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?
I’ve been a Mac user for nearly 20 years. My iPod handles the music that is a constant companion, and my iPhone goes everywhere with me. (I wish that I had far more than the few shares of APPL in my IRA holdings.) I enjoy my trips to the Apple store, and the thought that maybe there might be cheaper prices to be found elsewhere holds no allure. While I’ve only had to call for Support a bare handful of times over the years, each occasion has been effective and pleasant. 
Saying “it just works” is only the beginning part of the reason I keep buying from Apple. There is a consistent experience of delight inherent in the products themselves, in their use, and in interacting with the people of the company that is not accidental; it’s all the result of the company’s relentless insistence on excellence of design and execution. That insistence works for the company as well as the customers.
The single source for all of the product’s components is a key aspect that SaaS vendors wishing to emulate Apple’s success need to recognize. The seamless linkage between my computer, phone and music player wouldn’t be possible if all three came from different vendors and the burden of tying them together was on me. I have no interest in learning about technology, I just want to use it. I realize that Apple doesn’t make all of the components of their products themselves — but I have only one number to call when I have a question. And I almost never need to call that number.
Apart from The HotLine Magazine, Mikael Blaisdell writes white papers and is a frequent speaker at professional conferences and other venues. Here are some highlights from his speaking engagements. (Where sessions were recorded, links are provided.)
SaaS, Cloud Computing and The Future of IT Support: Annual Conference, The Help Desk Institute; March 2001: Software as a service (SaaS), or cloud computing, is predicted to become the industry standard in the coming years, as more and more software companies offer cloud-based subscription software products. Is this a dark cloud for customer support professionals? Does this dark cloud have a silver lining? In this session, Mikael Blaisdell discussed the key factors that have brought support professionals and organizations to a fork in the road and identified the challenges and opportunities SaaS presents for customer support.
Recorded webinar: The Reality of SaaS/Cloud Customer Retention. In many SaaS/Cloud companies, it’s often the customer that sets the level of the relationship in the beginning – and it just stays there. The unfortunate result is churn, and cost to replace lost customers. What’s worse, by not actively developing existing relationships, a lot of money is left lying on the table. Closing a subscription sale is no longer enough to win in the accelerating SaaS/Cloud era; it’s only the beginning of the real effort. Passing short-term responsibility for the customer relationship from one department to the next within the company is a recipe for failure. It’s what you don’t know about your customer relationships that can cause you to lose them – and the game as well. Click here to listen to a challenging view of the essential factors of SaaS success, and a start on developing a competitive advantage for your company.
SaaS, Cloud Computing & The Redefinition of Customer Support. Initially published as the first of a series by SupportWorld, the magazine of The Help Desk Institute, in the July/August 2010 issue, this article identifies issues and challenges confronting both external and internal Customer Support professionals alike.
“The Future of Customer Support” -
[Keynote address; Boussias Conferences - Athens, Greece 1/28/2010] The pressure of the current hard economic conditions brings with it an advantage, the encouragement for business leaders to re-think old strategies that no longer work in these times. Traditionally, the role of Customer Support is essentially about Break/Fix. When something breaks, the Service representative reacts to fix the problem. The result is that Service has always been perceived as an unfortunately necessary cost, to be avoided wherever possible. It’s time for a change, for a new vision, and the new profession of Customer Success to bring value to both Company and Customer.
“Customer Success; The Key to SaaS Company Profitability”
[OpSource January 14th 2010 Webinar. (Recorded; click here for access.)] Mikael returns to discuss the most significant finding in The SaaS & Support Project research, the degree to which SaaS vendors tend to ignore the ownership of and responsibility for their ongoing customer relationships in their organizational structures and process. Customer retention and revenue enhancement are too important to be taken for granted. It’s time to explore a new approach.
“No Churn: Sustaining Profitable SaaS Customer Relationships”
[Presentation - SIIA On Demand; San Jose October 29th, 2009] All too frequently, Software-as-a-Service companies focus all of their efforts on generating new software license business rather than on retaining the customer relationships already won. The unfortunate result is unnecessary churn and reduced profitability. Going beyond software subscription licensing to take advantage of the additional revenue conduits of the SaaS model can increase both profits and customer retention if done effectively. Learn from the results of The SaaS & Support Project research:
What companies like yours are actually doing to tap the additional revenue sources, and- What kinds of organizational and technological resources are required. This fast-paced presentation will identify actionable opportunities and broaden your thinking about going beyond basic revenue generation to build a river of profitability.
”Creating & Sustaining Profitable SaaS Customer Relationships“ — The SaaS & Support Project: A Sneak Peek
[OpSource Webinar. September 23rd, 2009. Long term customer relationships are profitable customer relationships. However, all too frequently Software-as-a-Service companies focus all of their efforts on generating new business rather than on customer retention. Mikael Blaisdell, a SaaS industry customer retention expert, is conducting research with dozens of on-demand company senior executives to develop a set of best practices for effectively managing profitable customer relationships in the on-demand ecosystem. Mikael will join us to share early results from this important, first of it's kind report including:
- How taking advantage of revenue opportunities beyond software licensing fees can actually help you retain your customers
- Best practices of continuing customer relationship management in the SaaS community
- Organizational and technological resources required for ultimate SaaS customer support
”It’s the Service, Not the Software“
[Presentation - SaaSCon 4/1/2009 - Santa Clara, CA] The essence of a SaaS product is not the technology itself, but in how that functionality is actually used. What you’re really buying is a relationship over time that will enable your company to consistently increase productivity and profitability. To build a foundation for success, begin by choosing a partner instead of looking for a vendor.
”Leveraging the Channel“
[Panel Moderator at SIIA Software Summit - May 4th 2009] Channels have long helped software firms reach and support large markets. But the traditional strategy of distributors, resellers, OEMs and VARs is in flux. There’s a dizzying number of potential partners, and myriad ways to structure a channel. Add to this the emergence of digital distribution and the web’s ability to go direct to consumers, and we have a channel model that’s undergoing significant changes. This session looks at the possibilities and pitfalls of channels, bringing together several viewpoints–from channel-only to direct-to-consumer–to see how channels will evolve in coming years.
”It’s The Service – Not The Software“
[Presentation at OpSource's SaaS Summit - March 12 2009] The SaaS Tsunami and the general economic downturn have come together to form a perfect storm, bringing the necessity for fundamental change to software vendors and the rules for success. It isn’t over yet. Now is the time to look beyond survival to build profitability, to realize that the true product is the relationship.
“From Subscription Income Streams to SaaS River of Profitability”
[OpSource Webinar. February 11th, 2009 (Recorded session; click here for access.)] In the current economic climate, the pressure is on to increase both customer retention rates and per-customer revenue. The SaaS companies that succeed in the face of this challenge will be those that go beyond subscription income streams to build a river of profitability. Mikael Blaisdell, customer relationship architect and publisher of The HotLine Magazine, will talk about how your company can:
- Take full advantage of all seven revenue channels available in the SaaS model
- Establish an effective, scalable organizational structure to deliver what customers most want to buy
- Build a management technology suite that delivers actionable business information about the customer
“Customer Retention”
[Panel Moderator - SIIA On Demand San Jose - November 18th, 2008] The online and on demand world present the Application vendor with many new challenges. The income-stream subscription model of the ecosystem requires that the customer retention rate be considered as a vital metric for the business. Where traditional software manufacturers with their front-loaded bulk profits may accept an expected 10% or more yearly turnover in the customer base, the loss of a departing customer to a SaaS company has immediate effects on operating profitability.
- Where in the overall corporate process does customer retention begin?
- What are the signs that indicate a customer relationship may be at-risk?
- Are your company’s organizational structure and performance measurement metrics aligned with a strategy for customer retention?
“Monetizing Beyond The Subscription Model”
[Panel Moderator - SIIA On Demand San Jose - November 19th 2008] As a SaaS vendor, your company is about technology enabled services. The monthly subscription fees customers pay for the use of your application is the primary source of revenues, but are you leaving strategically significant money lying on the table? You’ve already invested the cost of acquiring the customer; what else could you provide to them on a profitable basis to substantially enhance the return on that investment?
- What use are SaaS companies making of aggregated/metadata to offer additional value to their customers?
- What is the potential profitability level of extended consulting services?
*A Conversation About Customer Retention”
[Panel Moderator, SIIA On Demand Europe - June 2008 (Video recorded; for access, click here.) The HotLine Magazine article is here. ] The online and ondemand world present the Application vendor with many new challenges. With the flexibility and choice of so many available solutions new methods to retain customers need to be considered.
- What is the value exchange required between the vendor and customer in respect of the packaging and communication of features and value
- How is the annuity stream built and then maintained
- How do vendors make the business steps from on-premise to on-demand and not cannabalise existing customers
- What dialogue does the customer need to maintain the relationship
“10 Key Things to Look For In Customer Support From SaaS Vendors”
[Presentation; SaaSCon 2008 (3/28/08) Santa Clara Convention Center.] It’s no secret that customer support has traditionally been an afterthought, a begrudged cost center, for most traditional software manufacturers — and, unfortunately, remains so for some SaaS vendors as well. To customers, however, support and the quality of delivery is a vital matter. This session will help you tell the difference between vendors who truly understand the importance of Support, and those who don’t — before you buy.
“Customer Centricity”
[Panelist. SIIA On Demand, San Jose November 8th, 2007] Beyond a delivery platform, what are innovators and traditional software companies doing to maximize the new on-demand capacities of the web to put the customer at the heart of every business and technology decision? What is the impact of real-time collaboration on the customer’s business and the customer’s customers? How is the impact communicated back to the service and software provider? Who is doing something about it?
Revised: November 3, 2011