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What your SaaS vendor doesn't know about you

David Taber | May 2, 2014
You'd think your SaaS vendors would know a lot more about you and their customers than IBM, Ma Bell or even the NSA. They know every click, login and data entry, right? Not necessarily.

3 Steps to Finding Needle in SaaS Vendor Data Haystack

It's not like SaaS vendors need to be the NSA. The business case has to be made for each stage of the investment. Luckily, that's not hard.

The first part of the business case has to be operational scalability. The SaaS system must be integrated with the company's operational system for order entry, renewals and accounting. Integration should be bi-directional, but not necessarily a closed-loop or two-phase commit. Cost efficiency and scalability can only take you so far; once the basic integration has taken place, you need to move to revenues.

This is where SaaS vendors really can shine. Every marketer knows that the most profitable revenues come from renewals, even if every sales rep focuses on the bright shiny object of a new customer win. So part 2 of the business case comes from increasing renewals and detecting "customer health" so problems can be resolved before the contract expires.

At this stage, it's too early to replace customer surveys. The goal is monitoring adoption and customer usage levels. While the exact threshold of "there's trouble here" varies wildly and will have to be discovered by each SaaS vendor, the general idea is to identify the red, yellow and green levels of adoption and usage by category of user. All you have to do is save one or two at-risk customers and you've paid for a decent project.

Once you get the renewal rate above 90 percent, you have to switch gears again in the business case. Part 3 is upsell revenue - figuring out which customers are most likely to buy more. The general analytical exercise is similar to what you did in part 2, but the specific findings and action items will be different. So will the payoffs - upsell revenues are nicely profitable and have the sex appeal that interests the sales folks.

With all of these projects, the focus will be aggregate activity levels, not the excruciating detail of full clickstream analysis. This means it will be both technically and financially tractable, with projects measured in months instead of years.

 

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