How to Persuade SaaS Customers When They Hate All Your Pricing Options

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Your pricing options suck.

At least that’s what some of your consumers think.

They like your products. But the pricing packages aren’t meeting their expectations.

Customers may enjoy one feature, but it isn’t included in a specific package. Or maybe they admire the pricing but prefer different benefits.

“Pricing is a moving target and found should view it as an ongoing product discovery process. Pricing should be re-evaluated regularly,” says Tomasz Tunguz, a venture capitalist at Redpoint Ventures.

So, what do you do when customers like your product but not your pricing? Check out the four strategies below.

1. Determine Your Most Valuable Benefits

Experts believe “30% of the thousands of pricing decisions companies make every year fail to deliver the best price.” Business managers don’t always match the right price to the right services.

What your team deems valuable isn’t important. You want to know what buyers love about your products.

That’s where data can help. Gather data to identify which benefits your customers enjoy the most.

Monitor customer feedback, product usage, and user behavior. Discover which benefits make your product worth buying.

Once you find the desired benefits, talk about them from the customer’s perspective. Speak their language.

Peep Laja, the founder of ConversionXL, writes:

“Your value proposition needs to be in the language of the customer. It should join the conversation that is already going on in the customer’s mind. In order to do that you need to know the language your customers use to describe your offering and how they benefit from it.”

Here’s an example from Intercom. The team highlights product features in simple, short sentences. It communicates what the platform can do and how it’s beneficial to the customer.

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Sell consumers on what they like most. Continue to emphasize your SaaS product solutions.

2. Educate Consumers About Undesirable Features

Research shows that “75% of B2B buyers rely more on content to research and make B2B purchasing decisions.”

Content gives your consumers the opportunity to learn about your products. And the information can be easily shared with a team of decision-makers.

Brigg Patten, a business and tech writer, says, “Educating your customer is a vital part of the sales process for any business, and is important in relationship building. Customers have more confidence that your solution is the best for their particular needs when you take the time to ensure they are well-educated.”

Therefore, when customers dislike certain pricing options due to product features, it’s time to educate them about the possibilities.

Show consumers how particular features can benefit their businesses. Give them real-life examples that their team can relate to.

For instance, if your SaaS sells subscription billing software, demonstrate why multiple payment methods matter. Produce content showing how their customers want options to pay by credit card, ACH, and PayPal.

When educating your customers, decide how you will convey the message. The medium is just as important as the message itself.

Collect data on which method your consumers prefer. You can send a simple email survey asking for their preferences.

Content formats range from eBooks to webinars to blog posts. Select the one that works for a majority of your users. Your team also may consider doing more than one option.

Below is an example from Asana. Did you know you could create editorial calendars on the platform? The team shows you how through on-demand guides.

asana-editorial-calendar

Some customers don’t dislike your features. They just don’t see the benefits. Educate your consumers.

3. Seriously Go Above & Beyond Expectations

Humans love routine. Some drink coffee at the same time each day. Sit at the same desk. And even watch the same TV shows every week.

It becomes a habit. Those patterns mold us to not expect anything new. It’s not that we don’t want to experience something different. We just don’t look for it.

To shake your customers out of the SaaS buying routine, go beyond their expectations. Give customers something extra for choosing a specific pricing option.

“People like bonuses. They help build positive emotions around your brand. They make customers feel happy and appreciated. As a result, the customers will strongly connect these positive emotions to your brand and the chances are you won’t be forgotten,” writes Damian Winkowski, former new business developer at PayLane.

For instance, if all your competitors are offering extra storage space for new customers, then provide your buyers with extra storage space and one-month of unlimited access to a customer success manager.

It’s all about doing things differently to grab your audience’s attention. Customers aren’t excited by the same-old sales tactics. They desire a little extra in order for you to secure their business.

SignupLab, a sales CRM and customer success dashboard, rewards people who found them on Product Hunt. They offer interested buyers a 30% discount on their first subscription period.

So, if any consumers really liked their product but hated the pricing options, this discount may convince them to at least give SignupLab a chance.

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Add a bonus benefit to your pricing packages. It will give your consumers another reason to choose you over the competition.

4. Emphasize Value With Social Proof

Psychology plays an integral role in sales.

Analysts have found that people buy based on emotions. Consumers purchase because their sad, happy, or even upset.

Moreover, purchases may involve not only internal perceptions but also external pressures. This means we buy items due to our environment.

This is helpful information for your sales team. You can show customers how other clients are benefitting from particular pricing packages.

Social proof makes pricing options irrelevant for some buyers. Because if they see top brands using your services, consumers will feel the need to be part of the pack no matter the circumstances.

So, offer social proof to your customers. Let them hear stories from your most successful clients.

“We tend to imagine ourselves in other people’s shoes when we read or hear a story. This is why stories are so persuasive and often more trustworthy than statistics or general trends. Individual examples stick with us because we can relate to them,” states Ed Hallen, co-founder of Klaviyo.

To build trust, SumoMe includes their client logos on its pricing page. These images solidify that many satisfied customers look beyond pricing packages.

sumome-social-proof

Studies also reveal that “70% of consumers say they look at product reviews before making a purchase.” Plus, product reviews are 12x more trusted than product descriptions.

Solicit honest feedback from your customers. And then post those comments on your website. Those reviews will persuade prospective buyers and display your brand’s transparency.

Consumers aren’t completely pleased with your pricing options. Use social proof to convert them.

Upgrade Your Pricing Options

Customers want your product. But your pricing options aren’t meeting their expectations.

Offer the most valuable benefits in your product packages. Educate customers about features they don’t initially like. And boost your product’s worth by adding verifiable social proof.

Persuade your customers. Upgrade your pricing options.

About the Author: Shayla Price lives at the intersection of digital marketing, technology and social responsibility. Connect with her on Twitter @shaylaprice.



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Why Churn Isn’t Always a Bad Thing

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You love your customers.

So, when they decide not to renew, it affects your SaaS business. It takes a lot of resources to acquire new buyers.

But is all churn bad? What are the underlying reasons for your customer’s departure?

Consumers churn for several reasons, including price and customer service. Therefore, it varies based on the sector.

“Customer churn rates that could be considered fantastic for one business might be atrocious for another. Why? Because not all business models are the same, and even companies with similar business models might define churn differently,” writes Dan Shewan, a web content specialist at WordStream.

Let’s explore when churn might be acceptable for your company.

Churn: Different Schools of Thought

In the SaaS industry, churn is a debatable issue. The Quora community has discussed more than 180 questions on the subject.

Several methods exist to calculate churn. Managers possess multiple strategies to improve the metric. And on top of that, there are different types of churn.

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Top-level leaders perceive churn differently. Some experts believe churn is a natural part of your business operations. Customers will come and go.

They suggest setting a churn benchmark. Then, using it as a guide for future growth.

“[D]on’t try and compare the churn of your SaaS product to anyone else. Rather, try and get a feel for what you think the ‘background’ level of churn should be within your business,” states James Barnes, co-founder of StatusCake.com.

Other thought leaders see churn as preventable. They would advise that your team take a proactive approach to retaining buyers.

“Considering all the ways churn hurts a company, there doesn’t seem to be any reason… that you should sit back and just accept churn as either inevitable or a good thing,” writes Lincoln Murphy, founder of Sixteen Ventures.

So, it begs the question: Is churn always bad?

It really depends on the school of thought, the circumstances, and your company.

Examine these three particular situations:

1. Wrong Customer Fit

We assume that every buyer fits our SaaS ideal customer profile.

Why? Because the person actually bought our product.

But that’s not necessarily true. Sales funnels are flawed.

Customers can churn because they weren’t properly onboarded. So, the person gets frustrated with the product and leaves.

Customers can churn because they were misinformed about product features. The lack of a specific function renders your service useless to them.

Some leaders will suggest that all customers won’t fit your buyer persona.

And despite your customer success team’s efforts, the buyer will never see the value of your product. To the customer, the cost will always outweigh the service.

Therefore, don’t fit a square peg in a round hole. Instead, focus on the buyers that meet your criteria.

On the contrary, other experts will encourage your team to upgrade your funnel. Research shows that “67% of customer churn is preventable if the customer issue was resolved at the first engagement.” So, execute strategies to fill the gaps in your sales process.

Taking it a step further, you may even want to improve your product for those “wrong customers.” Develop ways to meet their needs.

“If a customer insists on something untenable, like a crazy new feature or a 24-hour on-call customer service, you can’t appease them. But if this is happening over and over, you need to evaluate your customer success team and see if they’re helping clients unlock more value from your product,” says Steli Efti, CEO of Close.io.

Not every customer will find your product valuable. Before accepting that notion, think about how you can reach their desired outcome.

2. Customers Go Bankrupt

In the B2B market, businesses can dissolve unexpectedly. This leaves your company without a client.

And what if your customer merges with another company? Well, the go-to person handling vendor relations may change. And the new company may decide to stick with your competitor.

How can your team recover?

A few professionals will recommend calculating these situations in your current churn rates. Business ebbs and flows. You can’t predict when a company will go out of business. Too many unknown factors exist.

However, some experts feel that you can plan ahead for these incidents.

Start by targeting a viable customer base. For example, some industries are well known for lacking stability. They will continuously swap merchants.

“SMB customers tend to go out of business more frequently than bigger businesses. They switch products more regularly because switching costs are low. They simply aren’t as reliable customers as bigger companies,” writes Tomasz Tunguz, a venture capitalist at Redpoint.

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If your customer is acquired, use it as an opportunity to pitch the new buyer. That means showing value beyond the commoditized services. Compete on customer experience.

“Adding value beyond your bare product or service creates stickiness. It creates an environment where your customers start depending on you for reasons other than just the product or service you deliver,” says Ross Beard, former marketing manager at Client Heartbeat.

Your customer may become insolvent. Choose how your team will deal with it.

3. Competing in a Transient Market

Trends and fads have an effect on your churn rates.

Some companies operate in environments where customers discontinue services today, but renew again in two months.

“In a transient market, churn is expected because customers change their minds frequently, their situations change and they have to lower costs and then they get more money and they come back…”
Many experts will consider it the nature of the business. Therefore, monitor your cash flow and learn when your customers will leave and return.

However, there’s another point of view. Make your product an integral part of your customer’s life. Whether that means offering 24/7 support or loyalty rewards, give buyers a reason not to cancel.

The Baremetrics team recommends the following:

“Another way to make your product indispensable is with multi-user support. Adding this feature means your product becomes part of an entire company or department’s workflow, making it much harder to part with.”

The world of business is volatile. Either recognize it as the cost of doing business or create ways to move around it.

Churn Still Matters

Expect customers to discontinue their services with you. Whether you consider churn good or bad, it will remain a staple in your SaaS business.

“Churn isn’t going away. And that’s okay, if you’re willing to commit to churn reduction as a key element of your conversion rate optimization strategy. Just as you optimize your software and marketing, you can optimize keeping customers loyal and happy,” states Corey Pemberton, a copywriter and marketer.

Work with your team to improve your churn rates. Research uncovers that lower churn can boost your company’s growth.

And that’s what you desire. The chance to gain more market share and provide more value to your customers.

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More often than not, churn isn’t the fault of the customer. According to an Accenture study, “customer service, not price, remains the top cause of customer churn.”

Change how you serve your buyers. Reform your competitive advantages. Listen to your customers’ complaints.

Serial entrepreneur David Skok says, “Ask yourself if you know what are the key features that make your product sticky, and then use measurements of customer engagement to see which customers are not using those features.”

Churn is here to stay. Adjust your long-term strategy accordingly.

Monitor Your Churn Rates

Some thought leaders believe churn is unavoidable. And others think you need to combat churn no matter the situation.

Find buyers that fit your ideal customer persona. Diversify the industries where you sell products. And find alternative ways to mitigate churn before it happens.

Good churn? Bad churn? Just do what’s best for your SaaS company.

About the Author: Shayla Price lives at the intersection of digital marketing, technology and social responsibility. Connect with her on Twitter @shaylaprice.



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