Why Running a SaaS Business Is Like Looking for a Girlfriend
People find similarities between many, also seemingly unrelated, ideas and concepts. For example, Kanye West thinks he’s as ingenious a musician as Beethoven was.
In fact, Kanye made a lot of comparisons of him and other notable humans including Pablo Picasso, Steve Jobs, Shakespeare, God, Walt Disney, Da Vinci, Howard Hughes, Jesus and more.
Well, I don’t want to argue whether Kanye is like Steve Jobs so let’s move on. But right, Kanye. Everyone has the right to one’s own opinion.
I must say that having these comparisons in mind, I feel a little bit empowered to come out with my own.
If you’ve ever been in a relationship and / or work in a SaaS company you will get it right away.
I just realized that running a SaaS company is like looking for a girlfriend. I’m not sure, though, if it’s because I’m a single or I work in a SaaS company…
Anyway, let’s get to it.
In other words, what’s the aim of your SaaS tool, how it improves the world and where do you want to go with it. It’s a process in which you have to create a roadmap for your SaaS business, consider who, why, how will use your product.
Just like you design your product and have an idea of what its aims are, you have to be aware of your life situation, positive and negative traits and expectations toward a relationship. Looking for a long-term relationship, a marriage or a one night stand?
Find Your Target Audience
Establishing your target audience is key to development and success. You have to carefully analyze the potential audience on both personal and professional level, including demographics, industry, challenges, hobbies, goals and so on so forth. Finding the right target audience is fundamental.
In fact, to find your target audience, you can use a social listening tool like Brand24. It allows to collect real-time mentions of predefined keywords that can be connected to your business, product or potential audience. This is how you can find out who’s talking about your product which gives you a better picture of your potential consumers and market niche. Learn more about the use of social listening here or sign up for a free trial.
Now back to relationships.
Isn’t it a little bit similar to looking for a partner? I agree that love is blind but people still do have an idea of what the next partner should be like. Should she be a vegan, a cyclist, a movie buff or an avid reader of the Scandinavian thriller books? What are her life goals? Does she also like eating bacon-wrapped Oreos dipped in milk?
Now, that’s highly debatable. You want your product to be as good as it can get to provide your customers with a first-class user experience. Good content, neat design and friendly interface will certainly do the job.
But what does good mean? Good means working. Should this CTA button be red or green?
Does it sound like dressing up for a date?
We all know it. When you go on a date you want to present your best side to make a good impression, both, when it comes to the inside or the outside. Good luck!
It’s basically a process of attracting strangers, gaining their trust and turning them into customers.
How to acquire them?
The possibilities are numerous: landing pages, email marketing, social media and so on so forth. However, there’s a possibility that visitors discover you through your social profiles or other channels.
The more leads the bigger chance of conversion.
In this case, your lead acquisition channels include Tinder, Grindr, Match, eHarmony, referrals, speed dating and whatnot. I’d say that getting a lead is like getting a Tinder match. The more the better.
Sadly, some visitors aren’t willing to take your SaaS for a spin. What’s more, they’re not even willing to open your message. The number of the visitors immune to your charm and advances is called bounced rate. There’s a lot of factors that affect bounce rate: communication, timing, UX, UI and more.
When it comes to relationships, unfortunately, some people seem to be immune to other people’s charm. It turns out they have very different interests, plans and life goals and so on.
Still, if you’re a gentleman looking for a girlfriend, it’s good to practice some good pick-up lines.
We’re halfway there. If someone signed up for a trial period, it means he or she is interested in your product. During the trial period, a customer doesn’t have the full access to your product and learns the fraction of its capabilities. However, it’s a chance to learn about use cases, a tool’s potential, strengths and limitations. Also, what’s good about trials is that they’re a good source of feedback. You usually get to know what worked well and what didn’t.
Similarly, dating is like being on a trial period. You get to know your partner closer. You discover one’s nasty habits, positive and negative traits, interests and so on. Similarly, your partner gets to know you, too. You talk about yourself, your interests, that restaurants you both like or a new music album you love. Now he or she knows that you hate washing dishes. What’s more, the one, for example, learns that you are a vegan which in this case may be a huge turn-off. If you don’t get on well, the trial period ends. Hope for the best!
CAC (Customer Acquisition Cost)
Now we’re doing the math. In business, CAC is a total cost of getting a new customer. It must be affordable to get a new client. You cannot spend more on acquiring a new customer than you can afford.
Now back to relationships. You asked one of your leads out. Had dinner, spent $$$. Did you have a wonderful time? Are you dying to see this person again? If your answer to these two questions is a sound yes, you, let’s be honest, invested your money and time well. Hope to see a high ROI!
Conversion to Paid
Here you have it! Conversion to paid is turning a trial user into a paying customer. It’s the finish of the long process a lead had to go through.
What conversion means in terms of relationships? It depends on a person. People have different aims. Some of them want to get married, have kids or some want to have a person they can Netflix and chill with.
No one likes this metric. It’s the number of customers that leave your service. The reasons are numerous: customers don’t need your tool, they cannot afford it or they go to the competition, it doesn’t meet their expectations and more. In any of these cases, it’s not good. Fortunately, some customers decide to return to the product.
In terms of relationships, we churn can be compared it to breakups. People leave their partners for a similarly huge number of reasons, be it infidelity, control issues, not closing the toilet’s lid or whatever. They also sometimes come back.
Thanks for bearing with me. I appreciate that. Do you agree with me? Would you add any other metric or process?
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Till the next time!