Monday, August 19, 2013

The Collision Installation

The Customer First-Run Experience That Is Taking Over the SaaS World


There is a type of non-scalable conversion tactic for new customers that has been deemed the "Collison Installation" (after Patrick Collison of Stripe fame). It involves giving new and prospective customers a slice of your time to help them get setup on your software. Of course, it only works well if the CLTV > (cost of time involved in setup), so it's not so good for consumer startups, but good for companies who have products with high switching costs (like payment processors).

However, this tactic has been in use by quasi-consultant bootstrappers and web shops for a long while. And before that, there were sales engineers who helped install and setup large, complicated systems, so the concept is not new. So, its not exactly fair to give credit to Patrick Collison, but it has certainly changed thinking inside of YC, so I'm proposing a new name that honors the concept and the namesake as well as emphasizes the process and the benefits. Henceforth, I deem that it should be called the:


"Collision Installation"


The concept should be clear, you impart kinetic energy into customers by "colliding" with them in an installation process that sends them sailing into the CLTV stratosphere. You build a working relationship from the get-go that is very similar to consultancy, but it has the recurring revenue numbers that make consultancies weep with jealousy. That relationship is maintained over time by automated means, but that initial collision is never forgotten by your customer.

If you collide hard enough - create a great experience with your technical expertise in the loop - and follow up often enough, you make it psychologically very hard for your customer to switch to some other provider.

The downside: you lose momentum in the kinetic exchange.


"If you collide hard enough - create a great experience with your technical expertise in the loop - and follow up often enough, you make it psychologically very hard for your customer to switch to some other provider."


The problem that this overcomes is actually competition. You can create at least a short term competitive advantage if you simply provide better initial customer service that your competition. Also, its hard to compete globally with an ever increasing competitor landscape with marginally fewer convertible prospects. With a collision installation, you make use of the fact that you're local, with no language barrier, and familiar with the culture.


Keeping Momentum During The Collision Installation Process


If you lose momentum with each kinetic installation.... (now, keep in mind I'm talking about the early bootstrapping days when its just you and a partner)... then you have to spin up the flywheel again to continue being productive in the mean time. The answer is to space out your collisions. Monday/Friday or Tuesday/Thursday should be set aside for collisions and on-boarding, and the rest of the week should be set aside for building and maintaining product development or marketing momentum.

There will typically be, in any team of varied expertise, some period of time where one member has downtime while the other is busy doing their thing. For example, in a designer/developer combo, the designer is going to have an awful lot of downtime and will need to pick up on the collision installation process.

By the way, none of this works without leads. So if you don't have leads, you better work on your inbound sales channels. More on that to come in a later blog post.


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