Why Pivot Beats Panic Every Time
By Chris Rath and Lauren Thibodeau
"Champions keep playing until they get it right." -Billie Jean King
Covid-19 is doing a number on global economies and throwing companies the world over off their game. Canadian SaaS companies are no exception.
SaaS Ottawa and CS/CX Ottawa, two popular Meetups in Canada’s capital city, recently got together online to explore the impact and reaction of the Software-as-a-Service community post Covid-19. Lauren revealed results of the inaugural SaaSCan Project, showing that 60% of Canadian SaaS companies anticipate net revenue retention to decline in the next quarter or two, 24% expect it to stay flat, and 16% anticipate growth (April 2020, n=50).
Despite their different outlooks, Canadian SaaS companies in all three of these buckets are adopting a “Keep Calm and Pivot On” mentality, adapted to their specific context. Darryl Duncan, Commercial Account Manager at RBC, summed it up well by saying, “This reminds me of a similar lesson from the 2007/08/09 global financial crisis. Whereas the message then was DIVERSIFY, the message today is PIVOT.”
The Cambridge English dictionary defines a pivot as “a fixed point supporting something that turns or balances; the central or most important person or thing in a situation.”
Three key Canadian SaaS company pivots we’re seeing right now are:
1. Pivot your Product and Messaging
Tehama Founder & CEO, Paul Vallée, highlights the power of listening to your customers. After discussions with key customers and prospects, Tehama uncovered the opportunity to reach higher levels of growth by pivoting their existing product, initially designed to allow for enhanced security and accessibility for workers outside a company's network, to instead favour ease of use for a company's remote employees, along with scalability, cost, and security. This pivot gives Tehama’s solution a larger total addressable market given the post-Covid “work from home” mandate. In conjunction, Tehama quickly dialed up marketing webinars and use cases showing how their solution reflected these traits to drive home the connection with new prospects. This is resulting in revenue growth, while a majority of Canadian SaaS companies are projecting declines.
Pablo Srugo, Principal at Mistral Venture Partners, shared a dramatic pivot one of their portfolio companies made recently. Relogix, who deploys sensors and analytics to understand and optimize office and commercial space usage, pivoted virtually overnight to build a Covid-19 Workspace Monitoring Dashboard to help their customers manage tenant re-entry in commercial office buildings post-Covid. This is now #1 in the list of products on the Relogix website, and Relogix has ramped up marketing messaging accordingly to get the word out.
2. Pivot your Business Model
Klipfolio’s co-founder and CEO, Allan Wille, expects overall revenue to come under pressure in the next couple of quarters. Klipfolio is gaining some traction by shifting to favour annual over monthly plans, as this makes their future revenue stream more predictable. One pre-Covid study showed that annual subscriptions churn 30% less than monthly subscriptions (ProfitWell). And while Klipfolio already had a pause button in place for customers who started the unsubscribe process, they are finding this a valuable way to meet customers “where they are” right now. Customers can put their dashboards and data on hold for a period of time, and spin their subscriptions back up in a few months as their own revenue recovers.
In the broader context, 59% of Canadian SaaS companies surveyed said they were “preparing a set list of options to present to customers who are struggling financially right now.” (SaaSCan, April 2020, n=50). From extended payment terms, to adding more value for the same investment, companies are temporarily pivoting here to increase retention and reduce churn for the long term.
3. Pivot your Onboarding
Whether you are seeing increased or decreased demand, this may be the perfect time to pivot user onboarding. 40% of companies surveyed in the SaaSCan Project are doing just this - and taking a new look at re-onboarding inactive users. Perhaps you can do the same. Help inactive users unlock value so they become active users, or learn what they’re looking for that they’re not getting, and feed that back into product development. Either way you’re further ahead.
And if you are fortunate enough to be attracting new clients in this downturn, now’s the time to raise your game on onboarding. You want to rock your new customers’ worlds and make them so successful during and immediately after onboarding, that they stick with your solution well beyond Covid-19. Two onboarding best practices to adopt in a B2B context are:
Host a joint kickoff. Include at minimum: the customer executive sponsor, the internal sales executive, the customer user champion(s), and your customer success/ onboarding leader. Have the customer exec sponsor share why they selected your solution, and how it will help them run their business better. On your side, share what they can expect over the next 10, 30, 60, and 90 days, using other customer examples relevant to their context. Determine their specific goals for those time frames together. This helps customer users better understand the purchase decision, and what comes next. Change management is easier and adoption accelerates.
Make onboarding customer-centric not feature-centric. Customers care about being successful at their jobs, not about all the menus and product features you’ve painstakingly built into your product. Determine the most common workflows each of your key customer roles needs to accomplish in the early days, and then show them how to accomplish those workflows in your product. Better yet, let them practice hands-on. Provide links to follow on content and training, when you have it, that they can work through later as they become more proficient. This helps new users relate the new product to their own job context, and refresh regularly to counteract the “forgetting curve.”
Overall, Covid-19 is acting as a headwind for the majority of Canadian SaaS companies. That said, some key lessons are emerging that could help your company not just survive, but thrive. Now, more than ever, is the time to really listen to your customers. What new problems are they facing? What do they need right now? How can your company satisfy their needs and add value? Uncover opportunities, then “Keep Calm and Pivot On” where it makes the most sense: pivot your product and messaging, pivot your business model, pivot your onboarding. And as you do, sew the seeds now for making new-found success stick well beyond the Covid-19 economic recovery.
Reach out if you’d like to chat. We'd love to hear from you.
Chris Rath loves to help companies achieve their customer and growth goals via impactful Performance-based Marketing and winning Customer Engagement programs backed by Data and enhanced Marketing Operations. Over his career, Chris has acquired over 7MM new customers and leads and created over $1BN in revenue. He’s insanely curious and loves to chat about problems. Chris is an active member of both the SaaSOttawa and CS/CX Ottawa Meetups.
Lauren Thibodeau enables B2B SaaS companies to accelerate customer adoption and crush churn by bringing together the best of Customer Success, Customer Experience, and Value Realization practices. She’s worked across the full spectrum of company size and maturity, and loves marrying strategy with execution. Lauren is the founder and CEO of WTC Solutions, and a co-organizer of both the SaaSOttawa and CS/CX Ottawa meetups.