As the curator of the INSIDER Guide to New Product Development (NPD), I’m constantly keeping an eye out for bite-size information that will help you develop and scale better subscription products. Here’s my “Five on Friday” list for August 28th, featuring the five best trends, tips, quotes or stats from my reading this week.
1. The Ten Commandments of Product Marketing
Most of you know I’m a fan of the product-development methodology set forth by Pragmatic Marketing. A distillation of this practice, “Ten Commandments of Product Marketing,” is worth a read in its entirety. If you obey one of the commandments, it should be:
“Have an up-to-date positioning document and buyer persona for your product. How often do you start developing product or marketing materials without fully knowing who the target buyers are and what their pains are? It happens more than it should when we are going too fast, but without this fundamental understanding you run the risk of losing control of your message.”
It’s not just the marketing materials this commandment helps you get right. Everything we do is for our customer, so making the customer a tangible presence in all our decisions is critical to good product development, good customer service and good business.
2. Getting the Most Out of LegalZoom
If you’re a newer subscription business, you may be setting up the back office while also trying to get your offering out the door, and looking for cost-effective help. While not a panacea, I personally found LegalZoom helpful for completing the following tasks:
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- Trademark search and registration. You’ll spend three times more going to a law firm on this fairly straightforward search and registration process, but it’s also a pain to do yourself. LZ is a happy medium. You may also find that you need to file a DBA/alias name in addition to your trademark – I didn’t know anything about this requirement and would have missed it without the LZ instructions.
- Business filings. You’ll be surprised how many registrations, applications, altercations and supplications you need to have in place to do business. Tell LZ where your business is located and a few other details, and they’ll package up all the forms you need, with instructions on how to complete and where to send them in. Worth the time saved and peace of mind.
- Access to a lawyer. My package included a 30-day trial of Business Advantage Pro, a service I didn’t think I’d use. But Pro offered unlimited 30-minute discussions with a lawyer on any topic I wanted to discuss, and I made full use of it to ask about taxes, whether my LLC would protect my personal savings in the event of bankruptcy, and other topics. My plan is to continue this service over my 3-6 month launch period, then cancel it. At just about $25/month, it’s worth it.
3. Practical Ideas for No-Cost Marketing
Entrepreneur had a good infographic on how to acquire customers without a marketing budget. What I liked most about the graphic was that it included practical, specific advice in addition to generalizations. I’ve included one of my favorite sections, advice to reach out to other writers to gain market awareness, here. I’d also recommend reading our own Dana Neuts’ case study on Latterly magazine for an in-depth look at low-cost marketing tactics.
4. Good Advice on How to Price SaaS Subscriptions
Keep it simple is my mantra for pricing, and it’s reflected in this meaty article in the Spring 2015 issue of Pragmatic Marketer. I recommend spending some time with the whole article, but if you can’t, keep this quote in mind:
“At ProductPlan (a product roadmap software), we saw that [our competitors] required a paid license for every software user We charged only for editors of roadmap data and offered free licenses to other collaborators. Rather than offering complicated pricing tiers based on features, we offered unlimited use of all features for one price. Because the product managers want to widely distribute the product roadmap to stakeholders, this model benefits the customer. In addition, this model gives our product more exposure within the organization, so ultimately we sell more licenses when other departments ask to use the software.”
5. The Subscription Business Metrics to Watch
According to a white paper by Zuora, the following are three financial metrics that are especially important to us as subscription business owners. These are some of the key indicators of strength that investors review when making their go/no go decision.
- Retention rate. The percentage of customers that businesses lose annually through attrition.
- Annual recurring revenue. The difference between recurring revenues and recurring costs.
- Growth efficiency index. How much new recurring revenue a company gets from a given investment in sales and marketing.
It’s back to school for many of the kiddos next week, so have a great weekend everyone.
Diane Pierson, our INSIDER Guide to New Product Development, is a leader in product management and marketing, having delivered results to companies including Dun & Bradstreet, LexisNexis, American Lawyer Media and Copyright Clearance Center. She has built products & services that have delivered over $100 million in revenue and knows what works, and what doesn’t, when executing product plans and strategies. (Read Diane’s full Bio)