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The Customer Economy: How Customer Health Drives Success for Modern SaaS Businesses

If I start this blog by telling you that the world has changed, you are probably going to stop reading – in large part because it’s a well-known fact and hundreds, if not thousands, before me began their thoughts with the exact same proclamation. But please give me a few minutes of your time, so I can dive into one very specific way our world has changed, and explain a paradigm that has helped propel a fundamental shift in how businesses succeed and are ultimately measured, in both private and public markets. You see, successful companies, have changed how they manage operations – planning for the future by incorporating feedback from their products and customers into their boardroom decisions. Companies have become kingdoms where customers rule, what I call, the “flawless meritocracy” – operating off the unspoken vow: “make me succeed by using your technology, and I will spend endless amounts of money with you in the future, and I will never leave you.” That vow exists in every commercial relationship and paves the road to success for organizations. That’s why I joined Totango – to build technology that helps SaaS companies amplify customer success.

So, why is customer success so paramount these days? And, what is the specific opportunity for technology to help transform SaaS enterprises into customers-centric businesses? Finally, how can Totango help?

Customer Success is the ultimate signal of a healthy SaaS subscription business, which is why I am excited to be at Totango – a platform that works to revolutionize the way customer success is achieved.  Here are a few compelling reasons why you should implement Customer Success technologies:

1. SaaS doesn’t automatically equal success – you have to make an ongoing effort to make your customers successful.  

Many CIOs, consultants and business leaders believe that implementation of a SaaS product will solve their problems. They operate with the assumption that transitioning their IT infrastructure to SaaS equates to success in their enterprise stack. But, that’s not true at all. These days, customers are buying more than your product; they are buying your understanding of them, your willingness and your ability to make them successful. The traditional model of using CRM software with an occasional follow-up phone call, no longer works. This approach leads to SaaS shelfware, and disappointed users who feel they received a lack of value from their purchase.  At Totango, we are working on completely new ways to give you a rich set of predictive data to drive actions and understand where help is needed, and when to offer it, allowing you to prevent churn before it becomes inevitable.

2. Don’t confuse CRM for technology that can help you drive customer success. Modern CRM is still missing most important components that help companies along their customer journey

CRM is a great tool – one that has become synonymous with tracking everything a business needs to successfully sell and support, yet it is still missing ways to accurately calculate, describe and prompt action based on customer health. CRM is, for the most part, information that has been typed in by your sales team, support department and maybe a consulting organization during customer interactions. Fundamentally, this approach misses the correlation of this information to customer success – specifically a 360-degree view of customer health consisting of usage data that is connected with support information, contract data, user sentiment, activity, engagement and virality. CRM still acts as a static page and it’s time for it to be transformed into an action filled war room with the ability to move customers along their adoption journey. Totango brings this all together, adding powerful insights that allow modern SaaS businesses to become customer-centric companies using customer health as a leading indicator of success.

3. Most organizations still don’t use correct indicators to predict and reduce churn.

Churn is an ugly thing, and like a hole in your boat, it will sink you. Churn happens when customers are not happy with products you’ve sold them or the value those products have delivered.  Churn, however, isn’t like an infection that suddenly, and without any warning, takes over an account.  It doesn’t sneak up on you. The risk of churn is always there, you just have to find ways to surface it and then take preventative measures.

For modern SaaS companies, the only correct way to understand, measure, predict and prevent churn is by tapping into customer usage data to derive a specific portfolio health score based on multiple success metrics. You can’t just rely on a monthly phone call to check in, instead you have to build a customer success model based on data and use that data to develop a set of priorities. At Totango we are revolutionizing the ways in which you can do that with technology.

I’m excited to join the Totango team and work towards our vision for enabling Customer Success. You can count on us for an incredible amount of innovation in this space, and we are just getting started.

I’m always interested in your feedback. Please let me know what you think in the comments.

Maksim Ovsyannikov

I'm the Chief Product Officer at Totango. I am delighted to join Totango and help revolutionize how technology is used to transform customers into heroes for every SaaS and cloud business. Prior to Totango, I was the VP of Products at Zendesk, Rypple, and SmartRecruiters.

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