I was on a super exciting panel at the All About The Cloud conference in San Francisco this week: “the Power of the Customer”.
Here are 3 predictions for the future that were discussed on the panel:
1. All SaaS companies will use predictive customer analytics. Measuring and optimizing customer lifetime value was a big topic. You can’t manage what you can’t measure so expect SaaS companies to invest big in customer analytics and predictive analytics. These are technologies coming from the consumer marketing space. However, in software you can go one step further because all customer interactions, including interaction with the product itself are digital. So while Victoria’s Secret may analyze customer transactions to predict whether customers will buy again (and whether it’s worth sending you another expensive catalogue) imagine that you could actually know how often your customer wore that swim suit. That would be a pretty good indicator of how much you liked the swim suit and how likely you are to buy again from the catalogue. With software this is possible! And indeed software usage turns out to be the most reliable buy signal (or churn signal whatever the case may be).
2. There will be many SaaS companies with no sales teams. Think about Atlassian: a $100 million+ revenue B2B software companies with ZERO sales personnel. Their sales model is 100x or more cheaper than that of their competitors with field based sales teams. And their velocity is so much higher. I bet you their customer satisfaction is higher too. At no-sales companies, marketing is responsible for demand generation and initial signups. For more complicated products a customer success function is emerging to coach customers post sign-up and to grow usage, users and use cases over time. There was common agreement on the importance of building out customer success teams regardless of the sales model. Customer success managers have responsibility over renewal revenues as well as upselling and carry a quota rather than being a glorified support team.
3. Products are becoming social. The product itself will be the primary sales tool. Much of customer engagement will happen from within the application itself. Customer actions speak loudest: usage is the most important buy or churn signal. Also customers will communicate with other users and with the vendor using in-application communities and communications. The panel agreed that the new Social Buyer demands self-service. It started some years ago with self-service information (‘inbound marketing‘) and these days the ‘must have’ is a free trial or freemium version of your product. The panel agreed that freebies were essential in creating trust. Also think about this: if your competitor offers free trial of some version of your product and you don’t, then customers will be already half-way down the sales process with your competitor before they ever talk to you.
Thanks to the All About Cloud team for having us, thanks to Shubber Ali from Accenture for moderating and thanks to my fellow panelists Jon Miller (Marketo), Todd Bursey (FinancialForce) and Jeff Yoshimura (Zuora) for fun times! See you next year
If you are interested to analyze and predict your customers’ actions, or if you want to make your product social: