So you’re able to drive traffic AND convert these into customers. What’s next? Next you’re looking to maximizing revenue by optimizing acquisition and retention, upselling, expanding product line etc. i.e do more, better, faster, cheaper.
Areas To Focus On Post Conversion
- Optimize Acquisition Cost: The lower your acquisition cost is, the higher profit you will earn from a customer’s lifetime value. The extra cash can be used to acquire more customers, hire more, experiment more etc. How? Iterate on your landing pages, messaging, ads, sales funnels, and more to lower acquisition costs.
- Reduce Churn: Churn occurs when a previous customer decides to not be a customer anymore by cancelling their subscription or not making future purchases from you. Obviously keeping a close eye on your retention numbers helps you keep a close eye on churn. But, this is post event - i.e after you’ve lost the customer. So develop the habit of continuously talking to your customers and asking the “WHY” questions about their behavior to get some leading indicators on retention & churn. Apart from iterating on product to improve retention and retention marketing, working on product improvements to remain relevant/holding an edge over your competition, be clear about what your product and is not, who it is for and who it isn’t for, deliver on promises and double down on your product strengths.
- Customer Success: This is simply holding yourself responsible for your customer being successful in their achieving their goals. This can range from answering their product questions to helping the set up their account. It also includes delighting them in ways they don’t expect, so they grow loyal to your company. Even more importantly, the goal is to delight them so much, that they refer you customers. This is how you fuel your Word of Mouth and Referral Marketing acquisition channels for new customers.
- Upsell/Cross-sell/Revisit Pricing: Turn your customers into repeat customers by offering more products and services. This could be as simple as upgrading their current plan or offering a premium service to compliment their first purchase. Revisit pricing - are you leaving money on the table? Talk to them and find out how valuable they perceive your product to be and what sort of price elasticity exists for your product (and similar products)
- Expand Product Line: Now that your customers trust and love your brand, what complementary products or services does your customer need/use where you can replace their existing solutions. The source of ideas for your next line of products are: (surprise!) your existing customers!
Common Mistakes Founders Make
- Spend more money on getting new customers instead of expending the lesser effort in keeping existing customers happy. Not focussing on post conversion at all (Once a sale is done, some companies forget about their customers all together) - invest time/money, build relationships, talk to your customers
- Assuming “customer success” is a soft-science and not measuring well/enough, not tracking and improving customer success over a period of time.
- Not understanding retention or churn and how it has an affect on revenue compounding over time. Especially if your customer acquisition channels are linear (not-viral or non-exponential), you’ve got a very inefficient business in your hands.
- Being afraid of testing pricing
Real World Example:
Zappos is known for their extremely friendly customer service. Read about it here.
Read what early stage SaaS startups are doing about customer success: https://www.process.st/customer-success-process/
How Customer Success Meaningfully Reduces Cost Of Customer Acquisition Tomasz Tunguz, VC at Redpoint
Why Customer Success Is An Essential Part Of Every SaaS Startup Tomasz Tunguz, VC at Redpoint
The $2 Million Dollar Man/Woman: How to Think About Scaling Your Customer Success Team Jason Lemkin, Founder and VC at SaaStr
Customer Acquisition Cost (CAC), Lifetime Value (LTV), Churn, Up-sell, Customer Relationships, Customer Success, Word Of Mouth,