The Key to Driving Consistent Growth: Understanding Costs

June 30, 2015 at 05:00PM

I have a confession to make. I’m a revenue (sales) guy. I can think about, conceive and vision growth opportunities without even trying. On the other hand, thinking about (and understanding) costs doesn’t come so easily to me.

I’ve learned that understanding your costs is crucial to creating profitable revenue consistently, sustainably and scalably. Unfortunately, very few small and mid-sized companies understand their sales cost structure well enough.

This creates two potential problems (one obvious and one not-so-obvious):

1. If your costs are too high, you’ll struggle to grow profitably and your very sustainability will be threatened.
2. If your costs are too low, you may very well struggle to gain the momentum and velocity you need to break through the noise, separate yourself from your competition and achieve your sales growth goals.

An important metric to understand is customer acquisition cost (CAC). While this metric is very common with SaaS companies, my experience is that it doesn’t get the attention it deserves in other industries. It’s important that you understand your CAC, the contributors to CAC and the model you’re implementing to manage it.

With a clear understanding, you can ensure that you are investing wisely in growth. A lack of understanding makes it impossible to determine the effectiveness of your sales and marketing efforts. In this post, I outline the process we recommend for building out your sales cost model and how to monitor its effectiveness alongside your sales and marketing investments.

Calculating CAC

Determining your customer acquisition cost is a relatively simple calculation. You calculate it by dividing the total costs associated with generating new customers by the number of new customers you gained in a specific period of time.

When determining your costs, only include the costs associated with getting new customers. Do not include the costs of retaining or servicing them. If you’ve got salespeople who have responsibilities for both, you must prorate those expenses according to how they spend their time. The same is true for any technology or other sales and marketing overhead.

Here’s a sample calculation based on one year (note: you can run this calculation for any period of time, but for this post every example is based upon one year):

 

In this case, it cost this company just under $20,000 to acquire each of their 17 new customers. But, here’s the unanswered question: is that good or bad? Did this company spend too much to get their customers, or could they have benefitted from investing more?

Determining Where Your Costs Should Be

To answer that question, you need to determine what your target CAC% is. Calculating target CAC% is done by dividing your CAC by the average lifetime value of a customer. Average lifetime value simply measures how much money a customer contributes to your business over the lifetime that they are with you.

To determine lifetime value, we recommend using a variation of gross profit in the calculation. The variation is determined by taking the value of the sale and reducing it to only the non-sales, direct costs of what is being sold.

Let’s go back to our example. In this case, our sample manufacturing/distribution company earns an average gross profit of $24,000 per customer per year, and their average customer lifetime is 3.5 years. So the lifetime value of the typical customer is $84,000 and the CAC% is 23.5% (calculated by dividing their CAC (19,702.94) by their average lifetime value ($84,000)).

The next step in the process varies depending on several factors, such as the type of business you’re in, your revenue model and how aggressively you’re growing. Most sales and marketing benchmarks recommend that CAC be targeted between 20% and 35% for growth businesses.

As a general rule, here are some key contributors to determine where on the range yours should be:

 

As a side note, if you’re a very young business you should often go above these norms.

Given the nature of their business, our sample company is in a reasonable range. However, one could make the argument that if they invested more in customer acquisition, they’d be able to grow faster and more profitably.

The next step in this process will determine whether that argument can be won.

Establishing Your Optimum Lead Generation Model

One of the most common mistakes I see companies making that aren’t growing at the sustained rate they desire is they’re not allocating enough resources towards the top and middle of the funnel (the lead generation and lead management functions).

To be able to clearly answer the question about the effectiveness and sustainability of your effort, you must dig deeper into the CAC numbers and determine which parts of the process are your costs being allocated. A simple model to use is:

• Lead Acquisition Costs Percentage – what percentage of your customer acquisition costs are allocated to create sales qualified leads (SQL).
• Sales Acquisition Costs Percentage – what percentage of your customer acquisition costs are allocated to support the new-sales process.

Let’s go back to our sample manufacturing/distribution company and see how it stands up. By using the same numbers as we did to determine the overall CAC but changing the % allocated column to reflect the percentage of costs that go towards creating an SQL, we can determine the cost per SQL.

 

Now we’re quickly able to see that less than 10% of their acquisition costs are geared to support lead generation, and more than 90% go to supporting the actual sales process. This is a formula for stagnation.

Knowing the company that this data is based upon, they’re challenged because they feel that their sales team is at capacity and they’re still not getting the growth results they want. They would be far better off allocating more money toward the top and middle of the funnel to create more sales qualified leads and/or to improve the quality and readiness of those leads when they get into the hands of the sales team.

Here again determining how much money you should invest in the lead generation efforts is highly influenced by the business you’re in and the model you’re using. We recommend that anywhere between 25% and 60% of your CAC be allocated to the creation of SQLs. The following items will help determine how to split your acquisition costs between lead generation and sales:

• How complex is your sale?

The more complex the sale, the more you’ll want to allocate towards the sales process, and therefore be on the lower end of the scale. Don’t make the mistake, however, of under-allocating resources towards lead generation, nurturing and conversion.

• What’s the value of the sale?

A higher value sale will often allocate more towards the sales process and a smaller percent towards lead management.

• Do you have a defined sales development team?

If you don’t, you should consider one. This would put you towards the middle or even upper band of the lead cost percentage continuum.

• How much of the sale do you want done before it gets in the hands of a salesperson?

A growing trend in the world is empowering the customer to do more of the sale on their own so that when they get to your new-sales team, they’re better educated and ready. This would mean you’d allocate more of your CAC towards lead management.

The Benefits of Allocating More Resources to Lead Generation

When more money is allocated towards lead generation and management, your sales process becomes much more efficient and effective. You’re able to increase the volume and velocity of your lead generation, thus enabling you to increase the average sale value and your closing ratio. Research shows that companies that manage leads well enjoy 50% more sales ready leads (Forrester Research) that make 48% larger purchases (The Annuitas Group).

Up to this point I’ve been highlighting how to calculate and use this data when looking at the results of your efforts. This data is equally important when planning for the future. Determining what you can and should invest in each part of the revenue generation process is valuable when determining the tactics you will use, how you will implement them and how you’ll track your progress.

We call these numbers your target costs. To determine this we created The SQL Target Cost Calculator. Now let’s go back to our manufacturing/distribution company and figure out how much they should be allocating towards creating SQLs (for where they are now and what they should do to drive better results). 

 

Over time, as you improve and enhance your process you’ll see that your sales costs, and even acquisition costs, will decrease. While this is a strong indication of an effective process, don’t make the mistake of under-allocating resources as you may kill the very momentum you worked so hard to create.

 

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Can't Focus? 5 Ways to Overcome Distractions at Work

June 30, 2015 at 02:00PM

How often have you or one of your coworkers uttered the phrase, "I wish there were more hours in a day"?

Between work, your commute, the gym, cooking, kids, happy hours, baseball games, knitting, your band, and whatever else it is you try to squeeze in -- oh yeah, I almost forgot sleep -- it can be hard to accept that 24 hours in a day is all you get.

But acceptance is the first step. The second? Making the most of your time at work so you can get more done in less time. Learning how to maximize your time will lead you to perform better, feel better, and allow you to give your all to the slew of things you do outside of work that make you the human you are.

We get it, though. Sometimes, the office can feel like a game of whack-a-mole -- you never know where the next distraction will come from. (And it can be stressful as heck.) To help you be more productive at work, here are five tips for how to avoid and overcome distractions at the office.

But first, do a time audit.

The biggest mistake people make when trying to increase their productivity? Not taking the time to learn what it is that distracts them.

Is it email? Twitter? The news? Your boss? These are common distractions we all deal with at some point or another, but what is it that affects you the most?

For one week, keep a log of what you do with your time both inside and outside of work. Time management expert Laura Vanderkam calls it the 168 Hours Challenge. Log your time using a spreadsheet, Evernote, a physical journal -- whatever works for you. To determine where you spend your time online, try a time tracker like RescueTime to record how long you spend on certain websites and apps. And at the end of the week, review how you balance different activities at work.

Many of you might be tempted to skip this step because it seems like a time suck. Aren't we supposed to be saving time, here? My advice: Don't overlook this one. While logging your time for a full week will take a little extra effort on your part, it's an investment that'll teach you an enormous amount about how you actually spend your time -- and it could save you hundreds of hours in the long run.

Once you've identified what distracts you, it's time to come up with strategies to help you overcome those distractions. Here are some ideas to get you started.

How to Overcome Distractions at the Office

Tackle the small stuff later.

Your coworker stops by your desk to ask a quick question. A calendar invite comes in and you need to check your schedule. Your phone buzzes -- you got mentioned on Twitter! Distractions like these might seem small and insignificant, but they quickly add up over the course of the day.

What's worse, once distracted, it takes the average person 23 minutes to get back to the original task, according to a study of digital distraction. In other words, tackling small tasks as soon as they come up can seriously interrupt your flow.

"When you're interrupted, you don't immediately go back to the task you were doing before you were interrupted," says Gloria Mark, who spearheaded the study. "There are about two intervening tasks before you go back to your original task, so it takes more effort to reorient back to the original task."

"Also, interruptions change the physical environment. For example, someone has asked you for information and you have opened new windows on your desktop, or people have given you papers that are now arranged on your desk. Often the physical layout of your environment has changed, and it's harder to reconstruct where you were. So there's a cognitive cost to an interruption."

To limit these distractions, HubSpot Growth Marketer Scott Tousley suggests finishing your current project first, and then tackling those tiny interruptions. Or, if you're working on a long-term project, rotate between periods of work and short periods of rest, during which you can cross those little things off your to-do list.

In the meantime, invest in a good pair of noise-canceling headphones, turn off push notifications on all your devices (including your desktop computer), and put your phone on Do Not Disturb mode.

Block off specific time for email.

Chances are you're spending way too much time checking your email. According to a report from the McKinsey Global Institute, the average person spends 13 hours a week (28% of their workweek) reading, deleting, sorting, and sending emails.

Sure, many of us have jobs that require responses to emails within a few hours at most, but it's important to take that literally. You have a few hours to respond to that email, not a few minutes. Approaching email like you need to respond this very minute or the world will end is likely severely limiting your productivity during the day.

One solution to this problem? Email batching. This apporach requires you to tackle email during specific times of day depending on your needs. A schedule like the one below can help you curb your email addiction, limit the time you spend transitioning from task to task, and increase overall productivity.

Image Credit: Sidekick

Still having trouble? For a more disciplined approach, download the Chrome extension "Block site" to literally block Gmail.com during specific times of day. (Read this blog post to learn how to set this up.)

Schedule in "distraction time."

There are a lot of different theories and methodologies out there for how to manage work and rest time during a typical workday.

The popular Pomodoro technique, created in the late 1980s, involves dividing up time into 25 minutes of work followed by five minutes of rest. A study by the Draugiem Group found that the employees with the highest productivity spent 52 minutes working, followed by 17 minutes of rest.

The common denominator here? Schedule in "distraction time" where you can focus on something other than work. Researchers from the University of Illinois found that "deactivating and reactivating your goals allows you to stay focused. ... When faced with long tasks (such as studying before a final exam or doing your taxes), it is best to impose brief breaks on yourself. Brief mental breaks will actually help you stay focused on your task."

Block meetings in a row.

Ever had meetings that stopped and started within 30-60 minutes of one another, where you spent most of that awkward, in-between time checking email, reading the news, and haphazardly looking at your notes? That's lost time that can really cut into your productivity.

So, in the same vein as blocking out time for email and down time, schedule meetings back-to-back wherever possible. "That way, you're not losing productvitiy between them and trying to get back into the "flow" every other hour," says Leslie Ye, a writer for HubSpot's Sales Blog.

(While you're at it, make sure the meetings on your schedule are ones you actually need to attend.)

Physically remove yourself from distraction.

Sometimes, the best way to avoid distraction is to literally move yourself away from it.

Ginny Soskey, section editor of HubSpot's Marketing Blog, suggests booking a conference room to get away from coworkers and really get stuff done in a quiet space.

Brittany Leaning, content strategist at HubSpot, finds that getting into the office early -- before everyone else arrives -- helps her boost productivity. "I like to grab a coffee, find a quiet space, put my feet up, put my headphones on, and pump some classical music," she says. "Then, I proceed to write my face off until lunch."

Best-Selling Author Stephen King agrees. In his book On Writing, he strongly recommends that people "close the door" when writing to shut out the rest of the world and let people know you're working and don't want to be disturbed.

How do you overcome distractions at the office? Share your tips with us in the comment section.

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Why People Like, Share, and Comment on Facebook [Infographic]

June 30, 2015 at 01:00PM

Of Facebook's 1.25 billion monthly active users, 44% Like their friends' posts at least once a day -- and 29% do it multiple times a day. That's hundreds of millions of people interacting with content on the social network on a daily basis.

So what motivates people to Like Facebook posts -- and share them, and comment on them? And why should businesses care?

Research has found several psychological reasons behind why users enjoy using Facebook so much. For example, studies observing people browsing on Facebook found psychological indications of happiness, like pupil dilation. By uncovering this type of audience insight, marketers can apply this information to create more effective Facebook marketing campaigns. 

Intrigued?

Check out the infographic below from QuickSprout to learn more about why people use Facebook and what businesses can learn from it.

 

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10 Publishers Killing It on Instagram

June 30, 2015 at 01:00PM

Instagram isn't just for celebrities and teenagers anymore. In fact, it’s now the fastest expanding social network showing strong growth in nearly every demographic. Instagram's population now encompasses 53% of all online adults between the ages of 18 and 29, and 25% of all online adults between the ages of 30 and 49. Even better, nearly half of Instagram's users check it daily.

That's a lot of engagement going on. Yet many B2B publishers haven't created a successful presence on the network (or even an account!) Fortunately, these trade publications are ahead of the curve, and offer some insight for other publishers to follow.

B2B Publishers Who Aren’t Taking Instagram for Insta-granted

1) John Deere (Manufacturing)

This company may be 178-years old, but you wouldn’t know it by how well they use social media. In particular, their #DeereSighting user-generated content (UGC) campaign has been crushing it on Instagram, achiving engagement rates more than 40% the norm for the platform.

According to a recent Forrester study, Instagram boasts engagement rates that trounce Twitter and Facebook: 4.21% on average for an Instagram post, while neither Twitter nor Facebook break 1%. John Deere? Regularly gets between 3,000-5,000 likes per post. With a follower total of 65,900, that translates to engagement rates between 4% and 7.5%.

Nothing ‘grams like a Deere.

2) Billboard Magazine (Entertainment)

In a glamorous industry, Billboard has the luxury of drawing on its rich store of celebrity photos to get attention. Yet they don’t just rely on award shows and concerts to populate their page. Rather, they do a great job of integrating other mediums into their feed.

Most notably, they promote their print magazine in a stylish and deliberate way. The process starts with posting the new edition's cover. Roughly a week later, they publicize the print magazine again with a mocked-up image highlighting the cover story in a new way. In fact, Billboard was one of the few trade publications we found that edited its pics.

They are also one of the few publications incorporating video to promote their digital content.

3) Barista Magazine (Food)

This trade magazine, "serving people serving coffee" offers a wide variety of content on their Instagram feed to forge a genuine connection with its followers.

They posts pics reflecting their values, sharing what companies in their industry are doing, as well as their own promotional content. Barista Mag also remembers to include links back to specific articles on their site, or out to it’s community's content.

4) Pizza Today (Food)

According to Simply Measured's recent report on Instagram, posts tagged with a location result in 50% more engagement than those without. One reason why engagement may be higher with location-tagged images is because location is a popular search criterion.

Pizza Today uses location tagging to enhance their promotion of pizza parlors—a big bonus for such a neighborhood-oriented industry. This not only helps their engagement, but also makes Pizza Today a great partner to restaurants.

5) Automotive News (Transportation)

We liked that Automotive News (AN) understands how to tailor their content to each social media platform. Businesses familiar Twitter best practices may hold on to the bias against using more than a couple of hashtags per post. And while the two-hashtag limit holds true for Twitter, it doesn’t for Instagram.

AN alters their strategy by platform, and averages between seven to eight hashtags per post, increasing its chances of getting found. They also have a good mix of hashtags, including branded company names as well as more popular, generic terms.

6) American Spa (Health)

You have 2,200 characters available in an Instagram caption, plenty of room to include multiple hashtags and build a story behind your image. Here's one publisher that uses their caption space well to provide context for the image, referrals to additional content, a mix of hashtags, and @mentions.

7) Rangefinder and WPPI (Arts)

Innovation? How about this: two organizations that noticed an overlap in audience created a joint Instagram account. Rangefinder, a magazine for photographers, teamed up with WPPI, a trade association for wedding and portrait photographers. This sort of partnership is a great example of an effective way to target one segment of a market.

Rangefinder also uses this account to promote both the digital and print versions of their magazine with the visual creativity befitting of its market. Instead of using a digital image of its cover, they instead use a captivating photo of someone holding the issue. Nice touch.

8) Architect (Construction)

You would expect the Journal of the American Institutes of Architect to have gorgeous photos. Their feed doesn't disappoint.

However, that doesn't mean the content isn’t focused on business. They use their profile bio to promote and link to specific content on their website. They were also the only publisher we saw that used Instagram as place to post infographics.

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9) Artnet (Arts)

Just as with the previous publisher, Artnet’s feed benefits from having an unending source of visually enticing content. But they don’t just assume pretty pictures will hold their audience’s attention.

They use their captions to create meaningful context around an image, regularly tag specific people relevant to an image, and they also repost (or "regrams") from others, and links to other people's content.

Lastly, they also promote their own and other businesses’ posts in unobtrusive ways.

10) WWD (Fashion)

Here's another publisher with an unfair wealth of stunning imagery that goes beyond the obvious to offer up a wide variety of substantive content. If you're looking for types of images for your Instagram account, WWD offers examples of behind-the-scenes, personal stories, and community interaction posts, all while including a call-to-action to read more on their website.

Can you think of any other examples of great publisher Instagram accounts? Let us know in the comments below! 

 

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Slack, Shopify & Tough Mudder: Business Lessons From 3 High-Growth Companies

June 30, 2015 at 12:00PM

How can we take what we have and make it grow?

It seems like a simple enough question. But growth is hard -- especially in the corporate world.  

Between increased competition, shorter cycle times, and growth hackers finding innovative ways to disrupt a market in record time, scaling your business has become increasingly challenging (and more imperative than ever before).

But before we delve in further, let’s not deceive ourselves: There is no secret formula to growth. There are no magical fives steps to take us from point A to point B. There is no checklist or formula. That era is gone (if it ever existed).

Growth is an outcome of hundreds or thousands of working parts. It's a result of thousands of explicit and implicit decisions made by crowds of people within and beyond your organization, each and every day.

And while there are no secrets to instantly unlock or guarantee growth, there are lessons to learn by observing growth companies. With that said, my hope is that the wisdom and observations below will help propel your organization on a better growth trajectory than you were on yesterday.

3 Business Lessons From High-Growth Companies

Have you tuned into The Growth Show yet?

This podcast from HubSpot -- hosted by CMO Mike Volpe -- is full of compelling conversations with leaders from high-growth organizations. By tapping into the processes and inner workings of these organizations and the individuals that power them, Volpe uncovers valuable takeaways for businesses both big and small. Below we've identified three noteworthy lessons from his conversations with three impressive organizations. 

1) Slack

When Zendesk CMO Bill Macaitis left his growing SaaS company to join a startup called Slack, he marveled at how maniacally focused Slack was on their customers. (For perspective, Zendesk helps organizations provide world-class customer service, and is often lauded for its expertise in creating great experiences for their customers, and allowing their customers to do the same.)

If you are unaware, Slack is one of the fastest growing enterprise software company of all time. In less than nine months, it went from launch to a valuation over $1 billion. Less than 2 years after its founding, it is now approaching a $3 billion valuation, with ARR (Annual Recurring Revenue) growing by $1 million every 11 days and user growth growing 8% weekly.

But, what is Slack?

Slack is an internal collaboration and communication tool. In his conversation with Volpe, Macaitis likened the tool to Uber. In the same way that Uber improved the experience of finding and riding in a taxi, Slack has set out to transform the painful experience of enterprise communication and collaboration. 

Slack built their revenue model primarily around usage, which is commonly risky for an enterprise SaaS company. Most enterprise SaaS companies charge per user per month, whether their customers use the software or not. However, by focusing on this metric as its primary measure of value, Slack forces itself to continually make the product more useful and more engaging for its user base. If people aren’t using it, Slack isn’t making money.

In another move counter to traditional thinking, most organizations would jump at the chance to onboard new large accounts. Macaitis recounted being courted by multiple companies who wanted to deploy 10,000+ seat installations that Slack decided to decline early on. How many companies would have the guts to do that? It was too early, and they simply couldn’t risk disappointing that many users. They waited until they were confident that the users would be delighted and willing to recommend Slack to their peers and friends.  

Another key fundamental observation is that Macaitis views branding not as a marketing exercise but a result of interactions with every single touchpoint. Engineering, support, and customer service are all ambassadors of the brand, not just those who are considered marketers. This viewpoint -- embedded into Slack’s culture -- has a profound effect on its internal priorities, communication, activities, and culture. As mentioned earlier, they are maniacally focused on the customer ... and it’s obviously resonating.

2) Shopify

Shopify powers thousands of ecommerce storefronts. And while the growth has not been quite as dramatic as Slack’s, Shopify still easily qualifies as a high-growth company. When CMO Craig Miller joined Shopify, they had 13,000 customers. Three years later, they had 130,000. For those keeping score at home, that’s 10X (1,000%) growth in just 36 months.

One of the most interesting highlights from the conversation with Miller was him stressing the point that everyone is responsible for marketing, and that anyone can bring in a customer. This is vastly different from most organizations where marketing and sales are exclusively responsible for customer acquisition.

When Miller arrived, Shopify had a strong technical culture with little respect for marketing. He built the marketing team from scratch and soon renamed marketing the “growth team” in order to clarify what they were all there for.

However, instead of just focusing on growth within their group, the growth team’s main focus was to create a culture of growth and customer acquisition throughout the entire company. The transition and collaboration across silos wasn’t easy at first. However, by creating value through little small wins for other departments, the growth team earned trust and began to gain more respect and influence throughout the organization.

Experience and brand are also a reflection of the evolving culture at Shopify. In the digital world, it takes something special to differentiate. Along with a great product, Shopify is often lauded for its "Terms of Service" page of all things. By infusing a bit of humor and personality into the most boring part of its website, the company garnered attention and created a more human bond with customers and prospects. Additionally, when customers sign in, they are met with a greeting of “Good morning, good afternoon, or good evening.”

“You’re doing something anyway. Just make it a little bit interesting, make it a little fun. It really doesn’t take that much effort to do something a little more remarkable,” according to MIller.

3) Tough Mudder

In case you were thinking that all high-growth companies come from the world of high tech, think again.

When Will Dean was an MBA student, he was racing in a triathlon. While he was changing out of his wetsuit to begin the next section of the race, his zipper got stuck. He asked several fellow competitors to help, and was shocked that no one would.

He thought that there should be a better way for people to work together to conquer obstacles and achieve goals. When he ran the idea of what would ultimately become the Tough Mudder by his business school professors, they all thought it was a terrible idea. But, he went with it anyway. His focus wasn’t necessarily on profits, but rather making the world a better place.

He launched his first event in 2010, hoping that 500 people would show up ... 5,000 people showed up (and they payed between $70-80 to be there). A business was born.

Fast forward five years, and Tough Mudder now has more than 70 events annually around the world, and it has been so impactful on people’s lives, it is estimated that more than 5,000 people have Tough Mudder tattoos.

One key differentiator for Tough Mudder is that they view themselves as being in the “self esteem business." People are ultimately paying money to feel good about themselves and to conquer new obstacles alongside a team.

Dean talked about the virtuous cycle of creating a great and unique experience, which attracts the best people, which in turn, allows them to continually create the best experiences (which attracts the best people and so on). This cycle results in incredible brand advocacy and thousands of resumes for each available job opening around the world. A cross-functional team that he likened to Disney’s Imagineers are constantly trying to cook up the next mind blowing experience for the race course.

According to Dean, “If you’re not growing, you’re dying."

Key Takeaways

So, what can we learn from these growth companies? While each story has its own uniqueness, a few common threads emerged:

It's all about the experience.

In each story, there was a deep understanding of a very specific need coupled with a driving passion to make the customer’s experience remarkable. These organizations have structured their culture, operations, and incentives around creating a great experience for their customers, not just as a side note to their core business. 

In doing so, both Slack and Shopify have democratized the responsibility of growth, experience, and branding to everyone in the organization. This helps to ensure that each and every touchpoint shapes the customer’s emotions and experience, which ultimately aims to influence how much they spend in the future.

Great people are essential.

The greatest assets of any organization are its people. As the pace of change increases, finding people who are talented and can adapt to change with a strong work ethic, high integrity, and the ability to learn and solve new problems is the key. 

At the end of the day, being remarkable attracts the best people, and having the best people allows you to do remarkable things. 

A culture of innovation is necessary. 

In each of the conversations above, there was something special and unique about how each company was approaching their respective markets. They’re not locked into traditional roles divisions, business models, or metrics, but are investing new ways to create value for their customers, faster. But rather, they are relentless about creating something that’s awesome, unique, and that others can’t duplicate.

Slack is trying to remove pain associated with communicating and collaborating by holding themselves accountable to make enterprise technology that people actually want to use (and staking the financial success of their company to it). Tough Mudder is tapping deeply into human desires of feeling good and belonging to a community, while continuing to invest heavily in raising the experience bar for those who participate in their events. And Shopify is making growth the responsibility of everyone, not just people who are traditionally in customer focused roles.

Regardless of your industry, these high-growth organizations provide examples of how businesses are leveraging creativity and passion to create significant value for their customers.  

How will you leverage these observations and apply them to your growth efforts? Let us know in the comment section below. 

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How to Avoid Being Awkward on the Phone [Infographic]

June 29, 2015 at 06:00PM

Talking on the phone, especially with people you don't know, can be intimidating.

I have the utmost respect for my friends in Sales, Support, and other departments who spend most of their days talking on the phone -- usually with complete strangers. How do they set a positive tone and earn respect using only their voice? And how do they do it without being awkward or making the other party uncomfortable?

No matter your role, every professional can benefit from learning how to be good on the phone. That's why the folks at Expert Market created the infographic below. Check it out to learn tips and tricks for how to not be awkward on the phone -- and get what you were calling for in the first place.

 

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5 Reasons People Say 'No Thanks' After Your SaaS Free Trial

June 29, 2015 at 05:00PM

"We're different, there's no-one else like us in the marketplace."

"As soon as people use our product, they'll want to buy."

"Our product is so good it sells itself."

When you're a marketer who works closely with companies in the SaaS/cloud technology space, you get used to hearing these phrases. Every emerging SaaS business is passionate about its product and convinced it has exactly what the market needs.

These businesses also buy into the widely accepted wisdom about the SaaS sales process, which goes something like this: it's much shorter and more transactional than traditional software sales, customers are ready to buy 'off the page' without the involvement of a salesperson, they just want to test out the product and then get started.

The result of this thinking is the ubiquity of the FREE TRIAL button.

You can see it on the home page, in the top navigation, and in the multiple calls to action that pop up across the website of almost every SaaS provider out there: Take a FREE TRIAL. Those are the words on the button, but what it actually says is "once you experience this product, WE KNOW you're going to buy it".

Sometimes, they're right. Occasionally, a SaaS product is genuinely so compelling that a customer will find it, try it and want to buy straightaway. And some people genuinely do land on a website, trial a product for a few minutes and decide to hand over their card details. For these products and for this type of customer, the free trial is the perfect way to generate leads and close business.

However, there are a lot of SaaS companies out there who aren't converting a high number of their free trial sign-ups into paying customers. They see a reasonably high percentage of site visitors agree to take a free trial (great), but not so many are willing to continue using the product - and pay for it - when the trial is over (not so good).

If you work for one of these companies, the good news is there's plenty you can do about it. Research tells us that best-in-class SaaS companies are able to convert 25% of free trial sign-ups into paying customers. Here are five possible reasons your trial isn't producing the goods:

1) Your Trial Exists in Isolation

When you're starting out, it's tempting to set up a website that offers a free trial and not much more. In fact, a quick glance at a handful of SaaS players - I'm thinking of companies like Kahootz, Workflow Max, Wrike - can give this impression. These sites are slick, well-oiled lead generation machines that invite the visitor to 'Get Started' (in other words, take a free trial) at every opportunity.

But look closer, and you can see there's a lot more going on. Each of these sites uses content to support its free trial offer. Content - in the form of blogs, videos and downloadable guides - helps you to stand out from your competitors (which could be many - remember, you're not that innovative). It's also the best way to attract potential customers still in the 'awareness' stage of the buying cycle: people who have identified the need to solve a problem, but are yet to evaluate potential solutions.

Without content, you can't educate these prospects about your product and why it is the best solution to their problem. Strong branding, effective design and an understanding of SEO will help you gain some visibility and attract visitors who are familiar with the marketplace, but these visitors are likely to simply shortlist your product along with others. To increase the chances of free trial users becoming customers, you need to educate them from the very beginning of their relationship with you.

Takeaway: Don't be all CTA with no "substance"

2) You're Not Leveraging Your Content

Remember the popular idea of SaaS sales - short, quick, transactional. This makes it tempting for SaaS companies to revert to the short 'buying funnel' by default, which means sending people directly to the free trial from every blog post and piece of content.

The problem is that not every visitor is ready for that - even in the SaaS world. And again, taking this approach means you lose the opportunity to educate prospects about why your product is the best fit for them. A lot of visitors may sign up for a free trial, but with little understanding of how your product in particular suits their needs.

Your content strategy needs to align with the different stages of the buying cycle, and reflect the fact that prospects may pass through those stages at different speeds.

Don't try to force everyone to the free trial as soon as they land on your blog - remember that some people are only just identifying their pain point and won't be actively seeking a solution. You need to play a longer game with these prospects, which leads us on to point three…

Takeaway: Different prospects will take different journeys to your free trial.

3) You Aren't Using Email Marketing to Engage and Nurture

If you're going to try educating and engaging prospects before you encourage them to take a free trial, your email marketing strategy needs to be rock solid. In fact, email is one of the best ways to reach out to people before, during and after the free trial period, so don't underestimate the power of communicating via a prospect's inbox.

When people download a piece of content at the top of the funnel, try automating an email workflow to send out a follow-up piece (say a selection guide) in a few days' time, and then introduce your free trial CTA.

For people who have already signed up, don't just fire off a single 'welcome' email at the beginning of the trial period. You don't want to bombard them, but it's fine to send two or three emails in the first week - providing your messages contain useful content designed to help people get value out of their trial. Try sending practical guidance and tips that encourage people to test certain features of your product.

Takeaway: Use email to lead people towards your free trial AND to keep them engaged once they sign up.

4) You Don't Offer a Demo

This is where you might have to face another uncomfortable truth and question whether your product really is 'so good it sells itself'. If you're struggling with a large abandon rate on your free trial, it's probably because people just aren't seeing the value when they use the product. There might be something in particular that frustrates them, in which case further development work may be required.

However, it could also be that some subtle complexity - or that one feature that really, really hooks new users in when they find it - just doesn't come across in the context of the free trial. Some people may have questions about your product they can't answer when left to their own devices.

The solution is to offer a demo alongside your free trial offer. Doing so can give prospects a helping hand and ensure they fully understand the capabilities of your product before they start using themselves. Companies like Xero do it really well - visitors are given the option of watching a two-minute video overview, and/or a series of feature demos, with the free trial CTA featuring prominently alongside.

Takeaway: Some people want to be shown how before they try it for themselves.

5) Your Free Trial Period is Too Long

The 30-day free trial has become fairly standard across the SaaS industry, but your trial doesn't have to be that length. It's all about finding the trial period that works for you i.e. the one that's going to drive the most conversions.

A lot will depend on the complexity of your product (for example, Salesforce offers a seven-day free trial for its entry-level Contact Manager edition, but the higher-end Performance edition comes with a 30-day trial).

It's easy to make an argument for a shorter trial period - you might be able to increase engagement if people know they have less time to try the product, and your sales cycle will also be shorter - providing you can convert them.

If you're already running a 30-day trial, study the usage statistics and see how many people actually take advantage of the full period. If they're logging in for the first few days only and then losing interest, it could be time to make a change.

Takeaway: Don't make your trial 30 days because everyone else does. Analyze the data to find out what works.

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The 12 Weirdest (and Best) Things You Can Get For Free

June 29, 2015 at 02:00PM

This post originally appeared on HubSpot's Sales Blog. To read more content like this, subscribe to Sales.

People say the best things in life are free. They also say, however, that there’s no such thing as a free lunch.

So who’s right? We all know there’s truth to both axioms. You can’t buy a sunset, but if someone offers you a free steak dinner, chances are they want something.

Fortunately, we’re here to clear it up for you. We’ve compiled the 12 best (and weirdest) things you can get for free. No tricks, no gimmicks, and best of all -- no money needs leave your bank account.

1) Your College Admissions Records

FERPA, or the Family Educational Rights and Privacy Act, requires that students have access to their educational records. Back in January, a group of students at Stanford University began requesting their admissions files and drafted boilerplate language that anyone can send to their schools’ admissions office to request their files. You'll be able to view admissions officers' comments and criticisms of your application, as well as written records of any other information that affected your admissions decision.

One small caveat: Some schools have begun destroying their admissions files, so depending on where you went to school, your alma mater may no longer have your records.

2) A Tesla Test Drive

The Tesla Model S was named Consumer Reports’ best overall car in 2015, with a driving experience that guarantees “thrilling acceleration, pinpoint handling, and a firm yet comfortable ride.” While Teslas top out with a six-figure price tag (basically the opposite of free), driving a Tesla doesn't have to cost you anything -- just sign up at the Tesla website for a test ride. 

3) Facials at Origins

Sometimes you need to feel pampered but don’t have the time or money to book a three-day spa vacation. In situations like these, the Origins 20-minute mini facial and skincare consultation is the perfect solution. Book an appointment or walk into any Origins retail location.

4) CRM Software

CRM -- or customer relationship management software -- is essential for businesses with customers or clients. Yup, that's most businesses. CRM systems help companies keep records of important customer data, track every interaction they have with clients, and see at a glance how many prospects are in each lifecycle stage. In short, CRM software is incredibly helpful and frees up reps' time to sell, which explains why it is often expensive. If you're wary about the upfront investment or just want to save some money, HubSpot CRM is 100% free and ready to use. No strings attached.

5) Library Books

Once upon a time, before Kindles, Nooks, and iBooks, there were actual printed books. Remember those? The public library system in the United States has millions and millions of volumes available (the largest collection in the United States, the New York Public Library, has over 23 million items in circulation), so you’re guaranteed to find something you want to read. Nothing can beat holding a physical volume in your hand and turning real pages.

6) Digital Books

Of course, it’s nice to be able to carry several options around without giving yourself serious back pain. Project Gutenberg is an online collection of over 46,000 digitized books, available to browse and download for free. Some gems include the entire works of Charles Dickens, William Shakespeare, and Mark Twain.

7) Free Email Tracking

If you've ever sent an email and gotten no response, you might wonder whether your recipient even read your message. Stop wondering and find out for sure with Sidekick, a free browser extension that tracks email opens and link clicks in real time.

8) Samplepalooza: Sephora, Whole Foods, and Target

The concept of the in-store sample is nothing new, but these three brands take it to the next level. Sephora associates can provide samples in person, but if online shopping is more your thing, you can add up to three samples to your online order. Whole Foods employees will let you sample most things in the store for free, even opening packages of items you haven’t tried before. Target’s Sample Spot provides shoppers with the opportunity to receive samples of new products, although access to certain offerings is limited by zip code and age.

9) Knowledge

College tuition is at an all-time high, but never fear -- there are plenty of programs that allow you to go back to school, free of charge. 

• Coursera is an online educational platform that gives members access to a wide range of courses from participating educational partners, such as “Social Psychology” from Wesleyan University and “Fundamentals of Music Theory” from The University of Edinburgh. 
• Codeacademy is a free resource dedicated to teaching people to code. Walk yourself through the tutorials for common programming languages, including Ruby and JavaScript. 
• Duolingo is an app that teaches language through challenges and mini-games. You can learn languages ranging from Portuguese to Turkish -- and, as of next February, Klingon.

10) Health Tracking

This one’s technically “free with purchase.” The iPhone’s Health app and the Android's Google Fit app, both included with your device, track your steps automatically and integrate with third-party applications to record everything from sleep to nutrition. They're akin to Fitbit, but you won’t have to spend a dime. (Well, unless you count the dimes you spent getting the phone in the first place.)

11) Music

Noisetrade is an online music collection that enables listeners to download tunes for free and donate to the artist, if they wish. Of course, if you'd rather stream music than store it on a device, Spotify, SoundCloud, 8tracks, and Grooveshark are all great -- and free -- options.

12) Birthday Gifts

This one’s a list-within-a-list. Many retailers and chains host annual “free” events -- think 7/11’s Free Slurpee Day or Ben & Jerry’s’ Free Cone Day -- but some brands also offer special giveaways for their customers’ birthdays. Freebie Depot has a massive list of the brands that will wish you a happy birthday with a free present from their product lines. Highlights include a free full-size product from Bare Escentuals, a free Frosty from Wendy's, and a free appetizer from Red Lobster.

So there you have it -- the weirdest (and best) things you can get for free. What's your favorite? Did we miss anything? Join the conversation by tweeting to us with the hashtag #GetFreeNow.

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A Critical Look at Ecommerce CTAs: What Works and What Lacks

June 29, 2015 at 01:00PM

 

An inspiring call-to-action is equal parts design and psychology. Prompting the desired response is never easy, especially as consumers become savvy to the tricks and tactics that online retailers use. The last thing you want is for your CTAs to be labeled “click-bait,” but you have to get buyers to convert somehow, right?

We’ve shared a lot of tips over the years for creating compelling CTAs. While some of the components may change a little over time, the basic requirements remain. An image of the product or service, some compelling copy, and a button that stands out from the rest of the CTA are all must-haves.

What happens when any of those pieces are missing? Let’s take a look.

Sub-Optimal CTAs

One might think ecommerce giant Amazon would know a thing or two about CTAs, but a quick visit to their site shows they’re either ignoring the basics or trying to change the game.

There’s an image, sure. There’s also some fairly compelling copy. Where’s the directive? The whole image is clickable, but without some hint for visitors, who would know that?

This CTA from Target is also a little disappointing. A retailer with Target’s reputation for style and flair should probably have a better call-to-action game going.

First of all, while mildly clever, “save a bundle” is hardly compelling. The button, which is actually present here, is off to the side in a boring gray that does nothing to stand out from the rest of the images on the site. The copy on the button also doesn’t really inspire a click, does it?

Then there’s this one from Hot Topic. We love how they’re always edgy and breaking the rules, but sometimes rules are made to be followed.

The whole thing is a little busy, with multiple images and text pretty much everywhere. We do get a bit of urgency there in the middle with the “Limited Time” copy and the huge text proclaiming the discount. Why, then, is the CTA in teeny-tiny letters below that—and in the same color, no less?

CTA Bronze Medalists

The Gap stands out as a company that gets things done with their CTAs. This example shows a hero image, some helpful copy, and a very clear button with text that compels a click.

Why do they get a bronze medal? Well, without the circle there, the button wouldn’t stand out from the rest of the design, would it? A bold color in a contrasting color is always a better plan.

Tommy Hilfiger seems to take a page from the same book with their design. Here they are, tied for bronze, with their great hero image, even more clever copy, and CTA button.

It’s just…the button is so plain. Maybe they don’t want it to disrupt the rest of the call-to-action, but isn’t that the point?

CTA Silver Medalist

Believe it or not, WalMart gets a second-place spot for their CTA. This image from their homepage features bold colors, a timely message, and a button that really stands out from the rest of the images without making the user cringe.

They’d take the gold if not for two things: first, moms usually want something that doesn’t hint at chores or work for their special day (kudos for the jewelry thrown in as an afterthought). Second, someone else managed to beat them by taking the game to the next level.

CTA Gold Medalists

Dollar Shave Club is definitely a winner here, with their huge hero image, fun copy, and bold buttons.

The button doesn’t just use traditional text. “Do it,” is fun, fresh, and really fits the brand. It also prompts an immediate response. Still, another company might just edge them out of the top spot.

Remember when we talked about Hot Topic breaking the rules and failing? Plated used the same tactic and won everything. Here, you can take a look at the screencap, but it won’t show you why they win.

The two separate CTA buttons are different colors. The one they REALLY want the customers to click is a different, bolder color. “Learn more” is still an option readily available, but the true conversion button begs a little louder.

To find out why they win everything, you have to visit the website. Instead of a static hero image, the background of the CTA is a looped video of various cooking and dining scenarios. The movement draws the eye right there and refuses to let the user’s gaze go. That’s how to win a click: Don’t give them any reason to look away.

Now you know what we love and why. What CTAs have you seen on ecommerce sites lately that made you want to click? We’d love to know what wins it all with you.

 

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