Cracking the engagement code
Having active and engaged users is what makes the difference between a successful, and a failing SaaS company. Simply because without a steady stream of regular users… do you really have a functioning SaaS business? The answer is no because for SaaS companies revenue is generated over time through monthly or even annual subscription. Even the most successful SaaS companies can take around 6 months to start generating positive revenue, so it’s a given that you need users to engage with you for as long as possible.
There isn’t a discernible one size fits all for measuring successful engagement across different kinds of applications. So how can you demystify product engagement?
Try to reflect internally and determine what engagement actually means within the context of your app. To help you with that, here is how Lincoln Murphy succinctly describes engagement, “when your customer is realising value from your SaaS“. Your engagement rate is equal to the % of users who remain engaged (again, within the context of your app) over a set period of time. Tracking this number of engaged users is a great window into the health of your product. Changes to this number can be extremely insightful when identifying your most successful services, or detecting problems further down the road.
The more trials you provide the more customers you gain… right?
Any SaaS company worth their weight will be providing a trial period to allow users to quickly understand just how valuable their product is. So much so that it is now an expectation for your future customers. Providing a trial is no longer seen as going above and beyond, and failing to provide one can result in not being considered. Naturally, because of this, most companies are providing trial periods to users without fully understanding the risk and reward!
The truth is most customers who sign up for a trial only use a product once, so first impressions are often the only impressions you’re going to get. It’s for this reason that although trials do often lead to lots of signups, many won’t convert into customers when all is said and done. In fact, if you are exposing lots of potential customers to a trial version of your product and the majority are not turning into customers… aren’t you actually just burning bridges?
So why on earth aren’t people using my tech?!
It can be difficult to isolate the reason why people are churning from your trial at a top level, so you need to review your app data and break down the customer journey. Once you understand the journey users are taking, you can start to investigate at what point and for what reason, people are leaving your app.
For the sake of this example, we will start the journey with people that have signed up for a trial and break down the steps taken to becoming a customer.
After a signup comes engagement
You need to look into your data and find out how many of your trial users are becoming active and engaged, so that you can also see how many are becoming idle and not using your tech!
User engagement is something that all too often goes overlooked as companies get complacent with high numbers of trials, but it’s one of the most important elements for converting trials into customers and it starts the moment someone opens your app. First impressions count, this is something that is easy to forget as your team is so familiar with how the app works themselves, but most of your future customers will be experiencing your interface for the very first time. Bearing that in mind, here are three problems that users often experience the moment they step in the door:
- There is no immediate explanation as to how the product works
- There is no motivation and driving force encouraging them to get started
- There is no personable touch letting them know how to get help should they need it
Failing to provide these three things is the fastest way to get users to mentally ‘check out’ and will most likely cause them to bounce.
After engagement comes conversion
Next you need to look into the active trial users, to see how many of them are willing to convert and pay at the end of all their activity. This will allow you to start to identify which elements of your service are causing people to convert. All great products have a depth of features that aren’t immediately used or apparent to the user. I’m sure you want to showcase all of the great features you have to offer, but you need to avoid information overload; consider the customers journey with your application and instead, educate them on additional services at the point where those services are likely to be needed. Here are three problems that active users often experience when trying to explore the possibilities of an app:
- A full range of services is promoted on the app, making it confusing for the user to determine what they need to complete their goal
- Users are finding a task difficult, and can’t easily find the support that they need to progress
- The application is unable to fulfil the task that users are trying to complete
The benefit of addressing these issues is that you are doing your part to help your trial users achieve their goal and thereby convert into customers. So let’s take a look at how you can develop an engaging and customer-centric experience as a service!
The secret weapon for getting people to use your tech
Product usage data tracks what your customers do with your product, when, and for how long and is essential for gauging engagement; it’s your guiding light for understanding your users in order to provide more value. Many companies are cottoning on to the power of usage data, but few have been able to achieve a holistic view. Let’s take a deeper look into the ways that usage data can benefit both you and your future customers!
Speed running customers from trial to conversion
The main cause for trials converting is, of course, the user achieving immediate value from your solution the moment they gain access. Conversions drop significantly when users don’t engage within the first few days of set up, beyond that most will never convert. So, the first benefit of usage data is that it serves as an early alarm for trial users that aren’t immediately active, allowing you to follow up with them and stimulate usage.
One way to stimulate usage for new users is to get creative with how you welcome new signups. A great first step is to provide a welcoming message, including supporting content for guides and also offering to help whenever needed. If you can start a conversation you are much more likely to invest emotionally and convert. Once you have managed to get users excited and ready to start using your app, you’ll have avoided the no engagement zone and you can start to focus on what your customer really cares about, completing the goal they joined your trial to achieve!
Putting your best foot forward
Now that you have a process in place for encouraging trial users to become active as soon as possible after signing up, usage data will enable you to recognise trends in features that are leading to higher conversions. There are two benefits to this, first of all, you will be able recognise your most valuable features in the eyes of your future customers and then upgrade their user journey to experience them immediately.
The more users engage, the quicker they will be able to adopt your solution, and this is important to measure because chances are; these users are likely to be more receptive to up-sell and additional service. It’s crucial to present an up-sell opportunity at the earliest moment of need, so utilise usage data for your most active users. Don’t be tied down by waiting for a trial to end or for renewal dates to arrive in order to trigger this conversation.
Making the most out of what isn’t working
The second benefit is in fact the exact opposite, recognising which of your features is causing users to end their journey and not convert. Naturally, you need to be monitoring for clients that are using your product less and less, or to be honest, not increasing their usage; which is arguably the same problem. These show a potential risk for churn and you need to act fast! The same applies here, do not wait for a renewal cycle to fix what is causing user dissatisfaction as the decision to move on could happen long before then. Customers that have disengaged and reached renewal are unlikely to re-sign, which means that issues that stop users from adopting your app need to be systematically found and fixed.
To solve cases like this you need to consider what is causing dissatisfaction and why, so here are three signals to look out for:
- No actions being performed beyond login – is the user having a hard time getting started? Is your product easy to use the first time around?
- Patterns in navigation that look like people are getting stuck – look for specific pages that users are leaving and heading direct to your help page or FAQ.
- Leaving processes that your app walks them through without completing them – Is it designed in a way that makes them either not want to or even not be able to complete.
To tackle these problems, you need to review internally and perhaps remove or rework a feature to have it better align with the goals of your users. It could also be that users are unable to see the value of a feature and instead you need to find a way to make its value easier for users to understand and benefit from. At best you are winning business, at worst you are able to learn where people are struggling with your service, or what they feel is missing. Either way, usage data allows you to upgrade the way that future customers experience your app which will lead to a higher conversion rate!
Case study: the ‘Calm’ before the storm
Meditation, like most habitual processes, takes repetition to really stick. So when Calm, a meditation and mindfulness app didn’t effectively help people build a repeated meditation practice, they were seeing high churn rates from their users.
Cue behaviour data, that taught them that users who take the time to schedule a daily reminder in the app settings were much more likely to be retained. The problem was that this setting was hidden deep within the app and it wasn’t being used. So, they decided to set a prompt for users to create a daily reminder immediately after completing their first session. This saw a 3x increase in daily retention that rolled over to weekly & monthly retention as well.
This is a perfect example of a product becoming more successful due to users being directed to the most useful and valuable aspects of an app, which could only be achieved because Calm were self-aware that they weren’t helping users to achieve their meditation goals.
Creating advocates: bonus level
If you are able to successfully adopt a customer-centric approach that utilises usage data to make sure that you are doing everything you can to help users achieve the goals they set out to accomplish, then you will surely be reaping the benefits that we discussed above. However, there is one more huge revenue driver that you gain access to when you have an app that thrills your customers.
Have you ever wondered how successful businesses or applications tend to exponentially explode into the market?
The truth behind this is fairly simple and they always have the same things in common, the first is that they are able to provide a product or service that helps their users achieve a goal and providing exceptional value. The second is that these happy customers then create a snowball effect that catapults the success of the product or service through word-of-mouth. I call it advocacy, and it’s the most natural and potent form of marketing you can hope for!
The trick for you is to start looking for advocates using usage data. The aim is to develop a personable relationship in order to attain testimonials and encourage word-of-mouth. So keep an eye out for your heaviest adopters, most engaged users, and people who are working with you to improve services through feedback; these are the most likely candidates to rave about you!