What it really takes to move customers to SaaS…

logo I spent some time this morning being set up by iPayroll. I’ve written about iPayroll in the past and been pretty critical about the look of their offering and also whether or not there is a value add to SaaS delivered payroll apps. To their credit, iPayroll decided that, notwithstanding my criticisms, there was value in getting me hooked up with their product so I could better assess what they do (maybe a case of keeping your friends close and your enemies closer ;-)).

I’ll post about my experiences using iPayroll later on, but for now I want to talk more generally about the cost of customer acquisition for SaaS products. I’ve gone on record in the past saying that SaaS vendors who are trying to subvert a traditional installed application need to ease the conversion pain for their users. I for example have been doing SME payroll for over a decade, through multiple businesses – I understand payroll but even I couldn’t face the conversion pain.

iPayroll I can unreservedly say are doing absolutely everything right in this respect. After agreeing to sign up I was personally contacted by iPayroll’s sales manager to run me through the set up process – there were no automatic emails to contend with – rather a patient and helpful real person to talk to.

As we currently utilise a payroll package, we wanted to migrate our data. Again iPayroll shows best practice with this. Rather than asking me to do a migration and deal with the hassles, iPayroll simply asked for either a printout of the reports from my existing package, or a backup file of it. From there they do all the work required to migrate to their own package. (Well they’ve told me they’ll do all the work all ready for our pay run on Monday morning – I’m assuming (and confident) that it’ll happen).

Other SaaS vendors should learn from iPayroll’s model – my contention is that if SaaS accounting vendors in particular provided a similar level of set-up and migration service – their conversion numbers would be much, much higher.

I’d estimate that it costs iPayroll well north of a months revenue to perform this process alone, this is after the sales and marketing costs involved in customer acquisition – it shows a real commitment to giving customers a good experience migrating to their product.

Elaine from iPayroll tells me that they have an exceptionally high conversion rate and that most prospects they pitch end up converting – I can totally see why this is the case, and why their existing customers become the best salespeople they have.

Let me reiterate – anyone trying to create momentum with a SaaS product in a class that competes with installed applications has to ease the conversion pain if they hope to achieve scale.