We’re pleased to announce the Bowery Capital 2020 Startup Sales Stack Report! This report is meant to serve as a guiding framework for anyone evaluating sales solutions. Whether sales, marketing, customer success or management, if you’re thinking of using or buying software to optimize customer…
Last week, we hosted Bill Hobbes on the Bowery Capital Startup Sales Podcast to discuss “Growth Hacking With User Behavior.” In that episode, we discussed a broad range of ways that user data can be leveraged not only for better retention and up- / cross-sell, but also for better conversion throughout the sales funnel. In this follow-up piece, I’ll expand on how user data (i.e. product engagement data) can be used to build a behavioral marketing strategy for your startup.
So how is behavioral marketing relevant to SaaS? Per Bill: “The ad industry often talks about behavioral targeting: profiling prior behavior of online users in order to determine which ads those users will see next. We use [behavioral] in the SaaS world to determine how best to engage with customers in a very customized fashion. The key to keeping customers is to ensure they see immediate value, continuous value, and through real-time, curated communication that speaks to their specific journey, they feel like an important person to your business.” Bill shared an interesting fact on the podcast: when Facebook sends you a “you’ve been tagged” email, they have an over 80% open rate; the reason is personalization. Too often SaaS startups don’t personalize communications with their own prospects and customers. Let’s walk through the 5 tactics to leverage behavioral marketing to increase not only open rates but also general SaaS sales effectiveness:
1) Identify & Target Your Revenue-Addressable Customers From The Larger Pool: Any early-stage startup deals with this issue: you have a huge pool of potential leads and you need to best qualify them in other to allocate limited AE resources. If you have some way of collecting user / lead engagement prior to closed-won, you leverage it to continually refine your understanding of which leads are “revenue addressable” (most likely to convert) vs. those that are just kicking tires. The clearest example of would be for startups that have Freemium models. In this case, your product is in the hands of many users before they are paying. Using product engagement data, you can determine things like: who uses your product the most (frequency, consistency), of those frequent users what are their roles & budget authority, who is reaching out and asking questions, who is referring other Freemium users, who is coming to meetups / webinars, etc. But this tactic can be relevant to non-Freemium business models as well, which brings us to our second tip.
2) Maximize Data Collection & Segmentation In Beta / Trials To Enhance Conversion To Paid: If you are not a Freemium startup, you might use trials in order to demonstrate value to potential customers. The very same engagement data from tip #1 can be applied here. A common strategy is to kick off a drip email campaign upon the start of a free trial in order to show users how to get the most value out of the product. But behavioral marketing can be used to nurture leads here in a much more sophisticated way. You should consider much different messaging for those users that are highly engaged vs. those that sign up for a trial then go dark. For an early-stage startup, you are not only trying to maximize conversion to paid for individual customers, but also triyng to develop a sense for what your Ideal Customer Profile actually is. That means you need to be collecting the right data for all your customers in trial so that you can retrospectively analyze who converted and who did not. Is the factor most correlated to conversion: role, industry type, lead source, number of stakeholders engaged in the organization? For example, it may make sense to offer whitepapers to your trial participants, and it may be the case that you want to segment those whitepapers based on the industry of your lead. Long story short, micro-segmentation of your trial participants can help you custom-tailor your communications to drive true behavioral marketing and hence grow win rates.
3) Use Customer Data To Better Understand “Compelling Events” In Your Sales Cycle: In a recent podcast, “Shortening SaaS Sales Cycles” with Don Otvos of DataHug, we discussed how one key to reducing time-to-close is identifying the “compelling events” throughout your sales process that indicate a meaningful step in qualification. Example compelling events might include a request for a product demo, sharing the product with other key stakeholders, or making use of certain product features. Behavioral marketing can help you surface otherwise hard-to-identify compelling events. For example, early on, sales leaders at InsightSquared determined that a key compelling event in their sales cycle was getting the CFO looped into the process to vet the product. If your startup found the same, you might target highly engaged users with a whitepaper tailored to the CFO a certain number of days into the trial.
4) Find Your “Power Users” & Make Them Champions With Special Offers: Too often, startups only look at negative indicators to determine where they should focus sales / success attention. For example, a drop in customer engagement that is X% lower than their average, or a failure to login enough times during a trial. But positives indicators can drive highly successful behavioral marketing tactics. Many SaaS startups look to “land and expand” within an organization and grow ACVs by increasing the number of paid seats and / or upselling premium enterprise features (e.g. power administration, user management tools, security features, executive reporting, etc.). These strategies require finding that “tipping point” where enough line-of-business users are engaged with the product such that the pitch to a more senior decision-maker for the enterprise upsell is strong. You want to maximize the number of initial users that are champions who will go to bat for the product once the bigger contract is under consideration. You can micro-segment your early users within a company to determine who your “power users” are, and offer them special training, content, or incentives to evangelize your product internally. You may even find individuals who your sales team can build a direct personal relationship with to “sponsor” the sale.
5) Use Engagement Data To Empower Outside Sales & C-Level Pitches: Behavioral marketing, as we’ve discussed, can be a huge boon to a sales process, be it for lead nurturing, conversion, or upsell. But the same product engagement data that can drive successful behavioral marketing campaigns can be equally important when it comes to highlighting value proposition to C-level executives you may be pitching, even in outside sales efforts. Imagine an in-person onsite sale to a CEO. As Bill discussed in our episode last week, a common pushback from such a decision maker might be: “sure, a few people use this product but I doubt it’s really a critical need; after all there’s only one team using this thing.” Remember, as a startup salesperson, it’s on you prove to that the value is there. For line-of-business champions, getting airtime with a C-level exec isn’t always easy. If you can come to that meeting with a detailed breakdown of the high product usage you’ve been seeing to date, your argument is that much stronger. Repeating the party line on product value is much less powerful than: “you’re correct, today one one group is using our product; but 90% of that team logs in to our product daily… how many other tools do your employees rely on every single day?” All of these tactics circle back around to a common theme we see in SaaS marketing & sales optimization: you need to understand your customer deeply to understand your ideal sales process. The biggest mistake you can make is failing to collect this user data early on. Once you take the time to collect & segment usage data, tailored behavioral marketing strategies like these can help you win more deals faster.
If you missed the podcast itself, make sure to check out the full episode, “Growth Hacking With User Behavior” with guest Bill Hobbs (VP of Sales at Totango) now. Also, check out past episodes and make sure to subscribe to our podcast to get new content every Friday. Thanks and until next time!
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