“There are two rules for success:
1. Never tell everything that you know” (Roger H. Lincoln)
Company Culture and Customer Success
In my previous post, I discussed perspectives that dealt with the technical and formal issues of improving customer success. It suffices to remember one fact – companies are more successful when their customers are more successful. In this article I will talk about a crucial facet of SaaS: company culture - that not only affects Customer Success, but many other aspects of running a successful SaaS operation.
(I have written about Culture in a number of articles in the past – some posts are pointed out)
Multiple Touch Points
In the on-premise business model, the touch points with the customer moved slowly from one part of the organization to another: Sales and Pre-sales were engaged with the customer at the beginning; then Professional Services engaged with the customer until implementation was complete. Following that stage, the ISV did not interact much with the customer. There may have been a yearly status call; sometimes the customer inquired about bugs or perhaps sent a request for features that was pushed into a waiting list. (The product may even have been sold through a VAR, leading to an even larger disconnect).
In the SaaS model, at any given moment there could be multiple touch points with the customer: The end users may be speaking with Support, while the customer IT is talking with the Ops group; the customer business manager is engaged in a call with Sales, while the CIO is speaking with the SaaS CEO about the latest outage, and Finance on both sides are figuring out last month’s bill. Some SaaS companies assign Technical Account Managers to large customers, but that would not alleviate the problem if end users continue calling Support, or IT happens to be talking with the network manager in the Ops group. In any case, TAMs are only assigned to a few, large enterprise customers and this will not work out if the company has hundreds or thousands of active customers.
Mapping the touch points of the customer is therefore essential, and making sure that everyone who might have contact with the customer is using the CRM (or equivalent - I know, it is not cheap).
Need for Speed
Everything switches to Fast-Forward in SaaS. The sales cycles are shortened by at least an order of magnitude. The release cycles are shorter through agile methodologies and DevOps technologies; the impact of bugs is immediate (the new version is released at night and the following morning thousands of users interact with the software) and the response from the customers is almost instantaneous. Customers expect a fast turnaround and Information about success or failure travels as fast as the latest Tweet. Numerous customers may be added in a single day through self-service, or might churn at the end of the month.
Therefore, SaaS companies must shift into high gear. Especially if they come from the old, legacy, on-premise world, where the staff is used to much longer cycles in every aspect (I have been giving seminars at these old-world companies to emphasize that fact and push for cultural change). Quickness of response, of decision making, and pro-activity result from the elements discussed below: Transparency, Communications, and Openness.
Transparency
I have written in the past about Transparency and it is still a valid article. I do not wish to recycle old material but suffice to say that customers will not only appreciate the openness and honesty as a virtue; they can also benefit from the knowledge while helping your company improve. When service is down, or slow, or erroneous, covering it up will not make your customers feel more confident. If you discuss the issues with them (s**t happens, you know,) you may work out together how to deal with service degradation in the future; that will help them become more successful.
When you promise a certain feature that you know will not be delivered on time or as expected, you may gain a few weeks of industrial peace, but that will clearly not make your customers more successful. If, instead, you openly share the status of your release, your customers would be better prepared. Working together, you may formulate an alternative solution that will allow the customer to succeed while reinforcing the ties between the companies.
Communications and Openness
The fact that almost anybody in the company might be in touch with someone on the customer’s end and that everything has sped up means that inter-department communications is crucial and internal transparency is a must. There is not time for ego games, or gaining an edge by holding important information close to one’s chest.
Transparency within the company is crucial (there usually is a correlation between external and internal transparency). If you promote a culture of openness and acceptance of mistakes, problems will be reported earlier and be dealt with the maximum available information, therefore reducing their negative impact. Both the company and its customers will benefit.
(Recommendations for periodic meetings can be found in my article on Inter Department Communications)
Service Level Agreements
The Support staff usually take the first hit when bad things happen, but every employee must understand the impact of service degradation. Make sure people empathize with what it is like not to be able to complete the task that the end user is evaluated on.
SLAs are usually regarded as a necessary evil, forced upon the SaaS provider by a standard expectation in the market, and is usually reduced to the minimal accepted level. (read more about SaaS SLAs).
But, imagine a company that takes it SLAs seriously, that thinks about the Service Levels that it provides its customers and that is proud of what it can offer to the end users and is open about it.
Imagine that someone within that company actually read the SLA and thinks about how to improve the Service Levels, not only the dead horse of the Availability section. Imagine what that might do to enhancing customer success!
A Point about Priorities
Some companies emphasize that the ‘Customer is Always right’ and keeping the customer satisfied is the top priority of the establishment. With other companies, making the shareholders happy is the major driving force.
The following observation is based on my subjective experience and understanding and has no scientific or statistic corroboration:
If you manage to make your Employees Proud, Dedicated and Happy, they will make your Customers Paying, Loyal and Happy, which will make your Shareholders Fat, Supportive and Happy.
This is why company culture is so crucial. Getting people excited and unified behind a common goal of excellence and customer success will result in Excellence and Customer Success.
Software-as-Service as a disruptive trend and how it affects the traditional, ISVs and IT moving to the Cloud. Considerations in the transition to the new model and expertise on SaaS Service Operations - STORM™ and DevOps
Showing posts with label Customer Success. Show all posts
Showing posts with label Customer Success. Show all posts
Saturday, March 15, 2014
Friday, February 28, 2014
SaaS Customer Success – Best Practices (part 1)
“The only place where success comes before work is in a dictionary” (Vidal Sassoon)
Nostalgia
In 2003 I was managing the operations of Mercury Managed Services (today, HP SaaS). A large Mercury customer was about to give up on the product as he could not manage the complex in-house requirements, and was suffering from too much downtime. The capable account manager convinced the customer to switch to the SaaS model for a higher (!) price than what they were originally paying.
After a complex migration project the customer switched over and in the first week of the service we noticed a problem with the migrated data causing errors in the process. I called the application manager and apologized that we needed to take down the service for two hours until we fixed the problem (We abhorred the idea of more than a few minutes of downtime). The guy was ecstatic, happy as a puppy with two tails. I cautiously inquired why he was so pleased when I informed him of the service being unavailable. He told me that in the old model, no one would notice there was a problem, and when IT was notified of the issue it would take them two days to respond and a week to fix, and here we knew of the problem in real-time and service will be restored within two hours!
Obviously, customer satisfaction is a matter of expectations; within a few months this particular one got used to high availability and started complaining of less than outstanding response times.
So then, customer success is a combination of real value, of perceived value and TLC – Tender Loving Care.
Do it right the first time
As I have written in a previous post, the cost of acquiring new customers is between five to seven times more expensive compared to retaining existing customers, yet most SaaS CEOs/VP Sales are focused on new customers, optimistically hoping that ‘once a customer always a customer’.
From a recent poll conducted by Totango it is evident that the fastest growing SaaS companies “…have a significantly better record on churn and upsell, underscoring the critical role of managing revenue from existing customers…”. In other words, being successful in the SaaS model means that you have to make your customers successful.
Bellow, I provide a list of best practices that a SaaS company should follow to improve Customer Success; of which Customer Satisfaction is a crucial but not sufficient factor.
Real Value – Perceived Value
Let’s start with something as trivial as bringing value to the customer. Obviously your service/product has to provide an advantage to the business that was not there previously, but many times the users may not be even aware of the real value. If the end user is coerced by her boss to use a certain business process without her seeing the value in it, it is not going to fly. Or, if the service was procured by a business manager that wanted a simple function that was not available or affordable prior, it could be that the users are not even aware of the full range of functionality (‘value’) of the offering.
Therefore it is crucial that the SaaS company be aware of the reasons why people are using (not using) the service, what their expectations are and how they perceive the value. This can only be done through engaging the end-user, not just the business entity that is paying for the service.
Which is a perfect segue into the next item…
Customer engagement
Remember the ‘good’ old days where R&D defined the product, the needs and the functionality? We’ve come a long way since, with Product Marketing defining the offering and releases; still, it is not clear how much real feedback is being collected and integrated into the roadmap.
How do you know what makes your customers successful? Ask them. Direct calls, forums, surveys, any means available to you. Involve the customer in the process. Ask for feedback on the product, workflows, and features. The end users typically would love to voice their opinion, to know that what they think is important.
The best venue for this kind of engagement is building a community around your service. Whether using a LinkedIn or FaceBook group or building your own community page in the corporate site. Create forums, discussion groups, a Q&A/FAQ section, an expert panel and blogs. This serves both as an invaluable source of knowledge into your customer’s deepest desires but also enhances loyalty. Consider gamification to promote participation in the community.
Branding
The community engagement is highly important for building your Brand Name. You want people to remember your name, and in a positive way. Twitter, FaceBook and other social media will kill you as easily as promote you. You must be aware of what is being discussed, chatted or Tweeted about you on any network and try to engage angry users and deal with their issues, real or imaginary.
Tell them they are successful
If you, as the service provider, know what brings the customer value, make sure they know it as well and can gauge it. Provide ‘success’ reports and ‘success’ dashboards as part of your product offering. Whatever metrics that you can define as gauging success, let them know how your service improves it, every time they use your software.
Know what is going on
“If you can’t measure you can’t improve”. There are two areas in which you must make sure you know what is going on. The first is Churn Management. You should be able to collect every bit of information on why customers left you, after how long, how big were they (revenue and company size), who was responsible for the engagement, etc. Only by analyzing, trending and reviewing this data will you be able to predict future behavior, identify telltale signs and reduce your churn.
The other area is how your product is being used by your customers. You could analyze log files and perhaps fields in your web pages, or use ready-made solutions such as Totango. Totango’s analytics and reports allow you to identify behavior indicating loss of interest, or patterns leading to disengagement. In addition, they can show you which components of the service are being used by whom, and when (e.g. EOD, Weekends), and which paths are abandoned in the midst of the flow. This can all be fed back to Product Management to improve the service and the experience, and therefore the customer’s success.
Integration
While your solution may be the best thing since sliced bread, your users do not live and work in a vacuum. There have been business processes in your client’s organization and other SaaS and onsite software in place long before you came into the picture. You must make sure that your SaaS application blends seamlessly into your user’s working day. This means allowing them to import or export data and tasks to the other applications they are already using the run their business and smoothly switching between applications (through SSO). SaaS entrepreneurs tend to focus so much on building a great application that they sometimes forget that true success occurs when you users start to see you not as an application but as a platform. Integrations are one of the ways to become a platform.
Having a good base of integrations also makes your customers decision to buy & use your product a much easier one. There is a wide variety of integration consulting companies and integration and SSO SaaS solutions out there. There is also a new breed of companies like Bondable which enable SaaS businesses to build integrations with other SaaS businesses, without having to constantly maintain these integrations.
Keep in mind that the more you are integrated with other services, the more ‘stickiness’ it adds to your solution and the more difficult it becomes to disengage.
Culture
In the next post I will talk about company culture and its direct impact on customer success. It is important enough to merit a standalone post.
Nostalgia
In 2003 I was managing the operations of Mercury Managed Services (today, HP SaaS). A large Mercury customer was about to give up on the product as he could not manage the complex in-house requirements, and was suffering from too much downtime. The capable account manager convinced the customer to switch to the SaaS model for a higher (!) price than what they were originally paying.
After a complex migration project the customer switched over and in the first week of the service we noticed a problem with the migrated data causing errors in the process. I called the application manager and apologized that we needed to take down the service for two hours until we fixed the problem (We abhorred the idea of more than a few minutes of downtime). The guy was ecstatic, happy as a puppy with two tails. I cautiously inquired why he was so pleased when I informed him of the service being unavailable. He told me that in the old model, no one would notice there was a problem, and when IT was notified of the issue it would take them two days to respond and a week to fix, and here we knew of the problem in real-time and service will be restored within two hours!
Obviously, customer satisfaction is a matter of expectations; within a few months this particular one got used to high availability and started complaining of less than outstanding response times.
So then, customer success is a combination of real value, of perceived value and TLC – Tender Loving Care.
Do it right the first time
As I have written in a previous post, the cost of acquiring new customers is between five to seven times more expensive compared to retaining existing customers, yet most SaaS CEOs/VP Sales are focused on new customers, optimistically hoping that ‘once a customer always a customer’.
From a recent poll conducted by Totango it is evident that the fastest growing SaaS companies “…have a significantly better record on churn and upsell, underscoring the critical role of managing revenue from existing customers…”. In other words, being successful in the SaaS model means that you have to make your customers successful.
Bellow, I provide a list of best practices that a SaaS company should follow to improve Customer Success; of which Customer Satisfaction is a crucial but not sufficient factor.
Real Value – Perceived Value
Let’s start with something as trivial as bringing value to the customer. Obviously your service/product has to provide an advantage to the business that was not there previously, but many times the users may not be even aware of the real value. If the end user is coerced by her boss to use a certain business process without her seeing the value in it, it is not going to fly. Or, if the service was procured by a business manager that wanted a simple function that was not available or affordable prior, it could be that the users are not even aware of the full range of functionality (‘value’) of the offering.
Therefore it is crucial that the SaaS company be aware of the reasons why people are using (not using) the service, what their expectations are and how they perceive the value. This can only be done through engaging the end-user, not just the business entity that is paying for the service.
Which is a perfect segue into the next item…
Customer engagement
Remember the ‘good’ old days where R&D defined the product, the needs and the functionality? We’ve come a long way since, with Product Marketing defining the offering and releases; still, it is not clear how much real feedback is being collected and integrated into the roadmap.
How do you know what makes your customers successful? Ask them. Direct calls, forums, surveys, any means available to you. Involve the customer in the process. Ask for feedback on the product, workflows, and features. The end users typically would love to voice their opinion, to know that what they think is important.
The best venue for this kind of engagement is building a community around your service. Whether using a LinkedIn or FaceBook group or building your own community page in the corporate site. Create forums, discussion groups, a Q&A/FAQ section, an expert panel and blogs. This serves both as an invaluable source of knowledge into your customer’s deepest desires but also enhances loyalty. Consider gamification to promote participation in the community.
Branding
The community engagement is highly important for building your Brand Name. You want people to remember your name, and in a positive way. Twitter, FaceBook and other social media will kill you as easily as promote you. You must be aware of what is being discussed, chatted or Tweeted about you on any network and try to engage angry users and deal with their issues, real or imaginary.
Tell them they are successful
If you, as the service provider, know what brings the customer value, make sure they know it as well and can gauge it. Provide ‘success’ reports and ‘success’ dashboards as part of your product offering. Whatever metrics that you can define as gauging success, let them know how your service improves it, every time they use your software.
Know what is going on
“If you can’t measure you can’t improve”. There are two areas in which you must make sure you know what is going on. The first is Churn Management. You should be able to collect every bit of information on why customers left you, after how long, how big were they (revenue and company size), who was responsible for the engagement, etc. Only by analyzing, trending and reviewing this data will you be able to predict future behavior, identify telltale signs and reduce your churn.
The other area is how your product is being used by your customers. You could analyze log files and perhaps fields in your web pages, or use ready-made solutions such as Totango. Totango’s analytics and reports allow you to identify behavior indicating loss of interest, or patterns leading to disengagement. In addition, they can show you which components of the service are being used by whom, and when (e.g. EOD, Weekends), and which paths are abandoned in the midst of the flow. This can all be fed back to Product Management to improve the service and the experience, and therefore the customer’s success.
Integration
While your solution may be the best thing since sliced bread, your users do not live and work in a vacuum. There have been business processes in your client’s organization and other SaaS and onsite software in place long before you came into the picture. You must make sure that your SaaS application blends seamlessly into your user’s working day. This means allowing them to import or export data and tasks to the other applications they are already using the run their business and smoothly switching between applications (through SSO). SaaS entrepreneurs tend to focus so much on building a great application that they sometimes forget that true success occurs when you users start to see you not as an application but as a platform. Integrations are one of the ways to become a platform.
Having a good base of integrations also makes your customers decision to buy & use your product a much easier one. There is a wide variety of integration consulting companies and integration and SSO SaaS solutions out there. There is also a new breed of companies like Bondable which enable SaaS businesses to build integrations with other SaaS businesses, without having to constantly maintain these integrations.
Keep in mind that the more you are integrated with other services, the more ‘stickiness’ it adds to your solution and the more difficult it becomes to disengage.
Culture
In the next post I will talk about company culture and its direct impact on customer success. It is important enough to merit a standalone post.
Thursday, August 14, 2008
Quick response to a silly blog
Normally, I have my own plans for what I want to post on my blog and I leave the fencing for the US women's Olympic team.
BUT, this morning I received an email from a friend who is also a CEO of a SaaS company, pointing out a new post with an outrageous title Why You Should Steer Your Customer Away from SaaS, for Now asking me to comment on it in my blog.
Frank's argument was that since Goggle's Gmail had an outage " just mention Google and Amazon's problems and a shadow of doubt can be place over the whole hosted applications market" He goes on to say that cloud computing (SaaS) "is just a pipe dream" and that we should resort to good old reliable client server technology.
I told my friendly CEO that it is such a non-issue that I don't think I should waste a good posting on it, but I did add a comment to the blog.
As the day went by and my comment was neither posted nor acknowledged, I decided to use this forum to respond.
So, my comment went something like this:
BUT, this morning I received an email from a friend who is also a CEO of a SaaS company, pointing out a new post with an outrageous title Why You Should Steer Your Customer Away from SaaS, for Now asking me to comment on it in my blog.
Frank's argument was that since Goggle's Gmail had an outage " just mention Google and Amazon's problems and a shadow of doubt can be place over the whole hosted applications market" He goes on to say that cloud computing (SaaS) "is just a pipe dream" and that we should resort to good old reliable client server technology.
I told my friendly CEO that it is such a non-issue that I don't think I should waste a good posting on it, but I did add a comment to the blog.
As the day went by and my comment was neither posted nor acknowledged, I decided to use this forum to respond.
So, my comment went something like this:
- I can't believe we are even having this discussion. This is not 2003 when people were discussing the merits of this novel delivery system. As Dave Rosenberg pointed yesterday in his Negative Approach blog "Software-as-a-Service is so common it's actually boring at this point"
- Frank's argument is as valid as steering customers away from motor cars back to horse drawn carts, because accidents happen.
- SaaS companies make a living out of providing these services. Although I do not have the statistics, I know from numerous interactions with many companies that your average SaaS uptime figures are far better than your average IT department's.
- Part of the success of SaaS has to do with the fact that IT was simply not delivering the goods, not in performance nor availability, so the business units went out looking for someone who could deliver a better service, NOW.
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