There’s an ugly little secret about the software business that is ripe for a change. The average user of a software application, at best, taps less than 10% of its features & functionality. As the SaaS sea-change continues to unfold, the implications of this simple fact for the software industry are very powerful. The dramatic success of Apple’s iTunes is about enabling people to easily buy a single song instead of the entire album the music industry would like to force consumers to purchase. Vendors of bloatware, applications full of unwanted and unused “features,” would do well to consider the iTunes lesson. If given a choice, buyers are not slow to vote with their dollars and to overthrow entrenched industry patterns in the process. Will SaaS vendors seize the “iSoftware” opportunity for industry leadership?
It’s time to profoundly reinvent the profession of Customer Support. From the beginning of the technology industry to the present time, Support has been the Department of Break/Fix; “when something breaks, we fix it.” As such, the “profession” offers no real economic value to anyone; it never has. What’s worse, as we move deeper into the gathering recession and farther into the rapidly unfolding SaaS era, Support as it is currently defined has no future. There are two paths that lead away from this point. One is downward into obscurity, obsolescence and ultimately extinction. The other is towards an authentic profession based on the exchange of true economic value.
There is an inevitable shakeout coming to the SaaS ecosystem, increasing the pressure on corporate leadership over and above that brought by the economic downturn. More and more companies are entering the market with SaaS offerings, spurred on by the growing successes of the forerunners and the inherent advantages of the new delivery method. The increased competition, however, is not the true concern. The real challenge facing SaaS CEOs is how to transcend an unnecessarily limited business model.
Memo to the Customer Support Team: Here we go again. As you’ve been hearing, cash is tight, and getting tighter. Senior Management is talking about burn rates, and actively calculating how long the company can survive if new sales slow down or fall off significantly. You know what’s coming at us — budget cuts, hiring freezes, deep layoffs and maybe even center closings. And don’t even think about the desperately needed upgrades to our aging contact center technology suite that we were promised. Get ready to tighten your belts, keep your heads down, and continue chanting “we can do more with less.” As things are going, the immediate future looks worse than gloomy. We’ve basically got two options. One is to cross your fingers for luck, hide and hope that perhaps it won’t turn out to be as bad this time as last. The other is to seize the opportunity to reinvent the profession of Customer Support.
There is no question about the darkness of the economic clouds looming on the horizon. The only unknown is how long the recession is likely to last this time, and how deep the losses will go. While the portents are ominous, and CEOs are right to be concerned about their companies, the good news is that SaaS vendors have some clear competitive advantages. That’s no guarantee of success; the downturn will have a profound impact on everyone. But for those who are wise enough to understand the nature of the problem and sharp enough to make use of the situation — and are willing to assume the risks of leadership, there’s a definite gleam of silver in the gathering gloom.
As an analyst/consultant/writer with a very long background in customer contact center technology, I regularly get a lot of calls from CCTECH manufacturers. Some want me to become a rep for their products, openly or otherwise. Others want to get on my list of candidates to be suggested to prospects doing Vendor/Technology Selection projects. I’m often on the distribution lists for announcements of new releases and improved functionalities — which is great! And a few of those callers are looking for recommendations for enhancements to their product suites, which is even better. For all calls from case management system (CMS) manufacturers, I have a standard question: What specific functionality does your product offer that would enable a customer support contact center to be authentically run on a Profit & Loss basis?A recently published white paper urged the industry to build “high performance customer contact centers,” and offered three questions to enable managers to assess whether or not their centers would qualify as such. “Does your operation work in tandem with the rest of the enterprise on key operational and performance metrics such as cost controls and service quality?” “Are individual workers aware of clear performance goals aligned with business objectives, and do workers have timely and accurate access to their progress towards those goals?” “Is the flow of information into and out of the center controlled and channeled so that appropriate managers and analysts can interpret the raw data and use it to create specific prescriptions for change that improve performance?” A contact center that was recently shut down and its entire staff laid off could have answered all three questions affirmatively. They’re still just as unemployed as if the answers had been No.
The SaaS tsunami has had profound impacts upon the software industry, and it isn’t over yet — especially for Support, where it’s just beginning. While traditional software vendors and their customer contact center teams desperately struggle to keep ahead of the expensive floods of “It’s Broken; Fix It NOW!” calls, Support in SaaS companies is different. A new era has begun; what was once a despised but necessary evil in the traditional software game is fast turning out to be the key to long-term corporate success in the new SaaS ecosystem. For Board members, CEOs and senior management teams of SaaS manufacturers and their partner organizations, it’s time for a conversation about redefining the role, profession and practice of Customer Support. Facilitating and extending that conversation is the purpose of The SaaS Support Forum ™.
Since the beginnings of the software industry, Sales has claimed to own the customer relationship. Under the traditional premised-based model, the connection between company and customer is almost invariably transactional in nature, an exchange of up-front money for software licenses. Sales gets their commissions, and has but little interest in the customer afterwards. The burden of extracting value from their technology purchase remains entirely on the customer, although software manufacturers have grudgingly been compelled to offer various forms of Break/Fix support. But while the on-demand tsunami has swept away most of the traditional need for customer support, SaaS ISV management should think hard before rejoicing. The succeeding waves of change are redefining the product along with the nature of the transaction, opening the door to a new ownership of the customer and the relationship product — and that new owner could well be external to the company.
The SaaS companies that succeed in the midst of the economic downturn will be those that go beyond subscription income streams to build a river of profitability. Mikael Blaisdell, customer relationship architect and publisher of Customerium.com and The HotLine Magazine, presents a recorded webinar session about taking full advantage of all seven + revenue channels in SaaS, and how an effective strategy and a scalable organization can be built to optimize customer relationships for maximum retention and profitability.
The current bleak economic landscape offers proof of what has long been suggested here: there is no future in tech support. There is, however, a very bright potential for the profession of managing customer relationships. It’s time to acknowledge the difference between layoffs and leadership, to explore the architecture of what comes before management: the design and development of what might be called “product as a relationship.”