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The Customer Experience is Key to Growth and Profitability on the Cloud

The Cloud business model is probably the biggest breakthrough in computing since the invention of windows-based software.
By offering applications and functionality on a subscription basis, software companies are becoming more like services companies than product companies.

Salesforce.com may not have pioneered the software-as-a-service model, but they, more than any other company, popularized it and made the concept a part of everyday life among SMBs and in the corporate world.

Thousands of cloud companies have followed suit, offering anything from accounting applications to business analytics platforms.

The Cloud land grab

The Cloud application and computing movement is undergoing a fast-growth land grab. Start-ups in every possible vertical market imaginable, and now the largest and most important ISVs, are scrambling to become the dominate players in their niche on the cloud. The key to dominating their market and locking out the competition is a fast-growth strategy.

Additionally, because of the pay-as-you-go business model, cloud companies must make up in volume what their brethren ten or fifteen years ago charged in high enterprise software license fees and services.

Cloud application companies have subsequently focused on acquiring as many customers as quickly as possible.

But to become profitable, they need loyal customers

And this presents an interesting Catch-22.

The key to cloud profitability is to maximize the lifetime value of their customers. This requires customers to renew their contracts with them every year or every month, as they case may be.

On the cloud, the customer is king, and happy customers drive SaaS business model ROI.
To achieve the customer’s loyalty, Cloud companies must deliver an exceptional experience. On the other hand, in their bid to grow as quickly as they can, customer satisfaction and experience may suffer.

Hence the Catch-22.

Cloud companies need to create advocates and avoid detractors

But it’s not just customer renewals Cloud companies should be concerned with. In order to sustain the level of growth they need to dominate their niche, Cloud companies must enhance their in-house marketing and sales efforts with the efforts of a committed, passionate cadre of customer advocates.

These are customers who love the service so much they will proactively, and without prompting, spread the word via their social graph about their Cloud service provider.

Cloud-based companies must also avoid detractors, customers who will spread the word about bad customer experiences on their social graph.

So what’s the solution for all this?

A Customer Experience Delivery System

The key to keeping customers happy, ensuring renewals and developing customer advocates, while maintaining a fast rate of growth, is to implement a Customer Experience Delivery System.

A customer experience delivery system must begin by determining the ideal experience for your target customer from a customer care, customer support perspective. That IDE will then allow you to design the HOW that experience will be delivered to your clients. This includes looking at every touchpoint, designing the right services for customer success (onboarding, implementation, training, technical support, premium support, social engagement), and combining people, processes and technology to ensure your customers enjoy the best possible experience.

Call it customer success, customer support, customer care, this is taking care of your customer in the 21st century, and something the Cloud economy has brought to the forefront in a big way!

 

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Infolink-exp key to growth

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In this digital day and age, customers still favor personal connections

A recent article published by Moneywatch (Nov. 2013, Michael Hess, author) revealed a number of interesting findings about what customers are looking for in customer service. Some of those only confirm how important customer service is, for companies in industries across the board, and the fact that most customers would not say companies “exceed their expectations” or go the extra mile for them, most of the time.

But to me, the most interesting finding has to do with the fact that, according to the study, “personal connections still matter most”. A huge percentage (65%) of customers, still prefer a live phone conversation with a real person to get assistance, over widely popular channels, like e-mail or chat. And that includes services like product assistance. It just seems like, according to Mr. Customer out there, much of what we’ve been doing to automate the interactions with customers and their access to product support and assistance actually goes contrary to their wishes.

There are plenty of wonderful solutions that allow companies to help the customer help him/herself, from customer-facing knowledge bases and search technology, to automated virtual assistants. But the lesson of this study seems to be that it may not be such a good idea to try to “deflect” calls at all cost. After all, giving customers a superior experience is all about connecting with their emotions, particularly in the product assistance/support touch points. And nobody does that better than a capable, empathetic human being at the other end of the line.

People still like to talk to people…

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How is support of SaaS/Cloud Products Different Than Traditional Products?

A question we get a lot is: “What is the difference between support for cloud products vs. traditional software products?” This question always amazes us, because at Infolink, as product support specialists, we believe the difference is vast.

Customer Experience is Key to the Saas/Cloud Business Model

To explain the difference between support for on-premise or perpetual license software applications vs. cloud-based software, let’s first draw the distinction between the two business models.

Traditional software vendors sell a perpetual license with a 3-year or less support contract. Sometimes customers will not renew the support contract, or after a period of time the vendor stops supporting the product because they have released a new version. Their previous version is now obsolete and it’s more expensive to support it.

The customer experience is not critical to the business model. There is no incentive to delight the customer. Once they buy the license(s), they own it, and that’s it.

Support for Cloud Products is Key for Customer Retention

But for SaaS software vendors, the user experience is a critical part of their business model. The distinguishing factor for the SaaS model is Monthly Recurring Revenue (MRR). Most SaaS vendors have no long-term contracts (with a few exceptions). The customer can choose to end the relationship at any time, and the monthly revenue the vendor was relying on could be gone – forever.

Customer retention is baked-in to the SaaS business model. So key to cloud-app customer retention is driving great customer experience through all key touch points, or moments of truth.

Customer Experience and Moments of Truth

Jan Carlzon, CEO of Scandinavian Airlines (SAS) from 1981-1994, introduced the term Moments of Truth in his book of the same name. Carlzon describes turning around the the flagging airline by focusing on delivering an above average customer experience through all their customer’s moments of truth. The lessons Carlzon introduces apply perfectly to SaaS companies.

But what are Moments of Truth? They are: “…any time the customer comes into contact with any aspect of a company.”

In the case of an airline, they could be when a consumer makes a reservation, checks their bags, checks in at the ticket counter, or when they board at the gate.

What are the Moents of Truth for a SaaS product? They are:

  • Sign-up
  • Onboarding
  • Provisioning
  • Training
  • Tech Support

Deliver A Wonderful Experience at Each Moment of Truth

Each one of these touch-points provides the SaaS vendor the opportunity to either make an awesome first impression, or lose the customer.

The customer care team now has to be trained to go beyond the break-fix model, and to comprehend their function as critical to user adoption and satisfaction.

In the SaaS model there are no significant consulting/professional services anymore. The customer care or support organization, starting with Tier 1, now becomes central to a high volume, high touch customer experience delivery situation, which directly drives revenue retention and growth.