So the world is going to hell in a hand basket? Stocks going pear shaped? Mortgage or job looking shaky? Old ‘Bush’ about to pull 700 billion out of nowhere to devalue the economy further? Can’t sleep at night?
Join the masses – we’re all in it together. It’s pretty basic really, the economy goes up, then some years later it goes down. Guess what – than it goes up again… Wait for it… Then down… Spotting a pattern yet?
This isn’t going to be a groundbreaking blog post about recessionary survival tips for software companies, rather this is just a list of common sense reminders we should all apply and consider from time to time. It just happens that now is a great time (while the world is economically hurting) to apply them. It will get better, but now is an opportunity to make your startup or business more efficient so when the tide turns you’re in a good place to scale. So here’s my tips on some key areas:
“Code customers only make up 8% of our customer base (today), it show’s you the move from code to SaaS, 100% of our customers used to be code” – this was a quote I noticed on a staff members Twitter account.
He’s right though. We operate a leading project management software company – www.proworkflow.com. We’ve been around since 2002 and have seen a few things over that time. The most obvious is the natural shift from a ‘Code Selling’ model to a ‘Subscription/SaaS’. I say a ‘NATURAL’ shift because over the past 4 years we’ve been marketing a single solution with both code download and subscription option.
When we began, we only offered the code download option, and listed in many code libraries. 2 years later, we started the subscription offering (SaaS/Software as a Service). At no point did we ever really push the deployment option as a marketing angle. Simply put, our approach has always been that we have a solution, and customers can either download locally or host with us on subscription. It’s their choice – not us pushing.
It’s a hard balance being in the Software/SaaS (Software As A Service) industry. We can put lots of time and focus into systems and development, but sales may suffer… or we focus on sales and then development suffers… or focus on acquiring new customers and current customers start leaving.
When current customers start leaving, we call this churn. Whilst churn is a natural occurrence in all software companies, it is also an indicator that something isn’t right with either the product or the business model. Software companies can be so focused on building online communities to gain traffic and new users that they often forget about the more important community – their user base. These are the ones that pay their bills.
Don’t misunderstand this comment as there are great benefits to building online communities. The point I want to make is that the community strategy surrounding your marketing efforts is very different from the community strategy to increase current customer retention.
Whether or not the current customers collaborate with each other or stand alone, they are still part of your user community, and it’s vital that you know the key factors that keep them using your solution, referring to others and not running to a competitor. Here are some of the main areas to consider when looking ways to increase customer retention.
Why is it that doomsayers popup every now and then with a completely negative message and somehow manage to get major press. Harry Debes, CEO of Law Software has publicly declared that the sky will fall on SaaS (Software as a Service) companies in 2 years. Personally I think it is either a naive, arrogant or plain stupid statement to say “The SaaS market will ‘collapse’ in two years”.
I found an old email the other day with some thoughts on bootstrapping I’d written to a mate. I thought it was interesting reading over what I’d written, so decided to repost the thoughts here… Here goes!
Regarding bootstrapping, It’s a hard balance. We put lots of time into systems and development, but sales suffer… or we focus on sales and then development suffers… Bootstrapping is fun to a point, then if the intention is to bootstrap through to profitability, the issue is 100% correct allocation of resources between development, sales, systems and marketing.
We don’t have a lot of wasted resource, only a tight team, no flash offices and a few contractors but we do A LOT with what we have. We have a good number of dedicated servers in California and one in NZ, are in profit and have no debt. So the years of hard work are paying off. Not an industry legend yet, but we’ll get there.