One of the first things a customer will question in a downturn, is where they can cut or reduce recurring payments or OPEX. They will look for any reason, rational or otherwise. Licensing commitments aside, if you are a SaaS business and have been doing your job well, they should find only reasons to stay. Going forward, you can also do things to keep them committed.
Before we start looking at the things you should have done and can still do, there is Lady Luck. You may have played your cards right or simply have the fortune to be in a space that is seeing huge demand at the moment. Like software that supports remote work. Think Microsoft Teams, Zoom, Slack.
If so, well done, enjoy the ride and good luck managing the surging demand. Make sure you do it right because it can make or break the moment but that is for another post. If you have not been so blessed, read on.
Every CEO and CFO right now have a spreadsheet open of existing software spend ranked. Vendors that are below the line, because of poor adoption, experience or outcomes, get cut.Nick Mehta, CEO of Gainsight, a leading Customer Success Company
Nailed it ☝ Historically, you should have been focusing on extent of use of your software, what value you have identified that is important to the customer and what relationships have been built with the right stakeholders. I’ll tackle each in turn.
- Usage, usage, usage. Its the new oil in the subscription economy. Here are some heuristics to guide you.
- Closely aligned is data. Metrics matter and you have to be tracking adoption at a basic level, how it’s trending and what impacts usage.
- Have you set KPI’s with the customer?
- Are you tracking them over time and what influences them?
- Are they aligned to key business metrics so you can determine and show causality?
- Users, users, users. Are they happy (can you show healthy sentiment), do they love you?
- How broad is the base? Depending on the technology and its specificity, you can still ensure as many parts of the business as possible are using it and gaining value and benefit.
- Is the experience optimal? Is the way users and key customer stakeholders interact with your software, employees and company as a whole tracked and optimised and can you show evidence of this?
Present positive evidence from all of the above to the CEO or CFO. Chances are high you are not going to be cut from the list of vendors your customer retains when times are tough.
It’s not too late. Although it’s what you’ve done to date and the evidence you show of this that will count most, you can and should still try to pull a rabbit out of the hat. How you respond can make all the difference – I recently wrote about companies doing great in this area: How to respond to global challenges mindfully and the 3 stakeholders in success. Here is more to ponder.
- Invest more, not less. Now is the time for customers to be at the heart of everything you do. Focus on, tune and optimise the team that has customers at their heart. Mind you don’t push them too hard and do everything you can to support them to support the customer better.
- Segment and target. If you hadn’t been doing this before, get serious and find out which customers are the most valuable. Determine how you can focus on them even more with red carpet treatment.
This will probably be where the greatest sensitivity lies as the tendency will be for customers to want to conserve cash. Some of the things you can do to help:
- Offer a subscription holiday. Rather than them stopping altogether, can they defer payment or stop for an agreed period. Until they are back on their feet and the crisis over.
- Lower the price. This is trickier because they will want to stay at this lower price indefinitely. But if done well and you can afford it, it’s better than losing a customer.
This is where you can overcome tricky price conversations later too. Offer new value propositions and you are likely to convince the customer to stay.
- New learning material and “how to’s” that help the customer endure their unique challenges in the downturn better. Even if not directly related to your product and service.
- Service support enhancements that do similar.
- Empathy. Don’t underestimate the value of a sympathetic approach and most importantly actions, that make the customer feel valuable.
- Killer features are always welcome, but in a crisis especially those that tackle the main reason for it and how your customers can adopt them to fight it. Double down on finding and developing them with your product and customer success teams.
- Can you innovate the customer experience? Think also about your internal employee experience and how that can be innovated on to in turn impact on the customer.