SaaS Companies and Building Customer Loyalty in 2017

Laura de la Court has read posts on how to build customer loyalty in the new year, but none of them are addressing customer loyalty in the SaaS industry.

How are you going to be managing customer loyalty in 2017?

I’ve been coming across a few posts these days on how companies can build customer loyalty in the new year, but none of them are addressing customer loyalty in the SaaS industry.

There are two major factors that make B2B SaaS companies different from any other:

1. B2B SaaS Companies Are Product Focused

These companies started up with developers at their core. As they grow, their focus always remains on the product, constantly working to optimise online software and release new features. With the tech industry developing so rapidly, to stay ahead of competitors and retain customers, the technology needs to be better than it was yesterday, from backend to UI.

This is not an easy task. Teams of developers, engineers and designers need to always be on top of their game. This is where the success of the software lies.

2. B2B SaaS Companies Offer Online Licence Subscriptions

Because these products are readily available for trial and purchase online, as opposed to other eCommerce products, SaaS companies worry about sales at a far later stage. Having a sales team in place is costly, recruits usually need loads of training before they’re ready to sell the product and many different resources are needed in order to help sales teams achieve success. This is why most SaaS companies will only begin looking at this part of their business once they feel their product has gained enough traction in the smaller markets and is ready to be introduced to the larger ones.

From Sales to Customer Success

Every salesperson working in tech sales will tell you that the enterprise market is the most challenging. It’s difficult to get in the door, and once you’re finally in it can take weeks, sometimes months, before there is proof of value. And then it can take another few weeks or months for the procurement process to be completed. Sales cycles are very long, but these deals are also the most rewarding, with multi-year contracts and large deal sizes.

When customers begin spending more energy and funds on a product they also expect the support and other services to come along with that. So besides investing in a sales organisation, companies also need to invest in other resources such as customer support and customer success, or client services.

Companies begin expanding their support teams from a simple online Q&A board to a 24/7 help desk and ticket system. Sales teams are also incentivised to ensure that they not only acquire new customers but also retain and upsell their existing ones.

Some companies will split the sales team in two so that they can focus on revenue generating activities (net new customers) and the customer success team can focus on revenue retaining activities (renewals of existing customers).

Meeting the Needs of Ever More Demanding Buyers

With so many products flooding the online world, buyers will look at many different factors before committing to a particular kind of software. Besides high expectations around the performance and capability of the product itself, there is an ever increasing expectation that support and success services will be readily available to them too. And it’s not only the enterprise customers that are looking for this!

Is it enough that the product is easy to use and intuitive?

We might get away with it when only 1 or 2 people will be using the software but once there’s a team of people involved there are a few other things to consider:

1. Process change and optimisation:

New software changes the process of work. Sales professionals that once used a spreadsheet to do their sales activities begin using a CRM system, or developers that waited for customer complaints about a bug will use a software monitoring solution to find bugs before their users are even aware of an issue. The examples of this are endless! Software is not only changing processes, it’s automating work that people otherwise used to do manually.

2. Feature discovery:

Most users will only use a small part of the product without realising there are a whole list of other modules to help make their jobs easier. Sometimes they are aware of the other features but just don’t have the time or energy to figure out how it all works. They end up not gaining the full benefit of the software and fall into unproductive working habits.

3. Change Management:

How will the people within the team react to the change? How are their roles, responsibilities and time affected by the new software? Ultimately it’s the users that will determine whether they will continue to use the product or not. If it isn’t successfully adopted the customer will churn no matter what the value was that was promised upfront.

Product Adoption is Critical

How do SaaS companies make their product “sticky” in order to ensure successful adoption, licence renewal and in turn build customer loyalty?

The customer journey determines the life cycle of a customer, but what creates stickiness all boils down to one specific time during this cycle – the first 30-90 days of engagement.

With the right tools, people and expertise in place to manage this critical period, SaaS companies can drastically impact their bottomline. It’s also these resources that are the most challenging to find and extremely costly. Measuring the success and justifying the cost for such a team is then another major challenge for leaders in this space.

By taking the above analysis into account, you can focus your efforts on building customer loyalty in 2017.

To learn more about how we solve this challenge for our partners read our Partner Manager Daphne Lopes’ article: Can You Outsource Customer Success?

For even more information, get in touch with us to set up a call, and follow us on Twitter, Linkedin and Facebook for more updates.

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