CEO’s of SaaS companies are beginning to notice a couple of vital aspects of their customer support operations. Their first wake-up call is the realization that they can’t afford to staff their support team in the traditional way. The economics of an incremental income stream profits-realization model has no room for a cost-center support operation. The second realization is that they don’t need as much of a support team. But in the space between those two realizations, there is a significant risk of a lost major opportunity. The SaaS model can indeed have a dramatically lowered product support burden for the manufacturer. It can also offer a powerful transition into customer centricity for those wise enough to take advantage of it.
In the course of working with application software developers and VARs for many years, I learned that a prospect is highly unlikely to buy a software system from a company or a sales rep that doesn’t speak their language fluently. If you don’t clearly know your way around the machine shop floor, the owner will naturally fear that if he buys your solution, he’ll end up teaching you about the realities of his business at his expense. Part of the expression of the necessary fluency in a particular vertical is embodied in the design of the application. The prospect needs to be able to look at your technology and immediately realize that its developers know his business and industry. Most product-centric manufacturers stop there, with the embodiment of their expertise in the software. Unfortunately, stopping short places all the reliance on the technology, and leaves a significant opportunity for competitive advantage and a lot of money lying on the table, untapped.
Look at the failure of CRM, for example. Various software manufacturers wrote powerful sales force automation packages that offered the customers exactly what they were asking for in terms of specified functionality. However, the horrendous failure rate and accompanying staggering financial losses from the failed implementations reveals that what was being sold was not what was needed. Physically installing the software and completing the implementation on site was not the problem. Getting people to make appropriate choices on functionality so that their employees were motivated to use the systems was the real issue, and the manufacturers typically didn’t address that need at all. Their product centric stance lacked follow-through; the technology alone wasn’t enough to enable the customer to succeed.
What customers need to buy is the seamless combination of technology and industry-specific expertise in how to use the power of that technology for maximum productivity and profitability. That’s not what SaaS companies or their current Customer Support or Professional Services teams are offering these days. But it could be.