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“Engagement” The Most Important Metric For Any Software Company

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Derek Skaletsky

Written by: Derek Skaletsky, Founder and CEO of Knowtify


Knowtify was born from the difficulty I personally experienced in marketing to my existing customers. At a previous SaaS startup, we had a major problem: churn. It was crippling our growth and we had to reduce it. But we knew this churn was just the result of a bigger root issue – lack of user engagement. We looked for good solutions to help us solve this, but there really weren’t any good tools – so we had to build something from scratch internally. We build a pretty robust engagement email system to help us deliver relevant and personalized emails to our users on a regular basis.

Logins, app actions, and, most importantly overall Lifetime Value increased across the board. But no matter what we did, our customer engagement was reliant upon ‘stealing’ valuable engineering resources to build and continue to improve these program – which was not a good situation for us on the marketing side – or for engineering.

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This is when we started to think about a solution that could serve more than our one company. We realized that every modern software company must drive engagement with their existing customers in a personalized and scalable way. That’s when my co-founder, Dane Lyons and I decided to build Knowtify – the first, true Engagement Marketing platform designed specifically for helping software companies better market to their existing users.

We believe that “engagement” is the most important metric for any software company today and long into the future. It doesn’t matter if you have an enterprise SaaS app, a prosumer app with a freemium model, a B2C social networking app…or anything in-between – the amount of engagement your product drives, in many ways, defines its value.

For B2B SaaS products, engaged users stay longer, upgrade their accounts and have much higher LTV;

For freemium apps, engaged users convert to paid, stay longer, invite others and have have much higher LTV (any LTV above $0 is a big deal!);

For B2C social networking, or gaming or other B2C apps, engaged users spend more time in the app, invite others and drive exponentially more impressions that can be monetized.

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No longer is a signup or a ‘sale’ the end game in the value-creation process for software businesses. In many ways, it’s just the beginning. For software companies, value is created little-by-little, one-month, one interaction at a time over a long period of time. And this is why smart, strategic, scalable, and sustainable marketing programs targeting existing users are essential for building value for all software companies.

And in order to support these types of programs, marketers must think (a) holistically; and (b) with empathy.

It’s important for marketers to think holistically about their users experiences and engagement because doing so leads, not only to a better experience for her users, but to smarter, more effective marketing programs as well. Too often, marketers aren’t able to think about their existing users in a holistic way because their information about their users and their communication with those users are spread across disparate applications that don’t communicate well. This situation does not arm the marketer with what is needed to make the best decisions or determine if what she is doing is actually working. A marketer that can think holistically is better for everyone.


A marketer that can think holistically can also act with empathy. This means, the marketer can be emphatic about the complete user experience. She can consider where the user spends his/her time; how he/she uses the product; how often to contact him/her; when to contact him/her; what other products he/she might use — all of which will enable the marketer to create highly relevant and personalized marketing programs that will actually deliver value for the user. And marketing programs that can actually deliver create value for the users are marketing programs that are going to build affinity and drive long-term engagement.

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The other thing we thought a lot about when creating Knowtify was the idea of marketing channels. Part of our ‘holistic’ approach is to enable the marketer to ‘touch’ users across multiple channels, from a single platform. This achieves a few things:

• Increases marketing efficiency – being able to message across multiple channels is simply more efficient (both in terms of time and money);
• Enables a coordinated effort – when you can message across multiple channels from a single platform, these programs can reference each other – meaning you don’t have to over message a user or try to engage him on a channel that doesn’t make sense;
• Offers a better understanding of what is working and what’s not – enabling more holistic, cross-channel marketing allows a marketer to rebuke the old adage – “I know 50% of my marketing is working, I just don’t know which 50%”

We started with the most effective, yet most painful channel available to marketers today – and that’s still email. Before Knowtify, email, in itself, was a disjointed, disconnected experience for the marketer. For most software products, emails delivered to existing still come from multiple sources. Most live in the product’s code base while others are spread across multiple different tools. There was no consistent branding, no coordination and certainly no way to determine what was working and what wasn’t. So, by attacking email as our first channel, we have given marketers a lot of power to positively affect engagement.

Last Updated on April 29, 2017

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