“The first rule of fight club is you don’t talk about fight club.”
“The second rule of fight club is you don’t talk about fight club.”
The most important rule of fight club? Screw the rules.
We love the 90’s movie “Fight Club” because it has so many themes relevant to the SaaS industry. One theme, of course, is money and how it changes people who interact with it. The other theme is disorder—what happens when you break the rules? Sometimes it’s necessary to drive results.
In a recent webinar for customer service pros, we compared Fight Club’s competitive “break the rules” plot to the SaaS industry’s increasingly competitive cloudscape. Referencing discussions we’ve had over the past year with some 160 industry players—including VCs, investment bankers, customers, and consultants—we unveiled two major industry trends:
1. While sales still discounts services’ time in order to win deals, successful SaaS companies are breaking with tradition and forming sales and services partnerships.
2. And while most SaaS companies still rely on NPS, rule breakers are collecting and leveraging gobs of rich customer feedback via pulse surveys to dramatically improve their onboarding processes.
Like any fight club, SaaS industry competition is cutthroat, and those breaking with tradition are quietly building winning implementation strategies. We go into much greater detail in the video here, but check out these examples to whet your appetite:
SaaS companies are combining sales and service
A Series B SaaS company with both small business and mid-tier enterprise customers had serious failure-to-launch problems on a net revenue basis, and was consistently missing its margin goals.
Using a project management platform, services segmented its implementation workflows by the customer’s business sector, regulatory needs, the product they purchased and (when applicable) product amalgamations. Then they created onboarding playbooks for each customer type.
Next, they created four implementation services tiers— free, bronze, silver, and gold—based on the hours it takes to “go live” with each customer type. They included guarantees—if you want to go live on a certain day, you must pay extra for a premium tier. Sales and service then worked in partnership to identify the customer’s ROI goals and develop an onboarding schedule to meet them.
In the first two quarters they sold $450,000 worth of implementation services and decreased their go-live time by nearly one-third. By aligning with the customer’s ROI goals, clients were happy to pay extra. That solved the failure to launch issue and more implementations are now completed in less time.
Successful companies employ pulse surveys
You can’t improve a process unless you measure it. Most people we talked to use NPS to rate their service and we think this is absolutely the wrong measurement!
NPS is after the fact and only the squeaky wheels respond. It may be a client champion who only knows you missed the go live date but doesn’t know it was their own internal team’s fault.
Here’s how you change all that.
Segment your processes by workflow units—QA, training, development, or the last couple steps of defining success. Follow each step with a pulse survey targeting the client-side individual doing the work—right after it’s been completed, and the information is still fresh. Aggregate the scores over projects and over your portfolio. Are you getting better, or worse? Are some issues just hiccups, or is there a pattern?
A leading SaaS unicorn was missing its implementation go-live dates. As a result, its services team was over utilized by 130 percent (these poor souls were working like crazy). They needed to determine where the issues were so they could ask their CFO for more resources.
They assembled workflow data on a myriad of projects over two months. The data revealed projects rarely started on time because services didn’t have access to or control over the startup calendar. Sales sold and scheduled the projects without services input. Further, the company’s technical resources were globally shared, so services couldn’t be certain when key personnel would be available.
The data demonstrated—quantitatively—that with additional resources, services could get clients live two to three months faster, thereby reducing churn and boosting revenue. With the pulse data in hand, services secured additional technical resources and met its go live dates.
But that’s not all—with NPS surveys, the company had a 15 percent response rate. With pulse surveys they had a 100 percent response rate. All that rich data, compounded over time, helped them identify and resolve issues and rebuild their onboarding process from the ground up.
Why this is HUGE
SaaS is transitioning to more usage-based monetization. Instead of just selling seats, we’re increasingly selling volume through our platforms. Therefore, you need to find new ways to pump up that volume.
The best way to do that is to break from tradition and get the customer to tell you what they’re looking for. Have sales and service work together to develop a playbook based on ROI and time to value in the early stages of the sales process. Do that and you will very likely hit that ROI and reduce the implementation timetable.
Want more insights to accelerate revenue and reduce churn? Watch the video below.
