Lessons Learned By a Serial Entrepreneur

This article is a guest post by Christoph Engelhardt of SaaSEmailMarketing.net.

Today I’m going to show you 3 emails that can change the trajectory of your SaaS business. The emails I’m highlighting here are easy to set up and pack a punch – ideal for early-stage products.

You’ll learn how to:

• increase your signup conversions by 15%
• improve your “trial-to-paid” conversions
• prevent payment-related churn

The best part? You can combine the three emails for a multiplicative benefit

In today’s article you’ll learn exactly how to leverage those emails.

Use the Signup Abandonment Email to increase your signup conversions by 15%

The concept of the Signup Abandonment Email is something I learned from Rob and the Drip team and implementing it had a dramatic impact on my signup conversion rate.

The idea here is very simple. Take any two step signup process like the one from Drip here:

Did you know that roughly 60% of signups will drop out on the 2nd step? Me neither.

Now the good thing is that you’ve already got their email address, so there is nothing stopping you from reminding them via email that they should sign up. So that’s exactly what you’re going to do. Look at Drip’s signup abandonment email:

If you want to learn more about this and even more advanced tactics I’ve written an extensive case study on signup abandonment emails.

Convert more trials into paying customers with trial extension emails

Another problem most SaaS products encounter is that roughly 50% of trial signups do not start using the app and do not convert into paying customers – and often it is even more.

While it’s depressing to realize, this is also a great opportunity as you can rather easily pump that conversion rate up with good onboarding and some email marketing.

One easy to implement, yet effective tool in your email marketing toolbox is the trial extension email. Imagine the following scenario:

Bob, the CTO of ConstConvSoft, signs up for your app, starts the 30 day trial, looks around a bit and gets distracted by the CEO/his wife/an alien invasion. Now, he totally wanted to use your app, but he got distracted and then forgot about it. Next time he remembers your app is when you inform him on day 31 that his account got cancelled, at which point he just thinks “meh”.

Ideally, you (/your app) realize on day 15 that Bob is failing in his trial, e.g. by comparing their usage of the app to successful customers. Then it’s just a matter of sending Bob an email on day 15 and offering him more time to check out your app – along with some help (videos or 1-on-1 call) – for a decent chance to convert Bob into a successful (and paying) customer.

Here’s a great example of such an email:

This tactic is easy to implement. You don’t need a link that extends the trial, you can do that manually after Bob replies. All you need is an email template and a method to filter for failing trial users.

Prevent payment-related churn with great dunning emails

The last topic I want to touch on is payment-related churn. This is a fancy way of saying “a customer’s card didn’t go through and we have to cancel their account”, which happens way more often than you’d think.

Granted, this isn’t as much of a problem when you’re very early on, because people tend to give you up-to-date credit card info during signup. But after a year or so you’ll see more and more cards near their expiry date – and subsequently fail payments. Even before that you’ll see the occasional failed payment as the credit card balance may run low.

Payment-related churn can make up to 50% of your overall churn, so it is well worth addressing. After all cutting your churn rate in half will fast-track your growth like nothing else.

Getting dunning emails exactly right is an art, but you can get 80% there by heading a few simple rules:

1. Do not ask users to update their credit card details BEFORE payments start to fail
2. Do NOT immediately retry a credit card the next day after a failed payment
3. Make updating the credit card details as easy as possible

Most payment providers (like Stripe) will update expiration dates behind the scenes without any payment failures. So asking customers to update their expiration date creates unnecessary friction for them.

Additionally, you shouldn’t retry a credit card immediately on the next day, because the credit card may have reached its limit and the customer is waiting for a deposit on the credit card to go through. If your first charge fails on a Friday, you retry on Saturday, and again on Sunday, your customer won’t be able to balance their credit card before you cancel their subscription.

The folks at Churnbuster wrote a detailed article on how to get dunning emails right – check it out to learn more!

Learn even more email marketing tricks

If you apply just those three email tactics in your SaaS you’ll get more trial signups that will more likely become paying customers and churn at a lower rate once they are paying customers. How’s that for a nice triple whammy?

Of course there are even more email marketing tactics that you can use to accelerate the growth of your SaaS. If you want to learn more, I’m writing the SaaS Email Marketing Handbook where I share everything I’ve learned from years of running my own SaaS and consulting other SaaS businesses on email marketing.

Head on over to SaaSEmailMarketing.net to read get a special discount.

It’s been a week and a half since we launched Drip’s biggest feature in 18 months, called Workflows.

Had we not committed to a deadline, in public, 2-weeks prior to the ship date (when we published this post and emailed a bazillion people), I believe we’d still be adding finishing touches.

It’s scary to ship. And it’s in our nature to want everything to be perfect before doing so.

When working in tandem, these two forces can keep you from shipping for far too long.

Enter Deadlines
This is why I’ve gone back and forth over the years about deadlines. Deadlines, especially those you commit to in public, are great at forcing you to ship.

But they can also have a negative impact on your quality of work (if you don’t give yourself enough time to do things right), or your quality of life (if you don’t give yourself enough time to do things right).

So personally, I don’t use deadlines all that much. But every once in a while (and especially when you’re just starting out), the discipline of a deadline works better than perhaps any other motivational tactic to force your hand and make you ship.

And with our Workflows launch, the deadline worked.

It forced us to make some tough decisions and get things out on time. And the launch turned out to be our biggest growth accelerator of the past 18 months. Hooray for shipping.

But committing to a public deadline is pretty scary. Here’s why you should do it anyway…

Continue reading →

In early 2011 I was looking for my next thing. Long ago I learned that when I’m not learning I’m not happy. And in early 2011, aside from hosting our first successful MicroConf, I wasn’t doing many things that scared me.

Which told me I needed a next thing.

My book was selling well. I had a portfolio of 8 or 9 small apps and websites. But nothing was pushing me to expand beyond my current mental limits, and I knew that within months I would start to feel a tinge of burnout and apathy that would eventually turn into genuine unhappiness.

I had spent the previous 10 months hanging out with our newborn, working 12-16 hours a week, and making an income comparable to what I had made working full-time.

Life was good, and I had to go screw it up.

Continue reading →

Between this blog, my podcast, MicroConf and the Micropreneur Academy, I’ve had the privilege of watching hundreds of entrepreneurs launch products over the past decade (even into the thousands, depending on how you count).

After a while, I started to notice a pattern emerging among the pool of bootstrappers who were able to successfully replace their income, buy back their time, and quit their jobs.

I first captured this pattern in my notebook in early 2009, but I didn’t have enough data to be confident in the theory. I started embracing it as a framework on my podcast around 2010, and in 2013 I gave it a name.

I call it The Stairstep Approach. After fully fleshing it out in my talks at DCBKK and MicroConf Europe last fall, I’ve been struck repeatedly by how many successful bootstrappers have followed, or are currently following, this trajectory.

The interesting part is that my own path moving from consulting to products followed the same steps, as you can see in my product revenue chart from the past decade:

Continue reading →

When I was writing the copy for the home page of Drip, I ran into a bit of a challenge: the idea of marketing automation is still new to a lot of people, so not everyone is aware of how email marketing (much less marketing automation) can help them.

One of the easiest ways I’ve found to explain the value of Drip has been making screencasts, walking people through the product and pointing our very specifically how Drip can help in their particular use case.

But making a personalized screencasts for every trial customer isn’t realistic, so I put my mind to finding a way to make this a little more scalable. After discussing with Derrick we came up with the idea of creating a few explainer videos to walk visitors through how I would tag, segment, and structure a Drip account for a few different business types. 

Normally, I prefer to use contractors (typically those who offer productized services) for basic marketing elements so I can focus on higher-level tasks, but in this situation there was a catch…

Continue reading →

My new podcast launched yesterday. It’s called Zen Founder, and it’s focused on finding the balance between startups, relationships, and life.

I co-host it with my wife Sherry, a clinical psychologist, and the first 4 episodes are ripe with discussion about:

• How to stay sane while starting up
• How to structure an annual retreat
• How to punch procrastination in the face
• How to deal with depression and setbacks

Listen on the web here

Or subscribe in iTunes here

If you use a podcatcher such as Downcast or Stitcher, it should be available by searching for “Zen Founder.”

Give it a listen and let me know what you think. If you enjoy it, would be a huge help if you’d give it a shout on Twitter.

I’ve just released a 2-hour audio documentary chronicling the story of building and launching my latest startup, Drip.

Launch. A Startup Documentary was compiled and edited from 9 months of Skype calls between myself and my software developer, with an epilogue recorded 1-year later (about 2 weeks ago).

From the honeymoon period of “green field” development to the sleepless nights of database failures, Launch captures the real-life angst of building a startup.

The goal of this documentary is to fight the press-portrayed startup myth by pulling back the curtain as a company is being built. There is no champagne-popping, no hockey stick growth, and no overnight success.

Only a couple years of hard work and uncertainty documented  for your listening pleasure.

Listen in your browser or iTunes.

In October I spoke at Dan & Ian’s DCBKK event in Bangkok, Thailand about how to make more money from your business.

Through the mad illustration skills of one Maggie Appleton, here are SketchNotes summarizing my entire talk in a single image (click the image for a hi-res version).

I’m in the midst of the biggest gamble of my career. The thing is, every chance you take feels like your biggest gamble while you’re taking it.

When I left salaried employment for consulting in 2006 it felt like a big gamble.

When I left consulting for product in 2008 with a wife, kid and a mortgage, it felt like a huge gamble.

When I spent most of the money I had in the bank on a broken-down SaaS app few people had heard of, called HitTail, I was downright scared. It’s hard to put years of work and savings on the line, based on nothing more than confidence that you will execute.

Upside
But every one of the above gambles worked out, and I wound up far better off than if I’d never taken them.

And here’s the thing…

Continue reading →

This is a guest post by Kyle Brown, author of the upcoming book Systematize.

Are you spending a lot of time explaining how to perform tasks to your employee(s)?

Do you have documents scattered all over the cloud, various emails, and computers?

Do you struggle to find documentation when you need it?

If you answered yes to any or all of these questions, then hope is not lost and there is something that you can do.

You’re running a SaaS business and likely don’t have the resources or the desire to hire an individual or management company to run the operations of your business and you cannot be everywhere all of the time. Spending your time repeating endless cycles of q and a are not the answer to growing your business.

Imagine if you had more time to market your business or work on a new feature for your SaaS to increase the profits? What if you could consolidate all of your methods for performing tasks into a clean organized manner so that you could easily find and share information required to run your company?

In this post I outline how you can take your mind share and knowledge required to perform tasks in your business and document them so that your team can execute in your place. The method is also known as systematizing. Also referred to as standard operating procedures and business process management.

Continue reading →