Creating and Sustaining Profitable SaaS Customer Relationships

The essential key to long-term success for a SaaS company is simply stated: No Churn.  Get the right customers and keep them.  But all too often, Software-as-a-Service companies fall into the bad habits of their traditional-model predecessors by focusing only on acquiring new licensee customers.  The resulting unconscious assumption that all customer relationships will automatically persist and/or be profitable is a huge and largely invisible risk for a SaaS company.   It’s time to ask some poss

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The Role of the Channel in SaaS Customer Retention

A very savvy SaaS CEO told me recently that he was concerned about the fact that 80% of his customers had never met anyone at his company face to face. The resulting lack of customer intimacy, as he termed it, was seen as a major contributing factor to the risk of churn. I think he’s right about the connection to risk, and the customer retention rates of most, if not all, SaaS vendors are also vulnerable. Features and functionality are not long-term competitive advantages; they are too easily an

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Seeing Beyond Software to Success

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 m

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SaaS: Dark Clouds and Silver Linings

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

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The Cost of Asking the Wrong Questions

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 accura

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