Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about lessons learned analyzing 250 SaaS pricing pages. They give their opinions and takeaways on the article and how it may apply to smaller size SaaS businesses/products.
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Transcript
Rob: [00:00]: In this episode of Startups for the Rest of Us, Mike and I discuss lessons learned from an analysis of 250 SaaS pricing pages. This is Startups for the Rest of Us, Episode 271.
Welcome to Startups for The Rest of Us, the podcast that helps developers, designers and entrepreneurs to be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike [00:28]: And I’m Mike.
Rob [00:28]: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
Mike [00:33]: Well, after a couple of months of effort on this, we’re finally pulling trigger on migrating Founder Café into Discourse. I ran through a dry run of the migration earlier today. Everything seemed to go pretty well. I think we ran into one minor issue but it was because a table was not able to accept the amount of data that we’re throwing into it. We fixed that and everything else seems to be going well.
Rob [00:53]: Very nice. For those who aren’t familiar, Founder Café is our membership community for self-funded startup founders and folks who get a lot of value out of the podcast and want to engage more with the community. We’ve been running it for several years. We’re moving it from an old platform that wasn’t working as well and moving it into Discourse which, so far, has been pretty cool. It has a lot of neat features. I like what Jeff Atwood and his team over at Discourse are doing with it.
Mike [01:19]: The user experience in general is going to be a lot better for us. The primary reason for moving is just partly for that community aspects but also the price considerations because the current platform we’re on is fairly expensive. There’s a huge number of features that we just simply haven’t used. We thought when we moved over to it that we were going to start using a lot of those features and it turned out that we just didn’t and they didn’t turn out to be as important as things that were much more focused on the forms and community interactions. Because of that, it fell short on a couple of different areas. If you go to a product that does a lot of different things, what you find is inevitably it will fall short on some of the things that you might find to be important. For us, that community aspect of it was really important. The other thing is that it wasn’t really designed to be like a paid membership site. It really wasn’t designed to be a membership site, it was really aimed at internal internets for large companies. Because of that, there were a bunch of workarounds that we had to do. At the end of the day it just didn’t work out for us. How about you? What’s going on with you?
Rob [02:20]: We ran an interesting experiment at Drip over the holidays. In essence, your trial to pay conversation rates often plummets over the week of Christmas and the week after Christmas, before New Year’s. What we did is we pushed everyone’s trial out, in terms of their expiration day. We pushed it out by a couple of weeks, anyone who’s going to expire during that time. We e-mailed them and let them know that we were doing that, kind of said, “Hey, happy holidays. Here’s our gift to you at the end of the year,” like restarting the trial in essence, checking in with people who aren’t set up. It gives everybody a little longer trial but it’s a really good reason to do it and to avoid the dip in conversion rate during that time.
With that said, it is very much an experiment, I’ve never done it before, and we have no idea what the results are going to be. We’re just now starting to see the trial to paid conversions from that earliest set of that and so far, so good. We’re a day into it. It’s not anything that has real results yet, but it has been a trip. Basically, there were no trials converting for two weeks and that is absolutely nervewracking as a SaaS founder and as someone who tracks my metrics as closely as I do. I, everyday and frankly every night after billing runs, I’m in there looking at the revenue and what the trial count is and all that stuff. Those are just haywire right now because we kind of decimated the last two weeks of our metrics. The idea is that it will pay off in spades here in January but it will be interesting to see.
Mike [03:47]: On the bright side, you can run most of your yearend analysis stuff two weeks in advance.
Rob [03:51]: Yeah, I know. We didn’t have final revenue and all that but it certainly didn’t change very much in the last week and a half of December after we moved these folks out.
Mike [04:00]: The only other thing I’m working on is migrating a lot of my e-mail campaigns over from Infusionsoft into Trip.
Rob [04:09]: Coming back, huh?
Mike [04:11]: Well, there were a bunch of things that I was looking at inside of Infusionsoft that were fairly attractive. At the end of the day, I got into it and was using it. They introduced a bug back in June or July or something like that, for something that I was using within the Twitter Lead Cards. They just refused to fix it. I ended up having to build this report inside their UI, which showed me all the things that were going wrong and then I would have to go in and manually fix them. It was like every day or every a couple of days I would have to go in and fix a bunch of data errors because the Twitter Lead Cards simply did not work. I kept asking them and saying, “Hey, are you going to fix this?” And they’ll, “Oh, we’ll get to it,” or “It’s not really important,” or “People aren’t really requesting it.”
I was like, “Look, if you don’t fix this, then I’m just not going to be a customer anymore.” They’re like, “Oh, we’ll have somebody get back to you soon,” and I guess they were going to have somebody in their engineering department get back to me. It’s been, I don’t know, several weeks and I’m still waiting, so I’m done with it at this point.
Rob [05:05]: That’s tough. They are a major competitor of ours and so I don’t want to speak poorly of them but I have heard similar stories from folks running into bugs that haven’t been fixed and stuff along those lines. It’s a bummer.
Mike [05:16]: I heard similar stories from other people and for a while, it worked great, did everything I needed it to and it was kind of chugging along. If you’re not running into those bugs, then you’re fine, but as soon as you do and it’s not high on their priority list, then it become a problem. It’s a problem for you but not necessarily a problem for them. It’s higher on my priority list than it is theirs.
Rob [05:38]: Sure, sure. There’s a reason we get a lot Infusion software FUGS and you’re adding to that total. Today we are talking about lessons learned from an analysis of 250 SaaS pricing pages and we get the information from an article on The Next Web and we’ll certainly link that up in the show notes. The article is titled ‘I analyzed 250 SaaS Pricing Pages – Here’s What I Found.’ It’s written by Benjamin Brandall and he says, “We recently had a major overhaul of our pricing and landing page and wanted to get a good idea of what a high-converting pricing page looked like.” He went to the SaaS 250. It’s a list compiled by Montclare and the list is supposed to indicate the most successful SaaS products in the world.
You and I had a debate before on whether or not – or not even a debate, just a discussion of each of these metrics you should probably hold them loosely because these companies, some of them are public, some of them are not. They’re looking at just private data and whatever they can scrape together. As we know, that tends to be less than accurate. Anyways, he looked at 250 of let’s just say they were all successful SaaS companies. A lot of them are big enterprise companies like Salesforce or LinkedIn. They do have Basecamp on the list and companies like New Relic. They have Google on the list and I’m assuming that’s for one of their paid offerings because it’s certainly not google.com. They named Dropbox and stuff like that; a lot of folks that we’ve heard about.
He analyzed their pages and then he tries to pull takeaways and he pulls several takeaways like X% of these companies highlight a package, it’s the best option and that kind of stuff. What we wanted to do today is first talk a little bit about this kind of article and the methodology of it, and our opinions on that and then dive into the takeaways and talk about when we think those actually apply and when we think they don’t apply to folks who are probably listening to this podcast. Because if you’re listening to this, you’re probably not starting the next Salesforce. You’re not starting at $10 billion or $1 billion or maybe even $100 billion company. You’re probably aiming to start a SaaS company with a price point between 10 and 99 bucks a month. That’s the lens that we want to lend to this is when our opinions and our experience, and the testing and the data that we have, based on our experience, when we would use these approaches and why we think maybe that data lines up or doesn’t line up with this article.
Mike [07:54]: Yeah, and I think that’s probably the most important takeaway because I think that throughout the course of this podcast, we’re probably going to pick at this list of commonalities or suggestions from this article. It may very well come across like we’re either not necessarily argumentative, it’s probably not the right word, but very anti against some of the conclusions that are drawn in this. You have to remember that this is from the SaaS 250 and those 250 companies are a list of some of the most successful SaaS companies according to Montclare. Because of that, those companies are in an entirely different category than the types of people who are probably listening to this podcast. Bear that in mind as you’re listening to this podcast. Where do you want to start?
Rob [08:35]: The interesting thing, the first note that he talks about is he says, “Why did 80% of companies not have pricing pages?” He says of the 250 companies, only 48 of them had pricing pages and the rest had pricing available on request by contacting sales people. He talks about how Jason Lemkin – Jason Lemkin was the CEO and co-founder of EchoSign. He sold that company plus a previous company and he is a SaaS genius. He blogs over at saastr.com. If you listen to no one else about SaaS, listen to Jason Lemkin. He tends to talk about the $100 million and billion dollar SaaS companies. There’s stuff that he says that doesn’t necessarily line up with our audience or our approach to it, but as a rule, the stuff he says is not inaccurate if you do want to build a large company.
He has a bunch of reasons; we won’t go through them all, why these companies don’t have pricing pages and he talks about how deals, as you get into the larger deals, they’re going to get more complex as you grow. Discounting becomes difficult if you have a pricing page. If you’re selling into the enterprise, then actually having a low price can really devalue your products. Being a $99 price point is not something that a company like a Fortune 500 company wants to use. They really want to talk to someone, to have the demo, to do the assessment of needs. They really want to go through the long sales process, as much as that sounds insane to us, who want to do it self-serve. But if you really are selling to the enterprise and you really are trying to grow that $100 million company, you need to sell into the enterprise, then having a pricing page is actually a bad approach. That’s one of those things you have to keep in mind. It’s like just because 80% of these don’t have pricing pages, doesn’t mean that you shouldn’t. It’s only if you’re going to be selling into the enterprise that you should consider only having a call only for pricing.
Mike [10:20]: I think that ties back to what type of business that you want to run and what type of customers you want to have. Because if you want to go the self-serve route, then you clearly want to have a pricing page and it’s going to very clearly list out everything that you’re offering and what the prices for it are. But if you want to push up into those $100,000 or a million dollar deals, then you really shouldn’t. I don’t disagree with the conclusions here but it boils down to what type of business that you want to run and how much effort you want to spend on each individual customer to bring them on board. Obviously, with an enterprise-level customer, you spend a heck of a long time, wooing them as a customer but it’s also financially very lucrative if you can plan them. That said, sometimes the other direction is much more appealing to you, depending on what type of person you are and how you want to run your business. It really just depends on what you want.
Rob [11:13]: Right. The final caveat I’ll say to this is he looked at 250 SaaS pricing pages and then pulled out some data from them. I think it’s interesting, it’s novel. It’s kind of like a Myers Briggs Test where it’s like, “Oh, that’s something. That’s an indication of something.” This is certainly not rigorous, scientific study of all SaaS companies. It definitely steers towards or leans towards these big, large enterprise companies that tend – since they are big, they tend to also be selling to other large enterprise companies. It’s something to keep in mind as you’re reading through this. The first point, there’s 11 points that he covers. I don’t know if we’ll have time to get through all of them. Let’s kick off the first one. The first one is that the average number of packages offered on pricing pages is three and a half. What do you think about that?
Mike [11:55]: I’ve never seen a half a package before, but I guess it’s like the 2.3 kids in the United States.
Rob [12:00]: It’s an average, he says the average number. I could imagine if it had three and then half? That’s not an optimal use case, people. Don’t put three and a half. What do you think about the idea? Obviously he’s saying a lot of them have three, a lot of them have four, some have two, some five. The idea that having about three or four pricing tiers is what they did, is what these folks see as optimal.
Mike [12:21]: That’s seems like your classic case of price anchoring. You’ve got your low tier price and then you’ve got a high tier price. The middle one obviously helps you in many ways to anchor it, especially if you’re using that as your most profitable plan, assuming that is your most profitable plan, because sometimes it’s not. Having those three options and then a ‘call us’ option; it seems to me very, very common. I wouldn’t necessarily say that this is a surprise or a shock in any way, shape, or form. That said, I do think you need to be careful about which of the tiers that you decide to use as your price anchor, whether you want to try and anchor people to the top one and get them to subscribe to a lower tier or maybe go for the middle one and there’s going to be people who go above that. It depends on how in demand your products is and where it fits in the market.
Rob [13:09]: Yeah, I think my rule of thumb is when in doubt, have three pricing tiers, like you said, so that you do have the price anchoring. Having three plus an enterprise with either a ‘call here’ button or some type of calculator as you see on the Drip pricing page. It has a calculator there because people can have 50, 000 subscribers or 100,000. We could do a call for that, call us or click here for demo, but we’ve chosen to do a calculator. That’s what I do by default until you have time to test otherwise. I think that having about three pricing tiers and maybe four is about the right way to go. I think that if you can simplify it down to a single tier where is built on or priced based on the number of users or a single metric where you can just say, “All right, it’s 10 bucks per user, per month.”
That’s how Helpdesk Software, CRM software does it. Or, if you can go like a lot of e-mail marketing softwares, it’s purely based on the number of subscribers. It gets difficult if you’re going to have tiers because then you at least need some type of tiering on your homepage. If can boil it down to where it’s a simple pricing, I actually think that that can work as well. It’s looking around and seeing what your competition is doing and if you try to do it too different than the rest of the market, you will cause some confusion and we ran into that, earlier on, with the way that the Drip pricing was done. I think that if you don’t have a competition, that figuring out what to pivot this on, is always going to be a challenge. If you do have competition, there’s probably a standard in the space and not veering away from that is probably a decent rule of thumb as well.
Mike [14:36]: One thought that comes to mind about the three and a half or whether it’s three or four pricing tiers is that I wonder how much of this decision is actually driven by the design of the pages and how much space you have available. If you look at most pricing pages, if they have three or four, they’re typically using almost all the space across the page. If you try to add another one, it would be difficult that things would start to get smooshed or you’ll have to drop the text size and if you try to drop below that to, let’s say two, it makes the space look a little but barren. The UI just looks a little but lost because there’s too much white space. I wonder how much of this decision is actually based on white space design on the pricing page as opposed to what would really make the most sense for people.
Rob [15:21]: I think responsive designs have also changed this because to go responsive means that as you squeeze it inward and go to a cell phone size screen, the, really tier should either go on top of each other, it will have to move around. It starts looking weird and the old model of having all the features listed on the left and then check boxes throughout your tiers, it breaks down when the tiers flop on top of each other instead of next to each other. I bet responsive design has also had an impact on how many of these tiers or at least how they’re structured and how they’re displayed. The next takeaway is that only 50% of the companies highlighted a package as the best option. What are your thoughts on that?
Mike [15:59]: I like that Benjamin calls out some of the different reasons why you might highlight some of the different pricing tiers on your websites. For example, if you have a specific plan that is the most profitable for you, then calling that out to help draw people’s attention to it can be helpful and that it will essentially generate more revenue for you. What I question is how much A/B Testing has been done on this to identify whether or not that’s pushing people towards a specific plan or away from it. Because I think there’s a natural tendency for us to say, “Oh, let me draw people’s attention to this,” and think that it is going to anchor people’s minds to that plan and they’re going to be more likely to select it. In fact, they might do the opposite, where if you highlight the most expensive plan for example, somebody might look at that and say, “Oh, well, I’m not that big. I don’t need that level of service so I’m going to go for the one below it.” I wonder how much testing has been done around whether or not it drives people to a plan or away from it. I think that that’s something to definitely consider when you’re implementing that. You should go in and measure that because you could very well be shooting yourself in the foot as opposed to helping yourself.
Rob [17:05]: I’ve always been a fan of highlighting a plan and I tested this with HitTail and it worked out. It had a positive ROI by keeping a plan highlighted and my average revenue per user, per month went up when I highlighted the second from the bottom instead of not having highlighted or in highlighting the bottom. It drove more people to use that. It was the recommended plan and people who were in a hurry or who wanted to take the take the recommendation, wound up doing it. That doesn’t mean that it’s always a good thing to do or that you should always use the second from the bottom or anything like that. I just know the one time that I have actually tested it, that it really did work out and raised revenue. I think that trying to highlight the top plan is one of the suggestions here and I think that always seems odd when that’s done. You have to use your head here. Highlighting in the middle is my rule of thumb to allow people to get an idea of where you think they should start.
The third takeaway was that just 69%of companies sell the benefits. I have strong feelings about this one. He says it’s only 69% of companies, like he expected more people to do that. The thing, though, is by the time you get to a pricing page, you should already be sold on the benefits. Your homepage has a ton of benefits, and I think you should get into some features towards the bottom of your homepage. Your features page should have benefits and features.
By the time I’m coming to look at a pricing page, I’m at least entertaining the idea that I might use this software and price is now coming into play. I think that listing a bunch of benefits of like, “Hey, it will save time and make you money and save you money,” is just lame. I actually get irritated when stuff is that high level on a pricing page because I want it to be digging in more at that point to actual differences just between the pricing plans. That’s all I want to know at this point. If I want to go hear about your benefits, I’ll go to your homepage or your benefits or wherever else. On the pricing page, I’m trying to figure out how much do you cost and what are the differences between the plans? The more benefits that are listed, the more confusing it is because they are too high level. I want to know the exact features that are included in each tier.
Mike [19:08]: I think it’s just the way that this is phrased and some of the underlying assumptions that you pointed out, because the whole article is based on the analysis of pricing pages. You’re not going to use those benefits on the pricing page. You might want to put it at the top and a headline or something like but you’re certainly not going to sell each individual plan with all of the different benefits. You need to know the details about what it is exactly that you’re paying for. That’s why all these features are going to be listed so that you can, as a buyer, can do a feature comparison between those different things. I almost disagree with the way that this is phrased just because it seems to me like on that particular page, you would want to sell based on the features, not necessarily on the benefits.
That’s because it’s specifically talking about the pricing page. If you’re talking about the homepage or various other pages, then you probably want to sell based on the benefits. I think that you really need to very clearly spell out all of the different features on that page so the person who’s buying it knows exactly what it is that they’re buying in relation to some of the other things. The other side of this is that when he says just 69% of the companies sell the benefits, how much of the benefits are you including in that 69%? Is one sentence enough to get you over the hurdle of saying that you’re selling on benefits or what? It’s not clear to me what that actually means.
Rob [20:25]: It is an interesting takeaway nonetheless. I like that he took a look at it. Number four is that 81% of companies organized their prices low to high. When I read this, I thought, “Of course.” Whenever I come to a pricing page, I like to see it low to high. It just makes sense. It actually throws me off when I come and the high price is all the way on the left. However, he has a quote from Lincoln Murphy at SixteenVentures and Lincoln Murphy said, “The left to right, high to low approach seems to provide a statistically significant lift every time.” I like the way that Lincoln Murphy phrased that, in terms of “seems to provide a statistically significant lift every time,” like in his experiments, he’s [couching?] it, in a good way, to not say, “This always works so this is what you should do.” He’s just stating his experience. That’s interesting, counter-intuitive to me. It’s not something I’ve ever done because it irritates me so much. It’s like when you go to a site that has a bunch of annoying pop-ups or it has an exit antenna. It’s not stuff that I like to experience. Even if it can get you 1% lift or 2% lift, I haven’t done it myself but I am curious if folks out there are doing it and having success.
Mike [21:27]: I’m in your boat on this one. It throws me off when the highest price is on the left. It is a little irritating and I don’t know why. Maybe it’s the OCD in me. It seems odd when the highest price is on the left rather than on the right.
Rob [21:40]: The next take away is that 38% of companies list their most expensive package as ‘contact us’. What do you think?
Mike [21:47]: I think that if you’re trying to land some of those larger customers, that totally makes sense. You could very well me leaving a heck of a lot of money on the table if you have a higher tier plan there that would work for, let’s say, 90% of your customers. But there is this 10% of the people out there that still need something above and beyond that. You’re almost positioning yourself at that point to say, “Hey, we can’t serve you,” or “We can’t help you.” You’re almost writing off that 10% immediately. A lot of times if those types of companies come and they see that you only support 200 users for example, and they have 700 or 1,000, they’re going to immediately assume that you are not going to be able to handle the load that they’re going to place on your servers and they’re going to go find something else.
You need to be a little bit cautious here, but you also have to be in tune with what the general size of your audience is. You might also want to draw some delineation between your company and some of your competitors to say, “Hey, we serve people under 500 employees really, really well. But if you’re above that, go to these other people. They’ll handle it.” You can position yourself that way because you are really cutting into the lower tier of the market for that competitor. I think that there’s nothing wrong with going in that direction, you just have to be consciously aware that that is exactly what you’re doing when you choose to put a maximum on those plans rather than a ‘contact us’.
Rob [23:08]: Yup, it’s a good rule of thumb to always have that enterprise or that high-end plan, have a ‘contact us’. The next takeaway is that the most common call to action is ‘buy now’.
Mike [23:20]: This is a pricing page. Isn’t that supposed to be the call to action?
Rob [23:23]: He compares like ‘buy now’ is 27% and ‘sign up’ is 23%. ‘Start your free trial’ is 8%, ‘try’ is 6%, ‘contact us’ is 4%. I don’t know what necessarily he’s calling out. I guess the conclusion here is that people are saying that you click this to buy now. It does feel weird with a SaaS app. I don’t think of buying a SaaS app as much as I think of either signing up for a free trial or signing up. Beyond that, if you think about it, you probably want to provide a benefit here instead of buy because buy makes it think, “All right, I’m going to take a bunch of money out of my pocket and give it to you.” [?] want to provide a benefit like grow my list faster or get started building my list, something to where the person is they know they’re signing up for SaaS and they know they’re signing up to get a benefit. If you have a benefit there, it’s probably going to convert better anyways.
Mike [24:09]: Looking through what he’s got listed out here; it seems to me he’s comparing the texts there as opposed to what they’re trying to get you to do because the other category has 32% listed in it. Things like more info or fill out the form and things like that. All these are designed in some way, shape or form to move you to a paying customer. I think his point here is ‘buy now’ is the most common. I don’t know if it really makes a difference. At least to me as a buyer, when I go to those pages, I don’t consciously differentiate between them. I don’t necessarily care. It comes down to what the statistics and the numbers tell you for your page, whether or not it works. I don’t notice myself making decisions based on whether this is ‘buy now’ or ‘free trial.’ I don’t necessarily statistically analyze every decision I’ve ever made on those pricing pages either.
Rob [24:56]: My guess would be a lot of these pages I would guess have never been split test. I know that seems kind of shocking. I guess they just haven’t run the numbers or haven’t thought to split test ‘buy now’ versus an actual benefit someone would get. My guess is that they would get a lift now. Would that lift make a difference to the business? I don’t know. Maybe that’s why they haven’t split tested. My guess is they haven’t had the time because they’re busy working on other stuff. That’s the thing we’re looking at. 250 pricing pages from successful SaaS companies doesn’t imply that these are the most optimized with the best SaaS pricing pages.
Mike [25:24]: The other thing to consider there is that you have to have a significant enough volume to come in through those pages to begin with, in order to do effective split testing on those. If you just look at the numbers alone and let’s say that you’re getting 100 people a day clicking on something and if you can get a 10% lift on that page, then you’re getting an extra 10 people a day clicking on it, extrapolate that a little bit, that’s an extra 300 people a month. Let’s say 10% of them convert, you’re talking an extra 30 paying customers a month. But, if there are easier ways for you to get 30 customers a month, you’re probably going to spend the time and effort doing those things rather than testing over the course of three to six months to try and figure out what the best copy is on some of those buttons. It depends a lot on your volume as well.
Rob [26:13]: That’s true if you’re smaller. Of these 250 companies, I bet every one of them has the volume to run a test in a couple of days. We were talking Autodesk and UpWork. I’m even way down in the line. I’m at 134, I’m at EMC and Dell and other companies I haven’t heard of, CollabNet.
Mike [26:31]: I was couching that for our listeners.
Rob [26:33]: Got it. Not for these guys.
Mike [26:34]: Yes.
Rob [26:36]: Another one is that 63% of these companies offer a free trial. This comes back to these being large enterprise companies. I know that in the self-serve market that a free trial is how people get in and get going. Often times, if you’re selling something that is $30,000 a year as a SaaS because a lot of these do annual SaaS contracts. It’s 30 grand a year, 50 grand a year. It’s a huge decision you’re making, but it’s probably a pretty complex piece of software. As a software company, you don’t want someone clicking a button and just getting dumped into an account because without the proper demo, and the proper guidance, and the proper help, they’re going to be confused and they’re going to say, “Oh, this app is confusing. I don’t know what to do here.”
Actually, a free trial could be a detriment. I don’t always think it’s a good approach. However, if you’re a listener to this podcast, then you’re probably starting a SaaS with a smaller price point. In that case, I do think that free trials tend to be a boon if you’re doing self-serve. There’s some different options here. You could either go freemium, which I would not recommend unless you know what you’re doing. You could do a free trial if you have really good on-boarding and you have really good on-boarding follow-up. You could go with no free trial and make people pay as soon as they start using the app. The latter two are the ways to go. I’ve always liked free trial. There’s probably a whole episode on why I like free trials and why I’ve always done that. That’s my default rule of thumb because especially when you’re getting started, it’s hard to get people to pay upfront, but moving to the point where people are paying upfront, I think, is also a good approach.
Mike [28:03]: The other thing to point out here is when you’re offering that free trial, you’re giving somebody an opportunity to say, “Hey, I know you’re signing up here, maybe you take a credit card maybe you don’t.” That’s not specifically called out here as one of the things that’s done. When you’re giving them that free trial, then you’re giving them an opportunity to say, “Hey, you don’t need to do all the work to get the value out of this immediately.” You can push it down the road either a week, two or three weeks, whatever. You can do the work then. You can at least get them in, get some initial things set up and then do the work later versus if you don’t offer that free trial, then they’ve paid the $50 or $100 per month and they’ve paid it right then.
Because they don’t have that free trial period, they’re going to feel compelled to start using it right away, which would essentially decrease your conversion rates because people are going to look at that and say, “Well, there’s no free trial. I’m not ready to do this just yet so I’m not going to do it. I’m going to come back at some other time.” Unless they’re on an e-mail list or they’re really on track to buy your software down the road, then they may very well just never come back. I think that making sure that there is a free trial of some kind on your site is almost a necessity. Even if you look at a lot of the enterprise vendors, there’s typically a free trial of some kind that you can get at. Whether you have to give them your information in order to get it, that’s a different story, but almost all of them still offer a free trial of some kind. I think it’s very rare to buy a piece of software sight unseen and have to purchase it without being able to use it first.
Rob [29:33]: The next one is that 81% of pricing packages are named. I feel like this is a lesser known one. I was surprised it was as high as it is. The idea here is that if you’re going to name your packages, you want it to be linked to a buying persona. You don’t tend to want to offer Lite, Pro and Pro+ Plans because those aren’t that helpful. The better way to do it is they give you an example from Huddle. They offer three plans; they have Workgroup, Enterprise, and Government and Public sector. Those are their three plans. That’s where you really start talking. If you have a Freelancer, Consultant, and Agency as your three plans, people can segment. They can come in and say, “Oh, I am a freelancer. That’s the one I need.” At least it helps guide them. If you are at all able to put some names to it that actually have meaning and aren’t these generic headers at the top of the pricing tier, that’s pretty helpful. I was surprised to hear that 81% of packages are named. I’m wondering how many of these were named things like Lite, Pro, and Pro+
Mike [30:32]: Interesting data point. I heard the CEO of FreshBooks talk at Business of Software several years ago. He talked about some split testing that they did on their pricing page. If you look at their pricing page, they’ve got these weird names for some of their different pricing plans. Their top tier is Mighty Oak and then they’ve got Evergreen, and then Seedling and Sprout, which if you look at that, it doesn’t mean a whole heck of a lot. But when they took those things away and they replaced them with much more generic versions of it, like … I forget what exactly what it was they used, so I won’t try to remember or make something up, but they were very, very generic names or they did that or they didn’t even put a name on it. They noticed this significant conversion rate drop because they didn’t have something there that would help guide people. That’s an interesting data point to take away from that, not just having something like Workgroup, Enterprise, Government and Public Sector or Startup, Growing Business, et cetera. You can have off names, I’ll call them, like Mighty Oak or Evergreen that relate to your business that people are going to relate to or resonate with a little bit more. Those can help your conversion rates.
Rob [31:34]: The last one we’ll cover today is that only 6% of these pricing pages show a money-back guarantee on the page. He talks about there been two sides to this argument. One is that offering this guarantee derisks the sign-up for your customer. If they’re making an impulse purchase or they are signing up for a trial or even paying right away, then of course money-back guarantee is something that is going to lend them confidence in your product and it could encourage them to sign up. The other side of it is that the SaaS 250, they often have these annual contracts. They lock you in for a year or two-year contracts even. Why would they offer it? They don’t need to or want to offer a money-back guarantee. They don’t need to. They’re such a brand name that they can get folks to sign up without it. If you’re doing self-serve, having that money-back guarantee especially to start, especially when you’re not a brand name, is helpful. Even once you are a brand name; I think it’s a good policy to have in general, so why not have that on the pricing page? I do think that it has an impact on certain people, if you’re an unknown to them, of what confidence they have in signing up for your service.
Mike [32:39]: I wonder if part of this might also be related to how much of the onus that you want to push onto the user for using your software versus guaranteeing that your software works and does what it promises to the user, because I think that those are two different scenarios. If the user signs on and they have signed up for your product, they start using it, they use it here and there but they don’t fully commit to it, 60 days later they come back and they say, “Hey, I’d like a refund.” Maybe they even forget completely that they have the account and six months down the road, they come back and say, “Hey, I’d like a refund for the past three months or six months.”
You and I have seen that before, where somebody forgets that they bought something and signed up for a subscription. Then they come back six months later and say, “Hey, can I get a refund on all of this?” Maybe even longer. I’ve seen people go for a year or two and forget that they have a subscription and try and get all of that. It’s almost unfair to you, as a business, to have to offer that. Out of policy, we do that as a matter of course just because we don’t like the idea of taking somebody’s money for not delivering value to them. At the same time, whose fault is it that they didn’t use it? Whose fault is it that they weren’t getting the value out of it? The fact of the matter is you have to put in the work in order to get something out of it. There is some of those things that factor into this as well. Whether you put it on the pricing page or not, I’d say that as a matter for debate. As to whether or not you would adhere to that as a matter of policy, I think that’s a completely separate issue.
Rob [34:06]: Well said.
Mike [34:07]: On that note, if you have a question for us, you can call it in on our voicemail number at 1-8-8-8-8-0-1-9-6-9-0 or you can e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘We’re Out of Control’ by MoOt, used under creative comments. Subscribe to us on iTunes by searching for startups in business and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 260 | What is the One Metric That Matters?
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the one metric that matters. The idea of focusing on one metric at a time, the metric that is helping move your business forward.
Items mentioned in this episode:
Transcript
Mike [0:00:00]: In this episode of “Startups For the Rest of Us,”
Rob and I are going to be talking about the one metric that matters. This is “Startups For the Rest of Us” Episode 260.
[Theme Music plays]
Mike [0:00:16]: Welcome to “Startups For the Rest of Us,” the podcast that helps developers, designers and entrepreneurs be awesome at launching software products. Whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob [0:00:23]: And I’m Rob.
Mike [0:00:24]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week Rob?
Rob [0:00:28]: MicroConf 2016 in Las Vegas, the dates are set. We signed a contract, although we haven’t received the counter-signed as of today, but as far as we know, everything’s in place. Las Vegas, April 3rd through 5th. So if you’re interested in hanging out with about 200 of your closest founder friends, a lot of bootstrapped founders heading over there out in early April. Go to MicroConf.com, enter your email address. The tickets every year sell out way before they make it to the open market. So if you are interested in coming, you want to get on the list.
Mike [0:01:01]: You know, it’s always a little disconcerting talking to people about the dates before we have that counter-signed contract.
Rob [0:01:06]: I know, I know. I’m such a more conservative in terms of stuff, and I like to have everything signed and known, but boy, we’ve been talking to the hotel for months and the odds are pretty good it’s going to go through.
Mike [0:01:17]: Yeah, I think I even remembered that there’s a clause, kind of early on that they kind of throw in there that just says that if they kind of offer us right of first refusal. So if somebody else comes in and says, Oh, we want that date, they have to come to us first and offer it to us, or at least try and get something signed. But because we don’t have a counter-signed contract, I guess it’s, I don’t know, I guess it seems less official.
Rob [0:01:39]: Sure. Well it is, it’s not legally binding at this point. So feasibly there could be a screw up at some point, where they get our signed contract and go to hand it to whatever the VP in charge of signing contracts, and someone else hands him one for the same dates, and they’ve just totally screwed up. It’s within the realm of possibility. But knock on wood, this is what our eighth or ninth conference? And we haven’t ran into any major issues like that. How about you, what’s going on?
Mike [0:02:02]: Well, I’ve been doing a little bit more customer validation on the new idea I’ve been working on, and that’s been going well. I’ve had a couple more conversations this past week. And right now, something else I’m working on is I’m testing whether or not it makes sense for us to move Founder Café off of the Communifire platform and onto Discourse. So I don’t know how that’s eventually going play out, but so far it seems to be going reasonably well. I don’t know all the details of it. It’s kind of the unfortunate part. I know about half of it, because I don’t know the Discourse side of it, or Rails or Postgres. But I’ve got all the Communifire stuff that I’ve been working on. I’ve been working with a contractor to help with the other side of things. And we’ll see how things work out. I’m not real sure it.
Rob [0:02:45]: All right, cool. You mentioned that you’ve been doing a small amount of validation for your new idea. How come so little? I would imagine that you’d be fired up, cranking away on it.
Mike [0:02:55]: So what I did, when I was going through my validation steps, was every conversation I was having with people, I would basically just take a ton of notes during the conversation. And I’m starting to get, probably more towards the end of my list of people that I’m talking to, and I’m starting to hear the same types of things over and over again. So I’m going back through and I’m probably having less conversations now than I have in the past couple of weeks, but it’s more because I’m sifting through all that data I have to try and find overlap between different people and figure out exactly where to go. And I’m at the point right now, where I’m probably going to start – I am at the point where I’m starting to kind of draw up designs for what it’s going to look like and then take those designs back to them as kind of a double check.
Rob [0:03:37]: Is that your next step?
Mike [0:03:38]: Yeah, that’s what I’m working on right now is, as I said, just sifting through the things that they’ve told me, figuring out where those overlaps are and seeing what the lowest common denominator is that I can put in front of them that they’ll say, that they’ll still continue to say, “yes, I’ll pay for that.” And then kind of get the commitments from everybody to move forward.
Rob [0:03:55]: What’s your ETA on doing that?
Mike [0:03:56]: I’d probably say, I started working on the designs this past week, and it’s taken longer than I expected it would to go through some of those designs. So I want to say one week, but I’m guessing it’s probably going to be closer to two or three.
Rob [0:04:10]: Those things are always hard to estimate, kind of like building software. We’re working on some pretty cool stuff inside the Drip walls, and our end growth is continuing like as it has been for the last several months, things are going well. We’re actually hiring another developer, more of a front-end emphasis. And we just have so many features that need to get built, and now there’s even marketing stuff that I want to do where you just need some code and you need some design work and you need some Javascript and some CSS, so that it’s just enough that I can’t sit down and bang it out and I can’t get everything else done that I’m trying to do, so we’re probably going to hire someone and have him or her help do the majority of their time in hardcore development, but then also helping out with kind of marketing tasks, because that need front-end work and development.
Mike [0:04:58]: Cool. So this week, what we’re going to be talking about is the one metric that matters. And this is inspired by a couple of articles that I’ve come across online, one of which is from the Kissmetrics blog, and the other one is from leanstack.com, and then a third is from the leananalyticsbook.com. And all three of these articles refer back to the one true metric that matters. And essentially the idea here is that you should only focus at one metric at a time. And that metric is the one that is supposed to be moving the needle in your business. And we’ll link up all three of these articles in the show notes. But again, going back to this point, the idea is that you can track other metrics, but there’s one that’s going to be the most critical to you, which is going to depend a lot on the goals that you’re trying to reach at that time. So for example, the one key metric that I’m tracking right now is the number of prospect conversations per week. And because I’m kind of moving into the design phase, that’s probably going to change. But that’s the one metric that I was tracking over the past three weeks.
Rob [0:05:55]: And for me, I haven’t given it any thought in advance of recording this episode, and I guess we’ll see as we go through this if mine fits this criteria because I know we have some kind of does and don’ts of how to do it, but I would say it’s MRR for me. And so you might look at that as MRR growth, how much did it grow this month and is it going to grow more next month than last month. But really the one I look at is just MRR since it is a recurring metric itself, that’s what I have tended to focus on. And I think if I were to commit, of course, there’s everything then falls below that, right, of I could look at the trial count for the past 30 days. I could tell you if we’re going to grow and by how much at this point at the trial. The paid conversion and what we’re going to turn out and the upgrades and all that stuff. But the real focus that all feeds into, MRR.
Mike [0:06:39]: So the first thing we’re going to talk about is why? Why is it that we’re only looking at one particular metric? And the first thing to keep in mind is that these metrics encourage focus. If you only have one metric that really matters, then you can essentially ignore everything else that’s going on, whether – and in your case, for example, you’re tracking MRR and that’s the one metric that matters the most, then you can essentially ignore all these other things like the conversion rate and the number of visitors to your website. A lot of those things can just go right out the window because they don’t necessarily matter. And sometimes these metrics will play into one another and influence each other, so that’s something else to keep in mind when you’re looking at these metrics. And it’s especially important when you’re looking at something like MRR because all those things do essentially influence MRR, but not directly.
Rob [0:07:26]: Yeah, I would agree with that. I mean, I think being able to focus on one thing and not be distracted by trying to chase after a lot of things all at once is going to be a good thing. One point, early on, when Noah Kagan was building AppSumo, I had talked to him and we were talking about kind of what you’re focused on, it was like focusing on one thing. And at the time, I think I was doing, it was early in HitTail, and I was talking about, yeah, it’s just MRR I was focused on. And he said, I’m focused on growing my list. He said, it’s the number of subscribers total and the number of subscribers we’re adding each week or each day. And I remember thinking, oh, how interesting that he wasn’t focused on – there was not, he wasn’t focused on revenue, wasn’t focused on profit, wasn’t focused on deals per month, there’s a bunch of other things that you could look at, but at that point he knew that to get where he wanted to go, he had to build that list. And that’s kind of why I look at MRR as SaaS founder, is that to get where I want to go, I need to get that to increase. Now there’s a bunch of ways to do it, but it does give you focus. The other thing is it tells me what not to look at. As an example, I don’t, at this point, when we’re in heavy growth mode, I don’t look at profitability. Now, we are a profitable company, but I’m not measuring my success based on how much cash we can make in a month on a net basis. I am looking at that growth number as long as we are not doing stupid things like paying more than our customers’ lifetime value in order to acquire them or something like that. If you keep that in mind, I think that focusing on that one thing and then looking at all things that lead to it is a good way to go.
Mike [0:08:49]: And that’s the second on the list of why you should be looking at just one metric, because it helps narrow the field of things that you need to pay attention to. And even if you can’t pick just one, if it really boils down to like two or three, then at least it’s eliminated a lot of the other things that could potentially be distracting. If you’re looking at too many of these different metrics, essentially what happens is it just becomes noise, because it’s hard to get everybody to look at the same thing at that particular moment. If you have everyone looking at the same thing, then what it does is it helps create accountability for everyone. Everyone’s all focused on the same goal, and it becomes very easy to relate the different things that people are working on to the projects or the tasks that other people are working on.
Rob [0:09:30]: This also creates accountability for your team because folks can kind of focus on a single metric and then all be working towards a higher level metric. When I say that, to come back to the MRR example, that as a founder of a SaaS company, that’s what I’m looking to grow. But perhaps the person sitting next to me is working in marketing, her goal may not be to grow MRR directly. Her goal may be to drive more trials. I know that is going to feed towards the company goal of increasing MRR. But then she doesn’t have to look at her job and say, boy, how did I myself increase MRR this month? She can just say, I know I drove this many trials and directly measured that based on her efforts, so I think that having a single company goal as well as individual goals for each person or kind of individual metrics based on what they’re working on that they can directly influence, that all lead up to that company-wide goal, is I think a good way to do it. Or it’s at least something that we found success with at Drip.
Mike [0:10:24]: It also encourages people to kind of experiment within the guidelines of that because you can always look at something that is not necessarily related to that KPI and say, well, I’m going to do this A-B test over here. And that could be very well be optimize a specific part of your sales funnel, but it’s not necessarily related to your goal. And it’s not to say that doesn’t help the business in some way, shape and form, but if it’s not what you’re focused on, then essentially what you’re doing is you’re spending time improving something that isn’t directly related to the company’s current goals. So the next part of this process is figuring out which metric matters. And essentially, there’s four tenets of how to pick the metric that does matter. There are four pieces of this. There are things that you know, which are essentially facts. There are things that you don’t know, which are questions that you have, which you know the questions to ask. Then there’s things that you don’t know that you know. And those are essentially things that are driven by your intuition. You have a gut feel about something. And then the last one is probably the most mysterious of all these is those are the things that you don’t know, that you don’t know. And a lot of times if you start exploring these areas, this is where you’re going to find those unfair advantages. You’re going to uncover things that other people in the market haven’t really figured out yet, and those could substantially drive your business forward.
Rob [0:11:39]: I’m not sure I understand these four in terms of how they relate to picking that metric.
Mike [0:11:45]: So the idea with these four tenets is that essentially what you’re trying to do, is you’re trying to distill all of the things that you do know and that you don’t know into a mechanism for identifying the analytics and the metrics that you should be looking at. So for example, if you are able to directly measure what is going on in your website, the number of visitors that are coming, then you can interpret those as facts. So if you have Google Analytics installed you can, with giving some credit to Google for actually being accurate on all of this, you can look at that and say well, yes, I know that I’m getting ‘x’ number of visitors per month or per week to my website. So those are the facts that you know. And then there are things that you don’t know that you could answer by reporting, by saying, okay, well, we know that we’re getting this number of visitors to our website, how many people are coming over and viewing our pricing page, or visiting our pricing page and then going in and signing up for a trial? And for something like that, you might use Kissmetrics or Mixpanel or something along those lines. But those are questions that you have that you could ask that you just, you know the question, you just don’t know the answer because you haven’t gone and looked at the data yet. And then there’s things that you don’t know, that you know, which are things that you just have a gut feel about. So for example, you might say, well, I think that we’re getting a lot of our trials coming in through word-of-mouth. If your products are growing and your customers are telling other customers about it, then you might have an intuition about that. But you don’t necessarily know that, and it can be very difficult to figure out exactly how that’s happening without doing a lot of analysis of those people that are coming in and having direct conversations with those people one-on-one, for every single person who signs up for your service. And then the fourth category are the things that you don’t know, that you don’t know. And those are things that, honestly it’s going to change a lot based on your type of business, but you might find out that maybe you believe there is a viral component or that people were sharing a lot of information about, oh, you should sign up for this service and your customers were talking to other customers about it. But you may just find out that, oh, it was posted on some forum someplace, and you didn’t even know that that was a great way for people to find out about your service.
Rob [0:13:53]: Okay, cool, that helps clear it up. Finding the metric that matters also depends on what kind of business you’re in. If you’re running a SaaS app, maybe it’s MRR, maybe it’s MRR growth. Maybe if you’re at an earlier stage, it’s just trying to get some customers in the door, customer count. If you’re like in a collaborative or a community software company, maybe something like StackExchange or Reddit, then maybe it’s the number of votes, the number of comments, the number of new content pieces that are created for you by the community. If you’re a media company, maybe it’s the number of page views that you’re getting. If you sell games, maybe it’s the number of in-app purchases. Or if you sell apps and maybe don’t have direct access to your customers, you’re obviously going to have less data than if you’re dealing directly with folks, so maybe you sell a mobile app through the iOS app store, then you might have to look at a higher level thing, like the number of downloads of your free version and then the number of purchases or number of dollars coming from your paid version. And finally, if you have just a transactional business with like one-time sales, so maybe you have desktop ftp client, or you have invoicing software that someone can download and install and it’s not a subscription, obviously your metric is going to be different than a SaaS app, because you don’t have monthly recurring revenue. At that point, maybe it just is total revenue per month of total downloads of your free version, if those tend to highly correlate with getting more downloads and more sales of your paid version.
Mike [0:15:20]: The other thing that factors heavily into this is what stage of your business are you at. So are you really in the early, early stages where you’re just talking to people and you’re just trying to get attention for a landing page that you’ve put up. Are you actively having conversations with people and doing a needs discovery? Are you at the validation stage, where you are creating an MVP for the product? Or have you even gotten past that point and you’ve launched the product and now you’re looking at doing feature optimizations and implementing customer requests, or even further than that where you’ve got a stable app and you’ve hit product market and you’re really just trying to optimize the entire business, based on which of those stages you’re at, your metric that you’re looking at is going to change kind of dramatically from one stage to the next.
Rob [0:16:03]: Yeah, absolutely. I mean, if you’re pre-launch, then I’d say a big metric is how many email addresses can you get on that pre-launch list. If you have a few customers, beta customers in there early and you’re doing customer development, maybe it’s the engagement, maybe it’s like the amount of times they log in or the amount of features that they’re using. Or even like the number of features that they suggest that kind of fit within your vision. I mean, it could be as simple as that, when you’re trying to get to that next step, it actually comes easier and more clear once you’ve broken past, I’ll say product market fit, but once you know that you’ve built something that people want, it becomes easier because then you tend to just have a pretty straightforward metric that you’re trying to grow. It’s going to be probably revenue or trial downloads or there’s something there, but before that at each stage it’s going to be changing pretty frequently as you move between the stages.
Mike [0:16:53]: Right, I remember kind of a specific example from when Facebook was kind of building up in the early stages. One of their metrics was that they wanted somebody to sign up and add, I think the number was like 10 or 20 friends, within seven days. And those people were going to have a dramatically experience and be more “successful” with their product than the people who did not. So that was one of their key metrics that they used very early on. So it was very feature driven at that point. They said if somebody uses this particular feature which is just adding friends, then they will be more successful with the product, and we want to be able to identify those people and figure out how to get more of those people. So the next thing to think about is who is this metric for, you know, who is the intended audience for this metric? If it’s MRR, then it might be to management, but there are different metrics that you can track that could go to internal groups. It might go to the marketing team or the developer team. You might have metrics that you’re developing for investors or for the press, or as part of a marketing campaign. There’s lots of different reasons why you might have these metrics, but you want to be able to make sure that you are identifying these metrics for a very specific reason. And you want to know who those metrics are going to, because that’s going to make a difference. And the specifics of which metrics you’re tracking.
Mike [0:18:10]: So let’s start talking about what makes a good metric. And the first part of this is make sure that your metric is a rate or ratio, because those are going to be better than an absolute or a cumulative value of any kind. So, I’ll give you an example, from earlier in this particular podcast I talked about the fact that I was measuring the number of conversations per week. Now, if I were just measuring the total number of conversations I had, then that wouldn’t necessarily be a good metric. But the fact that I’m measuring them on a per week basis, I’m able to relate one week to the next and figure out whether or not I’m maintaining progress or declining or exceeding the expected rate.
Rob [0:18:51]: And I think it’s interesting to think about with the SaaS app, we never even talk about what’s the total aggregate revenue that the app has ever generated, right? That would be a very bad metric, that’d be an absolute number and it would grow every month, right, because as long as you have revenue coming in, you would just add it to it. And that number could be hundreds of thousands of dollars or millions of dollars, but that doesn’t give you a really good picture of what the business is doing because there’s no rate or ratio to it. So I think, if you think about MRR as it’s basically the recurring revenue that you have at the end of that one month, so that gives you kind of a rate there, and then I think growth, like MRR growth is a ratio as well, right, because it is the amount of new revenue, new MRR you’ve added compared to your total. And so, I know that a lot of start-ups look at their month over month percentage growth, and that’s a big thing that [YEC?] looks at and a lot of these accelerators look at. I personally don’t track, I’ve gone back and calculated it for particular purposes when the audience, whether I’m giving a talk or whether I know someone is actually looking for that number, it’s easy enough to calculate going back, that is not a key driver that I look at when managing the business, but that’s not a bad thing. I think if you are a startup like Paul Graham says, growth is everything, and so for them, even if you’re doing revenue growth, they probably lose sight of the absolute revenue because that’s less important than the growth and the rate of growth that they’re experiencing as they’re working on it. Because growth has a lot to do with whether or not you have traction. And traction has a lot to do with whether or not you’re going to be able to raise that next funding round. So if you’re in the V.C. space, the venture funded space, about every 18 months you tend to have to raise a round. And even if your MRR is going up, if your growth numbers don’t hit the ranges that they need, it’ll be pretty hard for you to raise a round. So you can see how for those guys, given their audience, they’re tracking more growth, whereas someone who’s maybe boot-strapping a business, and probably has other goals, might look at something a little more solid like monthly recurring revenue or some people might even look at monthly net profit.
Mike [0:20:56]: But I think the key point that you’re making there is that those are monthly numbers, that it’s monthly recurring revenue or monthly profit. And it’s important to have that monthly piece of it, because if you don’t have a time period of any kind, then really it’s just a number, it’s a vanity metric at that point, which is essentially meaningless to the business. You can’t compare it to other time periods because it’s just a number. If you are able to compare it to other time periods, that’s when it becomes meaningful, that’s the important piece, and that’s what makes it a good metric.
Rob [0:21:25]: Yeah, it also makes predictions a lot more easy to come up with and probably more accurate. If you’ve been tracking this number over time for these small time periods, so let’s say weekly growth or monthly revenue, you get a sense of where this thing’s going. You can notice pretty early on if you’re looking at the rate of change, you’ll notice on a graph or even intuitively in the numbers, if you’ve been following this, you can kind of feel the pulse of it. And you’ll notice as things are changing, you’ll be able to predict out a month or two. I don’t tend to do predictions for predictions sake, but there are a few conversations I’ve been in where people have asked me, now where do you think you’ll be in three months or six months or whatever, and I have a decent idea. And so far the predictions that I made during the summer were hitting those, barring some unforeseen circumstances, you can get pretty good, if you’re doing this ratio per time period, you can project out and be reasonable as long as a major roadblock that’s unexpected doesn’t crop up.
Mike [0:22:18]: Another thing that makes a good metric is that it’s easy to understand. So for example, monthly recurring revenue, is very cut and dry. You can easily understand that. Same thing when it goes to like profit or conversion rates. But I think that once you start getting into some of the super advanced metrics that are much more difficult to understand, so if you’re aggregating a bunch of data, and then trying to use that to compare against other aggregated data over different time periods, as soon as it becomes a lot more difficult to understand, it becomes much more difficult to also figure out what it is that you need to do in order to start making changes to that number or how to influence it. So you want to try and choose a metric that’s simple and easy for everybody in the organization to understand so that they know what their capabilities are around influencing that number.
Rob [0:23:06]: And another piece that makes a good metric is if the metric helps you make predictions more accurate. I already touched on this a little bit, but I kind of went about it the other way, saying that if you have a good metric, it makes it more accurate. But you’ll want to choose a metric that actually helps you make better predictions. I think that’s a key piece. If you find that yours is not, then it’s probably not a very good metric.
Mike [0:23:30]: And the last thing that makes a good metric is that, the metric has to change your behavior. And one of the things that I’ve seen a lot over the years is that when people are doing A-B testing, for example, they’ll do A-B testing just to do A-B testing. And it doesn’t change what they do. They’ll pick it up, they’ll do it for a little while, and then they’ll stop. And whether they see results or not, the fact is they don’t carry that forward. So it doesn’t change their behavior. So the fact of the matter is, like why are you even bothering. If those numbers that you’re getting out of that aren’t going to change or influence what you do, then why are you even tracking that. It’s essentially immaterial at that point.
Rob [0:24:05]: If you’re interested in learning more about finding your one key metric, we have three links for that we’ll put in the show notes that Mike used to help put together this episode. And if you haven’t read it, you’ll probably want to check out “Lean Analytics.” It’s a book from O’Reilly Press. It’s written by Ben Yoskovitz and Alistair Croll. And it is worth looking at, if you are looking for the single metric that matters. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our them music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for “startups,” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 256 | The 10 Elements of Highly Effective SaaS Landing Pages
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike put together a list of the most common things that are working and effective for SaaS landing pages.
Items mentioned in this episode:
Transcript
Rob [00:00]: In this episode of Startups for the Rest of Us, Mike and I discuss the 10 elements of highly effective SaaS landing pages. This is Startups for the Rest of us, episode 256.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike [00:28]: And I’m Mike.
Rob [00:29]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So [what are this week?] sir?
Mike [00:33]: Well I caught a nasty virus over the weekend so I was hugging the toilet the other day. I could not keep food down. So it’s what? Wednesday now, and I’m just kind of getting back into the swing of things and trying to catch up from having not gotten anything done the past several days, but it was pretty brutal.
Rob [00:49]: Do you get sick a lot?
Mike [00:50]: No. I almost never get sick. I’ll get sick like once every couple of years and that’s about it. But when it comes, it’s just brutal. I’ll be in bed for a couple of days just because I just can’t get out of bed. I remember making fun of you a little bit because you said that you were sick once, and you were so sick that you couldn’t even listen to podcasts, I was that sick. I remember [?] it was like, “Oh, I shouldn’t have made fun of him.”
Rob [01:14]: I totally know what Rob is talking about right now. That is funny. So, we’ve gotten a lot of comments on last week’s episode, episode 255, where you talked about moving on from AuditShark and that whole decision. You’ve received Tweets, you’ve received DM’s, we’ve received several e-mails, there’s more than a dozen comments on the podcast blog with folks just talking about how they felt this was one of our best episodes and basically wishing you luck and appreciating that you put yourself out there with the vulnerability and were willing to discuss this. I think it really hits home with people to see, it’s not only vulnerability, that’s a big part of it, but it’s also just to see you or anyone come out and talk about mistakes that they’ve made and to basically help show other folks how not to make those mistakes. I think that was really the point of last week, was to kind of bring it all to the front so, A: You could kind of have a post mortem. But then, the entire listener base for this podcast can kind of peer into it and think to themselves, “Wow, am I doing that right now?” or “Am I going to do that with my next product?” And really take it as al lesson for the community rather than a single person hiding away in a basement making these mistakes and no one learning from it. How have you felt about the response?
Mike [02:29]: It’s been overwhelmingly positive. I haven’t really seen anything negative about it, just a lot of thanks and appreciation. I don’t know. I guess it’s humbling. It’s more than I could have expected or hoped for. I guess. I don’t know. It was one of those episodes where, it was coming and I knew it was coming for a while, and I was kind of dreading it at the same time.
Rob [02:48]: Very cool. So let’s move on to what we are talking about this week. We received an e-mail from Stefan at vividwebcopy.com. He says, “Hi Rob and Mike. How about an episode SaaS landing page design?” And Stefan is actually, it looks like he is a copywriter, vividwebcopy.com, if you want to go check his stuff out. But Mike and I have a lot of thoughts on this topic, and so we wanted to weigh in. And I specifically put together this list. I was trying to boil it down into the most effective elements that I see that go into these landing pages that work and I want to talk about the typical SaaS landing page rather than going outside the box. Obviously, if you know the rules and you’ve been doing this and you’re an expert, UX guy or UI woman, you can break the rules. You don’t need to listen to something like this. But if you’re wondering about the most common and most effective things in general that are working for SaaS landing pages, that’s what we’re going to be talking about. And this typically a SaaS home page, although it can be often you copy your homepage to make landing pages for, say, Facebook ads and other stuff, because your homepage should really be that landing page that gets someone acquainted with your product quickly. So we’re not going to talk about long form landing pages, like getdrip.com right now, is a long form sales letter in essence. We’re going to talk about that because we are going to talk about the more traditional SaaS landing pages and you could see examples of these at places like bidsketch.com, planscope.io, getambassador.com, hittail.com, all of those are the more traditional scene that we’re going to be talking about. So to dive in, the first element of highly affective SaaS landing pages are to design it for first time visitors, to get in the mindset that you really want a first time visitor to come, get acquainted, and go down a very specific path that you’re outlining for them. If you have customers who are coming to your homepage to log in, they will find the log in box. Don’t make that prominent, don’t put that right smack in the best part of the screen right above the fold, this is for first time visitors, trying to educate them, get their interest [peaked?], have them figure out if it’s for them, and then get them to take the next step in the action. So often times, I will see a log in or a sign in button right in the same top navigation that you’re trying to sell to people and I disagree with that approach. I think it should be a tiny link above or maybe far off to the right. Like, there should be a separation because your customers are going to find a way to log in, don’t worry about that, but your goal is really to get those first time visitors to follow this path that you have in mind.
Mike [05:14]: Yeah. And the essence behind that is just to not give them false paths that they’re going to go down and waste time because it’s very easy to, and I’ve done this myself, I’d go to a web page and you just land on it and then there’s a log in button and you’re like, “Oh well, I kind of want to see the pricing and see what that stuff is like” and maybe it’s not obvious where to see some of that stuff, so you click log in and then it’s just giving you a username and a password fields to have you log in and there’s nothing else. There’s nowhere else for you to go on that page so then you end up going back and you get a little bit confused about where to go. So the whole idea of this is to make sure that when somebody is coming to your page, and they don’t know anything about your site or your application that you’re essentially walking them through everything. So that’s why Rob is talking about designing it for the first time visitor. You have to make a blanket assumption that the person coming to your site knows absolutely nothing. So because you’re designing these pages for the first time visitor, you have to figure out what the goal of that page is, what is it that you want them to do, why should they care about your product, and what are the next steps that you want them to take? Do you want to ask them for a trial, do you want to get them to get into pipeline there, do you want them to come back to your website in the future? Rob, you had a great talk a few years ago at the business software which was – I forget the exact title but it was something along the lines of, “The purpose of your website is not to get them to buy your app, it’s to get them to come back to your website.”
Rob [06:33]: Yeah. It was called “The number one goal of your website” and it just talked about how returning visitors are between six and twenty times more likely to purchase from you. I mean, very few people purchase on the first try. There are exceptions to that. If you have a price point, I’d say starting between maybe $10 a month, we’re talking SaaS here right. But anywhere under, let’s say $15-$20 a month and you have a high curiosity factor where you’re kind of giving someone something that they kind of curious about trying. So an example of this could be like HitTail. HitTail has this promise of, “We’re going to give you keywords that you’ve never seen before.” There’s this high curiosity of like, “Wow. What are my keywords going to be? And I can get them right away?” So you’re very likely to be able to sign up to directly for a trial and not actually need to go through an educational process first. It’s a low commitment thing. Most apps are not like that, I’ll say. I mean if you have a proposal app or even a marketing app or affiliate software, that kind of stuff is less about curiosity and it’s more about, “Wow, does this fit me? Why is this better than other things that I’ve seen?” and getting [signed?] before a trial right away is just a lot lower, there are lower odds to doing that and that’s where you need to start thinking about, “Okay, I shouldn’t push this trial right away but how can I start educating and how can I bring them back to my site in the future?” And bringing them back, of course, these days, re-targeting is a big one, and then getting folks on your e-mail list. These are the two biggest drivers of being able to start to build a relationship and bring people back. So instead of having a few people signed up, you get that 6 to 20 times higher likelihood of folks signing up. The second element of highly effective SaaS landing pages is to have a gripping headline. And I have a pretty simple formula for this that I’ve talked about in the past, but it’s to just have three things in place. The first is to make a promise in the headline, the second thing is to have an action word, like a verb, and the third one is to either have a directly stated “You” or “imply you” meaning, that you’re talking to the person who is reading the headline. So as an example, I’ll come back to HitTail again, because it fits this well. The headline at hittail.com is “Guaranteed to increase your organic traffic” and the promise is that it’s guaranteed to increase traffic, the action, the verb, is “Increase” and then there’s a “You”, it’s “your, you, or you’re”. You rarely should be talking about your app. Here’s another headline for HitTail that wouldn’t work nearly as well, “The best long tail SEO keyword tool.” Because there’s no promise, there’s no action and there’s no you. So I’m not saying that this is a hard and fast rule that all headlines need to follow, but I’ve found that it’s a really good starting point for me. When I sit down to write a brand new headline, I say, “What can I write first that follows these three rules?” and then I start massaging and thinking of other headline ideas. So I think it’s a good solid framework to begin with.
Mike [09:23]: Yeah. When you’re coming up with the headlines, it’s definitely all about the person who’s visiting the site, and again, it goes back to who is coming there and what are they coming for. But when they’re looking at the page, they’re going to be thinking, “What’s in it for me?” And this simple formula really gives them a good idea of what’s in it for them. You’ve got that promise, the action and you’re talking specifically about them. You don’t want to be talking about your app or the things that it does or how it works or anything like that. You want to be telling them how it’s going to benefit them.
Rob [09:51]: If you want more information on headline writing, you can head over to copyhackers.com and they have 7 different e-books and book two is $19 and it’s called “Headlines, subheads, and value Propositions” and that’s definitely a decent place to start. There’s a lot of info on headlines but that’s nice because it’s specifically for software and startups. Third element of effective SaaS landing pages are to have at least one visual element here at the top of the page. So as Mike and I walk through this list, I want you to imagine it as going from top to bottom. It really is a prescriptive order of starting with that headline, having a visual element either next to it or below it. And then from there, we go to element 4, element 5. Again, these are not hard and fast rules, once you know what you are doing you can mess with these things. But when you are starting out as a framework, this is a good solid place to start from. So this third element which is visual elements, I’m thinking of something like a video, short video, less than 90 seconds for sure or an image. And if you go to the web page of hittail.com, you’ll see an image that describes what HitTail does just with a couple of circles and some arrows. So it’s almost like a video, it doesn’t move but it has enough text and some arrows that it shows you what it does in that image and I think that’s important. I think just having an image of a random person sitting there clip art staring at a screen, I don’t think it’s helpful because it doesn’t actually talk about your value proposition or talk about your benefits or demonstrates something. I think this visual element needs to serve a purpose. So either an image that actually serves a purpose, a short video that gives some high level benefits, or the third one that really is ideal but is a lot harder to pull off, is an e-mail capture form related to the functionality of your application. So I don’t mean something that says, “Hey, here’s some education about this topic of how to find more affiliates or how to be an e-mail marketer of SEO, but actually starts to demo the functionality of your app. So an example of this is if you go to the bidsketch.com homepage, and you’ll see that Ruben has a form there where you enter your e-mail and it doesn’t sign you up for a course, it doesn’t send you education, it actually creates a proposal, it e-mails you a proposal basically demoing the functionality of the app. And so, although, he will send follow-up e-mails after that, that first one you get is essentially your first [foray?] into seeing how the app actually works. And I think if you’re able to pull that off in a way that’s pretty elegant and actually shows people how your app’s working, I think that’s a big win as well.
Mike [12:18]: Yeah. If you look at the Bidsketch website right there on that homepage it says, “Get a sneak peak at a sample proposal” so that kind of meets the element two that you said, a gripping headline, where it follows that simple formula for promised action and then talking about you, and then has that email capture form which says, “Send it to me” which gives you that sample proposal. So you get a couple of different things there and those two elements are combined. And Ruben has been doing this for a long time, so he has been able to effectively put those things together. And it may take you a couple of times to do this sort of thing but again, the goal of this episode is to kind of lay these things out and talk about the different elements and how they can be added to the page and in which order they should be added in order to give you a starting point. Once you’ve done this and you start testing it and checking with your customers to see how well it’s converting, then you can start playing around with these things, but this is just the framework that we’re following through.
Rob [13:09]: And the fourth element is to provide a couple of benefits, not too many, typically use the rule of three here where I would veer on the side of having 3, 6 or 9. Probably, the fewer the better, it kind of depends. If you go to planscope.io, you’ll see that right down below his visual element which is a video, Brennan has three benefits, [?] more estimates, one sentence describing what that means, “deliver better projects and grow your business”. It’s a really nice example of, boom, having three left to right, three benefits of what you’re going to get using planscope. If you go to hittail.com, you’ll actually see it’s three sets of three and each set is aimed at a specific market segment that is using HitTail essentially gets value, it’s SEOs, it’s internet marketers, and it’s e-commerce folks, and those are kind of the key three core areas that use HitTail, so both of them work. I think the thing that I would recommend is, when you’re providing benefits like this, stay grounded. The biggest mistake I see with benefits is that people go so high level that it doesn’t even make sense anymore, like it’s so vague that any app could do it. So I really don’t like benefits like, “Saves you time, makes you more money” because doesn’t every app do one of those two things? I mean, really that’s the point today, is that every business application needs to do that. So I think if you find yourself saying that, like come down one or two steps to be a little more specific, and again, like Brennan says on Planscope, “Win more estimates.” If you went up a step you could say, “Make more money” but that isn’t helpful. You got to drop it down one level or two. Deliver better projects to grow your business. These are things that there is some tangibility to them. And if you’re having trouble thinking of these benefits, what I would tend to do is to- if you make a list of benefits and a lot of them seem like features, like actual features you have built into the app, then read that feature and say, “All right, we built XYZ feature so that” “So that” is the key phrase there and you complete that sentence. So we have built this keyword suggestion tool so that you will get more keywords that you can then get more traffic from blah blah blah. And that’s your benefit after that “So that” period of the sentence.
Mike [15:18]: When you’re describing these benefits, whether you’re going with 3, 6 or 9 it doesn’t really matter. The headlines are going to be I think a little bit on the generic side because they tend to be only several, 3 to 5 words for the title of that benefit. I mean if you have them separated out into 3, 6 or 9 sections, the words there are going to be relatively tight. But then underneath it, when you start talking about what the details of that benefit, you can be very specific about it. So for example on planscope.io, Brennan says, “Win more estimates,” and then underneath it, he says, “Our collaborative estimating features help Planscope customers close 2 to 3 times more clients. And that piece right there, closing 2 to 3 times more clients, is helpful in a couple of different ways. One, it tells you exactly what the benefit is and two, it is very specific. And the fact that it’s able to close 2 to 3 times more client projects, means more money for you and that is, in a way implied but it is also led from the “win more” estimates headline. So keep those sorts of things in mind when you’re putting together those benefits. Another thing that you can do is you can take those benefits and separate them out onto different pages and talk more specifically about those. A lot of times when people are building a website for a new SaaS product, it can be difficult to figure out what information needs to go on the different pages. So make it simple, just start out by outlining the different benefits and don’t talk too much about them. And then later on, as you start to grow the site and you expand the footprint of the website, then you can talk about those benefits individually on their own pages and then you can link to them from your homepage some place. But I don’t think that you need to do that from day one and you don’t want to overwhelm somebody on your homepage with every single piece of information you possibly have, because that becomes a long form sales page. And I don’t think that’s what you want to start out with. You want to start out with educating them about your product, and then if they start if they start drilling into your website and are interested in those other features, you can talk more about them and you’ll be able to get more information about them according to your bounce rates and how long people are staying on the different pages by looking at the analytics behind those pages as people are visiting them.
Rob [17:24]: I’d also like to point out, I just noticed on Planscope’s homepage, their headline is “Gain total control of your agency” and that fits right into the three elements I said before of making a promise, having an action and having “you or your” in the headline. Element five of highly effective SaaS landing pages is social proof. This one is very common and very necessary. I do not think this is optional. Social proof can come in many forms and actually believe that having all three of them is ideal. The first and most common one people think of are testimonials from customers. I always recommend you have head shots with those as well if possible. So you have a head shot of a person and the name linked to their website. You don’t want anonymous testimonials or just a first name or something. And then edit their testimonial down to just the core part, so if it can be 10 words or 15 words, you’re doing really well. Pretty much the best SaaS landing pages I see have testimonials. The next piece to have, press logos, whether you’ve been mentioned, whether online or offline press. If people are going to recognize that logo, have that in there. And the third one is to put a vanity metric in there. So if your app has analyzed a billion keywords, if you’ve sent out $100 million of proposals or your clients have through your app, if you’re a web host and there were 9 billion page views through your network last month. I mean these are very much vanity metrics. They are not business driven and they don’t help your bottom line, but they are basically bragging rights to show you that other people are using it and that you held up under the stress and that you have experience in this field, and all of this ties into basically socially proving that your app is something that someone should consider.
Mike [19:04]: Yeah. Part of the social proof is just all these things that you talked about, the testimonials and the press logos, those are essentially trust factors and people want to be able to trust your app but you need to give them a reason to, you need to give them proof of some kind. So the fact that you were mentioned on msn.com or CNN, or wherever, those are trust factors, the same with testimonials, especially if you start including head shots of the people who said the things about you. Those are also considered trust factors. When you start talking about those things that Rob just mentioned in terms of the vanity metrics and the number of keywords processed, the amount of money that is embedded in the proposals that are sent out or the page views last month, those are also trust factors but they are internally related. So there’s two types, there’s the external ones that you don’t necessarily have control over and then there’s the internal ones which you do. You could obviously fudge those numbers. But when somebody’s looking at that website, they are not going to sit there and think, “Oh, this person is pulling my chain.” And as long as the other things match up, they are just going to believe those numbers. They don’t have to be accurate, they can be incriminated on a daily, or monthly basis, or what have you, but there has to be some semblance of trust there for them to take those numbers and internally process them and believe them. And the same thing goes for those external loads, I mean if it’s something that they’re going to recognize, definitely use it and it’s essentially your piggy backing on the trust of that other website. So as I said, the logos of other major news outlets or anything like that. You’re piggy backing on their credibility to essentially enhance your own.
Rob [20:35]: And just to clarify, you said, the vanity metric doesn’t necessarily need to be accurate, you can update it once a month or whatever. I’d agree with that, I think as long as your low rather than high, you’re [airing?] on the side of caution, right. It doesn’t need to be an exact thing pulling from your database as a live feed.
Mike [20:50]: Yeah, exactly. That’s more what I meant than anything else. It doesn’t need to be up to the second. That’s really what it comes down to.
Rob [20:56]: All right. So our sixth element of effective landing pages. This one’s an optional one, its features. It’s having features on your home page. So not benefits, and this is further down the page, remember we’re going in order from top to bottom. I have seen this done really well with some very specific features that set you apart. And in fact, if you couch it like that, and you specifically say “No other app has this feature or these are the features that our customers like most” or something like that and just give a few of them. You’re not giving a whole run down of everything but you’re trying to call it out and show why you’re different. You have to be very specific at some point during this journey and if you feel like you can do it by putting some features on the homepage and then folks can click through at the bottom of the homepage and get to like a tour or a features page with more specific mechanics of your app, I think it’s not a bad idea. I think if you’re not sure, probably don’t do this step but I have seen it done really well. The reason that I like when people start getting into features, definitely, on the website somewhere, you need a features page. Because if you’re just talking about benefits all the time, no one knows what your app actually does. If you go to a website for like an IBM software product or some Salesforce product that each own [bazillions?] of products, it seems like all you tend to find is benefits with a lot of marketing speak and it’s really hard to just get a list of what does this app do. And it’s hard for folks to figure out what you do if you never get down to the features. So you definitely need a features page somewhere and I think a few that call you out on your homepage is not a bad thing. Our seventh element is to look at your top nav and have four items or fewer in that top navigation and that includes your home link. So you really only have room for a couple more. So I would typically have something like home on the left, and then either a tour or how it works, which is kind of the same thing. It’s explaining the basic flow of your app. Sometimes it depends on if you want to include a bunch of features on that page, probably another discussion but sometimes a tour is just- if your flow is fairly complicated and you’re trying to teach people what your app does, then you’d have a separate features page and that could also be in the top nav. And then you can basically have a pricing page. I’ve also seen it done well to have another page that basically says [why, app name?]. So if you’re base camp, it says, “why base camp” or why should you choose base camp. That’s if you have a ton of press mentions, social proof or just so much more to say. In fact, with HitTail, we have a “Why” page in our top nav and the reason is, there was so many press mentions because the previous owner was actually a PR firm. There were mentions on TechCrunch and in multiple newspapers and offline magazines, just all kinds of stuff. So there were so many quotes that I found that I didn’t want to stuff them on the homepage, didn’t want to stuff them in the tour. Although, I sprinkled them all over the place. We really needed a dedicated page. It’s just another way to build credibility and that someone can click to and think through and then offer social proof.
Mike [23:47]: These elements in the top navigation are probably going to get hit a lot more than anything else. We’re going to talk a little bit more about the elements at the bottom of the page. but at the top navigation, those are the things that people see right at the top of the page and they are far more likely to get the users to click through to those than anything that you’ll find in the footer. And I’ve used this strategy before where I’ve embedded links in the footer and I’ve used this strategy before where I’ve embedded links in the footer purely for SEO purposes to get Google to essentially spider other pages on the site. But the reality is, if you start looking at the analytics for that, the users who are coming to your website, virtually, never follow through and click through a lot of those links. So you want to make sure that the pages on your site that you want to get the most traffic to for people who are hitting your site and you want them to learn more about your product or what it is that you are going to do for them, make sure that those links are in that top navigation.
Rob [24:40]: Our eighth element is to have an exit path at the bottom of every page. In essence, this is a button that takes someone to the next step of your flow. You want to think of this as a specific journey that you are leading someone through. So when they hit your homepage, you don’t want a bunch of extraneous links, you want a few options at the top. If you even have a top nav, which is probably another discussion. I’ve seen folks run experiments that I’ve worked where you basically remove the top nav and someone really only has one flow to go. You can scroll down and read and at the bottom, there’s kind of a tour button that leads you to the tour and you’re basically leading them through a flow. But in this case, having an exit path at the bottom of every page is something I think you have to have and I think a lot of people don’t do this. It’s to think, “Boy, after they read this homepage, they get to the bottom, so maybe they’ve read the social proof and the benefits and maybe a feature or two, what is next? What do they really want to know?” And then take them maybe through a tour and then perhaps take them to features or you could start letting them know, “Hey, you can sign up for a trial,” there’s some options to think through. You really want to have one main and then maybe a secondary, call to action, down at the bottom there. But not having this exit path at the bottom, then makes your reader get to the bottom, and look around, probably click on something in your footer or scroll all the way back to the top of the page and you’ve lost them, you’ve lost control of their journey because now they’re just wandering around clicking random stuff and that’s not an ideal scenario if you want to lead them through a path of education.
Mike [26:03]: If you take a look at, I’ll use HitTail’s webpage for example, if you go in, right on the main page at the top navigation, you’ve got home tour plans and then why HitTail and you already explained why you have the “why HitTail” there. But embedded in the text in the middle of the page, it says “Increase your traffic” with the big orange button or take a tour. Well that’s the second link in your navigation. So if somebody does click that, they go to that tour page and then at the bottom of that, there is essentially this call to action which says “Your free trial awaits, grow your traffic” And then you click on that, that goes to the third thing in the top navigation which is essentially the plans and trying to get somebody to sign up for a trial. So there are definitely times where the call to action at the bottom of your pages is essentially going to mirror what they would see at the top navigation, but that’s not always the case. They may well be an extended set of tour pages, for example, or additional educational content that you’re going to put in front of them to help essentially walk them through the process of getting to point where you’ve educated them enough such that they are going to sign up for your product or at least sign up for and e-mail course or something along those lines to be able to bring them back. And it kind of depends on where it is in the sales funnel that those people are likely to be. The one thing that I have seen a lot of, and this is especially prevalent in a lot of word press themes, is that they have this “scroll to top of page” widget that will pop up. That’s not something that you want to put in there. If you can disable that, go ahead and disable it because the fact of the matter is, if you have a long enough page that it needs something like that, they’ve already scrolled through the page, they don’t need another thing at the bottom popping up to say, “Hey, would you like to scroll all the way up to the top to see all the stuff that you just scrolled past?” No, they clearly know how to use a scroll bar. So if you can get rid of those things, get rid of them.
Rob [27:44]: Element number nine is something I already covered when I was talking eight, but it’s to basically limit the number of links and buttons that you have on the page. It’s essentially limit the number of decisions that folk need to make as they’re reading though it. Be opinionated about where you vision should go. Think through this flow, it takes time. Think through the journey. But it will absolutely increase the number of folks get the proper kind of education that you’re trying to give them. And our tenth and final element is put everything else within reason into your footer. So typically we will see footers on homepages say something like about contact, terms of service, blog, affiliates etc., and I think that’s perfectly fine. I think having 6, 7, 8 links down there is fine. And something we’ve done with Drip, because we have a PI docks and we have like a press kit, I didn’t want a link out to all of those, we just have a docs link at the bottom and it links to kind of a nested page. So you can obviously start nesting things at some point. but I am not a believer in having 20 links down here, but I do think that having the basic pages that you’re going to have in a marketing side and basically linking to all of them from the footer when you’re starting, is the way to go. I would not put an e-mail sign-up form down here. I see people doing that and no one is ever going to submit that. If you really want folks to sign up for your course or whatever, I would not put it in the footer and frankly, I probably wouldn’t put it in the header either because that’s really your educational call to action of trying to get someone to learn more and click through to a trial. I would tend to use a little JavaScript widget like something you get from Drip or [Sumumi?] or OptinMOnster, instead of trying to plug this thing down in the footer and that will give you control to have it pop up at certain times or not and just a lot better control of when to make it visible and when not to.
Mike [29:24]: Something else that’s helpful to put down at the footer is some sort of a site map so that it’s easier for the search engines to spider your website and get to all of the different pages that are going to be embedded in your site. I think if you rely too much on dynamic html that essentially is put there through JavaScript or anything like that, to display based on who’s visiting your pages, that can be a little bit difficult to have the search engine spider your website. You could also submit a site map to Google but, again, having a site map there that is human readable and, I don’t mean by human readable xml, I mean a link that just goes to a site map where it lists all the different pages and all the different sections on your site. As your website expands and starts filling more pages, that becomes more important because sometimes people can get lost on your website. You may know exactly where everything is but again, your website isn’t for you, it’s for the people who don’t know anything about you and want to learn.
Rob [30:18]: I haven’t been building site maps recently as we build new sites. Definitely, we do this, the xml site map that search engines use and they’re pretty good at crawling anyways, but it’s always nice to help them out. The human readable one, I need to look. We still have one for HitTail because one existed when I acquired it. You know, when we update it and stuff, it’s been kind of a pain as we add new pages to have to add them there too. I’d need to look to see how many people actually use it because I genuinely don’t know how many visitors that page gets in a given month. I’d be curious to see if those are still used. I know it’s something that we did 10 or 15 years ago when you designed a site but it’s not something that I typically put in sites these days.
Mike [30:55]: Yeah. I find that there’s a lot of sites that I go to that if they are large enough, there is so much content there that you don’t necessarily know where you last saw something, for example, and the site maps can really help out with that, but it depends a lot on how mature the product is. I don’t think that, up front, you need a site map but I think that in longer term, as your product gets bigger and bigger, you probably do.
Rob [31:16]: So to recap, our ten elements of highly effective SaaS landing pages are; number one, to design for first time visitors; number two, to write a gripping headline; number three; to have a visual element; number four, to provide three benefits or to think it in the rule of three; number five, to provide social proof; number six is an optional one to provide features on the homepage; number seven, to have four or fewer items in the top navigation; number eight, have an exit path at the bottom of every page; number nine, limit the number of links and buttons; and number ten, put everything else within reason in your footer.
Mike [31:50]: Well that wraps us up. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re out of control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
