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Customer Success and SaaS Business Growth: A Symbiotic Relationship

Customer Success and SaaS Business Growth

To understand the SaaS business growth, let’s take a quick look at the SaaS history through this analogy.

Imagine a gated society of thousand apartments. After the construction, the builder sells the apartment to different customers. After all the apartments are sold, the builder would still maintain the society for a period of around 5 to 10 years. And then, the builder hands over the complete authority of maintenance and ownership to the society of house owners and bids them farewell forever.

This was typically the scene for legacy software vendors until the past decade or so. But with the advancement of SaaS, the growth model has changed drastically.

Now, the customers will never own the apartments. They will always be tenants and have the freedom to leave anytime they want. The ownership of the apartments will always be with the vendor. And there is no limit to the number of apartments they can lease.

So, for the SaaS business growth, the builder’s goal is to a) rent-out as many apartments as possible. b) retain the tenants for the longest period of time. The goal of renting-out a maximum number of apartments still falls under the traditional marketing domain. The only difference being instead of selling the apartment, they are now for lease.

But retaining the tenants for long is a new need. This is where the need for customer success has arisen. When customers are not committed for life-time to the product (apartment), they can easily switch to any other product. What makes them stick to the product for lifetime is the evolving science of customer success.

How customer success and SaaS business growth are symbiotic?

To understand the relationship between customer success and business growth, let’s draw a correlation with the marketing team.

If the marketing team is able to generate a fixed number of MQLs and SQLs regularly, they are deemed to be a growth contributor. If a SaaS company is acquiring 100 new customers every quarter, it is still considered to be growing. Through the SaaS marketing strategy, they add the generated leads to the sales funnel and move on for further hunt.

But such is not the case with customer success. Since they are responsible for retaining the customers, they need to grow along with the business. For example, if your company acquires 100 news customers every quarter, then the customer success team has to scale accordingly. In the first quarter they would be handling 100 customers. In the second quarter, 200. And so on.

Marketers are the gatherers and the customer success team is the nurturer. The CS cannot overlook the old customers in order to serve the new ones. They need to grow along with the business to keep up with their goals.

SaaS business development through customer success

SaaS business development through customer success

If you will read about how customer success adds up to the SaaS business growth, you will find numerous ways. It is easy to get lost in all of them. But if we group them all together to their highest levels, they all boil down to just three categories:

  1. Customer Retention
  2. Business expansion of existing customer accounts
  3. Brand advocacy

#1 Customer Retention

The lower upfront payment in the SaaS industry allows prospects to quickly convert. But this is just one side of the coin. The other side is that it also makes it easier for them to quit your business. They might start with subscribing to your service for a few months. If they discover value in this time, they would continue to use it for a longer period.

So what are the ways you help them realize continuous value from a product or a SaaS application?

  1. Effective onboarding
  2. Product adoption
  3. Customer Experience

Effective onboarding

Onboarding is the stage that consists of and extends from the sales process.

  1. To begin with, you must have a clear definition of customer onboarding. What makes them “onboarded”? The goals of the onboarding must be laid out clearly before you design an onboarding plan.
  1. Then you have to meet your customer where they are. Understand their challenges before you start giving them a solution. Their expectations must be brought forth and checked for its viability. How mature are they?
  1. Now you must identify the steps needed to move them towards onboarding goals.
    1. What are the system requirements for your product?
    2. Who all need to be involved from your end for their onboarding process?
    3. What do you expect from your customers to do in this phase?
    4. What guidance do they need?
      • Self-service tutorials
      • In-person meeting
      • Technical walk-through of the product
  1. How the transition from onboarding to the next stage would take place? You must have a clear vision of what comes next after onboarding. This would make you easier to guide customers towards further immersion into the product.

Product adoption

Once the customer is qualified enough to handle the product on their own, your next goal is to drive product adoption. This is the stage where the customer has realized much value from the product and it has become a part of their daily routine. This is an ideal state to achieve for the SaaS business growth. So how do you achieve that?

  1. Monitor product usage: Through a dedicated customer success software, you can access the usage pattern of your customers. This will reveal very useful information like:
    1. How often they use your product?
    2. For how long they use it?
    3. What features are they using or ignoring?
  1. Engage effectively: When you have the above information, you can engage with them within their context. Help them drive deeper engagement with the product by recommending them unused features. Demonstrate how they can drive more value from the product.

Customer Experience

Apart from the product value, what customers feel overall about your brand is equally important. Every interaction they have with different personnels adds up to their customer experience. It is not just limited to the technical support team, but spans over all other touchpoints. Right from marketing to sales to onboarding and customer success.

  1. Each individual interacting with the customer must reflect the brand values to them.
  2. All the different teams a customer interacts with must be on the same page. This is the responsibility of a customer success manager. Because they are the customer representatives to the SaaS companies.

#2 Business expansion of existing customer accounts

The famous “land and expand” strategy holds true in this case. When the customer has become regular with your product, it is the right time to upgrade them. This can happen in two ways:

  1. Upselling them a higher version of the product with enhanced features.
  2. Cross-selling other relevant products to expand their usage to a wider spectrum.

This is how the existing customer account grows with newer income sources. For a growing organization, the product must always be in a state of evolution. The customer needs are evolving, the business environments are changing, competitors are trying out new innovations. These are some of the factors you must be vigilant for continuous evolution of your offerings.

#3 Brand Advocacy

This is the last category of customer success goals out of the three I mentioned above. This doesn’t add up directly to the total generated revenue but accounts for new customer acquisition. You can say this is one of the channels of SaaS marketing in an organization.

When customers turn loyal to your brand, they would be happy to recommend your product to others. This drives further customers into the sales funnel and eventually leads to the growth of the SaaS brands.

Conclusion

The SaaS business growth goes hand in hand with customer success. The quality of relationships you nurture with your customers directly impact your progress towards customer success goals.

There has to be a proper way of scaling the customer success so you don’t have to cut down the value to your existing customer base. If your engagement model requires more in-person meetings with your clients, hire more CSMs as your business grows. If it can be managed through your customer success platform, buy more user licenses.

The growing revenues from existing customer base must justify the cost of maintaining the customer success. Then only this symbiotic relationship adds up to the holistic growth of a brand.

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