Managing annual recurring revenue is just as important as managing first impressions.
Key takeaways
Bridging the gap between customer expectations and product features is a common challenge.
Target experience design, customer journey mapping and service design blueprinting can help.
In the software-as-a-service (SaaS) landscape, the customer journey can either propel a company to success or lead to its downfall. The key lies in understanding and optimizing the various touch points that customers encounter throughout their interaction with the brand, including their experience using the product.
Because there are more of these touch points than most companies realize, organizations need to focus on which ones they can control and build or adjust the journey based on customer information and feedback. Customer segmentation and persona development are foundational, but SaaS companies also need to understand the critical factors that turn initial leads into solid prospects.
Below we delve into the crucial moments that can make or break the customer journey for SaaS companies.
1. Brand impressions and discovery: The first encounter
From the outset, whether engaging a new prospect or an existing customer, SaaS companies must articulate key propositions and value points that resonate. The first brand impressions are pivotal in shaping the customer's perception during the discovery phase. Companies need to understand which propositions and value points have staying power with customers after exposure to the brand.
2. Renewal: The moment of truth
Annual recurring revenue (ARR) is the lifeblood of many SaaS companies. The renewal moment is critical, requiring customers to recall their entire experience, which should live up to the brand promise. The goal is to make the renewal decision a no-brainer. In managing ARR overall, companies also need to understand that—depending on the platform or cadence of renewal—they may need to focus on a different type of customer as the business evolves.
3. Gap analysis: Managing expectations vs. product features
Bridging the gap between customer expectations and product features is a common challenge. SaaS companies must assess promises made in marketing and sales and align them with the actual usage outcome, addressing moments of customer dissatisfaction. In the SaaS space, this gap often manifests as discrepancies between what a user expects from a “freemium” model or corporate license and what the option actually delivers.
4. Funnel marketing and touch strategy
The delicate balance between prospecting and purchasing often falters due to a lack of knowledge about the customer. Beyond defining general personas, understanding customers requires a deep dive into the behaviors of each persona type at every stage of the buyer journey. For business-to-business services especially, SaaS companies typically must meet the needs of multiple people with different priorities, even within the same organization. What motivates procurement team members vs. actual product users, for instance, might be one area to assess.
5. Customer understanding: Qualitative and quantitative insights
While quantitative data provides insights, qualitative data obtained through discussions with current, prospective and past customers is invaluable. Companies need both types of data to comprehensively understand customer behavior and intent and fix the root causes of customer issues. But while many companies will gather qualitative data once a year, they often take a scattershot approach to acting on it. Harnessing that information to continually tweak and improve the customer journey enables organizations to earn, upsell and retain more customers.
6. Friction analysis: Identifying and addressing pain points
Understanding the friction customers face in onboarding, server setup, license expansion and platform migration is crucial. For example, if a call center gets flooded with calls about a process customers are trying to complete online but call center employees are unable to resolve the issue, it might be easy to assume that the main issue is with the center itself when it’s actually a website experience issue. Having a clearer understanding of frictions can help get to the root of the issue.
7. Comprehensive research and engagement
Companies should aim for a comprehensive understanding of their customers through both qualitative and quantitative approaches. These include surveys, research, focus groups and one-on-one discussions with current, past and prospective customers. Companies often have either qualitative or quantitative information about users, but gathering both types of data is key.
SaaS companies determining how to improve the various points of their customer journey can often benefit from third-party input on existing processes. Such an engagement might include:
- Target experience design
- Customer journey mapping
- Current- and future-state service design blueprinting
The success of SaaS companies hinges on their ability to navigate and optimize the make-or-break moments in the customer journey. By focusing on the seven areas above, SaaS companies can create a customer experience that not only meets but exceeds expectations, boosting their long-term success in a competitive market.
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