Phase One: Customer Acquisition

The traditional sales funnel takes a large number of raw leads and (in theory) filters out “unqualified” prospects, leaving the best leads for more attention by the sales organization. In a SaaS or subscription sales environment, however, the filtering process often fails to identify prospects with high long-term potential and may also waste resources on customers who are a poor fit with your products. Fixing problems with the pre-sale process will result in lower early abandonment and fewer “customers from hell.”

Some common problems during the customer acquisition phase:

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Trial version snafus: If most of your prospects can’t get your free trial version to work, do they keep trying? Dream on. In fact, trial version failures often convince prospects that the product itself is flawed or under-powered and shouldn’t get further consideration.

A better approach: First, check to see if your current trial version program is actually generating useful leads. If not, replace the trial version with a few well-crafted demo apps that reflect what an expert user can accomplish with your product.

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Unreliable time-to-profitability metrics: You know that winning and onboarding a new customer means negative cash flow for at least a few months (or perhaps even a year). But do you trust your own numbers? Are there big differences in upfront costs when you compare market segments, channels, and pricing?

A better approach: Collect real time-to-profitability data and use this data to score each prospect’s likely ROI.

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A weak first impression: Especially with complex products, serious customers almost always start with an Internet search to create their short list of vendors. If your pre-sales information is skimpy or misleading, you’ll probably never even hear from many of your best prospects.

A better approach: Offer a “Getting Started” video that demonstrates major features; create white papers that cover technical issues in depth.

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Flawed sales incentives: Do you pay 100% of sales commissions as soon as a SaaS or subscription deal closes? If so, your sales reps have no stake in the customer’s success.

A better approach: Link commissions to longevity and retention rates (and perhaps include tech support costs in your calculation).