wasn’t excited about it. She had little interest in promoting our platform as an internal tool within Google….She went through the motions just enough to be able to say “we tried, but it wasn’t a good fit.”

When selling to enterprises it’s not enough to wow the final decision maker. Your onboarding process needs to target the entire team right down to the individual users who would be actually responsible for delivering results with your app.

But maybe you have done that, got everybody on board. Are you out of the danger zone now and can rest?

Maybe in a perfect world.

Again, here’s Steli talking about his botched deal with Oracle.

We worked almost nine months on closing the deal. We built relationships with a senior vice president, director and managers on different levels.

We had a huge pilot in mind. We worked out a detailed plan of action, identified metrics to measure success, agreed on a budget. They’d be spending tens of thousands of dollars on the pilot.

After nine months of all the schmoozing and hustling and planning, putting all this work in, and just a few weeks before signing the deal, the senior vice president left Oracle to become CEO at a different company.

He took all the people we built relationships with at Oracle with him. We were left with nothing.

Dayum!

This is like a guy getting fired and breaking his legs in a car crash on his drive home. The police take him to the emergency room where a few hours later he finds that his wife has eloped with his childhood friend, taking the dog along with her.

If I was Steli I would quote Theoden from LOTR after hearing the final news from Oracle!

So should you give up your enterprise sales dreams and stick to customer sales?

How to bell the enterprise tiger

The situation is not all dire. Relatively small startups DO sell SaaS products to enterprises.They go through all these processes, sign on a customer for a year, and keep on engaging with customers continuously, move up the value chain internally, get more committed users and champions and keep customer success paramount.

Again, as Aaron from Box says

The best advice I generally have is try and build a business model that once you sold to your customer, you can continue to grow with that customer. Either new capabilities, being able to sell more seeds.

…We have to go back in and say, “Hey, you haven’t been using us for this next generation workflow that we’ve been designing. Can we understand your business a bit more?” That dramatically benefits both of us because they get more value. We get a stickier customer in the process.

And that’s the dream! In the SaaS model the winners are those who have mastered customer retention, not acquisition.

According to the book Marketing Metrics this is how it plays out (6%-20% chances for new prospect, 60%-70% chances for existing customers).

So you got to focus on your old customers to drive growth.

How much growth are we talking about?

In a series of insightful charts David Skok, a serial entrepreneur turned VC demonstrates that even with people leaving, a company will continue to grow at a healthy clip if revenue from cross-sells and up-sells (which he refers to as negative churn)…

…outstrips the revenue lost due to churn (this model assumes that bookings from new customers start at $10k in the first month and increases by $2k every month. MRR starts from zero).

Those numbers are impressive, and demonstrate the power of the formula championed by Jay Abraham

Massive growth=Tiny increase in deal (size X volume X frequency).#SaaSonboarding

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As long as current customers keep paying you more and more you can lose a lot of people and still keep growing.

There are multiple ways to reduce SaaS churn. and the fine folks at ConversionXL have a post with 9 extensive case studies of how companies like Groove, Telefonica Ireland, Mention, Hubspot etc tackled this problem.

There are a few principles to keep in mind while optimizing retention rates and improving onboarding, especially for enterprise SaaS products.

Actually, I have a made up a model for SaaS onboarding that goes like this:

I call it the OGUF model. This model operates in a closed loop

N.B. In most use cases onboarding happens after the free trial has started or the pilot has begun. This post assumes that you have figured out the long pre-sign up process for enterprises.

Let’s walk through the individual steps of the OGUF model:

1) Determine desired outcome

When you install a run tracking app does it benefit you or the app developers if you fill out your profile and sign in every day?

You may be an active user as far as the server logs are concerned, but you will get zero desired outcome (reducing weight, increasing stamina) out of installing the run tracker app.

And one fine day you will un-install the app.

Lincoln Murphy calls desired customer outcome one of the most important concepts in business and in user onboarding. He defines it as the combination of required outcome (the functionality of the product) and appropriate experience (the experience a customer has across all possible touchpoints with your company).

It looks like this

The appropriate experience will keep on changing as the company and the customer matures and changes. If you can’t keep pace you will face mental opt-out, and lose them.

Kill at SaaS onboarding by delivering desired outcome to users- @lincolnmurphy

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Determining and delivering the desired outcome should be your first priority when a user signs up. The best way to do this by building an ideal user profile and developing the UX of your company based on the wants and needs of your ideal user.

When you start this process with an ideal user profile everything- product design, lead gen, onboarding, growth -flows naturally, and the whole plan comes together.

This presentation should help you get started with building the ideal customer profile.

Supercharge Growth Using Ideal Customer Profiles from Lincoln Murphy

 

2) Mind the success gap

The concept of success gap is related to the idea of desired outcome. Simplistically, success gaps will prevent your customers from seeing desired outcome.

For finding the success gap you need to first find out what success means to your user. Because so many people in an enterprise have invested some political capital and taken a bit of a bet on their career prospects when signing up for a free trial or a pilot project you need to make sure that these people see the value early on if they are to become a product champion and ease the path of enterprise adoption.

You will find your success gap when you determine what the success roadmap looks like for an ideal customer profile.

Let’s assume you are selling a cloud-based help desk product for an enterprise.

The success roadmap for the person who signs the check might look like this

But as Steli’s Google story showed it often doesn’t matter what the final decision maker thinks if the people who are supposed to be using it doesn’t find value in the tool.

The crucial milestone in this process is the second block concerning improvement in customer support metrics. If you don’t show results then there is no business reason for them to ditch their current solution.

So, really what you should be concentrating on is the success map for the actual users- the customer service team.

If your customer development  is up to snuff then you would already know what steps a service rep should go through to achieve success. Maybe this is how the workflow looks to them (it’s a lot more complex too then the top boss’)

There are so many steps between the cup and the lip that in enterprise SaaS onboarding you might achieve massive ROI if you actually walk the user through every step of the process and close the success gaps. As this article on Framed.io shows, this is what Hubspot does with user onboarding:

The key to HubSpot’s strategy is in combining multiple factors to gauge each customer’s Customer Happiness Index score. Their strategy took into account the following:

Frequency of engagement and feature use

  • How frequently did customers blog using HubSpot?
  • How often were customers tracking leads with the platform?
  • Did they run email and conversion campaigns?
  • Were they engaging on social media?

Concierge onboarding

  • Every account is assigned an Inbound Marketing Consultant to help set up the software and work with customers for the first few months.
  • They provide monthly updates so customers can track progress.

By implementing their CHI method, Hubspot saw increases in the following key metrics:

  1. A 33% retention rate of previously unhappy customers.
  2. Customers were able to meet Hubspot’s internal goals for double digit increases in leads every month. More leads = happy customers

For many enterprise products walking the prospect through a demo might be enough to make them convert from free trial to paid user a lot sooner than then 30 day free trial period.

This translated into higher ROI, MRR, and growth!

But what if your customer success team is limited and you can assign people only for higher value deals or high impact steps? What if you still want to make the sign-up and the setup processes better?

Use behavioral emails! This is what Samuel Hulick of UserOnboarding fame has to say about them

You want to craft your strategy around key moments in the lifecycle and approach each email from a perspective of being as helpful as possible within that moment, not as a mosquito in their ear.

On the highway to user/product love, lifecycle emails are road signs providing timely guidance, not annoying billboards.

 

I have previously written about welcome emails and their best practices in the user onboarding process  but using behavioral emails throughtout the process can be very helpful.

Check out this awesome post from Jimmy Daly at Vero where he writes about how companies like TripAdvisor. and Amazon keeps users hooked through smart use of behavioral emails.

Close the success gap, deliver users results that matter and hit hypergrowth #SaaS

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3) Measure and monitor usage

In the Hubspot case study they hit the ball out of the park with customer retention by setting metrics and benchmarks.

But is there a metric which can accurately depict the effectiveness of the onboarding process?

Is it churn rate? Monthly Recurring Revenue? Annual Recurring Revenue? Active users? Cost of customer acquisition? Customer lifetime value? Average Subscription Value?

Does these questions even make sense? Do you feel like this right now?

Don’t go postal yet and smash your system.

Go the minimalist way. Focus on One Metric that Matters. It’s as simple as it sounds- pick one goal for a particular slice of time or stage of growth, and do only the things that will help you meet that goal.

For Facebook during it’s early days the mantra was to grow faster than yesterday. For SumoMe, a set of tools used in millions of websites to grow traffic it is 1 billion unique visitors in one year- Noah Kagan, the founder of SumoMe writes about the process and the reasoning around his OMTM here.

Okay, so what’s the OMTM during the onboarding process? Conversion rate, obviously.

So which metrics will tell you whether your enterprise onboarding process is humming along smoothly?

Here are a few ideas:

Notice how these metrics are all user-centric and not product centric.

Onboarding != free to paid. An user successfully onboards when she gets value #SaaS

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Ultimately you will need to measure MRR, ARR, LTV, Net Revenue, Annual Run Rate, User Churn, Per-plan LTV, Per-plan customers etc on a regularly updated visual dashboard. If you use Stripe as a payment processor you can actually use an awesome tool called Baremetrics to create one for free.

Here’s how Buffer, the social sharing app’s real-time public  revenue dashboard built in Baremetrics looks like

 

A note on metrics: In an enterprise product focus on team , and not on individual activities. One user not logging into your system since sign up might simply mean that they are down with flu.

But how can you find the metrics relevant to your users? That’s the last part of the OGUF model.

4) Get Feedback

All of us have received one of those surveys with multiple radio buttons, columns of checkboxes and a plethora of options to select. I call these surveys Stiff Drink Surveys (personally I chug down a beer if I am forced to grapple with these monstrosities )

Collecting user feedback is an art and a science. When you are aiming to optimize your SaaS onboaring process, the right questions asked of the right people at the right time can save you a lot of grief down the line.

First off, don’t promise an iPad or a Starbucks gift card in exchange for feedback, and especially online. The answers you receive may be biased because people will be attracted to the bribe and they might not necessarily be your best customers or users.

Over at Groove, a cloud-based customer support app the CEO Alex Trumbull talked to 500 customers in 4 weeks and gained amazing insights into how they used his app.

This was how he opened his call

“Hey, thanks so much for agreeing to chat. I won’t take too much of your time. The conversations I’ve been having with customers have been invaluable in helping us shape the product and our plans for the future, so I’m excited to get your feedback.

“My goal is to get an overall feel of how you’re using the app, what you like, what you don’t like, and what we can do to make it better. I’ll let you take the floor.

Some key takeaways

…The ultimate “win” from customer development is deep insights into how our customers think, feel and use our app. That insight is absolutely critical to the growth of any business, and it’s the biggest reason I took this project on. It had an immediate impact on how we approach our product roadmap and day-to-day decisions…

..We Learned That We Need Better Second-Tier Onboarding….we need(ed) to improve our onboarding as users get more deeply engaged with Groove so that they can better discover some of the more advanced features…

…I was able to repair a handful of relationships with customers who were unhappy with the product….

…I learned about several new use cases for Groove that I hadn’t considered before….

… the number of positive reactions, even from customers who complained about bugs or issues, was huge….

…We Got the Chance for Some Quick Customer WOW’s….a weird bug, but something we could fix in just a few minutes, and we ended up pushing a fix for her issue that night….

…Hearing our customers talk about the app and its benefits, along with their personal stories, challenges and goals, is the only way we can write marketing copy that actually connects…

Read that post- it’s filled with valuable information, including his customer development workflow.

Face to face or on phone/Skype are the best ways to get feedback especially from enterprise people.

But what if you need to send out a survey? Or use live chat? Or put in a Qualaroo pop up?

Qualaroo in-page survey(courtesy Helpscout blog)

What questions should you ask to get the most comprehensive and actionable feedback?

Ask open-ended questions like:

You might not want to ask all these questions  at the same time because even one question can be answered in detail if the respondent so chooses.

And detail is really what you should be looking for when analyzing feedback.

Let’s assume that 1,000 people answered your survey. Follow this process:

Boom! You have cracked the survey puzzle.

If you want to know more about the science and art of taking surveys read Ask, an Amazon bestseller.

Here is an example of how Hubstaff, an app used by businesses to manage remote teams, used a tool like Intercom to make the feedback process extremely painless, and even fun.

Every interaction with our customers is more personal which makes a massive difference….Many of our customers see the conversations they have through Intercom almost as a chat service, which is actually really cool. It’s more real-time. It’s more personal…

…It’s also very nice for users to simply hit the question mark inside the app where they are having an issue instead of having to find a support page and submit a “ticket”…It’s almost like your personal concierge.

And if you are following the OGUF model all this feedback will help you uncover pain points, and improve the understanding of your user’s desired outcome.

So, what should I do now?

This is quite the monster post and if you have stuck till now you are probably feeling like this

Give me a few more minutes to wrap it all up.

Onboarding enterprises is hard. There are way too many dead end and booby traps along the way, and it’s every easy to spring into one of these. The process will be long and exhausting, and exhaustive as well.

But a single enterprise customer can change the growth trajectory of your company. So if you are providing solutions that enterprises can use you owe it to yourself to give your best shot at storming the castle.

Understand the procurement process, try to  build up internal champions, and ensure that your interests coincide with theirs.

Stay patient and remember that it’s a long game.

Does anything in this post make sense? Do you have a specific learning in connection with enterprise SaaS onboarding?

Let it all out in the comments!

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