Leads are not created equal....

Happy Tuesday! Today I help you grow your SaaS by discussing: the importance of segmenting lead sources by conversion rates, transparent enterprise pricing and scammy accelerators. Enjoy the read - EveD.

Growth: Strategy

Low intent vs high intent leads

One of the biggest “hacks” of SaaS growth is making sure that you work on the right thing. If you get your “north star” metric wrong and end up focussing on a metric that is just a vanity metric, you are going to misallocate resources and sacrifice revenue.

Lead volume can be a vanity metric, if you don't segment low-intent vs high-intent leads (High intent are leads generated from demo requests, conversations with sales etc. Low intent is downloads of e-books, attending events, etc.). Look at the example below, posted by Chris Walker on LinkedIn. It's from a SaaS that does $60m ARR, and shows the different conversion of high intent vs low intent leads.

High Intent = 3.8% conversion (2,500 leads to 76 conversions, $4.1m value)Low Intent = 0.02% conversion (23,200 leads to 6 conversions, $467k value)Non segmented = 0.31% conversion (25,750 leads to 82 conversions, $4.5m value)

Think about how much time you spend on creating low-intent lead magnets like ebooks or events (brainstorming, production, marketing, SEO content to drive downloads etc). That time, effort and money could possibly be reallocated with better results. Yes, the number of leads will reduce drastically, but the number of lead conversions (and their value) will increase.

Equally, analyze how much time you spend following up on low-intent leads. Is this also mis-aligned? It's one thing to put low-intent leads into a email flow or as additions to a segmented email newsletter, but another to allocate sales team effort to followups. Not only is this expensive, it's also morale destroying for the team.

Takeaways :

• Segment high intent leads from low intent leads (use your attribution data wisely)

• Don't waste significant resources following up on low intent leads

• Don't waste significant resources on generating low intent leads

It’s tricky, because it never feels good to kill of a lead pipeline. But keep your eye on the main prize, and then diversify slightly. If you analyze your data and find the 80/20 principle applies to you (20% of effort creates 80% of the revenue), then flip the work allocation. Spend 80% of your time on the high-intent lead pipeline, and 20% on the less lucrative one (lead magnets, in this case).

Growth: pricing

Transparency in enterprise pricing?

Mixpanel has done something I have never seen before from a SaaS company: they have implemented transparent pricing for their enterprise models.

Usually, enterprise plans have a “Call us to discuss” pricing model, where pricing is determined on the client’s requirements. Two problems with this approach: one) it is widely accepted that clients will slash the quote, and negotiate it down - by a lot. [just read this post from David Hansson (@DHH) where he talks about how Signals37 (Basecamp) regularly negotiated 80% off for various contracts] and two) it adds friction to the buying process.

Mixpanel says, "... this removes the friction of customers having to schedule a call with a sales rep, negotiating on price, and the many other steps that completing a B2B software purchase typically entails. Our goal has always been to deliver a better customer experience and with this change, we now deliver one fair and predictable price to everyone."

(The transparent pricing model has launched in North America for now.)

What do you think?

To be or not to be a startup founder?

When you are a hammer, everything looks like a nail. @Jason is a well known angel investor, @vasallo is all-in on “small bets” movement (diversify your income stream across many small bets, stay open to opportunities and resilient to economic fluctuations). So how does each react to the massive layoffs from Google, Microsoft, Amazon etc? In very much a true-to-themselves style. 

Another reminder why pithy 280 characters on Twitter should never be taken as gospel!

(Personally, I think that a 15yr+ ex-Googler would have a very hard time running a scrappy, chaotic startup. If they had it in them, they would have jumped ship ages ago. But, if they team up with the right founder-mindset team, then the combination of experience, skill, resilience and relentlessness could definitely result in some great things)

Funding

Don't pay to raise funds!

Joshua Browder (of DoNotPay fame) is preparing to initiate a class action suit against NewChip, an accelerator that allegedly creates false hope of funding for founders (with a promise of a $250k investment), but first hooks them for an $8,000 training program. According to Joshua, although many founders have joined the program, not one has received any funding.

Don’t ever pay to pitch.

Growth Tools

I’m putting together a Growth Tools guide for SaaS founders who struggle to find the right growth tool / agency for their needs. If you want to include your growth tool, or have a favourite one you think should be included, please let me know [email protected]

See you tomorrow

That's it for today...

Coming up this week:

• How to easily get backlinks

• Why magnets are a very weak lead generating tool for SaaS

• Is brand marketing worth it?

• Is it the end of "open" startups?

• VC scams to look out for

Thanks for reading, and see you tomorrow!

Eve D

I'm a digital strategist and founder, and author of Up and to the Right. I consult with early stage SaaS startups to help founders evaluate the strength of their PMF, or refine their go-to-market strategy. I advise teams to develop in-house growth execution, but can help with vetting of resources that need to be outsourced. Contact me on [email protected] or find me on @eved