Welcome!

@CloudExpo Authors: Elizabeth White, Liz McMillan, William Schmarzo, Nate Vickery, Automic Blog

Related Topics: @CloudExpo, Java IoT, @DXWorldExpo

@CloudExpo: Blog Feed Post

Aligning SaaS Customer Success By @ChaoticFlow | @CloudExpo #Cloud

The importance of SaaS customer alignment across the SaaS customer lifecycle

SaaS businesses develop intimate, long term relationships with their SaaS customers. Keeping that relationship positive and aligned over the years is a real challenge. In fact, many public SaaS companies have yet to turn a profit. If they don’t keep their customers around for years, then all that capital invested in customer acquisition will have gone to waste.

saas marketing - saas customer success alignmentThis is the third post in a series that explores the importance of SaaS customer alignment across the SaaS customer lifecycle. The last post examined the challenges of aligning SaaS customer acquisition, resulting in a short a list of SaaS Customer Alignment Tips. This post continues the list of tips into the second half of the SaaS customer lifecycle by examining the challenges of aligning SaaS customer success.

Churn Starts on Day One
It is typical in B2B software for customer acquisition to eat up 50% or more of total costs. In traditional licensed software, that cost is immediately recovered when a deal is closed by the revenue of the deal. There is very little uncertainty about the value of any new contract: it is the margin reaped between license revenue and acquisition costs. In SaaS, however, customer acquisition costs are recovered over time as the customer renews each period. There is a great deal of uncertainty about the value of any new contract, because the customer might cancel early or stick around for years.

saas marketing - saas customer alignment stock

The economics of a SaaS contract are like that of buying a stock or a bond, where you make an up front investment based on the promise of future returns. As the future unfolds, the value of that investment has little correlation to the price that you paid. It is determined by how effectively the underlying business manages its future. In SaaS, the work doesn’t end when then deal it is signed. It begins, because churn starts on day one.

SaaS Customer Alignment Tip #7
Don’t Fumble Your Handoffs

saas marketing - saas customer alignment fumbleSeparating hunters and farmers is a common SaaS sales best practice. Deals are closed by an aggressive quota-carrying sales team: the hunters, and then handed over to a more service oriented group of account managers and customer success reps for on-boarding, renewals and up-sell: the farmers. Your SaaS customer has only one SaaS customer life cycle. Every time you hand-off a SaaS customer relationship, you create the opportunity for that SaaS customer to fall through the cracks in your process. When you break up responsibility for the SaaS customer life cycle, you must put processes in place that sew it back together. It might be as simple as an onboarding checklist and a formal meeting with all the relevant parties. Or, you might create teams that link specific sales reps to specific account managers and success reps. Use whatever approach works best for your particular SaaS business, but don’t fumble your hand-offs.

SaaS Customer Alignment Tip #8
Onboard in Real Time

saas marketing - saas customer onboardingSales, marketing, customer success, and technical support teams all play critical roles in servicing SaaS customers and driving SaaS business revenue. However, they should always be considered the second choice when the same goal can be accomplished directly by innovative SaaS product design. As much as we love our teams, they don’t have economies of scale. More importantly, they are not in front of the customer when the customer needs help with the product. The SaaS product is. Oboarding is best when it is done in real-time as the the SaaS customer uses the SaaS product. Build your SaaS products to detect and react to the needs of the SaaS customers based on their experience and usage. Don’t clutter up the user interface with advanced features for first time users. Strive for instant gratification. Design for discovery to expose deeper capabilities based on deeper usage. When all else fails, provide ques, tips, education and immediate access to support within the product itself.

If They Use It, They Will Stay
There are many potential causes of SaaS churn. SaaS products that don’t deliver enough value to justify their use. SaaS products that are so hard to use, such that SaaS customers never really get up and running. SaaS products that are so casually used that SaaS customers don’t incur any switching costs. Or, SaaS customers that simply go out of business. Whatever the root cause of SaaS churn, its impact is always measured by use. They might not come if you build it, but if they use it, they will stay.

Its a bit of a tautology to claim that SaaS product usage is the best predictor of SaaS churn. In one sense, churn is simply non-use. Over time, however, SaaS product use tends to deepen switching costs as SaaS customers put more and more of their data into the SaaS product, invest more of their time learning the SaaS product and bake the SaaS product into their business processes. The cumulative impact of ongoing SaaS product use creates an economic hysteresis that makes it easier to go forward and renew, than to go backward and churn.

SaaS Customer Alignment Tip #9
Use Your Usage Data

saas marketing - saas product usage dataSaaS product usage patterns provide unprecedented insight into SaaS customer alignment. Well aligned SaaS customers get up and running fast, use your SaaS product on a regular basis, discover new capabilities in the course of regular use, and expand their use over time. Only SaaS products offer this level of customer intelligence. Many other products from vending machines to automobiles embed SaaS-like components for the sole purpose of obtaining this kind of information. Use your usage data to gain a deeper understanding of your SaaS customer’s needs and habits to improve SaaS customer alignment.

SaaS Customer Alignment Tip #10
Qualify Churn like You Qualify Leads

saas marketing qualify leadsSaaS sales and marketing organizations spend an enormous amount of time and energy qualifying leads. They track conversion rates, create A/B tests, develop lead scores, put lead development teams in place, and so on. Lead qualification increases the probability of closing a deal and enables the SaaS sales and marketing organizations to focus on the best prospects. So it is with churn. Churn is just negative retention, and retention is revenue. Whereas lead scoring models are built on weak, superficial metrics for SaaS customer intent, such as click streams and page views, SaaS customer success models can be built clear indicators such as product usage, support tickets, and direct customer feedback. If you can qualify your current customers likelihood of cancelling better than you qualify leads, then you will have developed a significant advantage in the never-ending battle against SaaS churn.

Help Your SaaS Customers Help Themselves
There is no market for lemons in SaaS. SaaS customers gain a complete understanding of your SaaS product before they pay you. If they don’t like what they see, they churn. On the other hand, the SaaS business incurs the same customer acquisition costs. If your SaaS sales and marketing machine is too aggressive, your reps may make quota, but your SaaS business will pay for it in the end. Many enterprise software vendors pay lip service to solution selling, but SaaS vendors must deliver. The only sure way to build a sustainable, recurring SaaS revenue stream is to help your SaaS customers help themselves.

SaaS Customer Alignment Tip #11
Avoid The Downside of Upsells

saas marketing upsellUpselling is a critical component of many SaaS business strategies. For some SaaS businesses, long term profitability hinges on upsells. The importance of upsell revenue and retention revenue lead many SaaS executives to the natural conclusion that these revenue streams should be on quota to get the same level of individual motivation and accountability that sales has for new revenue. Putting account managers and success reps on aggressive quotas, however, is a double edged sword. Bad cops can’t be good cops.

A lost deal only implies an opportunity cost: revenue we might have had. Unlike new business, a lost customer is a real cost: revenue you would have had. If your upsell effort is so aggressive that it creates bad SaaS customer alignment, they your cancellations might very well cancel out your upsells. Avoiding the downside of upsells requires striking a careful balance between revenue accountability and customer success. In that regard, culture matters more than quotas. Make sure your SaaS customers are successful first, and your upsells will sell themselves.

SaaS Customer Alignment Tip #12
Advocacy Compounds Lifetime Value

saas customer advocateA SaaS customer that upgrades can easily be worth 2X one that doesn’t. A SaaS customer that brings your new SaaS customer, each of which might upgrade, can easily be worth 10X. The best SaaS customer advocates do more than provide logos for your website and quotes for your press releases. They recommend you to their colleagues and bring in new business at a fraction of your average acquisition cost.

Smart SaaS businesses put in place ongoing programs that identify, nurture and enable SaaS customer advocates, because the lifetime value of a SaaS customer advocate compounds with each referral. But remember, your SaaS customer advocate is not helping you. You have been paid for your services. She is helping the colleague she refers to you, because she thinks your SaaS product is genuinely valuable. And, she is helping herself to the good feeling of doing a colleague a favor. Help her, help her friends, and help her, help herself.

Read the original blog entry...

More Stories By Joel York

Joel York is an Internet software executive and popular SaaS / Cloud blogger at Chaotic Flow and Cloud Ave. He is well known for his work in SaaS / cloud business models, sales and marketing strategy, and financial metrics. Professionally, he has managed global sales and marketing organizations serving over 50 countries, including local offices in the United States, United Kingdom, Germany, and India. He holds degrees in physics from Caltech and Cornell and received his MBA from the University of Chicago. Joel York is currently VP Marketing at Meltwater Group and Principal at the Internet startup consulting firm affinitos.

@CloudExpo Stories
DevOps promotes continuous improvement through a culture of collaboration. But in real terms, how do you: Integrate activities across diverse teams and services? Make objective decisions with system-wide visibility? Use feedback loops to enable learning and improvement? With technology insights and real-world examples, in his general session at @DevOpsSummit, at 21st Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, explored how leading organizations use data-driven DevOps to close th...
"I focus on what we are calling CAST Highlight, which is our SaaS application portfolio analysis tool. It is an extremely lightweight tool that can integrate with pretty much any build process right now," explained Andrew Siegmund, Application Migration Specialist for CAST, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
The past few years have brought a sea change in the way applications are architected, developed, and consumed—increasing both the complexity of testing and the business impact of software failures. How can software testing professionals keep pace with modern application delivery, given the trends that impact both architectures (cloud, microservices, and APIs) and processes (DevOps, agile, and continuous delivery)? This is where continuous testing comes in. D
SYS-CON Events announced today that Evatronix will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Evatronix SA offers comprehensive solutions in the design and implementation of electronic systems, in CAD / CAM deployment, and also is a designer and manufacturer of advanced 3D scanners for professional applications.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
As many know, the first generation of Cloud Management Platform (CMP) solutions were designed for managing virtual infrastructure (IaaS) and traditional applications. But that's no longer enough to satisfy evolving and complex business requirements. In his session at 21st Cloud Expo, Scott Davis, Embotics CTO, explored how next-generation CMPs ensure organizations can manage cloud-native and microservice-based application architectures, while also facilitating agile DevOps methodology. He expla...
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
The dynamic nature of the cloud means that change is a constant when it comes to modern cloud-based infrastructure. Delivering modern applications to end users, therefore, is a constantly shifting challenge. Delivery automation helps IT Ops teams ensure that apps are providing an optimal end user experience over hybrid-cloud and multi-cloud environments, no matter what the current state of the infrastructure is. To employ a delivery automation strategy that reflects your business rules, making r...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve f...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, discussed how given the magnitude of today's application ...
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...