When the Software-as-a-Service (SaaS) era began over a decade ago, one of the core benefits touted by providers was the huge savings on support. Unfortunately, many SaaS providers took this to mean that virtually no support was needed -- after all, they argued, when software is so easy to access, what more could customers need?
This assumption, sadly, led to many great tools languishing as users struggled to understand how to use them. The lesson was clear: helping customers succeed with your software is just as important as making it easy to download and install.
As Jason Lemkin, managing director of Storm Ventures, put it recently, “Customer success is where 90% of the revenue is.”
For SaaS companies, customer success is a critical function for five main reasons:
1) Customers are your best source of great ideas
Most product teams will tell you that customers are an amazing source for feedback and feature ideas. When it comes to SaaS, facilitating these customer conversations can be tricky given the sheer number and variety of use cases. Customer success teams can bridge this gap by categorizing customers based on their behaviors and needs.
From there, they can help to facilitate tailored conversations and prioritize product ideas based on customer groups. Ultimately, this creates a virtuous circle where product is better able to deliver high-value features and customers know their voice is being heard.
2) Your software is only as good as the business value it delivers
At Narrative Science, we’re fortunate to work on a truly groundbreaking product, Quill, in the rapidly emerging market of natural language generation. The excitement around this technology is clear whenever we speak at events or meet with prospective customers. The potential applications are limitless.
But we also know that our customers do best when there is a clear business value associated with Quill — whether it be increasing employee efficiency, driving additional revenue, cutting costs, or improving customer experience. When we deploy our software, our customer success organization partners closely with our clients to establish clear KPIs around this business value.
We also make it a priority to keep in touch with our customers regularly to make sure their value metrics are progressing well and to make adjustments as their KPIs evolve based on new business needs.
3) Build trust early and often
SaaS companies typically rely on subscriptions and renewals to generate revenue. This makes it very easy for new customers to get started with their service but just as easy for an unhappy customer to cancel.
This can lead to being blindsided by sudden cancellations because of the lack of regular touch points with customers. They assume no news is good news, or worse, rely on customer support issues to drive their communication.
Formalized customer success functions ensure that SaaS companies have a proactive communication strategy. This not only reduces churn but also results in higher customer satisfaction and better renewal rates.
Inbound marketing SaaS giant Hubspot, for example, managed to retain 33% of previously unhappy customers by utilizing their proprietary blend of customer success known internally as the “Customer Happiness Index.”
4) Don’t set it and forget it
As your SaaS business grows, it’s very easy to set your customer communications on autopilot. If everything is stable and you’ve established a steady stream of feedback, it is easy to turn your attention elsewhere.
Your customers may be happy that day but without a comprehensive customer communication strategy, it’s easy to miss critical market feedback, identify additional opportunity, or simply get sloppy in your product implementation.
Additionally, your communications strategy should have response and outreach plans for scenarios that may not have even arisen yet. Customer success teams help ensure communication remains top of mind, organized, and thoughtful even during times of rapid growth.
5) It’s the cornerstone of your reputation
Every interaction from your customer service team matters -- from the tone of a conversation, to the response time to an email, to the overall empathy your team shows a customer. When someone asks your customers how they feel about your company, you want the response to be positive.
Otherwise, any lasting negative feelings could be costing you business. Great customer service is the most uniquely defensible part of your business and will position you well for future business.