Friday, March 19, 2010

Meet your customer at the door

Recently, I read an interesting blog post by Brant Cooper about accidental discovery of product-market fit. The gist of it is that if your server goes down for some reason, and you don't hear your customers calling you or even better screaming at you, you probably do not have a product-market fit yet.

We also unknowingly implemented an effective process for exploring product-market fit. Essentially it was embedded in our "customer acquisition" workflow. This is how it worked:

1. Customer would signup for ScrumPad for a 30-day free trial.
2. At any time during the trial period the customer can cancel the trial subscription.
3. We would notify them of upcoming end of trial by email and remind them of explicitly canceling the subscription.
4. If they choose to cancel the subscription, we ask them to take a short "exit interview" (which was optional; we allowed the users to skip the interview) with four questions:
                          a. Reason for cancellation?
                                1. Speed, 2. Usability 3. Lack of Feature, 4. Price, 5. Any other
                          b. Switching to another tool? If yes, which tool?
                          c. Reconsider in the future?
5. If not canceled before the trial period ended, the account "automatically" rolled into a "paid subscription" (since we do not have any "tiered pricing").

Requiring explicit cancellation turned out to be a very effective "product-market fit" exploration tool. We almost got 100% participation in the "exit interview." There were users who would forget (even after all the reminders) to cancel. When they would get an invoice (the controversial aspect of the process) at the end of the 2nd month, they would come back and cancel the subscription. We would always waive the invoice. Based on the the interview answers, we would go back to some of them to get further clarification on some of their answers.

However, we also quickly learned that some customers considered this to be an "annoying," even "deceptive" practice. Although we never intended to use "auto opt-in" as a way to mislead anyone,  we understood how this could be misconstrued as a "bad practice." It is important for us to do what feels right to our valued customers.  So, we now changed the process from "auto opt-in" to "explicit opt-in" (that is customers need to explicitly upgrade to a paid subscription before the trial period ends or the trial account is suspended). This reduced the number of trial customers that go through an explicit cancellation process, and hence the exit interview.

We have now embedded in our application in addition to our "exit interview" during cancellation process. However, it is difficult to get people to take the survey or explicitly cancel subscription.

How are you exploring product-market fit for your SaaS application? What do you think how we could increase participation in our "exit survey" or Your insights will be much appreciated.

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