Today, Casper’s return policy may be haunting them. Plus, an AMA on all things referral marketing. And Userpilot’s Aazar Ali Shad is here to talk about the State of SaaS Product Onboarding.
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Sleep tight (& please don't return your mattress)
About 10 months ago, D2C mattress company Casper was valued at $1.1 billion during its last public funding round. But paperwork filed Monday reveals Casper has now valued itself at no more than $768 million.
That's a pretty hefty price cut.
This lower valuation is based off a maximum per-share offering price of $19, Forbes reports. And if the stock opens at the low end of the projected range, those shares will drop to $17 a pop.
But it’s hard to make sense of this dramatic drop. Casper has basically been the virtual poster-child for the D2C consumer mattress business. It’s also made the brand appear loud and clear through extensive (and expensive) marketing and advertising: podcast appearances, social media, and subway station ads. You name it, Casper’s done it. On top of that, NPR reports that Casper has quite a few celebrity investors like actor Leonardo DiCaprio and rapper Nas. So where did these efforts fall flat?
To put it bluntly, Casper’s return policy really bit them in the ass. It offers a free trial period of “100 nights free” and an extremely generous return policy. NPR reports the loose refunds, returns, and discounts cost the company nearly $81 million in 2018.
And because of this leniency, people aren’t surprised by Casper’s losses.
Mattress Writer and Executive Editor of Furniture Today David Perry can attest, “This was long suspected that Casper is losing money. The number I really would like to see is what is the return percentage [of Casper’s mattresses].” Spoiler alert: he’s still looking.
It seems as though Casper is aware of the flaws in its return policies, though.
One part of the filing to go public says, “As a young company, we are still learning about the factors affecting customer returns and believe we have the opportunity to reduce customer return rates. We have identified several opportunities that span policy change, process improvement and consumer education to reduce return rates and increase overall customer satisfaction.”
Unfortunately, while Casper tries to roll out these kinks, there are now 175 other D2C mattress companies out there like Zoma Sleep, so the competition is fiercer than before.
Not your average he said/she said
In the marketing space, we know there’s nothing quite as rewarding (or effective) as a word-of-mouth referral.
Step 1: Someone you trust tells you what products they’re using to make life easier.
Step 2: You’re on board (if at least for a test run).
And we know that understanding which of your users are the most loyal—through a measurement like net promoter score (or NPS)—can have a direct impact on your bottom-line revenue.
Monetizing existing customers is highly contingent on customer success. If you measure NPS and work to improve the customer experience and brand loyalty of customers with low scores, you stand to create happier customers that are more likely to retain and expand their plans.
So Ambassador, the all-in-one referral platform, is hosting an AMA (or “ask me anything”)—tomorrow—on the future of word-of-mouth marketing. Because, sure, some of the marketing trends from the past decade are dying—luckily we’ve witnessed listicles and surface-level content finally seen for what they truly are—but referral marketing is still on fire.
How could it not be, really? It’s an appealing alternative for driving a high volume of qualified leads and ROI numbers. Ambassador reminds us that almost 75% of consumers identify word-of-mouth referrals as key influencers in their purchasing decision. No surprise there.
So if you’re around tomorrow at noon CST, hop on this AMA with the Ambassador crew to hear, and ask about, a couple key drivers, like:
- The value of integrating word-of-mouth into your overall marketing strategy
- Top trends and best practices for B2B companies and consumer brands
- How to scale this customer acquisition channel
Here's where to sign up.
The biggest impact on onboarding
Hot off the press: Just yesterday, Userpilot launched its 2020 State of SaaS Product Onboarding report. Because we know onboarding has a seriously direct impact on your product’s activation and adoption, an outlet with which to improve retention and decrease churn.
The Userpilot team analyzed over 1,000 different SaaS products, signed up for free plans and trials, and then worked through each onboarding flow to note every possible observation about how it worked, with thousands of hours of research to prove it.
So we had Userpilot Head of Growth, Aazar Ali Shad, weigh in.
Abby: Aazar, what motivated your team to compile this report? Obviously, Userpilot is all about user onboarding, but it’s so involved. Why take this much effort? Why is this important?
Aazar: “Yes, that’s a great question actually… I just started doing a show on user onboarding teardowns and we just started doing this one-on-one for companies that are doing good practices and bad practices. And what I learned was that a lot of companies are not doing those things that we usually preach to our customers.”
So what was one of the most telling findings from the report?
“Forty percent of SaaS companies did not even have a welcome screen to welcome new users, you know? Let’s imagine offline. When you go to a restaurant there’s a waiter down there opening a gate for you, saying ‘hi.’ And there’s a waiter that comes to you and says ‘hi’ again, and then gives you a menu card.
You know, that’s a normal human courtesy—and that’s there in the offline world but we don’t see it in the online world. So, 60% have it but 40% still do not welcome their users. And a ‘welcome’ is a great way to actually start the user doing some kind of activation right there inside the application.”
And is there data that proves the effectiveness of something like a ‘welcome’ page that continues the buyer down the journey?
“Companies who have a welcome screen with a checklist, the users who use the checklist, they are 3x more likely to convert—to become a paid user than the users that do not use a checklist. So just having one checklist and people interacting with that checklist makes the user understand the product much better.”
And who would you say this report is for? Who would you suggest downloads the report, studies the report? Who is this useful for?
“Anybody in SaaS—that’s either in customer success, product marketing, or product management—these three basic personas will be using it. And also growth managers, growth marketers as well...
But in general it’s for SaaS companies, right? We did not go into mobile onboarding, we just stayed in web app onboarding, so it’s almost applicable to all the SaaS companies who are usually looking to improve their one or two growth metrics—either activation or retention."
What’s the overall message? If our users could get one thing out of this report, what should it be?
“Customer wins are really important, regardless of if you use any external tool or your own tool. But start adding those customer wins in your reporting and analytics, and based on that, show the right message. That will actually have the biggest impact on your entire onboarding. And that’s the one message I want users to take away from here.”
Does onboarding impact WTP and retention?
This was one of the trickiest questions we've had to date, because coding onboarding perception and then measuring willingness to pay is a non-trivial task. But we looked at just under 500 different software products, spread between B2B and B2C, and nearly 25,000 customers of those products to find out
Here's what the data says.
And that’s a wrap for your January 29 roundup. Catch us back here tomorrow—same time, same place.
If you have news to share, let's connect. You can reach me at email@example.com. I'm all ears.