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:
- 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.