Unlock growth in XaaS (Everything-as-a-service)
How incorporating formal Customer Success practices is the booster you need to succeed in a pay-as-you-go economy
In a world where products are increasingly being replaced by services, it is important to understand the role that customer success plays and how it can affect the rate of user attrition. In the XaaS universe, where everything is offered on a monthly payment basis, the only metric that really matters to measure the performance of a company is the net growth rate of an account, or the aggregate of all accounts. If a company is acquiring new subscribers (selling), but in turn, losing clients (attrition) with a greater speed, their overall revenue and client base will be contracting. Traditional sales models generally ignore this dynamic.
#1- THE FUNNEL IS DEAD – LONG LIVE LAER
The traditional model for the customer journey is usually represented linearly, with customers going from being strangers to prospects, and finally becoming paying customers of the company.
Under this traditional model, once the transaction is done and the product is delivered and working, the company typically has little interaction with the customer and only becomes involved again if a problem arises, or once the customer decides to refresh their solution.
In the world of “as a service”, things work a little differently. First, the customer has the option to cancel the service at any time. In many occasions there are early cancellation clauses, but the option still exists and most often than not, clients cancel because they don’t fully use the solution and, they’re not “extracting the full value” of the solution. In the vast majority of cases, this is due to poor adoption of the solution within the client’s organization. The solution was purchased and installed, but nobody uses it anymore. You can’t blame the client canceling the service if they are not utilizing it.
In contrast, when customers adopt well a solution, they usually discover new uses for the solution, and many times, add more users to it.
This is what gave rise to a new paradigm of the customer journey, the LAER model. The acronym stands for LAND, ADOPT, EXPAND, and RENEW.
Under this model, ALL stages can positively or negatively affect the company’s turnover. It becomes extremely important to increase revenue by Landing more customers, but also Adopt the solution, and then have them Expand the use of the solution and Renew.
#2 – CUSTOMER SUCCESS IS NOT TECH SUPPORT
We have all made the mistake of using the terms “Customer Success”, “Customer Service”, and even “Tech Support” interchangeably, and incorrectly.
Customer Success is the formal methodology that aims for customers to achieve the desired results while using our solution. While traditionally Customer Satisfaction or Technical Support aim to make sure that the solution is working as promised, Customer Success must make sure that the client is utilizing it appropriately, and to its full potential. In this sense it becomes very important that the client not only buys the solution but also implements it as intended, uses it confidently, uses all its functionalities, and even recommends it to be used in other areas of the company and by more end users.
As-a-service models focus on the business benefits, and it further aligns the customer and the vendor’s goals, and delivering true “Customer Success” is the only way for the vendor’s own success.
Author, Huba Rostonics, Principal at OneAccord
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