The 10 Most Important Steps to a Successful SaaS Customer Lifecycle

by Insight Onsite

The SaaS customer lifecycle encompasses a SaaS company’s relationship with a customer from the earliest stages of interaction through turning happy clients into referrals. Whereas the customer journey focuses on the specific touchpoints a customer will go through when interacting with your brand, the customer lifecycle covers the evolution of the relationship.

Managing the customer lifecycle as a single entity can empower SaaS providers to better understand how they create and sustain positive customer interactions. This has become particularly important in the SaaS space. Where many businesses may still have product-driven customer interactions, SaaS businesses must contend with significant parity between solutions and customers who are willing to go between apps and services as their needs change.

Say you and a competitor offer similar core capabilities with nuanced features and points of emphasis that make you stand out. What's to stop a customer from switching providers if its business dynamics change slightly and you don't offer a feature they want? Ideally, you keep that customer through a strong relationship and trust. As such, the customer knows that even if you don't offer a feature now, you can work to meet its needs.

All SaaS companies need to emphasize relationships to foster strong customer experiences. As such, taking a strategic approach to customer lifecycle management is vital. Here's a look at key stages of the customer lifecycle and 10 steps you can take to foster customer success.

Step 1: Define Buyer Personas and Targets

What is your unique selling proposition (USP)? This is a question you'll often hear if you talk to investors or others with a high-level interest in your business. It's also a question you'll need to answer as you begin your work toward customer acquisition.

Once you've established your USP, you can use that knowledge to identify the segments of the market that would naturally be attracted to your industry. Imagine you've created a SaaS enterprise resource planning system that is unique because it integrates with a popular legacy customer relationship management system while providing a cost-efficient deployment model. (This is, admittedly, a broad example. A good USP should be more specific to your brand.). That USP would give you a direct target audience: smaller businesses that are using that legacy CRM and are looking for an entry-level ERP system.

With clear targets in place, it's time to analyze your sales process. Ask your sales team who tends to have final decision-making power among your targets and who the most powerful influencers tend to be in those organizations. Now, you have buyer personas.

Once you've defined buyer personas and targets, you can use those parameters to build your initial marketing efforts toward those audiences. In essence, you are already starting to personalize the customer experience by honing in on a specific audience so that your marketing materials can be nuanced and targeted. 

Step 2: Create your Funnel

Knowing your personas and targets also helps you identify your current sales funnel and drives lead generation. You can bring your sales and marketing teams together to discuss their experiences interacting with your primary audiences and identifying the key touchpoints during the sales process. You may find that one persona – executives who have received tips from an influencer, for example – frequently uses mobile-optimized social media for initial research into solutions when they have a few spare moments. Conversely, you find that the influencers who are in the trenches prefer product demos that let them experiment.

You can use this information to assess how well your organic sales funnel aligns with what you would consider an ideal sales and marketing process. From there, you can create a funnel that blends the practical needs of your customers and teams with the preferred interaction styles of your buyer personas.

Ideally, you want a process that uses top-of-funnel materials and activities to provide organic demand generation that pushes customers into deeper conversations. Those materials should reflect your brand well. You want the leads generated at the top of the funnel to still be qualified by the time they trickle to the middle of the funnel and begin interacting directly with your sales team.

Step 3: Align Sales and Marketing

You've probably picked up on this step from our advice in the first two steps. The initial stages in the SaaS customer lifecycle involve careful coordination between marketing and sales teams. If either group is operating in isolation, then you can run into problems such as:

  1. Creating marketing-generated leads that sales doesn't consider qualified.
  2. Spending time and money on materials targeting customer groups that sales aren’t interested in.
  3. Running into challenges in sales enablement as the divide between sales and market creates distinct values in content creation and usage.
  4. Wasting resources as sales struggles to prioritize different customers or target pitches based on buyer personas.

Step 4: Determine the Sales Process

Chances are nobody knows what it takes to sell your solution quite like you do. You know what your brand differentiators are  and why somebody should buy  your SaaS solution. But how you go about selling sets expectations for the ongoing relationship. We've all heard the negative stories. A company signs up for a SaaS partnership because the sales team was relational and responsive in the beginning. However, things start to fall apart after the sale because the high-touch interactions died after the initial sales process.

Your sales process needs to do many things. It should reflect the kind of relationship customers will have with you once they do sign on to use your software. But it also needs to be:

  • Efficient, ensuring you aren't spending so much time getting customers on board that your revenue opportunities are limited.
  • Repeatable across your sales team.
  • Based on data, to ensure you can justify your decisions and measure successes and failures over time.
  • Easily communicated to customers so they understand what to expect when interacting with you.

Step 5: Sign on the Dotted Line

Your service level agreements can be the basis of turning satisfied users into loyal customers. You don't want to end up in "gotcha" situations where clients expect certain features or capabilities during the sales process, only to find your SLAs don't align with those expectations. You also don't want your SLAs to be so complex and onerous that the process of signing up pushes customers away.

Defining standard elements of your SLA, areas where you can be flexible and best practices for guiding the customer through signing on, ensures your formal relationship with customers gets off to a good start.

Step 6: Set a Foundation for Expansion Sales

Sales leaders love to talk about landing and expanding. Getting the signature on the bottom line is landing the customer. They've signed on and bought into working with you. Now it's time to transition toward expanding the relationship.

Once you're beyond the customer acquisition phase, initial interactions set expectations for how the relationship can continue. If you step in to help with training, you should provide resources and assist with any problems – even if they aren't your fault. By partnering in both customer failures and successes, you can build a strong relationship. From there, you can use this initial trust as a springboard to upsell and cross-sell. By creating value in your relationship, customers will want to invest more heavily in the advanced solutions and features you can offer.

Step 7: Maintain Consistent Innovation

Expansion selling isn’t just about trust. You also need to develop new products or capabilities that your customers will want to purchase. Creating a product roadmap is the starting point for this. Having a strong vision for SaaS product development gives your teams a sense of cohesion as they work to meet emerging customer needs. On top of that, using the roadmap in earlier sales conversations can build confidence with customers that like your solution, but want to see one or two features that you don't have yet. If they know those features are on the way, they may move toward a purchase.

Step 8: Upsell Existing Accounts

The upsell cross-sell motion is a balancing act. You've probably seen the worst-case scenario: having the upsell pitch for a client – (that is already hanging on by a thread) – go horribly wrong. That's it; that's the final straw in the relationship. Instead, you should collect win-loss data on upsell and cross-sell to inform the pitch and similar customer expansions to help identify signs that clients are ready for more. From there, strategic sales enablement and the right marketing collateral can drive expansion sales.

Step 9: Focus on Renewal

Churn is among the most prominent challenges SaaS companies face today. The SaaS market has become so saturated with competition that shifting to a different subscription is easier than ever.

It's therefore important to create the incentive to renew, and it's often best accomplished through a strong relationship built on trust and mutual gains. Identify your desired outcome for customers and their goals and work to align the two over the course of the initial subscription term. Similar to when you're trying to expand the relationship, diving into customer data is essential in identifying patterns of customer behavior. This gives your sales, marketing, and customer support teams the tools they need to engage customers about renewal at the right times.

Step 10: Turn Customers into Referrals

The happiest customer is one who can't help but talk about how great it's been to work with you. This is the kind of relationship you want to cultivate. But getting to that point isn't always straightforward.

Some businesses are hesitant to speak publicly about the technology they're using or challenges they've faced, for example. These are hurdles that you can overcome, but the specific difficulty depends on the industries you serve. You know your customers best. Talk with your sales and marketing teams about their interactions with satisfied clients and brainstorm ways you can engage those customers in further conversations. If things go well, satisfied clients could participate in activities such as case studies to sponsoring your user conference.

A Holistic Approach to SaaS Customer Lifecycle Management

High-growth software businesses often face a common challenge: How do we move from organic growth to, predictable expansion to enterprise scale? Chances are you're already doing many of the things we're talking about when it comes to customer lifecycle management. What sets SaaS providers apart as they grow is how well they blend each part of the customer lifecycle into a cohesive experience.

This is why we work closely with our partners, helping them ask the tough questions to gain the raw data they need to refine their processes. At Insight Venture Partners, we provide a blend of guidance and resources to empower your leaders. Seeing the big picture and blending the isolated but complex tasks that go into lifecycle management into a holistic plan, can drive value creation.

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