Customer Success for SaaS Companies
If you build it, they will come may be famous words, but as many startups and customer success managers are aware, they don’t always seem accurate for SaaS companies.
Growing your customer base, drawing in new business, and keeping existing customers is an ongoing struggle, especially in the beginning.
The success of your customer base is hugely important to the success of your company as a whole in a very competitive market.
The success of customers can be the deciding factor between a successful company and one that gets left behind by competitors who provide more value to their customers.
This article will explain what customer success is and why having a customer success team should be a priority for any SaaS organization. After reading this, you will understand the basics of customer success and be able to better assess if your organization needs to invest in a customer success team.
What is customer success?
In other words, customer success is ensuring that your customers are getting the most out of your product or service. This includes everything from providing adequate onboarding and training to offering adequate support and making sure that the product or service meets the customer’s needs.
This is not the same as feeling satisfied in the moment; customers should feel like they are getting long-term value from using your software solution. They should feel the value immediately upon activating it, and continuously over time as they use it more. Your software should improve customer retention, enabling companies to grow faster with less capital.
The value of your product or service is based on how well it solves customers’ problems and how it helps them achieve their goals.
Anything that makes it difficult for customers to achieve their desired goals is bad for customer success and bad for business. This includes poor onboarding and convoluted UX/UI.(UX=User Experience, UI=User Interface)
Customer success refers to making tasks easier for customers and saving time over alternative options. Customer success is more likely to lead to long-term customer retention.
What makes customer success in SaaS unique?
But in the SaaS industry, the journey has just begun. After a customer pays for a SaaS product, their journey has just begun. This is because customer success in the SaaS industry works quite differently from many other industries. For many product or service providers, the transaction has concluded once payment has been made and the product/service is rendered. However, in the SaaS industry, customer success is a continuous journey.
This means that for SaaS companies to succeed, they need to not only acquire new customers, but also keep their existing ones happy. SaaS companies rely on recurring revenue from customers subscribing on a monthly or annual basis. In return for this, customers expect constant and consistent value for their money. To succeed, SaaS companies need to keep their existing customers happy and acquire new ones.
There are few things stopping customers from cancelling their subscription to a self-service SaaS company and going to a competitor if they think they can get a better price, product, or service.
B2B SaaS contracts often require large investments in terms of training teams of staff and integrating solutions into daily workflows. This makes convincing teams to change harder.
Customer retention is more important than customer acquisition because it is five times cheaper to keep a customer than to get a new one. Therefore, it is crucial that SaaS companies have a good customer success strategy.
You need to make sure customers feel like they’re getting their money’s worth. You should do everything you can to help them succeed so they’ll keep using your product or service.
How does customer success differ from customer service or customer experience?
Customer success is about making sure customers get the most out of a product, whereas customer service is about resolving customer complaints and customer experience is about the customer’s overall journey with a product Each refers to a distinct concept as outlined below:
A customer service transaction is a service provided to a customer before, during, or after a purchase is made. This service is typically focused on solving problems and usually requires the customer to contact the business first.
Customer service is any interaction between the customer and the company. This can include salespeople, account managers, and customer support reps.
The three types of employees mentioned are salespeople, account managers, and customer support reps. Each type of employee is described as possessing certain qualities. Salespeople are said to ask great questions, send timely follow-ups, and be informative. Account managers are said to be polite and prepared, while customer support reps are described as friendly and helpful.
The customer experience is the journey a customer takes from their first contact with a company to their last. This includes making a purchase or resolving an issue through customer service.
A bad customer experience is one of the main reasons why customers unsubscribe from a service or stop using a product. On the other hand, a good customer experience can increase customer retention and loyalty.
The customer success strategy is focused on the overall relationship between a customer and the company. It takes a holistic view of the customer’s journey, but the key difference is in the success metric.
Customer support and customer service exist to make sure customers are happy, while customer success is focused on making sure customers get value out of your product and feel good about their relationship with your company.
Service and experience, on the other hand, are usually synonymous. It can be difficult to distinguish between customer service, experience, and success, but it is important to do so. Customer success is a relatively new concept that many companies are just now starting to realize and address.
The goal of customer experience and customer service is to provide positive experiences for an individual customer throughout the purchase process and after.
Improving customer retention is the goal of customer success, which strives to provide value to customers so they will keep using your service. Showing customers how your service benefits them is key to success.
SaaS companies can increase their profits by 25-95% just by increasing customer retention by 5%.
Best Practices for SaaS Customer Support
There are many reasons why customer support is important.
However, we are going to focus on three main areas:
- Increasing retention and decreasing churn
- Improving your product, marketing, and sales around customer needs
- Structuring your support processes for efficiency and consistency
1. Focus on proactive customer retention.
It is very important for companies that operate through a subscription model to keep their customers.
This is a simple mathematical equation. The amount of money it costs you to acquire a new customer is compared to the customer’s lifetime value. You want the customer’s lifetime value to be greater than the cost of customer acquisition. The greater the LTV is in proportion to the CAC, the better your business is doing financially.
The basics of business are essential and returning to them is important. If you can keep a customer for 12 months instead of 6, then you have made twice as much money. The cost of acquiring them has not changed.
Owning a customer means that you can sell them additional services. It is much cheaper to upsell a current customer- around 5 to 10 times cheaper- than to gain a new one.
Keeping customers happy makes you more money.
There are key moments when customer service should be concentrated.
If you give your customers great service from the beginning, you’ll see higher retention rates and less strain on your support processes.
Training new customers on your company’s services and procedures using active customer service methods helps to solidify your company’s place in their work process, as well as teaching them how to use the services properly.
At Price Intelligently’s conference SaaSFest, HubSpot product manager Dan Wolchonok outlined how increasing retention during a customer’s onboarding period has a compounding knock-on effect on revenue through increased retention every month after.
The user onboarding process was improved, resulting in a retention rate of 75% for the first week. The second week saw a similar retention rate, with users remaining active at 60%. By the tenth week, 25% of users were still using the product, compared to the 10-15% who would typically be active at that point.
Good customer service can play a vital role in getting new users acclimated, and it can help keep people around, which reduces the rate at which customers stop using a service.
2. Use customer feedback to improve your product.
You can learn a lot about how to improve your product by talking to your customers and developing relationships with them.
The use cases for your product that your customers have are probably varied, and you would not be able to account for all of them without talking with them. Also, it is highly likely that your customers have used some of your competitors’ products.
Process Street has a system in place where every feature request and complaint that comes in through the support desk is tagged.
This data can be used to run a quantitative analysis to find out the most pressing needs and concerns of their user base.
This allows development resources to be focused on meeting customer needs, while the product design team can review the types of use cases and features described to understand what direction the product could develop in.
You can still use these methods even if you have a small business.
Sujan Patel decided to offer concierge onboarding to his clients so he could have discussions with them about the early days of the business.
After spending a lot of time interacting with his users, he was able to understand their needs and build personas to guide his marketing, product changes, and onboarding processes. This helped him identify what to keep and what to remove from his product.
At first, users were having a few issues with the app that they kept bringing up. These weren’t major problems, so the users didn’t reach out about them. However, these issues were enough to prevent the users from recommending the product to others.
- Users didn’t like the boring UX of the original version, having grown used to Tinder and Bumble and similar apps.
- Users felt the app wasn’t as fast or stable as the other apps they love to use.
- And on top of that, the messaging feature needed improvement.
Customer service efforts showed that they were not meeting the standards that customers wanted.
Although you may be large or small, it is important to listen to your users. Good customer service is required to have these types of discussions.
3. Employ user conversations to inform your messaging.
The point is similar to the one mentioned before.
If you want to better understand your customers, try interacting with them more. Getting to know them and building relationships will help you understand why they chose your platform over a competitor. You’ll also get a better sense of what use cases you’re most popular for and what your demographics look like.
The above can be used to target and message potential new customers.
Customer support that goes above and beyond what is expected can not only lead to a customer spending more money with a company, but can also help to entice new customers.
Content is not just for new prospects and funneling potential users. It is also for engaging current customers.
If you keep your customer support and marketing teams close together, you can create content that highlights the product’s features through explainers. This would be helpful for both existing clients and potential new ones.
You can share this content on your blog, your knowledge base, or both.
4. Structure your support team for efficiency and consistency.
You should have a system in place for your support efforts just like any other part of your business.
When your support team has a clear structure, it’s easier to see who should be doing what and when. Without a clear structure, it’s easy to miss tickets or misassign them.
If there are no structures in place, there is no accountability and poor practice can continue. Having strong policies, processes, and procedures will create structures for your team to flourish.
The strategies that are the most successful are the ones that revolve around the customer throughout the entire process.
You need the right tools and strategies to understand your customer, including tracking the right data.
An effective customer success software can help bring data together to create solutions that engage customers and lead to customer success.
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