- Who We Serve
On February 7th through the 9th, Brian Powers and I attended SaaStr Annual 2017 in San Francisco. We went to sessions, met with tons of SaaS companies, and took in some important lessons from some of the hottest SaaS companies around. I’ve summarized some of my findings based on my experiences here at PactSafe and how they align to what we’re doing. I hope you take something away from them, too!SaaStr Annual this year was an incredible event. 10,000 entrepreneurs, marketers, customer success and product folks all came together to collaborate and share their knowledge on how to start and scale up a successful SaaS company. It’s hard to summarize what all I gained from the event—it was our first year going—but there were tons of great sessions and tidbits of knowledge that we can apply here at PactSafe.
I’m primarily responsible for product and customer success here at PactSafe, but I dabble on the sales and marketing side as well. It’s incredible to see businesses that I’ve admired from afar in these functional areas open up the kimono to share what’s made them successful. Companies like Veeva Systems, Trello, Gusto, and amazing venture capitalists like David Skok.
I’ve always thought we looked at the world a bit differently at PactSafe. Build a platform, not a product. Build a profitable company, don’t grow for growth’s sake. We have also added to our mission that we will not celebrate number of employees or fundraising as a part of our culture. It’s important that we build and scale a real, sustainable business that has the future of changing the way business is done.
Venture capital and tech startups are a symbiotic pair in today’s world. They both have their place and we’ve been fortunate to work with some amazing investors. That being said, it’s not a part of our strategy to continue raising tons of money to drive super fast, unsustainable growth. When talking to many venture capitalists, this kind of thinking can rub against the grain, which is why it’s so amazing to hear from Peter Gassner, CEO at Veeva Systems. Veeva only raised $7 million total since they were founded (and only used $3 million of it).
They’ve gone on to build a huge, successful business with a $600 million run rate. It’s so invigorating to hear their story and hear their advice on how they’ve done it. It’s a harder path that relies on sales and continually driving more and more value for customers, but he provided many great nuggets for doing that—all while focusing on profitability (and maintaining ownership of our own destiny).
Gassner provided another great anecdote related to product pricing: “The price you set [for your product] establishes how good the product is.” He immediately followed up with the logic in support and product management would apply to this mentality. If you’re charging $100,000 for your product, two things should happen:
Once you get traction with your product, you can start to feel when certain customers probably aren’t paying enough—and if you subscribe to the SaaStr theory, that’s when you should start charging double.
Another nugget from Peter Gassner related to professional services and the tendency for SaaS companies to give professional services away in exchange for a higher annual (read: renewable) contract value. He believes that people are more valuable than the product because the experts at his company are the ones who breathe life into the overall solution. They’re the experts, and that’s worth paying for. I totally agree with this and loved seeing it reinforced with his success story.
Focus on the end result and ultimate value you’re delivering, and the value for the professional services becomes apparent. And as it relates to annual contract value, not giving people away really helps on two fronts—1) it keeps a high level engagement from the consultants on the SaaS company side (and makes them feel valued) and 2) it keeps the customer invested in adoption of the product, which ultimately drives a longer LTV and lower customer churn. Professional services help customers achieve the ULTIMATE value of products.
During a session from Lexi Reese, CXO at Gusto (an amazing payroll & benefits company you should check out), she talked about focus for customer success and who you need to be willing to be bad for. The example she gave was Southwest—a discount airline who offers an amazing discount airline experience, but may not compare directly to United or Delta. For them, that’s perfectly fine. Customers who complain about service, festival seating, etc. aren’t supposed to be happy with Southwest. It is a discount airline after all, and they offer the cheapest flights in the US. So they deliver to that experience and don’t set false expectations for their business.
My takeaway from this is that the service levels, experience, and products you’re delivering to your customers cannot and should not be a one size fits all. Customer success needs to be aligned to your ideal customer profile just as your marketing and product should. That’s how you should measure yourself and hold yourself accountable—and it also allows you to manage your customer’s expectations in the same way.
Another nugget from Lexi Reese’s talk spoke about managing improvement within your support/customer success organization around input and output. She showed a chart mapping input and output of inbound customer support requests. Couple of things to think about here:
At PactSafe, our goal is to make it right when our customers have issues — and taking this approach to measuring input and output will help us continue to drive things forward.
There was a great panel with 3 marketing experts from various stages of SaaS companies about getting leads. Jen Grant (CMO at Looker), Menaka Shroff (Head of Marketing at Betterworks) and JD Peterson (Former CMO at Trello) elaborated on some fun tactics and strategies for getting more leads. An important reminder for all of us—you can’t just put money into demand generation and expect to get leads out. It takes a factory with many complex, complementary components working together to drive awareness for your prospects. Here are some of the tactics they presented.
Find your “Lighthouse” customer. One great recommendation that we have followed here at PactSafe to get more leads is by creating content and developing an outbound sales strategy around who our happy, ideal customers are. This logic applies to role at the company, company vertical, company size, and the use cases relevant to the customer.
Put out content behind the passion driving the company. Do research and provide a valuable piece of content that is relevant to your lighthouse customer. Share it unabashedly with no strings attached. By finding the people passionate or intrigued by the topic you’re passionate about, it’s only logical they’ll soon show interest in what you have to offer.
Find a fixed amount of people to focus on. ABM (Account Based Marketing) is one of the biggest SaaS trends “because it really works and is a great strategy” according to Jen Grant. Picking a highly focused group of “Lighthouse” prospects and using a diverse set of strategies both in brand marketing and direct marketing has been an emerging theme for driving happy customers, consistent ACV, and a successful marketing team.
Weigh your marketing mix and how it all plays together. JD Peterson shot off an important reminder that brand marketing (billboards, for example), email, display, outbound, content—all won’t play together unless you consider how the mix resonates throughout the full journey of your customer. Where are they going to find information? Where are you being seen? What’s the right cadence or frequency?
Jen Grant gave a great example of how brand awareness was measured at her organization—she used an example where Looker reduced their ad spend in a specific vertical of their business to spend elsewhere. After reducing ad spend, organic traffic and leads went measurably down. What does this mean? Brand matters still.
David Skok gave an amazing talk on 12 SaaS metrics that matter most, but one key takeaway for me was evaluating conversion rates from top of funnel through to customers coming onboard. He used the term “microfunnel” to look at very specific pieces of the funnel that may be causing you issues. The example he used was a “Free Trial” converting (something very relevant to us here are PactSafe).
Free tools that add value have a viral effect. He used HubSpot’s “Website Grader” as a great example of a free tool that can drive a ton of leads to the top of the funnel. Getting the product and engineering team involved in helping convert new customers can also be great for overall morale and to help bring great new ideas to the table.
Free trials. He discussed that customers need the “Wow” moment to happen when using your product. Most times, when folks log in to a free trial, they’re logging into a blank account with no idea what to do. Obviously, that’s not a great way to get your customer to the “Wow” moment—he really made me question how our trials work and how we can help customers see immediate value out of a free trial to “get” how PactSafe can help.
Not only did we go to amazing sessions, we also met with some amazing tech companies, ate some delicious food and partook in some cocktails at all times of day. It was a wonderful event, and we’ll look forward to returning next year!
If you have any specific questions on my thoughts around the above topics, want to talk SaaS, or want to hear more about the conference just tweet at me!
-Eric Prugh, PactSafe Co-Founder & COO