Marketing Lessons from a SAAS driven world
Across the Pond- Marketing Transformed
33. Marketing Lessons from a SaaS Driven World
A few of the big stories over the last couple of months, whether its Zoom’s stellar growth of three hundred million daily participants, and that’s up from about fifty percent from earlier in the month, not even earlier in the year, earlier in the month, or the fact that Slack has added over thirty thousand customers according to the CEO. They’ve got one thing in common, well, to be fair, they’ve probably got a lot of things in common and it’s not just Covid 19, but what I’m talking about, Sam, is the fact that these are all SaaS companies - software as a service.
And obviously, we’ve seen a rise of SaaS companies over the last few years, partly because it offers flexible payment options, it’s accessible, it's scalable, there seems to be quite strong security around it. It allows consistent updates, increasing collaboration, all key attributes of successful and growing businesses and now, SaaS accounts for over twenty five percent of all software - which I think is pretty amazing, Sam.
If you’re looking to create a SaaS business and then sell it on from an investment perspective, then eventually that starts to charge a much higher multiple than some other traditional businesses. So, it’s definitely the flavour of the month or even of the year. There’s eleven thousand two hundred and eighty-eight SaaS companies, bound to get that wrong, that’s according to Crunchbase as well. over seven thousand of them in the marketing field, growing by eighteen percent and expected to rise to about one hundred and sixty billion pounds by 2022.
So, pretty darn big, Sam. And final stat before I stop, but I think it’s important, seventy three percent of businesses are planning on making their systems SaaS by 2021, I believe that is. And if that’s the case, if over seventy percent of businesses are planning that their systems will be running on a SaaS basis, I was wondering what that means as a marketeer? And if we want to remain relevant then we need to understand it, right?
Marketing with SaaS
Yeah, that’s true, Chris. I know for us, putting this podcast together and tapping into the different providers and getting our hands dirty in experiencing their products and services. There’s a plethora of services out there such as Zencastr, Squadcast and Anchor, and a bunch of others. And as we experiment and learn, there’s probably a show we could do on that in the future, so I’ll get back to the topic.
But it seems a little patronising to explain what software as a service is to our audience, but let’s just take a moment to ground ourselves and the audience on why we’re so excited about this topic. You shared some stats but let’s get into it a bit more. We can work, we can live, communicate and collaborate and store information effortlessly, because SaaS companies house the servers, the database and the software via internet access. So, we can access it via any web connected device. So, from a customer or consumer perspective, this often shows up in our lives when we pay a subscription fee to use an application. And there’s usually tiers and levels based on perhaps the amount of data needed or the number of users or the support level or features and benefits, so, were used to that experience. Be it Google Storage for our pictures and our files or enterprise business based access to Microsoft Office or Adobe suite of products, and there’s brands and companies like Apple and Dropbox and IBM and Salesforce and Shutterstock and Autodesk and on and on, I could go on and on there. So, as I was doing some more research, I read an article from Digital Guardian and they break down a few of the benefits that third parties will be responsible for, for the basic business function.
So, thinking about software as a service, you’re going to a third party, are they actually going to deliver for you? And some of the benefits are cost savings. Because as a business or as a customer you wouldn’t have to invest in expensive hardware to use this stuff. And then the ability to make it an easy update, so that the SaaS company can maintain the software and update it when needed. They provide the IT expertise and be able to troubleshoot, hopefully, and provide system reliability and security.
Obviously, then, the other aspect you get from buying into this is the scalability to increase capacity quickly, which you would do by outsourcing it and buying it as a service. Of course, there are risks and we always think about the things that could go wrong on the dark side, and I think one of the key ones is that you’re at the mercy of that company’s security. And we’ve seen concerns about overseas data warehouses subject to foreign government access and interference, so, that’s a concern that companies have.
The down time risk, the risk of things just not working, and we all see when Google or Amazon’s down because half of the internet stops working and you’re access to Netflix or your ability to actually send work emails, everyone feels the pain. And then pricing is another risk. Especially when you’re embedding into a product and it's so well embedded into your business, changing comes so painful, and you're kind of wedded to whatever pricing or pricing changes and the customer will impose, so that could be a bit of a risk as well to consider.
Yeah. That last one, we’ll come back to a little later on in the podcast, I think it’s a really crucial point because clearly from a consumer perspective you want it to be a positive experience, not like a straight jacket, but it also takes a certain type of marketing skill there as well. and these are household names, Sam. And if they’re not household names they’re definitely familiar to marketeers and whether we’re talking to HubSpot or Google or Adobe or Mail Chimp or Spotify or Survey Monkey, they’re all the same. And interestingly, I think in a future episode we’ll look at the top ten martech that you need in your life and some of the best players and some of the up and coming players as well.
I think one fascinating thing is the importance of mobile here as well, that’s expected to reach seven point four billion by 2021, a number of rising stars in disperse markets are likely to be there soon, as well. There’s a chat bot creation platform called ManyChat, which is focused on providing a Facebook integration, Free Will which is a charitable will and estate planning process. But increasingly companies across sectors are operating critical parts of the business from tablets or smartphones or employees even feel empowered to be able to do their jobs better by being able to work from dynamic mobile dashboards, all of these are SaaS operations.
So, that idea of having a mobile first mentality, optimising to suit a host of devices I think is going to be another important part. So, again, from a marketer's perspective, that mobile first mentality, I think is going to be key.
Not Just a Service
Yeah, as I think about that a bit deeper when we were doing the research, DocuSign is an interesting case when you think about their product because they are based not as an e-signature signing product, instead they see themselves as an agreement cloud. They have over, I think, six hundred thousand customers, sixty thousand clients across the world, the COO, Scott Olrich, he already has a great marketing background. He seems to find the business that had originally been un orchestrated, and he felt that when he joined the organisation, marketers should be driving the orchestration, which was an interesting perspective that the thought marketers should be doing that and to help drive the overall narrative and vision and focus for the business.
So, in these companies it’s interesting that marketing’s seen as a drive versus the product or the IT side. And it’s a topic we’ve talked about before because he had a huge focus on customer experience and how meetings and sales and operations need to come together with a true focus on the customer experience and the customer journey to make that better. And he makes a bold statement, he says “my job as a marketer is to predict the future and be able to articulate it in a way that people can get behind the vision, the customer and the C-suite”.
So, this future looking role is an interesting looking one, again consistent with our philosophy. And he’s a marketer at heart, so he talks about brand equity and long-term brand building as a key remit of doing this well. and that’s music to my ears because he’s clearly vested in the foundations of modern marketing, the principles of having great insight, great foundation of beliefs about the consumer and the customer but also about future facing perspective. It's about setting the market and driving the future needs. And what he sees is that the current process of writing and getting signatures and getting agreements and taking action are all interdependent.
So, DocuSign is very invested in driving and optimising for the speed of today’s business and to continue to accelerate that across different platforms. You said earlier clearly here the mobile and desktop interface has to be strong, and if you think about it, DocuSign’s biggest competitor is paper and pen. It’s as simple as that. And when you think about it, if that’s your competitor you’ve got a huge market upside! The CEO calls the company a trust brand and I completely concur with that. Now, my personal experience using it the past few months has been by my phone, and I was just amazed at how easy I was able to switch between a PC interface to a mobile based application.
I could jump between them and it was accurate, and it just meant that I could be very responsive especially when it comes to buying a home which follows certain obligations which often had a legal consequence if you weren’t fast and then get the response back. Using an e-signature made me feel like I was in complete control. Usually in a scenario where you’re responsive and you’re feeling as if there’s an urgent deadline and it feels like you’re only just about to get there and it’s just so stressful and things can go wrong, and you’re always fearful that if you don’t get the signature in on time, if things don’t get signed in time, it doesn’t get approved. So, the context of you using DocuSign in home buying, for me, was a stress reducing, stress relieving interface.
And in the short space of time we’ve been able to shift to a fully electronic and more rapid interdependent system. It’s making me think that the promise block chain is such a prime moment right now to come back, to be reintroduced, I think ‘block chain’ came across as a bit of a buzz word and a bit of a complex people didn’t really understand. But right now, it’s really an opportunity for that to be seen as a human driven solution and not tech for the sake of using the tech.
Yeah, well, I definitely think that will come back at some point soon. And it’s a great example, clearly from a business perspective it's smart, it's scalable and it's built right, therefore it should be efficient.
Interestingly, from a marketing perspective, SaaS companies are pretty unique as well because they combine all the elements of a strong tech business you would expect to have a strong performance marketing team, product management should be at the heart, a focus on customer experience and deep roots in analytics. But there’s also a lot of stuff from successful consumer brand marketing. We talked before about adding personality to the brand, I happen to think that Slack does that very well and of course, the best of subscription marketing as well.
You mentioned earlier on about pricing. And it’s why I find them so interesting, is my background as you know, it involves quite a bit of complicated pricing strategies on working out how to make them simple. It’s really a recurring revenue business, that’s the idea, and it requires a strong infrastructure to deliver the customer experience. So, interesting organisation to work with, Sam. So, what other skills do you think are required to be successful in this environment?
Sam’s Skills for Success
Well, I’m going to take it from a more corporate perspective and I’m going to build on your infrastructure point as I think there’s definitely a strong point and a strength of marketers who are being brought in by organisations. I was doing some research on Amazon the other day, and Amazon marketing leader, a lady called Kelly Windsor and she’s got an extensive background in entrepreneurial and digital software companies, she did some amazing work at contently, and she’s now driving the Amazon pay product. And again, that’s designed to make it seamless for customers to buy, using voice and lets you use payments with the payments and addresses stored in your account. So you don’t need to enter them at checkout, and it just seems to be fundamental marketing skills, knowledge of people, knowledge of customers, knowledge of the customer journey is critical to enable, upskill and uplift the organisation she has joined.
A lot of the work then is by Amazon Pay to remove the friction of the purchase final, which is an area many brands are working on but of course, Amazon can provide the benefit to their vendors and partners in a very scalable way. So, the benefits of Amazon pay, things like supporting the transaction through multiple channels improves the purchase conversion rate. There’s this data point of seventy percent of products that actually get added to your cart, don’t actually make it through to the checkout. So, Amazon pay can help reduce that friction, it can also help with integrating the customers or the brands digital store as a fraud detection element and reduction of bad debt 24/7 support. So, there’s just so many things Amazon can provide there, but you get the point.
I’m really advocating the power of business to business and that whole area of marketing and the individual marketer. Thinking about your skill set and how you can build on that. I’ve worked for a company called Granger, which is a maintenance repair operations industry. Yet it’s huge in terms of revenues approximately seven billion dollars’ worth of sales, of which four or five billion of that actually comes through ecommerce. And for me, what was transformative about my time working there was the level of sophistication in understanding customers off and online, which the SaaS really was pivotal to doing.
It’s the ability to leverage the power of the data and insights embedded in their customers businesses. So, I manage the exclusive brands business, which was a bunch of priority brands or what you call ‘own brands’ or own private label but we refer to them as exclusive brands. We could tap into the CRM, the customer relationship management skills and platforms to stay close to the customers. Tracking the sales to the pipeline, but also play a role in inventory management which made us the go to solution for customers. So, you can see how it really does help provide value and benefit to customers.
My point was, this is a marketing experience where the customer experience was a primary focus and a large chunk of the work I did. So, in fact, B2B marketing gave me a lot more of the martech and the learnings in a more in-depth way and a more internal investment driven way than I’ve actually been able to find in the business to consumer organisations I’ve worked in.
Women in the Industry
Yeah, that’s an interesting point I think. And it’s interesting also, we talked before about how B2B and B2C were converging around B2I and I do think SaaS business do tend to work at the centre of that venn diagram. And I thought it was really interesting, on the news this week the CEO of Slack Stuart Butterfield, and he’s picking up more media than Apple now, quite frankly, and giving great advice in a very humble way on how to run a business in a crisis. Obviously, Slack saw its stellar growth in terms of its users, as I talked about at the top of the show, and he talks about the need to be upfront, to be flexible, to be appreciative, to be human. All values I think we can all identify with and I think they’ve done a good job, because obviously there’s almost that expectation there that the Zooms and the Slacks of the world are going to pick up the slack, excuse the pun. But I think the point there is that everyone assumes they are scalable and quite frankly these organisations probably haven’t even dreamed that they would have to scale as fast and as quickly as they have.
So, are these the new kids on the block? Are these the ones where we're going to see the stellar growth? And there was a really interesting and great article on Drift about the 25 top women in SaaS business and it certainly seems like a whole lot of talent there, and some common themes were arising when looking at the profiles of some of the women. There’s a lady called Janine Pelosi, forgive me if I haven’t pronounced that right, but the head of marketing and online business for Zoom. Very much about bringing in the human element and emotion into the work and obviously, over seeing a stellar growth in user figures, but if ever there was a time for bringing in that human element and emotion, then that’s absolutely right. Some other themes that seem pretty clear coming through was a can-do attitude, also empowering other women, which I think is absolutely right, it's trying to regress that balance and being passionate about what you can do as well. So, some interesting skill sets in his sector as well, Sam.
Yeah, on that list, you mentioned 25 women in the industry, I’m a huge fan of Anne Handley, she’s the chief officer at Marketing Profs. A professional education company and they do a lot of training content, it’s a fab organisation in the marketing education space. They’ve a raft of training and content which is really a strong background of hers, with a strong offering for B2B marketers and a long-standing writer and speaker, so, definitely check her out, go follow her stuff. And she makes this space just so relatable and digestible which is why I’m such a great fan. And there’s this quote that she uses of recent, I think she’s writing a book on it, and she uses the expression, “speed up to slow down”.
And it’s one of the mantras that she’s working both in terms of how to challenge ourselves in the best interest in the next ten years. So, not the next ten months or the next ten minutes. And it's thinking that will probably help inspire our show in the very near future. So, stay tuned at the end of this episode, because I think we’re going to take some of that into our next show.
Yeah, I like that already. It’s already sparking up some ideas there. One other I had the pleasure of meeting over the last couple of weeks, a lady called Jen Mylroie, another really interesting example, she’s in the list as well. She’s worked at Tableau and Invision and is now set up under her own steam, her own company focused on hyper growth organisations, her companies called Authentic Mix. Which I really like as a title as well, actually. Again, the qualities there, it comes through, that growth mindset comes up again, being focused, calm under pressure, not phased with scaling up and being able to adapt in a world where you’re looking at this hyper growth. Now, clearly in the situation we’re in at the moment, we understand that there’s a lot of businesses that are plateauing, looking at survival or working out how to manage a downturn, but there are also a large number of SaaS businesses where their growing trajectory is increasing at the moment.
Yeah. Not to be too tactical as we’re talking about the women on that list of the top 25, I also think that it inspires me in terms of the social presence and personal branding that a lot of those women have, and people we can learn from and how they do it. We talked about personal branding in episode 28 and I think it’s a perfect time to go back to that to refresh our memory, in terms of putting it into practice. Again, from the leaders on the list we see that participating in the social platforms, their power for storytelling and as I say, role modelling the leadership and the way to do it in different ways, be it an Anne Brown, Ann Handley or Carla Harris we mentioned in the past. So, it's really great to tap into that list, we’ll definitely add it to the show notes.
Good. But I think also let’s not forget that there’s also some technical skills that are required in terms of the support of SaaS businesses as well. As I’ve said, a lot of the models are based on recurring revenues and that means that the customer experience is absolutely crucial, and it’s a classic skill in managing and building relationships, the subscription element. It’s an often-overlooked area but it does bring that to the fore and interestingly, you see a large number of sort of classic subscription marketeers that are now having very successful careers in SaaS organisations. So, I thought it was worth spending a bit of time on this, because one often overlooked area but crucially important is around cancellations and how you manage that.
And of course, the first thing that you need to do, classic subscription plan is to remind them of their loss. So, if someone is planning on cancelling you have to be very bold about what it is that they’re going to lose, just to give them the opportunity to think twice around it. Then, the second thing that is important is thinking of the alternatives or at least recommending the alternatives and those alternatives might be a different configuration, it might be a downgrade package, it might be a change of payment terms. So, at least you’re there understanding what that is.
And that third point, understanding, I think is crucial as well. So many organisations still on their cancellation process, don’t lead you back into a reason why you’re cancelling so that you can improve the product, and you’ve got to build that feedback loop in and it’s staggering how many people actually don’t have that in there.
I think the other point is that if you’re able to have that information then you’re much easier to recommend the alternative, and the possibility of trying to maintain some relationship, whether that’s a payment holiday or like I say, a downgrade but incredibly important. And then the final thing, it's about winning the why as well. It’s understanding that if someone has a need to cancel, that is absolutely their right and you should never hide the cancel button. However, at the same time you have a role to play in terms of bringing that back into the organisation and making sure that the SaaS business is focused on retention of its organisation, and that’s its primary business. And I think it’s worth calling that out because still, so many organisations do that really, really badly and it’s the life blood of subscription organisations or recurring revenues which SaaS organisations are.
Yeah, some great points there, Chris. And as I’m listening to you I’m just thinking, ok, so what’s next? What’s going to help us move forward? And I think I’ve got a couple of ideas, it’s not exactly rocket science here but you’ve mentioned this as well. But certainly mobile first and design and the user experience is becoming more and more of a necessity, by the year 2020 projections are that seventy percent of the population will browse the internet using mobile devices, more over employees, I think now, especially in the current climate feel more empowered to perform their jobs by using mobile devices and various tools. So the ability to offer robust and reliable business tools and the work across mobile and desktop is going to be a big revolution in the space and I know from myself, I have the habit of toggling a log in between a PC and a mobile, it’s just the way I roll now.
So, I often have them both open at the same time and using them because, it's often, mobile interfaces tend to be simpler, easier and faster, especially if you’re using video and audio, so much faster on a mobile device. The other prediction there is about the power of branding. The tone of voice, the messaging, the clear positioning and values of these organisations. So, we’re not going to go into an in-depth piece here but the martech 5000 actually come out with the latest version, which is now up to eight thousand, and we’ve talked a bit about Zoom and the Slacks of this world, but you’ve got the phrase such as ‘Zoom bombing’. It’s now a thing, and that brand is front of mind for kids and adults in a matter of weeks. So, that brands become so well established, it’s just curious in my mind that in Zoom’s case, it doesn’t go without saying that they’ve picked a blue logo, which seems in keeping with the Silicon Valley tradition of the Facebooks and the Twitters and the LinkedIn of this world, so, just curious as that business matures, how they’re going to be, are we going to be Zooming as much as we are Googling? And how that brand evolved over time.
Yeah. Very much so. And of course, you’ve got what impact AI will have on SaaS as well. Clearly, there’s a bit there about automation, learning and how that will be used in terms of customer services and applications and chats, helping to un board stuff. Personalisation as well, it's going to obviously improve the response and we talked about that before, didn’t we? How actually AI can bring in a human layer when done properly. So, it will be fascinating to see how the Slacks of this world adapt as well. And of course security, again, there’s something there about machine learning and recognition, the Zoom Bomb was a great example. I thought yeah, clearly that was something that needed to be fixed but considering the whole that Zoom has suddenly managed to fill I feel that was a bit unfair press and I thought they got on it pretty quickly. However, we do need to look at the security of these SaaS companies. A lot of interesting stuff, I think to bring us back home, Sam. And some of the themes we’ve covered before. The convergence of customer experience, the roles of the CIO and the CMO and the fact that actually in a post-Covid world, SaaS businesses are going to be the new focus. So, definitely one to look out for.
Today’s Three Key Takeaways
Thanks, Chris. I will definitely get to the three things that we’ve taken from this show in a snappy way today.
When you think of software as a service, think beyond marketing. It’s what kids are using for their education via remote learning, or families are using it to have virtual dinners across the country, through video.
We’re excited by the presence of female leaders in this space. They’re really helping to set the agenda and expand our knowledge in this space.
Quite a simple one really, mobile is going to be the future. A lot of data is showing that the utility of mobile is going to help us grow and expand internationally and globally.
Yeah, absolutely. That last one, look, it becomes something which can sound a little bit like wallpaper in a business, when you go, oh it's going to be mobile first, but we still don’t think like that, so, we have to change that mentality. So, episode 34, Sam, it’s going to be about the future world of leadership. I think it’s a good continuation of what we’ve been talking about today. Thinking about future marketing environments and styles that will be needed to get the best out of the people and the best out of the activities that we’re doing and how we can help workers focus on our passion and empower people to do the work and deliver good stuff. So, it's going to be a really good episode and a slight change of pace.