The evolution of enterprise software to SaaS has happened but software vendors also need to address business challenges with organisational changes. The most successful SaaS have understood those challenges while the others are condemned to a slow death.
For years, the enterprise sales process has been mainly a game of hunters: a top-down approach selling, based on personal relationships to C-level decision makers, who were buying thousand or even million dollar licences. The result was a compulsory software for all the employees, bound with new processes.
However, employees became familiar with online solutions and started to have their own expectation and demand. Progressively, the decision power has shifted to a bottom-up approach, leading to new business models centered around free trials or freemium models. That way, employees could easily test solutions and promote products that fit their needs and make them save time instead of wasting time with crappy processes and bad interfaces. Selling software has fundamentally changed: from crafting relationships to a few C-levels to delivering a credible promise to thousands prospective users.
The subscription and pay-as-you-go models seduce companies because they don’t become bound to a proprietary solution. The cost of switching has significantly decreased without the need to drop expensive licences investments upfront.
However, cost of acquisition have become so high that it is cheaper to retain or upsell an existing customer than to acquiring new ones. We consider that 80% of future revenues reside in existing customer.
“No Customer Success = No Your Success” Lincoln Murphy
Then, pushed by the delivery model, employee demands, lowered switching costs and increased cost of acquisition, the main problem for SaaS vendors has become retention and customer loyalty.
The successful SaaS companies have reorganised their sales and support teams around customer success which can be described as staying relevant and be proactive.
The customer success should follow the customer journey from its onboarding to conversion to paying, renewal or up-sell. Most customer success department include account management and support teams. The old heroes of the distribution of software was the hunters, the new ones are the farmers.
The farmers mission? Make a personalised experience for each individual customer, based on its usage of the product and its behaviour. Problems should be proactively addressed and satisfaction constantly monitored. That’s the reason why of my latest company:Salesmachine.
Analysing behaviour to score customers in real-time and identify those who need attention at the right time. In a word, giving the farmers (customer success, sales, support teams) the right tool to fulfill their mission, and eventually drive customers revenue and happiness.
Gilles Samoun, Founder & CEO Salesmachine