Why, in the Age of SaaS, Customer Satisfaction is Your Most Important Department

Woah, What the hell? 

Over the past year and a half, I have been running a post-sales team. This wasn't what I originally signed on as, but as with any startup you go where you are needed. The person we hired for the Director of Customer Satisfaction (CSAT) role ended up being deficient in a few key areas and I jumped in to help out and after a month or so that person was on my team 

Let me start by saying that I am not a good fit for this role in the traditional sense. I like things to have a beginning, a middle and an end, I do not like entitlement or taking orders of any kind, and I especially don't like listening to people complain. These 3 pillars were the world of CSAT as I knew it, and I was not thrilled about taking over this department. Despite this, over time I figured out a way to make it my own. 

The established sales methodology that has been in use since my career began shows the difference between pre and post sales can be measured in miles, not inches. Sales folks closing the big deals get all the glory and serve as a shining example of what grit and perseverance can achieve. Once a new customer is acquired, the customer satisfaction (CSAT) team just needed to listen to customer complaints, answer tickets, and make sure a few new features are released every quarter. Software sales and delivery has evolved dramatically in the past 20 years. When I was first learning the ropes, the typical sales motion was based on a heavy front-end sale and a small renewal. In a large part this was due to the style of delivery for software at the time; fat clients and appliances. Software as a Service (SaaS) offerings were a small, emerging part of the market and largely not yet trusted. Over time, SaaS offerings became the norm and permanently shifted the way we buy and sell software... and because of this traditional methods of selling to and retaining customers must be updated. 

So what does SaaS delivery do? In short, software just isn't as "sticky" as it used to be.  

When you buy a house, you own every aspect of that house. You own the structure, the foundation, the land, and all the bits that make up the house itself. As a homeowner, if you see a new house come on the market that's in better shape, or has some of the upgrades you want, chances are you're not just going to stop paying the mortgage on your existing house and buy the new one. No... you've invested serious time, energy, and money into the house you have now and moving is a huge pain. No... you'll probably just stick with the home you have. 

What if you RENT a house that is fully furnished? If you're living in a rented house full of rented furniture and we take the above scenario... would you move? I would... why not? I have no money and very little time or energy invested so why not make the switch? 

This is the fundamental difference between traditional and SaaS offerings. Because SaaS offerings are in the cloud, they typically require much less effort with installation, configuration and upkeep. As a result, it's much easier to switch should the right opportunity present itself.

Software just doesn't harbor the same loyalty as it once did. So how do we keep our customers? 

 First, let's think about the acquisition process... what does that look like? In enterprise sales, typically we have a sales team that primarily includes one sales manager and one sales engineer. Their sole purpose is to introduce the software, match a customer need, prove the value and close the deal. In my experience this process can be accomplished in 14 to 30 days, and at the end we've obtained a purchase order and we have a new customer. Bully for us. 

20 years ago, we would have been set at this point. The customer gets passed to the support team and we now have a new brand to put on our website and a slew of newly purchased hardware and software to deploy. With SaaS however, the relative ease of switching vendors is always looming. The software company can no longer just throw their new customer over the fence... what if the sales team from a competitor is already talking to them? I have learned this lesson firsthand. 

Up until this point my career has focused primarily on presales work... designing pilot deployments, proof-of-concept's (POC's), and building business cases. When you have a beginning, middle, and end to the engagement it's relatively easy to design a set of criteria and milestones to push to a positive completion. Contrast this with CSAT... once a customer has been acquired, the timeline to prove value stretches on infinitely. The success criteria defined in the pilot have (most likely) been proven out... and everything is SaaS so there is the possibility of losing the account at every turn... so what do you do?

The solution is the CSAT team needs to act more like sales. This doesn't mean they act like they're out to get something from their customers, but rather they are constantly showing, explaining, and "selling" the value of their software to their customers. CSAT can no longer just be "order takers" or "stewards". If all a CSAT engineer is doing is listening to complaints, answering tickets and drafting up feature requests on behalf of the customer, they WILL eventually lose that customer. It's not because that CSAT eng is doing anything wrong... the paradox is the customer could love their CSAT engineer and sing their praises constantly about how well they listen and take direction... but that doesn't mean they'll renew. 

So what... you lose a customer. The amount of revenue brought in year after year from an existing customer is a fraction of the initial purchase price, right? 

No. With a SaaS model, customers will buy a subscription to the service. These subscriptions typically renew annually... but not a fraction of the purchase price... for the ENTIRE purchase price. Yep, for SaaS delivered solutions, renewals are 100% year in year out... which makes the loss of a customer much more damaging to the vendor beyond just losing a logo. 

Couple that pressure with the difficulty of implementing a new, disruptive solution from a startup. This is the scenario that a typical startup CSAT eng faces with each new customer: 

• One or two proponents of your solution in a team of 20+ who have never seen it and don't like change
• Existing processes in place that have been built over years of research and tuning that will need to be re-tooled 
• Issues, delays & bugs that need to be explained to a team who are largely looking for any reason to shelve your solution 
• Other vendors that are looking for any chink in the armor to harp on and replace you come renewal time 

The good news is, there's a way to combat this litany of shit. CSAT engineers need to start thinking of themselves as guides rather than waiters. Coaches rather than waterboys. SHERPAS rather than assistants. This represents a paradigm shift in our idea of customer "care".. but I would argue it's actually far more caring than the previous methods. 

What happens if you are a sherpa taking a group of people up mount Everest and one of the folks in your group says "I want to go this way!" Will you listen to that person and take the group in that direction? Absolutely not. As a Sherpa, YOU are the expert and you know the best way to go. You would politely explain that if we follow the instructions of the person making noise we will all get lost and freeze to death or fall off a cliff. Based on your knowledge and experience, you would resolutely point the group in the right direction and press on. 

This is how CSAT needs to operate in the age of SaaS... letting the customer direct is no longer an option. If the value of your software isn't realized, it WILL be replaced. The only way for any customer to realize the true value of your software is for an experienced CSAT sherpa to show them the way. This is "value" selling, and though it's typically thought of as a sales motion, it is 1--% necessary to maximize customer retention. Remember, the SaaS model is subscription-based, so the value of the renewal is 100% or more of the original purchase price in perpetuity. Meaning the more customers you keep, the more your revenue compounds year over year, and this is by far the quickest way to show exponential growth.