September 19, 2016
Email Drip Campaign Examples to Turn SaaS Apps Cash Flow Positive
SaaS apps are notoriously cash-intensive businesses because they need to front-load salaries, office space, and customer acquisition costs before becoming profitable years down the road. It’s also the nature of the subscription business model; the customer you paid $200 to acquire may only pay $10/month, translating to a 20-month payback period. This means in reality, you’re cash flow negative for months – investing huge sums of dough ahead of time with the hope that you’ll not only break even in the future but also make a little on top for your troubles. WPEngine is no different, raising $41.2 million to date to fund operations, expansion and growth. Hosting and maintaining over 300,000 sites ain’t cheap.
How WPEngine tackled the cash flow problem
WPEngine addressed the negative cash flow problem by enticing customers to choose an annual plan over a monthly plan. This technique helps recover acquisition costs immediately. The obvious problem is that most people (if left to their own devices) gravitate towards the monthly option. Why get locked into something and pay upfront if you don’t have to, even if there’s a discount to make the switch? Instead an incentive, there needs to be value built. There needs to be education that shows and explains to customers why it’s in their best interest to not only sign up, but upgrade to a yearly plan immediately. And that’s what WPEngine did with a specially crafted drip email campaign.
Capturing new leads for your email drip campaign
People already get enough email as it is. Brace yourself: because you’re about to get over 5 emails an hour soon. So it’s only natural that people are becoming stingier – suspicious even – about giving their email address away. That’s why you need a good _offer__, _because a “massively creative and differentiated offer” has the greatest influence on conversion rates. WPEngine uses a Speed Tool which provides a fast report on key performance metrics like page loading times and the number of requests (along with a few helpful recommendations to improve results). After dropping in your URL on the main page, you’ll see a little contact form pop-up to capture some additional information and where to send the report. Immediately you’ll get the requested speed report as promised. And then the fun starts.
The anatomy of a drip email campaign
Over the next few days, you’ll begin receiving information-based email messages to help (a) educate and (b) nurture your attention.
As each interesting, timely email hits your inbox, your interest and trust improves. You start recognizing, even looking forward to these emails to find out more easy ways to improve your site performance. Most importantly for WPEngine, they’ve been able to help you become need-aware of a problem (slow site performance), and brand-aware of a potential solution (them!). When the timing’s right (usually after 3-4 emails), the messaging starts to shift into soft selling. Eventually, they’ll introduce a too-good-to-pass-up annual deal. Patrick McKenzie worked on this technique years ago with WPEngine, crafting a simple text-based email message that emphasized how cost effective it would be to have experts on hand, watching over your site 24⁄7. They also engineered a simple one-click upgrade that gave customers two months of free service.
The results were so good that WPEngine’s CEO, Jason Cohen, boasted: “Patrick’s advice on starting a drip campaign for WPEngine was an epic win for us – it permanently moved the needle on signups after just a week of work. And it’s easy to measure and therefore to improve”. Best of all, this simple technique can drastically help SaaS apps recover some of that front-loaded cash quickly. Here’s how to do it.
How to create your first drip email campaign
Drip email campaigns hit the trifecta of (1) the right person, (2) the right message, and (3) the right timing. It’s no surprise then that they can deliver 20% more sales opportunities when executed properly. Want even better news? Drip campaigns are the perfect set-it-and-forget strategy; requiring maybe a day-or-two’s worth of work but then allowing you to move onto more important things (until you come back and optimize them later). Here are four simple steps to get started immediately.
Step #1. Create (or decide on) your lead magnet.
Lead magnets come in all shapes and sizes. They could be as high-tech as the WPEngine tool, or as low-tech as a simple ebook or guide. The point is, you need to create a compelling enough offer for someone to hand over their email address. Incentives are great, but so is education for B2B peeps and other professionals. Start with one of these ten lead magnet examples that grab attention then set up a simple form to capture new opt-ins.
Step #2. Sync your lead capture and segmentation system
Wouldn’t it be wonderful if there was an easy-to-use platform that combined lead capture, segmentation, and automated drip email campaigns with built-in reporting so you didn’t have to worry about tech hurdles? Yes, it would be ;) Once your systems are synced, create smart segments that pull people in automagically over time as they fulfill specific criteria. This can be as basic as filling out a form on a specific page, or as complex as custom values they select and previous actions they’ve completed (like opening emails).
Step #3. Craft your emails
There are two types of emails you can send: HTML emails help recipients interact with your brand, and work best for getting started emails and content-focused sends (blog posts, videos, infographics, etc.) Text-based emails create a more personal connection, because they look as if you’ve personally typed them out in Gmail, Outlook, or Yahoo (JK - no one really uses that last one anymore, do they?!). I prefer using the latter, but experiment with both to see which leads to more conversions for your emails. Drip email campaigns typically send a message every 2-4 days over the course of 14-30 days. The idea is to message consistently so people start to become familiar with you and come to expect your emails. While also putting a limited time offer together to create a greater sense of urgency.
Step #4. Pull the offer away
There’s a reason breakup emails get people to respond. It’s a classic takeaway close; a sales technique designed to emphasize scarcity, urgency, and all of those other things Cialdini wrote about. You introduce the offer with all the gritty details, before giving a hard-deadline to either act now or miss out on the experience of a lifetime (OK, maybe that’s overselling it a bit).
Drip email campaigns can be one of the most effective approaches in your backpocket, reversing the ill-effects of a months-long negative cash flow position while only requiring a few hours to set up in many cases. The overwhelming majority of people hate mass emails. But they’ll be on the look-out for yours, because they relate back to an offer they just opted-in for, assisting them in dealing with a troubling problem, while tempting them with a valuable offer that’s starting to look a whole lot better after every drip…drip…drip.