The SaaS & Support Project research uncovered a lot about the current state of SaaS vendor operating patterns. In my opinion, the most significant finding was the degree to which SaaS companies tend to ignore the ownership of and responsibility for their ongoing customer relationships in their organizational structures and process. While some companies say that they have designated an owner, there is rarely any connection between that role and the metrics applied to measure the performance of it. The result is often the creation of a dangerously widening gap into which potential profits and valuable customer relationships can fall unnoticed, and an unnecessary risk to the company’s chances for long-term viability and success. The path towards closing the gap starts with a strategic decision; a new group is needed, one chartered and equipped to carry the responsibility and accountability for maintaining the ongoing customer relationships on a profitable basis.
Thinking that the act of restoring lost functionality in exception situations is somehow of the same stature as the value-purpose for buying the product in the first place is unfortunately all too common, but it’s still flawed. No one buys a product in order to experience a breakage and then getting it fixed. Business products are purchased because they offer the potential for increased productivity and profitability to the purchaser. The real economic value exchange is: I give you an amount of money so that I can use the product to make much more money for myself. If Support is to become a true profession, it will be found in being perceived as a necessary component of that value expression. The new Mission Statement for Support needs to be: “We directly contribute to making more sustainable profitability faster/better for our company and yours – and we can prove it.”
“How many SaaS companies are there?” At the recent On Demand conference in San Jose, I asked several key members of the SaaS community this seemingly simple question. “Around 2,500,” one said. “Most of whom you’ve never heard of because they’re too small to attract much notice.” Other estimates I’ve heard in the past few weeks give the current number of SaaS players at 1,600 to 2,000. More companies are entering the SaaS ecosystem every day, as existing software manufacturers create on demand versions of their applications and new companies are formed. That’s the good news; the bad news is that there is going to be some significant shrinkage in the coming months. Those SaaS firms who have failed to get cash-flow positive will sooner or later hit their “fume dates” when they run out of operating capital. Asking the numbers question only opens the door. Now it’s time for those who want to succeed to deal with queries that should have been answered long ago, and to spark a strategic discussion of vital importance to all concerned.
A consistent theme of this series of articles is that The Best Support Call of all was the one that was never made because the product didn’t generate the need for it. I’ve been advocating that basic reality for all of my career, and yet still encounter obvious examples of companies shooting themselves in the foot, wasting money and reducing customer loyalty. While there are times that you definitely want to talk directly with your customers, forcing them to engage in unprofitable and unnecessary conversation with a support rep isn’t one of them. Are you throwing money away and discouraging customers in your company’s contact center? Are you sure?
The shape and color of the Cloud formations have a dark tinge out at the farther edges. The market for Software As A Service applications seems headed into a commoditized future. As more and more software companies offer SaaS products, the swelling competition will exert ever-growing pressure on pricing. Sound familiar? It should, for increasing power and availability of choices coupled with decreasing price has been the reality of the PC market for many years. But that dark future is not inevitable for SaaS. Consider the example of a company that still consistently gets premium prices for a premium product family in the midst of the PC sameness. Even better, a company who enjoys continuing levels of customer loyalty its competitors can only helplessly envy. SaaS vendors who want more than subsistence, take note: Who will be the Apple of the SaaS community?