Date: July 2, 2009

Author: JT

Tags: , , ,

Comments Off on Is Your SaaS Provider’s Focus Skewed?

Is Your SaaS Provider’s Focus Skewed?

Generally considered Universally True: It costs more to get a new customer than to keep an old one.  Whether we’re specifically talking about SaaS providers, or not, this seems to be lost on so many businesses.  How much more profitable might a wireless carrier be, for instance, if they focused on keeping existing customers, rather than incessantly focusing on new?

Listening to the likes of quarterly reports from Verizon, T-Mobile, AT&T, for instance show companies focused on gaining more new customers than the number of old ones they lose. How much more profitable might they be if they simply changed their focus?

Depending on the provider, my experience is the longer the implementation takes, the more likely the provider is to lose interest and want to ‘just get it into production.’  Once the (closed last quarter) customer is up and running, it’s off to the races to find the next new customer (to close next quarter).

In a prior role, my team tried to get the CxO’s approval (with Sales’ backing) for specific features aimed at keeping an existing customer.  As contract renewal time approached, paraphrasing, the customer said, ‘…the new kids on the block have all this new whiz-bang stuff.  You haven’t done anything significantly new for us in [years].’  The CxO’s perspective, I kid you not, ‘…hey, they’re paying us, I’m not spending another dollar on them…’

It always amazes me how hard it is for some people to put themselves in the mindset of the customer, consumer, or client.  After all, we ‘all’ play that role ourselves, daily.  We tend to stay with a provider (e.g. your car repair shop) until they’ve made too many mistakes, or let us feel neglected or 2nd class, that our tolerance is consumed.  Often all it takes is a ‘little’ attentiveness. Simply accepting responsibility for a recent problem, saying, “I’m sorry,” can get you a year’s forgiveness. When was the last time, in a B2B context, someone told you they were ‘sorry?’

There is another side to this as well.  And I wrote about it not too long ago. As a consumer of SaaS services you are also responsible for following through on ensuring you’re getting what you’ve paid for.  If you neglect quarterly measurables, skip annual inspections you fought to get into the SLA, you’re allowing the SaaS provider relationship to atrophy.  You–let–them neglect you.  Yes, SaaS providers need to pay attention to you, but you also need to remind them of your importance.

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