It's Time for SaaS to Grow Up

It’s time for SaaS to grow up, and take responsibility for its customers.
It’s the only way out of this.

I talk to people in Customer Success, and they are fed up.

–> Fed up with the rhetoric about CS being everyone’s job.
–> Fed up with everyone hitting their targets but them.
–> Fed up with being the only ones that care about customers.

So how did we get here?
That requires a bit of a history lesson (sorry, not sorry).

Before SaaS, there was the on-prem model.
Customers bought software, and paid for it upfront.
It was up to the customer to drive adoption and get ROI.
Did the tech company care if this happened?
Not really, they already got paid.
Then, along came the subscription model.
Everyone loved it, especially investors.
Margins were 3Xs – 4Xs higher than on-prem.
So everyone moved to SaaS.
But here is the problem.

Other than change their pricing, most tech companies didn’t adapt to the new business model.

To this day, they still act like ACQUIRING NEW CUSTOMERS is the key to growth.

But in the subscription economy, you don’t get paid upfront.
You have to earn your revenue – every month, every year.
It’s no longer the customer’s job to prove ROI.
It’s YOURS.

If you don’t step up, customers leave before you make any money.
It’s an entirely new business model, with long-term customer retention at the centre.
But instead of adapting, SaaS companies added a DEPARTMENT for retaining customers.
And here we are.

So now that we’re all caught up, how do we get out of this?
First, we’re not going to tweak our way out.
It’s time to grow up.

That means…

1️⃣ Re-thinking how SaaS companies operate by finally prioritizing long-term customer retention across the organization.
2️⃣ Re-designing organizational functions based on jobs-to-be-done, unencumbered by traditional department names.
3️⃣ Re-designing incentives across the organization, based on each group’s specific role in long-term retention and growth.

I didn’t say it would be easy.

But unless you want to be having the same conversations 5 years from now, it’s the only way out.