Hiya guys! Patrick (patio11) here. You signed up for periodic emails from me about making and selling software.
I apologize for radio silence the last few weeks -- I've been working diligently on getting my course on lifecycle email marketing ready. Unfortunately, this is my first time doing a project requiring large amounts of video editing, and I really underestimated how hard that would be. I hope to finally launch next week.
In the meanwhile, to tide you over, I thought I'd share an email which made my business $6,000 this week. You can implement something similar (it won't take an hour), and you probably should. It concerns reactivating users who started using your software but haven't gotten much value out of it yet.
What "Activation" Means And Why 60% Of Your Customers Are Not Doing It
"Activation" means "achieve happy use of the software offering." It is one of several genres of conversion you can measure for your software. If you're following Dave McClure's Startup Metrics for Pirates AARRR (acquisition, activation, retention, referral, revenue) framework, which is about as good as a first-cut as you'll find for a SaaS business, activation generally means "had the minimum interaction with the software that we can consider evidence they got actual value out of it."
Do you track activation? If you do, pat yourself on the back. Most companies don't. Even some very, very savvy software companies don't have this number on an internal dashboard anywhere, and they might not have a good sense as to what would constitute activation in the first place. This is unfortunate because "what gets measured gets improved", so if you're not measuring activation, it is likely that many of your customers are having early experiences with your software which suck. And you're not helping them. Cripes! Let's fix that.
Some comparables from my consulting career and own experience: if you don't track activation, you are probably getting 30 ~ 50% activation at present. You can radically raise that number with simple interventions in terms of your first-use experience, your pre-app and in-app messaging, and your use of email to your trialers (or early-stage customers).
How To Define Activation (Case Study: Appointment Reminder)
I see many companies descend into analysis paralysis trying to find the best possible proxy for activation. Don't do that. You can bang up a heuristic today which will get you 80% of the value in 2% of the time.
Do you have an administrator dashboard for your app? (You should.) If you do, and you've been handling CS for a while, can you give me a quick, off-the-cuff, qualitative take on how happy users are unlike the majority of users who touch the app once?
At many apps, the answer is simple: they just do... more or they use this one thing that is a bit of a pain to set up but it's really awesome. Great. That's really all the insight you need to define a three-line function that takes an account as input and returns whether it is activated.
I run a business called Appointment Reminder. It does appointment reminder phone calls/SMS messages/emails to the clients of professional services businesses. Here's the entire activation definition: "Has the user scheduled more than 5 appointments?" That's it. I could justify this to you by saying "Look, I can backtest against 1.5 years of data and say with confidence that this successfully discriminates between people who are likely to pay from those who are not likely to", but honestly, a) there's better discriminators available (multivariate optimization algorithms, hey-o!) and b) who cares, this was totally good enough actually get working.
What To Do With Yet-To-Activate Users
Email them and ask them to activate.
What? You were expecting rocket science? It is really that easy. You can't save every user, but some users just need the smallest little nudge to get back into a happy relationship, so nudge away.
Appointment Reminder has a 30-day free trial, after which their credit card gets billed. The overwhelming majority of cancelations come from people who sign up to the service, never schedule more than a handful of appointments (fail to activate), and then cancel at the end of their first month or shortly after. Anything I can do to decrease the number of cancelations prints money.
So I started mailing customers at day 20 of their trial. If they've activated, great: they get a mail praising them for how much value they've created for the business, which does a quick ROI calculation for them on buying AR. (Want to see it? It will be included as a bonus with the course next week, but it's out of the scope of this strategy.) If they haven't activated, then the email goes into rescue mode.
Here's one copy of this email, which went out about three weeks ago to an account which had never made a single appointment. Clearly they were going to cancel at the end of their trial, right?
How This Email Rescued $6,000 Worth of Business
The day after the system automatically kicked this email to my customer, I got a quick one-line reply from a harried CTO at a non-tech business. I'm sure you know the type. "We've just been so busy. I need another month to look at options. By the way, can you do CSV import to get appointments into here? That would save us time."
This CTO had been on the $29 a month plan... because he just wanted to see the UI prior to buying the software. He had seen it, not been too compelled, and had just forgotten about it... prior to being reactivated by the email.
Since the email forces him to get in touch with me to extend the trial, this gave me the opportunity to hear his true needs for the software... which was a feature we had in development. We talked timeframes and I answered a few questions he had.
Suddenly, Appointment Reminder was not forgotten software anymore, it was the leading option ("super-responsive support, direct from the founder!") for the project they were building out. Before his (second) free month was out, he asked for a quote for Enterprise services.
A single email helped turn a certain-to-be-canceled $29 account into a $6,000 check.
Does every customer who gets the email react like that? Nope! Of course not. There are no magic bullets. But the ROI on sending lifecycle emails is just astounding. Writing the template for that email cost me 30 minutes, once. It leads to maybe an hour or two worth of marginal talking to customers a month. A $6,000 check for 30 minutes of work is wonderful, but the truth is even better than that -- I get to keep that system forever, and it will only get better from here.
(P.S. Many customers get the email, remember the trial they had, and start using it simply because the clock is ticking. They auto-correct into happy customers without any interaction with myself at all. That's the power of systems at scale.)
Wondering if this email badgers customers, annoying them with my persistent salesmanship? Honestly? I've never had a single complaint. If I did, oh well -- they'd reply and I'd cancel their trial. That's nothing worse than what would happen 10 days later anyhow. Most people are not annoyed by people proactively attempting to make them happy.
Interested In Using Lifecycle Email For Your Business?
The last time I talked about it (here), we discussed how lifecycle emails can increase customer lifetime revenue and pre-educate your customers so they are ready to be sold to.
There are many, many other things you can do with lifecycle emails. I look forward to sharing everything I know about them in the course, which will (the capricious gods of video editing willing) be ready for purchase next week.
In addition to the strategy of who you'll send emails to and why, we'll address meaningful tactical questions such as:
I look forward to sharing more with you about it, next week.
In the meanwhile, I have to write a half-dozen blog posts about lifecycle emails to support the launch of the course. I'll be writing three more before the week is out. Do you have a question about lifecycle emails that you'd love to see answered competently on the public Internet? Write me back (just hit reply -- I read them all and, as many of you have noticed, reply to most) and I'll see if I can't address it.
Until next time.
P.S. People have asked me if lifecycle emails is too complicated for mere mortals to understand. Hardly. In addition to great tools being available these days (finally!), if you have a team which can ship software, your most junior engineer can bang something out in two days which will work. Appointment Reminder's entire email codebase (sans the actual text) is only about 300 lines, and took all of two days to build.