It is more challenging for a software company to keep a customer today than it was in the 1980s and 1990s.
Today’s subscription model of software as a service (SaaS) is a far cry from years ago, when buying a license and installing software on a computer’s hard drive was the norm.
Before SaaS was popular, a company would license software for hundreds or even thousands of employees, and install it on all employee computers. Companies might even pay a large fee to a consulting company to implement and install the software. If it didn’t work out, the software vendor still got paid. In fact, oftentimes problems with the software were only found out when it was too late to do much about it.
Today, the world of software development is much different. Software is delivered through a browser and customers pay a monthly fee, based on usage or per user. If there’s a problem, or the customer is not satisfied for any reason, they stop paying for the software.
When that happens, the software provider loses two things immediately: a customer and associated monthly revenue.
Smart software companies focus on three strategies to ensure their customers are using their product and getting value out of it month after month. After all, when your customers succeed, your business succeeds.
Here are three strategies that work:
- Focus on delivering core benefits. Feature creep can make your product overly complex and unwieldy for developers and for the customer. Deliver the precise benefits the target customer is seeking and don’t add more. Your product should be lean and not bloated.
- Nail the getting started process. A delightful implementation process helps the customer experience the benefits of your software right away. Getting customers to value your product quickly increases the likelihood that they will be long-time customers and they will be glad to tell others about how your software is helping them.
- Hold employees accountable for usage. You don’t want your customers paying monthly for your software but not using it. Your support, sales and product teams should be measured and held accountable for ensuring that customers are getting value by using the software.
Successful software companies use these three best practices to ensure customers are getting tremendous value from their software. When customers love your software, everyone wins. Customers give you rave reviews, employees are happy, and investors get paid.