What Too Many SaaS Companies Get Wrong

tl;dr: SaaS begins with software and ends with service. SaaS companies focus too much on the software, not nearly enough on the service.At Localist, our back-office stack is made up of dozens of SaaS products that are supposed to make running a business easier. 36, actually.Zenefits for HR and payroll; Ubiquity and Guideline for 401k; Quickbooks Online for accounting; Slack for comms; Salesforce for CRM; Wootric for NPS... the list goes on.All of these companies have amazing websites.All of these companies have a well-funded and have very responsive sales teams.Some of these companies have well-designed, intuitive software products.None of these companies has good customer support.Well-funded companies are designed to get a customer in the door at all costs, with "keeping customers" set as a discreet problem that's punted to a year later.The problem is that customer retention rarely gets the time it deserves, with most of the weight of churn prevention being put on the product team itself.But the product isn't just the software. The product is the overall service to the customer. When a customer pays a monthly fee, it's not just to access the platform; it's to have a successful outcome. That positive outcome can depend a lot on the quality of support a customer is given.We've seen an attempt to automate support with chatbots, knowledge bases, etc. but it has the opposite effect, worsening the long-term customer experience. By relegating all interactions to chatbots, less investment is made in actual support staff, which means if a person is< em> required, there are fewer of them to go around.Even the most intuitive software takes some onboarding and gentle pushing, and nobody's going to do that work.To break the 'growth at all costs' cycle and give equal weight to customer retention and positive outcomes, the inventives need to start at the top. VCs need to fund high net-retention as the north star metric, rather than high growth.

Written on Jun 12th, 2018