Customer Relationship Management or CRM has fast become a term associated with multiple departments within an organization. CRM technology was positioned as organizing, automating and synchronizing sales, marketing, customer service and technical support. And although individuals in each of the departments will always have a vested interest in and interact with the customer, the focus of yesterday’s CRM systems was sales operations and sales automation. This isn’t too useful when it comes to managing customer relationships today.
Why? Existing tools were not built to match your use case. If you are a SaaS 2.0 company, then you need something to get you to the finish line – because the starting line has moved. The starting line today is a trial, a pilot, a freemium offer or a small implementation to demonstrate a low-cost use case. And the finish line is conversion, retention and referral.
And if anyone asks why your existing CRM system won’t work or why as a non-sales, trial-based SaaS company you need a CRM, start with these 3 reasons:
1. You really only do have one chance to make a first impression
We call it time to first value. Time to First Value is the time it takes for a customer to get positive feedback for making the commitment to a service – whether a trial or pilot or a larger rollout.
If the time to first value exceeds the customers’ expectations, it builds a foundation of trust and confidence in the relationship. If it takes too long, then customers experience frustration and embarrassment.
Managing that initial customer experience of value is key to lowering churn and accelerating increased adoption.
Forrester has a great blog post on “Time to Value” if you are looking for more.
2. When you don’t pay attention to a prospect or customer, they stop paying
Customer expectations are greater today than they have been in the last decade, maybe even decades (time can really fly!). They have more information, opinions and buying power in their arsenal than ever before. And they use it. Simply put – if they experience (or don’t) the business benefit they are looking for from your offering, they realize it and act on it – hence how churn rate became a critical success factor, especially for SaaS companies. Engage with your customers with the right information at the right time. Build conversations, relationships and eventually trust and they will become advocates.
Tomasz Tunguz talks directly to the maximum viable churn rate in one of his posts – all of which are invaluable.
3. Trying doesn’t guarantee buying
I am not sure about you, however when I am looking for a new service, I put a lot of weight on whether the company has a trial offering. And given the nature of Amity, I have started to pay very close attention to the attention they provide me during the trial.
Recently I was looking for two services – a proposal management and an email sales productivity offering. There seemed to be a spurt and the a sputter in managing my experience on 2 of the 3 trials; and when my trial was over, those 2 vendors never did follow up or try to convert me to a paying customer. Somehow, they suspected the notification in the software would speak for itself. The results so far: I have not converted yet, and there are plenty of other vendors in those categories that I can quickly and easily move on to.
Now I can come to a couple of conclusions – 1) their CSM to trial participant ratio is way off and 2) they likely don’t have the right system in place to provide the necessary alerts.
Lincoln Murphy has a several blog posts on SaaS – this one focusing on competing in crowded markets really hits home on how easy it is for customers to sample many but buy few.
The final outcome of having the appropriate CRM in your SaaS company? Managers will be able to showcase their results more easily; executives will be fully informed of the companies’ latest deals, and accurately project revenue expectations without doing any extra work; and everyone will benefit from the boost to the bottom line that often comes from building excellent customer relationships.