When companies are considering the move to include a Software-as-a-Service (SaaS) solution, there tend to be two groups: those who know they don’t have the necessary expertise and often don’t know what questions to ask, and those who think they have the necessary expertise, when really they don’t. Which do you think is in a more dangerous position? There are a few companies out there that do have the expertise, but this means they also already understand the significant differences between on-premise and on-demand software. In any case, here are a few items to check yourself against to see what you know, what you need to know, and how to get started.
Experience has shown that software companies most often need help with three main areas: Web-Centricity, Customer Value Realization Shift, and Agile Product Development. You may already be dealing with these, but remember that the game is different with SaaS. Even if your company is already in-market, it’s worth examining how SaaS changes the rules, since some of the items below can be applied to any software solution.
Web-Centricity
The first major lesson that many companies miss about SaaS is this: Software-as-a-Service is not a new way of delivering software, it’s a fundamental difference in behavior from a buyer perspective. This new buyer behavior is called web-centricity, or we say a buyer is “web-centric.” It’s a way of defining how your customers want to interact with you. As an example, I could be considered a web-centric buyer while my grandfather would be a web-agnostic buyer. I use my computer and the internet to do just about as much in my life as I can, while my grandfather is just starting to learn about attaching photos to emails. He will pick up the phone or go to the library to answer a question or solve a problem; I go straight to the web, and more importantly, I want to do everything relating to my inquiry on the web. For my next vacation, I want to research vacation spots, compare rates, read testimonials, book the hotel and flights, pick my seats, ask questions, get responses, and add my trip information to my calendar all through the web. It’s essential to note that if I’m moving forward with a booking and suddenly have no choice but to pick up the phone, it’s very likely that rather than picking up the phone, I will just click a few more times and find a travel site that will allow me to complete my transaction online. That company just lost my business because their site wasn’t geared to how I wanted to buy travel services; it was less web-centric than I am.
A web-centric buyer can buy anything, not just SaaS, but the nature of SaaS means that buyers are much more likely to be web-centric. A company may have extensive pay-per-click advertising campaigns, search engine optimization, and additional advertising through cross linking and white paper farms all pointing to a beautiful website with all the information a potential customer could ever ask, but if that’s where the online experience stops that’s where the web-centric user may leave.
Even without SaaS in the picture, a web-centric buyer wants to buy the software online, download it, and then get the activation code within a few moments by email. If they have questions they want a click-to-chat feature or at least an email address. If they have problems with their new software, they want to access tech support through a similar click-to-chat feature and reach a tech who can connect to their computer and see exactly what is on the screen. Of course sometimes a phone conversation is still best, but a web-centric buyer wants all the options.
Too often I see companies that are short-changing themselves. Not only should a customer be able to do everything through your website, but their web experience should add value and make them happy to continue working with you. Companies need to tailor their user experience to how the user wants to interact with you.
On a much simpler note, having a stellar website is more important than ever before. A recent survey showed that when shopping for a SaaS vendor, 38% of customers shortlisted several companies based on their website and then contacted only those vendors.
If your current website, business and marketing plans, and customer service are not geared to web-centric buyers, you may be losing business you never knew was there. If you create a frictionless experience where your customers feel comfortable and happy, not only will they stay, they’ll tell their friends how wonderful you are.
Customer Value Realization Shift
Simply put, when utilizing a SaaS model, your customers need to get value from your product before they even buy it. In traditional software models, you usually have a sales person with charisma and skill who can create the perception of value for the customer. The customer sees value, makes the investment, and trains everyone on the new software. By the time they actually start realizing value they are already invested, so even if they realize less value than anticipated, as long as your customer service is tolerable, they’re more or less locked in.
With SaaS, everything you do needs to add value to your customer. If customers don’t see real value during the trial they won’t buy; if they buy and then don’t see the value they anticipated, the barriers to exit are much lower than with traditional software. When I say “everything you do,” I mean much more than customer service; I mean everything. Of course, customer service and support is very important, but so is how they get to customer service, your website, and most importantly your product itself. Developers are great people and we need them, but when it comes to your user experience, developers are the wrong people for the job. When building your product you need to understand who will use your product, what their problems are, how can you fix them, which personas are more important than others, all while also considering usability, user experience, and design. In many ways, your product should be your greatest sales tool. The entire experience of interacting with not just your product, but your entire company needs to be focused on shifting the value curve ahead and accelerating your customers’ “time to value.”
I mentioned above that the web-centric buyer wants to interact with your site and your company in a certain way. The secret to these interactions is that the experience needs to work and it needs to work well. The person answering the phone, the chat, or the email needs to actually be able to help the person without escalating the problem, without wasting time by reading a script, and without adding frustration to the situation. Your product may be the best on the market, but if dealing with your company adds stress to your customers’ day, eventually they’re going to switch. If they experience these kinds of issues during a free trial, you can be sure they won’t buy. If their experience is great during the trial and then deteriorates once they start paying, you can be sure they won’t stay long, and they’ll tell their friends too.
I’ve seen companies that take a “white glove” approach to their customers’ experience have great success. Not only have they invested in a great product and customer experience, they pro-actively contact new and trial customers to see if they have questions, teach them about what their product can do, and make sure they’re getting the most value as quickly as possible. You can imagine how happy a customer would be when they can use the product better and know that a cheerful, helpful person is only a click or call away.
Of course, the company and product need to add real and increasing value in the long-term as well. Some companies may be surprised at how willing happy customers are to giving specific, useful, and free feedback to help you improve. It may not be considered often, but when happiness is an active component of your business plan and customer experience, the side effects can be amazing.
Agile Product Development
A secret to SaaS success is to get something out there quickly and then with your happy customers’ feedback, improve and grow your offering piece by high quality piece. Too often a company wants to build the best software solution ever conceived and spend months mapping out every possible variable and creating every possible feature. Of course, this is always an option and some companies have resources to do this, but an agile or “scrum and sprint” approach will get you to market a lot faster.
The basic concept behind scrum and sprint, is that you build something small and simple, yet high quality, and go to market as soon as possible. Once you’re in market you openly seek feedback and suggestions from customers for improving your product. Throughout the entire process you build a backlog of items, features, and additions that you eventually want to add onto your product. Often companies will release in “beta” mode to attract more trial customers and allow feedback from a broader range of users. Your team meets every day for a quick “scrum” meeting to discuss any feedback received, ideas for improvement, and progress towards your next milestone. In this model, the time between releases is short, from a couple of weeks to a few months. After you complete a sprint you look at your backlog and determine the next small piece that you will add to your product and the timeline in which you will be able to complete it.
The point of this method is to get to market quickly, then build up your product piece by piece, releasing early and often. Of course this process should include all aspects of quality, usability, user experience, and web-centricity as mentioned above to insure that your business, not just your product, is growing in the right direction.
Bottom Line
Many companies do on-premise software very well and their skills could be adapted to a SaaS model, but without truly understanding the differences with SaaS, the trial-and-error road to discovery will be long and costly. The areas presented here: Web-Centricity, Customer Value Realization Shift, and Agile Product Development are a litmus test for seeing what the rules are in the world of SaaS. Developing maturity as a SaaS provider ultimately involves a large set of activities across key process areas such as Business & Financial Management, Application Architecture, Hosting Architecture, Operations & Support, and Go-To-Market Effectiveness. Being a successful SaaS provider means “owning” the entire value-chain for SaaS – something that many software companies are ill-prepared to do immediately on their own.
When companies make the proper investments, they can tap the vast potential of Software-as-a-Service. The road to SaaS success starts with an honest look at oneself and the dedication to learn what you don’t know, ask the right questions, then set out to build the best product and customer experience possible.