We’re in the process of digging into the video vault from last year’s Tech Adoption Summit, held November 7 at a tiny, quirky venue in San Francisco’s Mission District. It was a packed day spent geeking out on the things that drive the small-business SaaS industry — creating compelling brands and customer experiences, building great products, and scaling customer acquisition.
One of the highest-rated and most cited sessions featured Adam Blake, CMO of ThriveHive, a Boston-based provider of SaaS-based digital marketing products for SMBs.
Adam’s thesis is that product-based marketers perform better than their non-product based peers, and product-driven customer acquisition is the key to managing ever-rising customer acquisition costs.
“The elephant in the room is that customer acquisition costs have gone up dramatically,” Blake said. He added that costs are up more than 50%, for both B2B and B2C companies.
He also pointed out that companies that offer free products, a requirement for product-driven customer acquisition, have seen their CAC rise at a much slower rate than those that do not offer free products.
The real eye-opener was the order of magnitude different in close rates across different sale models. Moving from cold calling to selling against product qualified leads yields a 100X improvements in close rates. PQLs in simple terms are prospects that use your free products and signal upsell. Adam offers a more precise definition in his talk.
Have a product-driven customer acquisition strategy isn’t as simple as offering free products. Adam went through a checklist of dos and don’ts for offering free products that deliver on the lower CAC promise. Key among these is to offer a “free forever” product and not just a free trial.
“If you can offer a free forever product vs. a free trial I would encourage you to do so,” Adam said. “The reason is a free trial is way further down the funnel. A free forever product has a much lower barrier to entry.”
Another key was that the free products be completely self-provisioned by the prospect. If you can’t bring each new user on at a very low marginal cost, it undermines what you are trying to do, which is acquire paying customer at a dramatically lower CAC than your competitors.
Adam’s presentation at the Tech Summit was so well received that Adam was invited to give a version of this talk to a much larger and more diverse audience at the upcoming LSA ’19 conference in Dana Point, CA.
You can check his TAS presentation from last November here:
In case you missed it, we covered some of this ground with Adam when he was a guest on our Above the Cloud podcast in September, prior to his appearance at the Tech Adoption Summit. You can listen to it below.
You can also view Adam’s slides as well as those from the other Tech Adoption Summit presentations.
