{"id":2609,"date":"2023-03-01T10:00:00","date_gmt":"2023-03-01T10:00:00","guid":{"rendered":"http:\/\/138.197.200.24\/resources\/blog\/saas-customer-engagement-model\/"},"modified":"2026-08-08T11:40:57","modified_gmt":"2026-08-08T11:40:57","slug":"saas-customer-engagement-model","status":"publish","type":"blog","link":"https:\/\/www.smartkarrot.com\/resources\/blog\/saas-customer-engagement-model\/","title":{"rendered":"Why a Successful Subscription Business Demands a Clear Customer Engagement Model"},"content":{"rendered":"
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There was a time when product based companies used to depend only on fresh sales to grow their business which was decided by the number of customers they acquired. The products were designed in such a way that only a one-time purchase was needed for the customers to own the product. The relationship between the customer and the company would terminate after the sale, or after a short period of post-sale support if applicable, and won\u2019t resume until the product expires and if the customer decides to repurchase from the same brand. This is the dynamics followed by all the companies selling tangible products and the software companies too continued with the same momentum in their initial days until the advent of\u00a0SaaS based customer engagement model.\u00a0<\/p>\n

The concept of membership as a model for generating recurring revenues has existed for a long time but the adoption of subscription based business models by the software companies has seen a recent surge in the past few years, if not decades. The\u00a0Saas\u00a0customer engagement model\u00a0has opened new avenues for business growth and sustainability for the companies. This cloud based technology has improved in many ways \u2013 either directly or indirectly \u2013 the companies build\u00a0and\u00a0 maintain their products, offer their services, acquire buyers and earn retention. Since it is a shift in the delivery model from one-time sale to subscription based, the most defining aspect for this model to succeed is the customer retention. Companies have to innovate new ways through\u00a0which\u00a0they can get their customers to continue using their products and renew their subscriptions. This is where a\u00a0SaaS Customer Engagement\u00a0<\/strong>model\u00a0<\/strong>as an organizational process comes into picture. It is a relatively new process in organizations that deploys a win-win strategy to retain customers unlike a traditional \u201cme first\u201d approach acquired by the businesses. In this article we are going to examine this process in detail and see how it helps resolve the challenges faced by the subscription based businesses and eventually helps them succeed.\u00a0<\/p>\n

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Challenges of\u00a0SaaS\u00a0Based Organizations\u00a0<\/h2>\n

Acquiring a new customer has always been one of the most expensive processes for a business. Large scale organizations spend months of time in running their marketing campaigns on different channels by partnering with external agencies. The\u00a0costs associated with converting a prospect to buy a product has\u00a0to be borne by the business owners by paying every individual in the marketing and sales division as well as the third party agencies. Owners invest heavily in\u00a0these areas only with an intention to cover the cost through long-term relationships with the customers. And if the companies fail to generate ROI even after the initial sale by not being able\u00a0to retain their customers then it becomes difficult for them to sustain in the longer run. There could be various reasons for a customer to not renew their services and that can range from behavioral\u00a0aspects of the customer to the quality of experience they derive while using the product.\u00a0<\/p>\n

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Lower Product Adoption<\/strong>\u00a0\u00a0<\/h3>\n

The time taken for the buyers to get familiarized with the product is crucial for retention. This is called product adoption. More precisely, it is the process which covers all stages between when a user hears about the product for the first time, starts using it, starts driving value from it and finally becomes habituated to it. Most of the user churns occur during the initial period post sale if the user fails to drive value from it due to any reason. For B2B complex products the churn may happen because\u00a0the user didn\u2019t start using all the features that can hook them to the product. These products are designed to either automate various\u00a0processes\u00a0 or\u00a0generate data or insights for high level managers to work towards their goals. They usually take some time\u00a0to sink in by getting used to the user interface as well as all features of the product. A lack of technical support, FAQs or user manual may prevent the customer from adopting the software.\u00a0\u00a0<\/p>\n

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Mismanagement in the Relationship\u00a0<\/strong>\u00a0<\/h3>\n

Another reason why customers won\u2019t return to the buyer is because of the poor relationship management of the vendors towards their customers. A wrongly qualified customer success manager may not have the domain knowledge of the customer\u2019s business and hence may fail to add value in\u00a0the relationship. A lack of\u00a0SaaS\u00a0Customer\u00a0Success\u00a0<\/strong>function can have disastrous impact of losing the customer without prior warning.\u00a0According to\u00a0Esteban\u00a0Kolsky<\/a>, a leading customer strategist, customers don\u2019t tell\u00a0you they\u2019re unhappy. In fact, only 1 in 26 unhappy customers actually complain.\u00a0<\/p>\n

The product has to be sold even after the purchase by highlighting the key features by the CSMs that a customer finds useful. There could also be chances of personality clash\u00a0between the representatives of the two parties if one gets offended due to any reason during the interaction. A lack of process for quickly switching to another CSM can have adverse effects on the customer. On the other hand if the CSM has managed to gain\u00a0trust of the customer over a long period but decides to quit their company then the buyer may lose the same support to which they got used to and eventually lose credibility. After all the CSMs are the product evangelists who regularly encourage the user\u00a0to use their products.\u00a0\u00a0<\/p>\n

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Product\u2019s Incapability<\/strong>\u00a0\u00a0<\/h3>\n

There are chances that the product was not meant for the customer at all. The sales team may have set over-expectations for the customer which they find out after not being able to meet business goals by using the product. This kind of reason cannot be controlled and the vendor has to let their customer go without investing further in the interaction.\u00a0\u00a0<\/p>\n

A lack of\u00a0SaaS\u00a0Customer\u00a0Retention\u00a0process for the situation when the product goes out of service due to technical issues could also be a setback for the user. If this downtime results in financial loss of the customer then it can turn out to be a serious situation for them to decide whether to continue the service or not. A lack of compensation by the vendor to make up for the loss can cause an adverse effect on the customer experience and may result in the termination of the service.\u00a0<\/p>\n

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A Customer Engagement Model Can Help Mitigate the Risk of Customer Churn\u00a0<\/h2>\n

Customer engagement model is the process followed by an organization for nurturing its relationship with the customer post sales. A customer success manager is appointed in the company who represents the customer\u2019s interest to other functions of the organization.\u00a0Saas\u00a0based companies are realizing more and more that the key\u00a0customer success strategy\u00a0to retain their customer is to invest in building an outstanding customer experience thereby resulting in greater customer satisfaction. The\u00a0Temkin\u00a0Group<\/a>\u00a0found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within\u00a03 years of investing in customer experience. For\u00a0SaaS\u00a0companies in particular, they can expect to increase revenue by $1 billion.\u00a0<\/p>\n

The renewal decisions made by the customer are totally based on the perceived value of the product. Companies who focus more\u00a0on\u00a0Saas\u00a0Customer\u00a0Engagement Model\u00a0<\/strong>are able to make their customer realize more value of their products and services which eventually leads to customer renewals and increased customer lifetime value ultimately fetching profitability and growth for the business.\u00a0<\/p>\n

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Types of Customer Engagement Model<\/strong>\u00a0<\/h3>\n

There are basically four approaches around which a customer engagement model is built to serve the customer.\u00a0\u00a0<\/p>\n

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  • High Touch\u00a0Onboarding:\u00a0The customer experience starts right from the moment they decide to purchase the product,\u00a0if not before. If the product configuration is a complex process then this process is owned by the Customer Success managers who take full responsibility of getting the customer onboard. They would either give the orientation by themselves or appoint an appropriate technical staff for getting the customer started on using the product.\u00a0<\/li>\n<\/ul>\n
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    • Low Touch\u00a0Onboarding:\u00a0If the purchase and configuration of the product has been automated through the vendor\u2019s website and doesn\u2019t need a manual intervention then it is called Low touch\u00a0onboarding. It is usually carried out by initiating the configuration through online links sent over mail or directly on the vendor\u2019s website after the customer\u00a0has made the initial payment. The training materials in the form of user manual or\u00a0video tutorials are enough in this approach for the customer to get to know all about using the product.\u00a0<\/li>\n<\/ul>\n
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      • High Touch Post\u00a0Onboarding:\u00a0This approach is mainly used for the enterprise customers who pay heavy revenue for using the product to cover the cost of one to one CSM appointed to engage the customer on all aspects of the product. In this\u00a0Saas\u00a0customer\u00a0engagement\u00a0model the CSMs act as customer\u2019s peers rather than sellers in the journey of the customer\u2019s usage of the product. It is the responsibility of\u00a0the CSM to help their customer realize the value of the product and help them use it seamlessly until they adopt the product.\u00a0<\/li>\n<\/ul>\n
          \n
        • Low Touch Post\u00a0Onboarding:\u00a0In this approach, when the\u00a0Saas customer\u00a0has been\u00a0onboarded, the means through which the seller maintains their relationship with customers is through digital or online methods rather than manual. This is a one-to-many approach as the cost of assigning a\u00a0single CSM to handle a customer account cannot be justified by the revenue generated by the customer. The communication happens through automated alerts and emails and a need based CSM can be appointed only for time being to a customer account.\u00a0<\/li>\n<\/ul>\n

          These are\u00a0the four approaches a combination of which can be used by the seller for their\u00a0SaaS\u00a0customer\u00a0Success\u00a0<\/strong>based on the customer and vendor\u2019s business profile.<\/strong>\u00a0I.e.\u00a0either\u00a0of the four combinations can be used:\u00a0\u00a0<\/p>\n

            \n
          • High Touch\u00a0Onboarding\u00a0\/ High Touch Post\u00a0Onboarding\u00a0<\/li>\n
          • High Touch\u00a0Onboarding\u00a0\/ Low Touch Post\u00a0Onboarding\u00a0<\/li>\n
          • Low Touch\u00a0Onboarding\u00a0\/ High Touch Post\u00a0Onboarding\u00a0<\/li>\n
          • Low Touch\u00a0Onboarding\u00a0\/ Low Touch Post\u00a0Onboarding\u00a0<\/li>\n<\/ul>\n

            Having decided the frequency of the touch-points to suit the different kinds of customers by the company, let\u2019s examine the different ways in which organizations follow their customer engagement model that eventually helps them grow their business.\u00a0<\/p>\n

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            How Customer Engagement Models Helps the Growth of\u00a0SaaS\u00a0Business<\/strong>\u00a0<\/h3>\n

            With more and more software companies shifting to the\u00a0SaaS\u00a0based delivery model, the more they are realizing the need of having a greater customer experience for their business growth. Having a great Customer Experience can vastly improve customer retention and customer satisfaction thereby enhancing the opportunities for up-selling and cross-selling.\u00a0<\/p>\n

            <\/div>\n
            <\/div>\n

            The strategy they work on for the growth of their business is termed as\u00a0\u201cLand and Expand\u201d. It is usually the journey that the businesses make with their customer after they have landed or sold their product. Through regular customer engagement they are able to help a customer adopt their product after which it becomes easier\u00a0for them to retain their customers, up-sell higher versions of their products and cross-sell other related products to the same customer.\u00a0<\/p>\n

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            Using the Insights Derived from Real-time Usage Data<\/strong>\u00a0<\/h3>\n

            The customer success managers (CSMs) usually keep in touch with the users of their product through which they are able to fetch the real-time usage data. This data helps them draw meaningful insights so that a predictive analysis can be made and used for the future offerings and actions. In other words, this would help them anticipate the user\u2019s next move and would give clear indication about how likely they are going to renew their subscription. This is one of the most useful insights for a\u00a0 SaaS\u00a0Customer\u00a0Retention\u00a0strategy to be implemented by the companies. For example\u00a0if the customer is using only 6 out of 25 features of the product then they can easily guess that the customer would not be going to renew their subscription unless\u00a0they do something about it. Hence, a CSM can proactively send email-tips to the customer, if not intervening manually, for recommending them about other unused features.\u00a0\u00a0<\/p>\n

            This data is also a good indicator for the seller to time their up-selling and cross-selling once the product adoption has taken place by the customer.\u00a0<\/p>\n

            Other processes can also make use of these insights based on the product adoption pattern of the customers. E.g. a Marketing team can build its strategies around those features which were most used by their existing customers. Or the product management team can highlight those features more while designing upgraded versions of their product and may consider putting them on the dashboard for quick adoption.\u00a0<\/p>\n

            A comprehensive report derived from the individual customer usage history can also help customer representatives to give support with a more personalized experience.\u00a0<\/p>\n

            <\/div>\n

            Success of a Business Comes with the Success of the Customer\u00a0<\/h2>\n

            While every business aspires to grow their revenues and profitability, it is about time that they realize that for running SaaS\u00a0business,\u00a0a clear\u00a0SaaS\u00a0Customer Engagement\u00a0model is indispensable. A great CSM should be able to engage at all levels in the customer\u2019s business. They have to demonstrate the value proposition for different decision makers of the customer organization. Additionally,\u00a0they must also be able to interact with end users showing them how their product helps them reduce time in their workflows. Hence, it is paramount for them to hold domain knowledge as well along with the technical know-how of the product.\u00a0\u00a0<\/p>\n

            A thriving customer engagement team cannot be built until the\u00a0customer success\u00a0is kept at the priority of the business. The value realization of the product is not just the responsibility of the sales and marketing team anymore as the customer retention, which is the key responsibility of a customer success function, decides the fate of a subscription based business.\u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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