You just logged into a new SaaS system and now they want you to enter your credit card JUST TO LOOK AROUND? “That’s ridiculous!” you think to yourself a little bit outraged. “I’m not putting in my credit card just to look at this thing. Why would anyone think that is ok?”
Then we have two different paths that people take. They usually go something like this:
- This is crazy, I am never going to put in my credit card just to look. Goodbye!
- Now that I am looking at this thing, it really does solve my problem, and this is a big problem for me. Alright, I’ll bite. Here’s my credit card info.
What is the value for a new SaaS of these two different groups?
Disclaimer: This article does NOT apply to all SaaS systems. The bigger the system and the more the system is a platform, not just a single tool, the more this article applies in my experience.
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When we started…
When we started this system, I had a good friend of mine and mentor tell me to put up the paywall before people could get into this kind of app when it was first starting. At the time, and even today, I am the kind of person who is very nervous to enter credit card info just to look around, especially knowing that I am probably going to cancel my subscription anyway. So when I was told to put up the wall before even letting someone look around, I thought to myself “That’s crazy, I would never do that”.
Then we started actually running the business, not just building a software system, that’s when it all changed.
Customers Are Invested, Users Are Not
Customers who are willing to put in their credit cards to sign up for a SaaS are invested in the system and have more reason to help it grow. At the beginning of a new system, these kinds of users are critical and getting the kinds of people who will do this it the difference between the system growing or failing.
In many cases, customers in a new SaaS are buying into an idea not just buying software. Your system is solving a problem they have, and when your starts it is never perfect. The people that find that the idea that the problem they have could be solved is appealing enough to be invested in the solution, they want it bad enough to not just pay for the system, but help you in your endeavor to help them. These are exactly the people you want and NEED when you are building a SaaS.
Good Feedback On A New System Is Critical
Here are some differences in feedback that you get from paying users vs. non-paying users. These have been modified from their original text, but the substance of the content is the same.
Paying Customer that had a login issue:
“Thanks for fixing my login issue! Here is are my environment variables and the steps I took to get to this point unless you need them to solve this issue!”
Non-paying User that had a login issue:
“Why can’t I log in? Your product is terrible!” – that’s actually what they said before they could even log in to look at the system.
Paying Customer that didn’t understand why the product was loading slowly:
“Hey BrainLeaf Team! I am seeing that you guys are using Angular 1 on this system and have… [list of issues with that system]… I know that refactoring from Angular 1 to Angular.io is a big project, and you guys are probably thinking about doing that already. Here is a good resource for doing this upgrade [linked]. Your tool is great, and I look forward to seeing it be a bit faster!”
Non-Paying User that didn’t understand why the product was loading slowly:
“This is this SO SLOW. Why can’t it be faster?”
Paying Customer that didn’t like the UX on a few pages:
“I am seeing some issues on the UX on the editor pages of this system. I see what you are trying to do, but I think there may be some better ways to do it. I am a UX designer and drew up some ideas for you guys. Please let me know if you need any help understanding this.” (set of XD files attached). – we actually used a number of this user’s suggestions.
Non-Paying User that didn’t like the design:
“This thing sucks. I can’t figure it out at all.”
For each user that sends us a message, we have to get back to them, no matter how rude or pointless their comment was. Thanking a customer for their contribution makes the team smile, whereas being forced to answer someone who is upset or unkind and there is not much you can do to help them anytime soon is demoralizing. Ongoing, angry or mean feedback is draining on the team’s morale and often moves a small team to not want to talk to users at all. Whereas kind, helpful, and insightful feedback can invigorate a team and push the product forward in a big way.
Contributing Customers Are Easier To Deal With
Sometimes people are upset, or they just had a bad day, or whatever, and when an upset question is answered in kind, constructive, and informative manner, that upset customer can become a raving fan. In a lot of ways, that is the essence of a successful SaaS customer service department.
It’s counter-intuitive, but the paying customers dealing with systems that are broken, even when you can’t fix them very quickly or at all, are substantially easier to deal with. Even if they are upset, if you answer their questions, take care of them well, and are responsive, they can quickly change their mind about things. They were invested in the beginning, so even if you can’t fix their problems right away, if they know that you are doing the best you can, they are usually happy to keep working with you. Whereas, a non-paying user has nothing to lose by just continuing to be upset and continuing to yell at you or waste your time on something that you cannot fix for them.
Time Is Money
For each person that sends an email, a Facebook message, a post on our Facebook community, a system bug, or a feedback request, we have to get back to them. When we are answering people who are just complaining from the start without having made any investment, the odds are fairly high that they are not going to become paying customers. But in order to keep our service high and generate buzz about our service is to answer every person with a well thought out answer and solution to their problem, even if we don’t have a solution.
Being a small company with just a handful of people, and only one or two support team members, an influx of emails is time-consuming, especially when you are starting out and don’t have SOPs (standard operating procedures) written up already about how to handle every situation or pre-written emails for different situations. Before you have those processes for your team you have to figure out every new thing, and that is very, very time consuming and thus expensive.
The Clock Is Ticking
If you don’t make enough money fast enough in a SaaS, the system is going to fail, so minutes and pennies count.
In order to pay just the payroll on a company like this, you have to sell hundreds or even thousands of licenses to the system. Answering non-paying users that are just complaining is essentially a waste of time. They are not going to help, they are not going to recommend you, they are not going to share your system, and they are not going to be paying your team for their work. So why make it easy for them to have access to your time?
One final one is that it’s just easier. It is just easier to build the system like this rather than building popups to remind people they have whatever amount of time left or emails to get them to pay and making the process of them paying within the system as easy as possible. If you spend money on letting users into the system to look around, you’re not spending money on finding the right users and marketing to them.
For this system, we have what we call “Built-In Friction”. It’s not simple to get access, the user needs to want it. If you are building a SaaS that really solves someone’s problem, they will want it, and they will want it enough to take the risk of putting in their credit card and putting their money where their needs are.
Need some advice on building or running a SaaS? We can help!
Just Fill Out Our Contact Form, or give us a call at (706) 425-1976.
If a user isn’t willing to put in their credit card to get started, at least in the beginning of your SaaS, they aren’t the right user right now
you haven’t built or explained the solution to a problem worth solving.
Once you are sure you’re solving your users’ problems in the right way, then you can open it up to less savvy, informed, or easy to work with users because the system and your team will ready for those users. But if you let those people in before you’re ready for them, they can crush your morale, your budget, and your company.