Businesses are all about monetization. So retention makes sense. Acquiring more and more customers is a definite must for growth. What’s missing?
Activate. That is what’s missing.
The biggest problem that businesses face is the fact that their conversion funnels are disproportionately wide at the top. It will always be the widest at the top, that is indeed a fact (that’s why it is called a funnel). But you should always aim to make it as less leaky as possible.
As an entrepreneur, you would always focus on maximizing the conversions — from clicks to leads, from leads to sign ups, and from sign ups to paying consumers. The drop offs at each stage are a part of the business process. But as soon as we have the paying consumers, our focus shifts to retaining those consumers, making them transact more, increasing the ARPU etc. And the funnel keeps going on. But what about the ones that you lost? When you look at the retargeting campaigns also that most businesses run, they are focused on getting past consumers back to transact again and again. On one hand it makes sense — people who have already transacted with you would be having a relatively lower threshold to transact again as compared to a new potential customer. On the other hand, each click that you fail to progress to the stage of a paying consumer increases the dollars it costs you to get a paying customer — ruining your LTV/CAC ratio. So, focus on activating those potential consumers as well.
So how do you increase that?
Irrespective of your line of business, always follow the same methodology leading SaaS businesses do. If you look at any SaaS business, you would find a similar pattern.
- Instead of promoting their product all the time, they take time to promote content valuable to their audience. Whitepapers, ebooks, strategy guides etc. This helps them in three ways:
- Higher conversion numbers. These free items are perceived as adding value to business by their potential consumers who end up offering their contact info to get this freebie. After all, there is a good reason these are called ‘lead magnets.’
- They provide content that is inline with the operating strategy these target businesses should adopt, and while offering these tips and advices, the SaaS business would highlight and showcase how their product helps their clients do it at ease. This helps give the right nudge to convert audience from leads to free users.
- Since they have the leads, they can now employ a good drip-marketing strategy here to aide in higher conversion numbers.
- They have a free plan — with limitations.
- They would then try to activate you on their premium plans.
Take any successful SaaS business, and you will always notice the same trend. That’s because this strategy works great for all of them. Adapt it in your business — modifying it in a way that makes it aligned to your vertical and audience type.
Yeah. It may seem absurd at first, but you can follow a similar strategy irrespective of which line of business you are into. I take the example of e-commerce because thinking this strategy could ever work for an e-retailer would be the most ludicrous of all, wouldn’t it?
- What content could you possibly promote?
- Free plan? What free plan? You aren’t going to offer them a free product!
That is where the modification part comes in.
Your intent is very simple, and in three steps:
- Use lead magnets to maximize click to leads ratio. (possibly even increase the CTR of your ads).
- Get these leads to the point where they start considering becoming a paying customer someday (somewhat similar to the psyche of a free-plan user of a SaaS product).
- Get them to transact.
So. Let’s take an example. A furniture retailer.
#Step 1 : The lead magnet
Purchasing furnitures is a long process — one that involves a lot of deliberation, planning and thought process. So, if we want to capture even a ‘potential’ customer, the conversion numbers will be dismally low. But can we improve the percentage here?
Sure. Let’s route consumers to decor ideas, themes and inspiration here instead of shopping. Show them ideas of celebrity homes, cool retro themes to decorate their homes with, set up an amazingly looking home on a budget. There are a tons of ideas here. Pick a few and go crazy with experimentation.
#Step 2: The engagement
Since you already have some sense of what gets your potential consumerbase’s blood pumping, this stage is easier for you. Give them further content on the same theme. Show them how it is that you can help them achieve those glamorous looks without having to part with an arm and a leg. Make your name a known figure for their subconscious.
Offer them personalised home decor advice, if you can.
#Step 3: The purchase
If you have done your job well, you would easily see an improvement of at least 50% in the number of consumers who end up making a transaction from you. And that is what you were aspiring for in any case.
The bonus? These consumers will have a much higher LTV as compared to your previous set, because for many of these consumers you have a much much higher brand recall as compared to those achieved even by your best performing advertising campaigns.
So go ahead. Think as a B2B SaaS sales business, and reap the benefits. Ping me if you have any questions, and I’ll help you out.