By borrowing concepts from crypto-currency, SaaS Founders can attract prospects and retain customers.
This insight looks at the underlying motivations of crypto without getting caught up in the hype around currencies and speculation.
Note: while crypto probably will eventually be the right way to help SaaS Founders, it’s not essential yet till there’s enough adoption and awareness.
Most people associate “crypto” with currencies, such as Bitcoin or one of many of the newer tokens that people can invest in.
But the ideas and concepts of crypto have brought into sharp relief things that every SaaS (or ultimately DTC brand or creator, but focusing on SaaS for simplicity right now) wants to grow their business:
- More customers
- Better retention
- Stronger community
“Currencies” -- whether tokens with no cash-value or actual currencies with cash-value with some collateral -- is a way to do this.
People respond to incentives. And those incentives do not need to monetary.
Let me start with a story that came up when I interviewed Dagobert Renouf, the founder of Logology.
He had a great story about a customer who liked his product and shared with someone else. That person also became a customer.
Dagobert offered to pay an affiliate commission.
But the customer who made the referral declined!
This customer just wanted to be helpful. He appreciated the show of appreciation, but it didn’t need to be monetary.
This is a problem with most affiliate services in that they limit the ability to create goodwill amongst customers and supporters.
There’s nothing wrong with an affiliate. I use them for all products and founders that I like and want to support. It’s a way to create valuable content and still get some monetary reward.
But until a customer buys, there’s a huge gap between the activity done that builds community and goodwill and reward. And sometimes that monetary reward isn’t even what the community wants to focus on!
In fact, I would say that an exclusive focus on a commission-based reward is actually not that great! What you’ll get, instead, are mercenaries, not missionaries.
And building community is really about attracting missionaries.
Nearly Every SaaS Company is in the Community Business
One takeaway from going deep into crypto has been the power of community.
In the end, every successful SaaS company, from solo founder to major publicly traded company, depends upon a thriving community.
This community may start out as just missionary fans in the beginning, but becomes much more as the ecosystem grows.
None of this is new. The most successful have built marketplaces, native integrations, and Q&A sites where people gather and answer questions.
What has been exciting is hearing from customers an openness to two things: incentivizing/rewarding missionaries while also programmatically cross-selling into their informal ecosystem.
These are related, but untapped, opportunities to grow a SaaS business.
Rewarding Missionaries
By nature, missionaries do things helpful in the community because they see the advantages of being a “Giver.”
They answer questions. They share their enthusiasm on social.
They give talks or write blog posts.
Even the most raving fans don’t do it all for free. They may want to find customers, build up their resume, expand their brand. So, yes, there’s some implicit exchange.
There’s a wide gap between the current kinds of awards and incentives for the community, however.
This is where the idea of every SaaS having their own “currency” that they can distribute to incentivize and reward their community, which includes ambassadors, customers, and partners.
This spectrum represents a range of intangible to tangible.
The “Giver” feeling good about themselves, even with no acknowledgment, is intangible.
Cold, hard cash from a successful affiliate sale: tangible.
A “currency” that can be rewarded by the company makes a little bit more tangible a sign of appreciate -- even if there’s no exchange value.
Did someone write a blog post? They get 5 “bucks.”
Answered someone’s question in a positive way in an open forum? Give them 15 “bucks.”
The concept saw a surge during the “gamification” hype, which has since died down. But the concepts behind “incentivization” and “rewards” still holds sway, especially when the audience is expanded to building and growing a community.
Even if worth nothing in the real world, we have seen multiple examples where “points” creates status: StackOverflow and Reddit are two prominent examples.
However, the dynamic becomes much more interesting when the currencies can be exchange for other things: schwag, discounts on the SaaS service for upgrading, discount for partners.
These don’t have to be exchanged for cash directly in order to create value for the community.
Imagine if a community built around a SaaS vendor could exchange these currencies amongst themselves to show appreciation for writing a great tutorial or offering a free plugin or integration?
The concept of a currency, a “token” branded with their logo, starts to make more tangible the intangible “goodwill” that develops in growing communities.
Conclusion
If you’re a heavy user of SaaS products or a SaaS founder, what do you think about creating stronger communities and goodwill with a branded “currency”?
I think the opportunities are great for those able to get on board:
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- Foster more loyalty within the community
- Expand customer acquisition through cross-selling into your ecosystem
- Enable more vibrant cross-community growth
While these currencies don’t have to be cryptocurrencies, some of the ideas were borrowed from that movement.
In fact, currencies like Satchel’s which don’t start out based on a decentralized blockchain could, with the right community appetite and support of the SaaS, become as such, which could take it to another level.
But just the idea of easily rewarding, incentivizing, and growing a community is can be very powerful.