Why Customer Service is Important in SaaS
As a SaaS business, you will continually face a distinct set of difficulties when it comes to customer service. It can be a challenge to find a good balance between the needs of your customers and the technical capabilities of your company.
Customers of SaaS companies pay on a recurring basis and use their products regularly but must master new features as the company develops them. In more traditional business models where a product is sold, the customer buys it and the product doesn’t change so the need for support is decreased, creating predictability of cash flow.
This isn’t true for the SaaS industry as the software sector often experiences quick unpredictable shifts in the landscape. These changes can lead to small temporary issues that need immediate support from your team, causing tough conversations between service providers and affected users experiencing setbacks. Having effective customer service communication is beneficial critical to the success of any SaaS solutions team.
Businesses can gain a competitive advantage when they prioritize customer support and treat their clients like individuals.
There's plenty of data to show just how important it is for businesses in today's market: 85% of executives say that offering a positive experience can give them an edge over the competition, while 82% B2B customers admit that personalized service influences their loyalty.
With all this information so readily available, why do such few companies put effort into creating these personal connections?
78% of B2B customers say that if they are not getting the service they want then they will shop for other services. This means companies with satisfied consumers have a higher revenue potential, which is why exceptional support must be offered when your consumer needs it most.
Effective customer service strategies will drive excellent reviews and recommendations, as well as keep consumers subscribed and increase your income month after month.
When it comes to customer service, SaaS products are in a class of their own. Excelling in SaaS customer support can have a significant impact on your company’s long-term success by:
- Reducing Churn
- Increasing MRR
- Increasing LTV
In this article we'll explain the difference between customer support and customer success then give you some pointers to help ensure that your team is providing the best possible experience to your clients.
SaaS Customer Service: Customer Support and Customer Success
As you build your business, it's important to understand the role of customer support and success teams. Both are vital components for healthy growth, but their functions differ slightly depending on what stage of the customer journey they handle.
Your success team is responsible for educating your clients and helping them adapt to your software as soon as they become customers. The goal is to get users on board with what you have to offer and prevent them from having difficulties using your service and having those issues handed to the support team. It’s important the support team is available to assist customers with troubleshooting on a as needed basis but aren't necessarily responsible for customer education or "success”.
Collaboration between these two customer service teams is critical. they must provide cohesive services on both ends. And, they need to be on the same page when it comes to providing information to your customers. You will retain more clients if they are being supported throughout their journey.
Best Practices for SaaS Customer Support
Focus on Customer Retention
If you're proactive and provide outstanding customer service from the outset, you'll see higher retention and less strain on your support procedures in the future. It's critical for a SaaS firm operating a subscription business model to keep hold of its customers.
You want the customer lifetime value to exceed the cost of acquiring a new client. The higher your business's financial performance, the better. A customer who churns will require customer service, marketing, sales and product effort to win back, putting a strain on your resources. A customer that remains is often one that requires no more than limited post-sales support, if any at all. Furthermore, upselling a current client on additional services is often 5-10 times less expensive than recruiting a new one.
Effective onboarding provides hands-on customer support and establishes a firm foundation for future growth and ensures that your customers are familiar with your products and how to operate them. Increased customer retention strategies during the onboarding period can have a positive, compounding effect on revenue in subsequent months.
Collect and Implement Customer Feedback
The importance of actively inviting customer feedback from people who are using your products/services regularly cannot be overstated as it provides valuable insight on what works best for them as an individual and as a company.
Understanding your clients can assist you in all aspects of your business, from formulating a marketing strategy to developing updates and improvements regarding service. This information about customers' needs will help improve the effectiveness for customer service processes like, for instance, onboarding.
Your clients most likely have a wide range of use cases that you would not be able to anticipate and to identify ways in which you can provide the best service possible, you need to listen and communicate with your customers effectively.
It is best to create a feedback system that is both visible and easy to access, but also powerful enough to find the information you need. To do this, keep all feedback channels open and don’t leave out any group from your solicitations. Customer satisfaction surveys are an excellent way to collect quantitative data in order to identify your user’s most pressing requirements and issues. Further, incorporating IVR technology (interactive voice response) into your customer feedback system can also streamline the process and provide customers with a convenient way to share their thoughts and experiences.
SaaS firms, by nature, attract a lot of input from the outside. There’s a very good chance your customers have used some of your competitors, and the ones that possess excellent comparison points to help you. This feedback can help you to see what made your competitors popular with their clients and whether or not there are features you lack.
Study Your Customers’ Language and Talk Like Them
When you think of customer support, what usually comes to mind is the technical and logistical. However, there's another side that sometimes gets overlooked: language. Customer support isn't just about responding quickly; It's also about developing connections through listening closely and speaking confidently with purpose.
Take cues from your customers when crafting content and developing messaging strategies. It's helpful if marketers take note of what language your customers and potential customers are using online and more specifically when describing products in reviews or referrals. Reiterating their language and ideas will help connect brands to their audiences when the target feels like they're represented in a brand's content.
Customer service starts by gaining understanding who your customers are, where they come from and most importantly, why they're using your service. To successfully target your consumers, you must interact with them, like them.
Hire a Winning Customer Support Team
Customer service agents help keep customers happy and reduce churn.
Hiring the right people is extremely important to a SaaS business model as they will be your first point of contact with customer queries. An ideal candidate should have an inquisitive mind, eagerness to learn more about their job and software, along with good communication skills so that you can trust them when providing support on behalf of your company.
A tiered customer service funnel is common in large scale businesses, but small firms may only have one agent providing customer support. No matter the complexity of your operations, finding professionals with good investigative and problem solving abilities are so important to a SaaS support job as few candidates will have practical knowledge of your product and business straight out of the gate.
Make it Easy to Contact You
We have all been there, you're on hold endlessly, your email goes unanswered or you're stuck with a chatbot giving you irrelevant responses to your urgent questions. Not only is this incredibly frustrating, it prevents your customers from experiencing your product as intended which could hurt the reputation of your brand over all.
What's the point of having a winning customer service team, if your customers can’t get in touch with them and show them how much your company cares about their business. Make sure your service teams are available and access to them is made easy so even your most confused customers can find some support.
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Key Contact Points for Successful SaaS Customer Service
The most common causes for a client to contact a SaaS customer support staff member include:
- Missing features
- Confusing features
Finding issues that could have otherwise remained unnoticed can help protect your business' reputation by limiting the amount of people affected. Resolving the issue quickly and easily gives you an opportunity to impress customers with your professionalism and expertise.
Additionally, if a consumer tells you about something they found difficult to understand, you may be able to improve UX overall or manage product expectations more effectively. Of course, this depends on how many people struggle and request alterations to a function.
Low Usage and Inactive Users
Customers who have not used the product should be contacted by SaaS Customer Service to identify why usage is declining. Again, as stated previously this gives you an opportunity to source problems and find a solution that could encourage your customer to give you another chance. It's critical to figure out why customers no longer find value in your service, so you can improve products for future users.
New Feature Launches
To keep your customers up to speed on the latest updates, you’ll need to have a customer support team to help along the way. However new feature launches can put pressure on existing resources if users are not properly educated about changes to their service.
Here are a few tips that will help ensure your customers are able to access important information regarding the use new features:
- Make sure new features are announced in user-facing community channels so customers will get familiar with new features and how they work.
- If there's a beta program, let your customers test new features and give you feedback.
- Don't be afraid to explain to your user why they need the new feature and how it benefits them.
- Show them examples of other people using the feature so it's easier for them to understand.
- Show them a demo video.
- Perform user tests to find user errors.
How to Measure Customer Service Performance
Tracking customer service metrics overall allows companies to identify which customers have problems, how frequently they experience these issues and whether or not your support team was able to resolve it.
Analyzing customer service performance metrics can help businesses establish goals for improving the quality of their product and customer services. This has shown to prevent churning among unhappy customers who consistently find themselves dissatisfied without support available.
Here are some metrics helpful when trying to identify areas of improvement:
Churn Rate: The churn rate, sometimes known as the attrition rate or customer turnover, is the number of customers who leave an organization each year. The percentage of service subscribers who cancel their subscriptions in a given time period is referred to as churn.
Customer Retention Costs: Customer retention directly affects lifetime values (LTV). The cost of keeping an existing client is known as customer retention. To figure out how much money a customer spends on your product during the term of their relationship with you, factor in both sales and retention expenditures. You may also subtract out churn, acquisition costs, and general overhead from this total to create an effective cost per dollar spent (CPS).
Monthly Recurring Revenue: MRR is the predictable total revenue generated by your company from all active subscriptions in a given month.
Customer Acquisition Costs: The cost of converting a potential lead into a customer is referred to as (CAC). This statistic is used by businesses to assess their profitability because it compares the money they spend on attracting clients against the number of customers they gained.
Average Revenue Per User: ARPA is a metric typically monitored and tracked in subscription-based and SaaS-based enterprises. Businesses often keep track of and evaluate ARPA on their financial reports as it aids in the calculation of profitability projections.
Customer Lifetime Value: CLV is the total amount of money a customer will spend in your business in their lifetime.
It's crucial that SaaS businesses provide great service and work to retain their customers and increase revenue stream.
Customer service is not just about being courteous; it’s also important to establish a relationship of trust with your customers. When you provide excellent service and create this type of bond between yourself as an entrepreneur or company representative and those who subscribe on faith in what you offer - not will they continue to subscribe month after month, they will feel comfortable referring othersto your business.
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