Lead Nurturing Key for Open Source & SaaS Vendors

Two licensing models are taking the software industry by storm at present: one is Open Source, the other is SaaS (Software As A Service). From a marketing perspective, both share similar challenges, the most prominent of which is converting users of free software to paying customers.

Many commercial open source companies distribute free open source versions of their product with a dual purpose: one, to build and expand their developer community, and second, to generate sales leads for the paid, supported version of that same product. (In this sense, the open source product serves as the defacto “free trial” version for the supported software.) SaaS vendors, meanwhile, because they’re not shipping or distributing software in the traditional sense, almost always offer some type of “free account” by which a prospective customer can test drive the product for a limited time (normally 15 or 30 days).

Both open source and SaaS vendors can quickly find themselves in situations where they might be generating hundreds, or thousands, of free downloads and free user accounts each and every week, a volume that quickly exceeds the scalability (and cost-effectiveness) of telesales follow-up. Furthermore, only a small percentage of “try, then buy” sales leads may be valid commercial prospects, which means even if telesales can keep pace, they’ll be spending most of their time chasing prospects who ultimately aren’t worth the effort.

The solution lies in lead nurturing, and a systematic, automated process that scores and qualifies leads as they enter the system, follows up with each prospect on a timely basis, engages each individual with relevant, timely e-mail communication, and then adapts that communication over time based on additional profile data or action on the prospect’s part.

The beauty of today’s automated lead nurturing systems is that they require very little information to be collected from the prospect on the front end. An Open Source or SaaS company can, if they so choose, require no more than an e-mail address for registration purposes, and yet utilize that e-mail address to engage with the prospect in a personalized, timely, and relevant way.

Lead nurturing strategy can adapt to a prospect’s interest level. For example, let’s say as part of one follow-up e-mail, you offer the prospect a downloadable evaluation guide. If the prospect responds, that tells you something definitive about that individual. You could choose to customize further communication with that knowledge in mind, perhaps even increasing the frequency of e-mails. If you collect additional profile data along the way, say as to company size, you can customize your message further to speak to benefits that are more aligned with the individual’s size of organization.

Lead nurturing doesn’t replace telesales in these situations; it simply makes it more productive. Instead of telesales chasing down every single downloader or free trial request, reps can focus valuable man-hours on more qualified prospects. Today’s lead nurturing systems enable you to push leads to sales, or trigger sales follow-up, based on specific criteria you define. To use the previous example, you may decide that if someone downloads an evaluation guide, they’re worth a phone call. Or they’re worth a phone call if the company meets a certain minimum size, expresses a specific short-term purchase intent, or falls within a target account list. The criteria can be as stringent, or as relaxed, as you want them to be. And you can revise those standards over time based on sales bandwidth or feedback.

Open Source and SaaS models make it easy for potential customers to try your software. That’s the good news. The challenge is identifying which of those prospects is worth the cost of sales follow-up, and then converting them into paying customers in a systematic process that you can continue to test, evaluate, and optimize over time.

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