Beyond Beta: How to Get Your First 100 Paying SaaS Customers
Updated: Jan 18, 2022
This article is taken out of chapter five of my upcoming book: Payment Received. Available soon on Amazon, Google Play, and wherever books are sold.
Assuming you have already developed a software platform or have one in the works, You are probably now thinking about various ways to get your app out there in front of likely users. Also, assuming you are looking to monetize your app via monthly or annual subscriptions: the SaaS model, you are also probably looking for some guidance as to how to go about a) marketing your app, and b) acquiring your first "premium", or paying customers.
I will come out and let you know right away that there are various steps that you must take to increase the chances of folks out there finding your app useful enough to want to pay for it. I talk about these steps in much more detail in my new book. You should check it out if you wish to capture the full picture of what you will want to do to get to the point where folks are sending you money on a predictable basis to use your app. For the purpose of this article, however, we shall focus on getting your first paying customers.
Once you have a fully-developed beta version of your app out there in the marketplace, you have signed up at least 100 free trial users, much of what comes next will be a result of your marketing, product development, and customer support efforts.
Why is this important?
Well, for obvious reasons, it is critical for the success of your overall business that you are able to monetize your software application, and as I stated before, there are many ways to do so including selling ads, allowing users to pay for supper but access your app for free and so on. For the purpose of this article, however, we shall concentrate on the subscription model. With that in mind, you will want to attract a large number of free trial users and take various steps to extract some paid users.
Zero to one hundred
I for one believe that any number of paying customers is a great thing, especially when starting out. Getting folks to upgrade their free trial accounts is always a great signal that you are really onto something. It goes further to validate the commercial value of your product. This is a milestone that transcends product-market fit, in my opinion. I look at it this way: Sure, you can get folks to try out your app and even use it from time-to-time if it is free. I mean, Bestbuy or Macy's will have no issues moving store merchandise if they were offering all items for free to the public. Getting folks to hand over their hard-earned cash for your product on the other hand? That says your product is needed, desired, wanted. In the Software-as-a-service space, getting your first 100 paying customers is a very significant milestone. Among other reasons, it is matters because getting your first (100) paying customers means:
Demonstrates that you have a commercially-viable platform.
Tells any potential investors that you have a potentially investable business. One that can earn a great return.
You have zeroed in on a customer acquisition strategy that seems to be working. One that can be scale to help bring in thousands of paying customers
You can now confidently think about bringing on a few people to help manage your app
Valuable feedback and analytics can now be extracted from your customers. Feedback that can be used to improve upon your current app and/or build new ones.
A wide funnel
In my head, I can still hear it. Even now: "You need to have a wide funnel, dude". Words spoken or rather yelled at me every day at a sales agency I worked for a while back. I didn't know it then but this is probably one of the most important concepts in sales and marketing: Having a wide funnel.
So what exactly does this mean? Simple. Let me explain in very specific terms. I am sure you would agree that from the user's point of view, it is quite a process to go from seeing your ad or email campaign for your app, taking the first step to set up a free trial account, to actually paying for your app.
This is a process that can take anywhere from 1 to 30 days, depending on the length of your trial and your onboarding efforts. Sure, most trial users will not convert. According to the conventional wisdom out there, you will statistically be able to convert about 3-5 % of your trial users to paying customers.
So, for every 100 trial users, 3-5 will eventually become paid customers. As you can imaging, you will need to have as many trial users on any given day if you are to succeed. Here, the top of your funnel is the free trial part of this process and you need to let as many users in as possible.
Guided tour
As you can see from the illustration above, User experience and onboarding are what happens between folks setting up free trial accounts for your app and actually paying for your app. Believe it or not, this phase is the most crucial part of this process we have been discussing. How easy it is to see initial value, ease of use, user interface - these are all instrumental in determining if folks will simply not come back to their accounts or actually go ahead and pay for your app.
Now granted, for some folks, your app will not be what they thought it was. And if you start to see too many of these types of trial users, then you will want to rewrite your ad copy to be a bit clearer about what your app does.
Others will have simply changed their minds about the overall reason they signed up for your app in the first place. I see this quite a bit with business applications.
That being said, you will need to take various steps to ensure that folks who sign up for your free trial come back and use your app often and eventually upgrade. To help increase the number of trial users who make it to the end of your process and actually pay for your app, here is what you need to do:
Set up automated onboarding emails
Apart from your standard emails to confirm the validity of a new user’s email address and to welcome them, you will need to set up a series of event-based emails to be automatically sent out to your users over a period of time.
For the most part, you will want these emails to answer any anticipated questions you think your users will have, and to guide them through account setup and usage.
The key is for these emails to help inform users of your most exciting and relevant features, and to also provide some tutorials on how to use their new accounts.
It helps to use video as your main content type in these “Onboarding emails”. You will want your emails to start to have a strong easy-to-understand title and a summary of what the email is about, then direct your users to landing pages where they can immerse themselves in the full length and breadth of the content you wish to deliver.
I typically use Benchmark, the all-in-one email marketing application, along with Zendesk Guide to create this one-two combo.
For ideas on what to say in your marketing emails and how to structure them, I would recommend you read “The 1-Page Marketing Plan” by Allan Dib.
Implement live chat
This is not a new concept - I know, but trust me when I say that this is a very effective strategy. Typically, visitors to your website and/or app landing pages will have questions. These types of questions will for the most part be the type of questions you ask when merely seeking clarification on a feature or two.
If the user is on your website and has signed up for a trial account already, they may simply be having an issue or two when using some of your app's features. You want you or someone from your team to be available to answer questions via live chat or provide a quick follow up to help users quickly access their account features.
When using an app like Tidio ( which I use), you will have the chance to set up a robust chatbot. One that can be programmed to quickly answer some of the most common questions so as to ensure continuity of support regardless of your users’ time zone or time of contact.
In-app guides
In-app guides are great when you need your users to be able to easily access features or process-specific how-to resources. Whenever we build apps at our company, we try to provide as much in-app support as we can.
We try to forgo using lengthy product guides - the ones that walk the user through all features at once the first time they log into their account.
We find that most people just click the"Skip" button only to find themselves stuck later on as they explore their account features. We instead use short video tutorials and closable banners to deliver specific steps on how to use specific features on specific account pages. Shopify, the e-commerce SaaS Platform, I find, uses in-app informational banners and guides effectively as well.
Shopify uses embedded in-app videos and banners to help walk their users through their various features, new releases, and other relevant information directly in user accounts.