SaaS Marketing: Win by Emphasizing the “Service”
March 30, 2012
In my last post, I dissected the fundamental issues with SaaS marketing techniques in that most strategists still think of SaaS product as a tangible, concrete, self-contained, transferable, or, in short, classic software product, provided superficially “on-demand”, slapped together with a “subscription pricing” that is just another word for “glorified maintenance”. The truth is that with the rapid adoption of cloud computing paradigm, IT buyers are increasingly looking to buy end to end, holistic services offering, rather than one-off, point solutions to solve specific pain points. Vendors that are able to think and market more in the “service” manner rather than the “software” side of their product will succeed, because they are able to speak to the overriding concerns of the buyers.
This is why IBM, the grand-daddy of IT companies, has been able to renew itself and continue its transformation from a hardware (product) heavy vendors into an all encompassing, solutions centric, services-focused powerhouse.
How do young, expansion stage SaaS companies leverage on this knowledge and become better at marketing the service they offer? Again, lessons from successful service businesses should give some guidance to how they can lean on the pecularities of service marketing. Below are some techniques that have been found successful in classic service organizations, and some thoughts on how they can applied for SaaS companies:
– Be more personal: To differentiate from the crowded marketplace, SaaS companies need to always be selling the personal experience, the personal achievements the end users and buyers can associate with using the product, rather than simply flaunting the technical specs or feature richness. Even though many SaaS companies are selling to businesses, it is all too often to forget that businesses are run by people and the decision makers are ultimately still looking for a good, personal customer experience.
– Build concrete business cases: As with service offering, SaaS purchase can be hard to justify, as it is spread over a long period of time, and that tends to force SaaS companies to underprice or offer generous payment plans to reduce the upfront costs or commitment. Instead of falling into that vicious cycle, SaaS companies should focus on showing tangible immediate values of using the service, and build concrete, quantifiable business cases around that.
– Create strong organizational image: As any SaaS business incorporates cloud computing in the sense that the clients’ data is stored outside of the customer’s firewall. Being on the outside, SaaS offering needs to be rely on a strong, trustworthy organizational image to give prospect customers the same sense of assurance. Moreover, as we noted, it is harder to transfer an unit of “service”, and thus there is no direct way for SaaS vendors to signal their quality or success, unless it is so well demonstrated in the public that everyone knows about it. To do so, we can consider the following specific tactics:
- Have public and consistent mission, vision and values
- Emphasize selection and training of client-facing employees to ensure excellent interaction
- Build thought leadership in the industry as an innovator, an industry supporter
– Focus on whole customer experience/customer intimacy: Many companies should do this, but SaaS business needs to consider this the most important task because the service only means value if it satisfies the needs of the customers. For them, focusing on customer intimacy as a discipline means:
- Actively manage the customers relationship
- Emphasize customer onboarding and support as a strategic component of the offering
- Measure and constantly seek to improve customer experience
– Focus on and prioritize the right segment: However, the intensive focus on holistic, end to end customer experience means a heavy weight on the company’s resource. This can only succeed with a razor sharp focus on the best customer segment, and focus on serving the best customer even better:
- Be willing to turn away customers that are not a good fit to limit the amount of resources spent on them
- Develop different level of customer support services to so that customer services resources are allocated proportionally to the customers’ value and fit with the company’s model
If you want to explore further in this topic, check out Hinge Marketing’s rich set of resources on Service marketing techniques, many of which are readily applicable to SaaS companies, as we have mentioned here.