Stay in the latest updates. Get the latest tips and advice delivered straight to your inbox. Email Ellis Luk | January 16, 2012 | The Need To Know for SaaS Businesses In the traditional software market, it has often seemed that the only thing that a vendor felt they really needed to know about a given customer was how to get their signature on the initial contract. The bulk of the profit to be realized (and the source of the Sales’ commission!) came up-front from the sale of the perpetual licenses. After that had been accomplished, the barriers to switching were presumed to be high enough to keep the customer tied to the vendor for some time. In the SaaS/Cloud sector and business model, there is no burst of up-front profit, and the barriers against churn are much lower. It can take many months, in some cases as long as a year or even more to recoup the customer acquisition cost. A customer who elects to end the relationship before that point can instantly turn what appeared to be a highly profitable deal into a dead loss. As a necessary result, the Customer Success Manager at a minimum must know a great deal about the customers’ business, and especially about the customer’s expectations and usage of the vendor’s application, in order to have any accuracy of insight about the real status of the relationship. Looking for Answers The beginning of the quest for knowledge is in determining what you need to know in order to function as an effective CSM (Customer Success Manager). What drove the customer to engage with your company and application? How does the customer measure success? Are they tracking their own progress towards those success goals and objectives? Are their individual users appropriately moving up the adoption curve of the application’s feature set? All of these core questions must be reliably answered, and on a continuing basis, but the need for knowledge doesn’t stop there. Some of the answers will come from conversations with your customers. Others will be provided by your application feature usage monitoring resources – but here, too, you have to know what to look for. Which features are core to the application. such that there is something very wrong when a customer is not using them? If your monitoring tools haven’t delivered enough data to use in this regard (or even if you think they have!), go talk to the Support team reps. Ask the customers themselves what they consider to be the must-have features. What does the Sales team report as customer hot-buttons? How do prospects talk about their expectations? What does Marketing say about competitive analyses of the opposition’s products? Are You Sure? What you don’t know can very definitely hurt you in the game of keeping customers and increasing per-customer profitability levels. So can what you think you know. Cross-check the data and responses you get to your inquiries from different directions. If there is conflict, dig deeper. Why would some customers or respondents think that a given feature was vital and others not? Look for patterns, and matches with verifiable customer behavior. Look, too, for what doesn’t fit – and ask why. About the Author Mikael Blaisdell, publisher of The HotLine Magazine, brings 30+ years of experience in the strategy, process, people and technology of customer support, retention and profitability to the emerging profession of Customer Success Management. He is also the moderator of the CSM Forum on LinkedIn. Read moer about The Customer Success Management Initiative, sponsored by Totango. Do you know how to measure your Customer Engagement? Our SaaS Dashboard can easily do that for you! Try it now for FREE Popular Posts A day in the life of a Customer Success Manager: What do they do? 15,902 views The difference between Customer Success Managers and Account Managers 12,963 views Your 90 day plan as a new VP of Customer Success 5,518 views Ellis Luk I'm the marketing and communications manager at Totango - but you can call me Chief Content Officer. When I'm not writing, you can find me obsessing over memes, debating grammatical usage or getting distracted by the latest Tumblr gif blogs. Customer love starts with a friendly hello! Larry Gordon Calling All VARs, Traditional VARs are at the crossroads, and those that cross the chasm and embrace cloud computing will survive and thrive in new technology evolution. Did you know that Software as a Service (SaaS) Global Market is going to grow by 33.1% CAGR over 2010 – 2016 period with an aggregate $156 Billion over the same period.This is one of the conclusions reached by Market Intel Group’s new research report titled: “The Future of Virtualization, Cloud Computing and Green IT – Global Technologies & Markets Outlook – 2011-2016”. LeadMaster stands ready to help VARs earn a slice of the $156B SaaS cloud revenue bonanza. Here are 10 great reasons VARs should sell and support LeadMaster: 1) Evergreen commissions. VARs earn royalties on licenses every month for as long as their customer stay current with LeadMaster SaaS license usage.2) VARs decide on the implementation fee and keep 100% of it. For every $1 of licensing fees there are usually $2 or $3 of consulting fees. On an annual basis a 10 user system costs an average of $6,000 in licensing fees and produces $12,000 to $18,000 in consulting fees. You keep 100% of the additional consulting fees.3) It doesn’t cost a dime to become a LeadMaster VAR Partner. We provide free product training.4) LeadMaster can be a white label solution. VARs and/or their customers can private label LeadMaster. We also provide white label collateral and user guides.5) LeadMaster does business the way customers prefer, NO long term contracts required.6) LeadMaster wants VARs to use LeadMaster, so VARs be better prepared to support your customers. 7) LeadMaster will provide VARs with 5 FREE SaaS licenses for internal and demonstration use for as long as you sell and support LeadMaster.8) LeadMaster makes it easy to setup free trial accounts with a private label demonstration database generator. The free trial leads flow directly into your 9) LeadMaster logon so you’ve got a steady stream of leads.10) LeadMaster has a Partner Portal for reseller/VAR only information, we provide access to sales leads and a deal registration system to protect your deals.You’ll have a LeadMaster expert available to help VARs with their first deals, trainings and implementations to help VARs learn the power of selling multi-tenant SaaS cloud computing. Join us every Tuesday 2PM EST for a listen in LeadMaster webinar: http://www.leadmaster.com/LeadMaster-Library/Tues-Webinar/webinar.html LeadMaster Overview Video Lead-Xtreme Video http://www.leadmaster.com/LeadMaster-Videos/Lead-Xpress/Lead-Xpress.html To quote my favorite mentor, and arguably the greatest technology entrepreneur of our time! “Think Different” – Steven P. Jobs All the best in 2012, Larry R. GordonGlobal Cloud Services Sales Manager http://www.leadmaster.com970-460-0331 ho 303.396.4509 cell You might also like You might also likeWho’s in customer success?Ten Reasons Your Organization Needs Totango, the Leader in Customer Success ManagementCustomer Success – The Farming Paradigm (With Gifs!) BACK TO BLOG | NEXT ARTICLE Let's stay in touch! We’re passionate about customer success. Sign up to get the latest in thought leadership and to follow our adventures.