SaaStr Cloud Thoughts #002: 14 Tips to Becoming More Customer Centric

Hey everybody, I wanted to talk about the single most actionable thing that most of you can do right now, which is to become more customer-centric. For some of you, your business may actually be doing better in these crazy times. Not most, but for some, great. For most of you, things are tougher, maybe a little bit tougher. Churn is already going up, sales cycles are lengthening, customers are under stress, and for other of you, things are already really, really tough. But there's one thing that always works, which is being more customer-centric. And I know we know this, and it's almost trite to say it, but it is so much easier to retain a customer than to go out and find a brand new one, especially the tougher times are. They've already picked you, they've already spent a month, 3 months, a year qualifying you, they may have already renewed once. Give them more attention. We all give way too much attention to sales and not enough attention to our existing customers. I want you in tougher times to do even more for your existing customers, to be more customer-centric. And let me talk about 14 ideas, hopefully most of which you're already doing. They may even be trite. You may have heard them before. That's great. Then this won't help. But hopefully this is a challenge to pick 1 or 2 or 3 things from these 14 ideas and do more of it. The first idea is to make sure you launch new features each quarter that your customers value. And a lot of you maybe do a blog post, you do a Trello board, you do something to keep track of new features, but we kind of forget how important our product is to our customers. This may be— your tool may be the one or two most important products your customer, at least your champion, has bought in the last year or two. Her job may be on the line based on deploying your product successfully. So they're going to care intensely about what's coming down the roadmap, and they've entered into a social contract. The social contract with the SaaS vendor is, yeah, I keep paying you forever, not just once, forever, but in return, I expect innovation. I expect innovation and support. So phase 1 is what innovation is coming? How do I know this is worth it? Make me feel like the $100 a month I'm spending, the $1,000, the $10,000, I'm getting more each quarter. Than I got last quarter and communicate more. Have a monthly webinar on new product features, communicate it by email, make sure everyone knows about that Trello board, whatever it is, overcommunicate, communicate more about the great awesome things that are coming this quarter and next. Next point, which I feel very passionately about, especially in challenging times and especially with smaller customers, is that every customer should have a named customer success manager. And one thing I really worry about and hate is the misuse of automation and tools. Yes, automation in customer success, automation and support, bots and all that should— there should only have one goal: make it better for the customers, not to eliminate headcount or to eliminate human interactions. There are interactions where I want an answer from a bot right now. There are times when a random pool of customer support people are the right are the right person to help me. But when I have a real problem, when I'm trying to get this product to work that I just spent $100 or $1,000 or $10,000 on, I want help right now, and I wanna know who it's from. Is it from Lou? Is it from Linda? So there's a strong current to provide less named account managers, less, fewer named customer success managers. I'm gonna challenge you to go the other way in tougher times. Even if you have 10,000 customers, everyone should have a human being that they can reach out to for help that does not require going through a support system, a ticket, etc. I know you may think it's crazy, but it can be done. And if you do that, if the customers know a human being they can reach out to, even if it's once in a while, once a quarter, your retention rates are going to go way up, your NPS is going to go way up, and your referrals, your bio-referrals are going to go up. That's more going to pay for the cost of them having a named customer success person. So think about that, and don't misuse automation. Don't misuse automation to cut costs. Use automation to augment the role of human beings in making your customers successful. Point 3, and hopefully we're all taking a heat of this right now, but no rote annual price increases. When things get tough, there's something I really don't like, and the customers don't like it. It's out of the blue or annualized price increases. When growth slows down, a lot of times what sales wants to do, what other folks want to do is jack up prices. Whoa, whoa, we promised 100% growth this year, it's looking Like 50%, you know, we'll do what, we'll increase prices 30% and split the difference. It looks great on a Google Sheet, but nothing upsets a customer more that's been on you for 10 years than an unexpected price increase. Just don't do it. Just don't do it. And if you are gonna do it, do it smart. Instead of raising the prices 10% or 20% on customers you already have, launch a better edition, launch a global edition, launch something that has more, that has distinctly more functionality than the edition today and don't make them pay more for it unless they want it. Remember from point 1, you're going to give each customer more awesome features each quarter, but if you can develop an even better version that is elective, maybe it also does support as well as sales, it does something more than what they're getting and won't create any tension with your existing editions, do that gracefully, provide an even better edition that folks can upgrade to. And grandfather your existing customers. When times are tough, the other thing I— it really breaks my heart to see when times are tough is they look back, well, You know, Google and Dell signed up early, they're only paying $20,000 a year and all our other customers are paying $100,000. Let's go after them, that's where the easy money is when times are tough. No, your early customers took the most risk, they bet on you, and you should grandfather them at least for a long time and at least through a clear process. Bad times, tough times are not the time to stick the knife into your customers that bet on you early, and grandfather them for forever when in doubt. Those early customers are your brand ambassadors and the extra nickels you can get out of them are rarely worth it. And don't let a decrease in growth or even shrinkage tempt the team to go after existing paying customers who've supported you since day one. So grandfather even more in tough times. Point 4, no rip-off contracts. Hopefully, maybe some of you have listened to me and others, but let customers buy the way they want to buy today and let them out the way they want to get out today. What do they want? If they buy a product from you and it doesn't work for them in 30, 60, 90 days, don't charge them forever. Even if they signed a 2-year contract, a 10-year contract, a 200-year contract, if they're unable to deploy, that's on you. It is your fault if your customer cannot deploy successfully. So I would always let folks out no matter what the contract term is if they never deploy. That's whatever it is, no rip-off contracts. If they don't get the benefit of your product, they should not have to pay for it. A related point, especially in these times, is let's copy Slack from the early days. Let's copy others. Let customers elegantly downgrade simply and easily without stress if they are under stress. If their company is shrinking, if they're having tough times right now, roll with them, be a partner. If they have 30% less sales reps than they had 2 weeks ago, let them downgrade no matter what their contract is. You wanna take stress out of this relationship. You wanna be a partner. and you want to, if you're gonna charge them more for upgrades when times are good, when they wanna add 100 seats, shouldn't you be their partner when they need to decrease 100 seats? Of course you should, of course you should. And if that means tearing up the contract or lengthening the term or doing something special so that you're a partner for them, and if they need less, they get less, do it. Find a way to make downgrades fine and a drama so that when we come out of this, they'll also upgrade, they'll upgrade again. Make sure it's easy. Next point is, and think about this one for a minute, it's related to the prior points. Pretend you have transparent pricing. And what I mean by that is make sure in tougher times to be more customer-centric, pricing's even more fair. It's even more fair, especially if you have contact me on the website. And contact me and non-transparent pricing has a lot of pros, it has cons. The biggest con is It can lengthen sales cycles. So if you want the fastest sales cycles, have transparent pricing. But obviously contact me and non-transparent pricing lets you fine-tune each deal to each customer and maybe leave less money on the table. That's great. But here's my idea. Pretend your top 100 customers are all your customers. Get a Google Sheet and they know everyone else's pricing, including grandfathering, including when they join. If I just bought your product today and you're at $20 million ARR, It's okay to not have the same pricing as your first 10 customers, but if I'm paying radically different pricing than another customer for the same number of seats in the same ministry, in the same industry, that's going to rankle me. So think about this idea, and your sales team will hate it and other people will hate it, but imagine every customer knew what every other customer paid. Just like we've learned in HR, it's easiest if you imagine every employee knows what everybody else makes. It's less stress, it's less drama, it's more customer-centric. So rethink your pricing, rethink your discounting, rethink your bands, rethinking which squeaky wheels get whe— eat which grease so that every customer would be comfortable if they knew what every other customer paid. That will remove friction from your sales process, what's left of it, and that will increase customer satisfaction. Next one we've talked about in the past that again, your sales team may hate is pilots. If customers want to do pilots, if they want to try you out for a week, a month, 60 days, 71 days, 48 days, Let them, let them. That is more customer-centric. Think about it, like if you found a new vendor and you weren't sure and you hadn't relied on them in your last job, wouldn't you want to pilot? I mean, of course you would. Who wants to sign a 2-year contract for a vendor they just met? Everyone wants to do a pilot. So it doesn't mean you have to instantly offer it, although think about it. What it does mean in tougher times, being more customer-centric is letting them buy the way they want to buy. In one key way is pilots. So encourage pilots, even though sales hates it, because a pilot almost means two sales. Like the sales team has to close the pilot, and then when the pilot ends, they have to close the deal again. Even if it's an opt-out pilot, it's still two sales. So sales always hates it, but a lot of your customers will love it. So do what makes them happy. Okay, next one, be transparent around issues. Number one is downtime. Don't hide downtime. There's nothing that breaks trust more than when I can't get into your app and your status.yourapp.com says everything's fine. It's bad enough in good times when maybe I feel like I've got other things to worry about, but when I rely on you in tough times and you're down and you're not being honest about it, it's even worse. So be more transparent about downtime. I know it may hurt. I mean, I may— I know you may want to say it's only affecting a small percent of your customers when it's everybody. But this transparency builds trust, it's customer-centric, so do it. And watch what Zoom's doing today. Zoom is under a microscope, Zoom is getting hit by 10,000 journalists and others picking at every element of security, and some of the criticisms are valid, some aren't, but they're listening, they're being transparent, they're iterating their codebase very rapidly, and they're doing all the right things to build trust, and most importantly, Zoom is very customer-centric today. Are they perfect? No. But copy them, be more customer-centric, and Zoom will be a $100 billion company after all of this. Next one, new solutions. This is something that always works with existing customers, which is think about their problems, give them new features each quarter, but this year, this quarter, design a new solution, a new solution to a problem. Remember, if your customers trust you, if your NPS is high, if before all this your net retention was positive, you had net negative churn, your customers actually may love to buy another product from you if they trust you, especially in tougher times. In tougher times, we gravitate toward brands we trust. We get nervous, we don't want to play games with new vendors as much, even if we do discovery calls. So your 1,000 customers, your 2,000, your 500, your 100 that trust you day in and day out, what's a new product you could build for them? Think about that, that isn't too expensive, but that they would pay for. Maybe there's magic there. Maybe there's a new adjacent product you can build now that sells to your existing customers makes them happier rather than having to source brand new leads. It's worth thinking about. A couple other points: remove friction from the sales process wherever you can so that customers can just buy if they need to buy today. And one of the most annoying ones is, is SDR states. Hard to be an SDR. I love SDRs, I'm appreciative, but not everyone wants a breakup email and not everyone wants to talk to a kid fresh out of school to be qualified. I don't like to be qualified. At a minimum, make sure that if folks don't want to talk to an SDR today, they don't want to. They want to go straight to an AE. They just want to do a trial. If they want to do a pilot, skip steps. Not everyone wants to talk to someone that's 2 months into their first job, and don't force folks if they don't want to. 10th point, 11th point. Let customers today buy the way they want to buy. Do they want to buy monthly or weekly or quarterly or annual, 2 years? Do they want a hybrid variable model? Do they want all the seats up front? Do they want to scale it in? This ties back to the point on pilots. It ties back to the point on downgrades. But we all have bought 100, 200, 300 SaaS applications now. These are tougher times. At least let me buy the way I want to buy. If I want to start off with a 1-month contract, if I want to pay on a credit card, if I— whatever it is, just let customers buy the way they want to buy. That is more customer-centric, and you will have happy customers. And two last points that are human-based that don't require a bill of duty code. Point 13: make your professional services awesome. We talked a long time ago at SaaStr about valuing your professional services, that in many cases, especially for bigger customers, charge them. Um, customers are willing to pay for great professional services. When we interviewed Peter Gaster from Veeva at SaaStr Annual a few years ago, I remember he said there's no point in doing services if you don't charge for them because we only want services that are insanely valuable. That's what you want. Deliver professional services that are insanely valuable. Have that team that's onboarding your customers, that's helping them deploy, that's supporting them. Make it the world's best professional services right now, even if it means you somehow have to find the money to hire someone else. That's something that's so customer-centric. We don't all have time to find the settings in our product, to do the deployment ourselves, to upgrade the new user table. Make your services awesome, and that is about as customer-centric as you can be. And the very last point, it's so simple. You can fix this today. You can fix it with Intercom, you can fix it with your phone number, you can fix it with, with a number of systems, but have support available in minutes, not hours or a day. When times are tougher, I want more help from my trusted vendors. I don't want to see at the bottom of my Intercom that support isn't about a day. I want that Intercom to work in real time. I want to talk to a human being now that solved my problem. So Don't cut back on support, invest more in support. Even if you can't build a feature this month, even if you don't have enough engineers to even get done your roadmap for next quarter or this year, even if you can't literally ship one piece of code this year, make support better. Support is part of your product. Your top customers deserve help in seconds or a minute, not in hours or days. And that is a delightful experience. That is customer-centric. And support is something you can easily invest today And it's not free, but frankly, support of all the resources you can hire is often the most inexpensive. It does not have to be in San Francisco, it does not have to be anywhere in particular. Just train the team to deal with your customers' top 20 or 30 problems and get that help in 60 seconds or less, and let's see if magic happens. Anyhow, pick some of these 14, take a look, but whatever you do, what are you going to do this quarter to be more customer-centric? Ask yourself that and do a few things, many of which don't require one single line of code.