What SaaS Companies Need to Know About the Success Gap
Often times, SaaS vendors get so wrapped up in their own products, it becomes difficult to remember that there is a whole world outside of their software.
They know the features and functionalities of their products, how their products integrate with other tools, and the nature of the insightful data provided to the user. They know what a successful or healthy utilization of their products looks like – which features need to be used, and how frequently they should be worked with.
What can be easy to forget is that a user who is seemingly ‘healthy’ based on their product usage might not be achieving their goals with that product.
Let me explain.
If a Product Manager wants to reduce customer churn, her goal is to learn as much as possible about why her customers are churning. If she uses a product analytics tool to pinpoint the actions users take that lead them to churn she is learning about churn, but she is not reducing it… yet.
What this Product Manager needs to do is apply the knowledge she obtains about her churning users to figure out how to prevent this trend from continuing. Sounds easy, right? The reality is that the capabilities of the product analytics platform she uses might not lead her to take the proper action to reduce churn. This means there is a gap between what she can do with this product and the goal she is trying to reach. This is what is referred to as the ‘Success Gap’.
What is the Success Gap?
By definition, the Success Gap exists within an organization when there is a difference between the organization’s definition of ‘healthy usage’ of their product and the way a customer wants to use a product to achieve their goals. Customer Success guru Lincoln Murphy describes this by saying “The Success Gap occurs when your customer functionally completes the tasks necessary in your product to do the thing they want or need to do, but yet they could still fail to reach their desired outcome.” The tasks necessary to reach this outcome or goal are what SaaS vendors fail to consider, and that can be dangerous for their business.
Why should you care about the Success Gap?
Because it could be occurring in your organization! If your organization happens to be subject to the Success Gap, you’re not alone. This phenomenon occurs in many organizations due to the prominence of cloud-based enterprise software. There is only so much a product can do, and in order to close the gap, there needs to be a combination of people and resources working together to accomplish the tasks necessary to reach the desired end-goal. A good place to start is to define the desired end-goal. Then, determine the point where the capabilities of your product end.
When the Success Gap occurs in your organization there are two things that happen:
- You experience greater churn
- Feedback from your customers will tell you that they are not able to accomplish what they want with your product
What can you do if the Success Gap exists in your company?
Fortunately, there are ways that each department in your organization can tackle churn and reduce the Success Gap. Here is what each department can do:
The best thing Product Managers can do to reduce the Success Gap is to talk to their users. Listening first-hand to how they use the product, the goals they are trying to achieve with it, and the features they desire provides Product Managers with valuable insight for improving the customer experience. It’s the Product Manager’s job to constantly evolve their product to match the user’s desired experience. Their responsibility is to keep pushing the capabilities of the product to be closer to their user’s end-goal, ultimately reducing the Success Gap.
As their name suggests, Customer Success is the most equipped group to shrink the gap between their customer’s goals and their product’s capabilities. The tasks that are required to close the Success Gap need to be presented by the Customer Success Manager. This trusted advisor knows which features customers need to use, and how they should use each feature for the best possible outcome. Furthermore, a great Customer Success Manager will guide their customer in using the data they collect to take the customer from complete product usage to achieving their end-goal. Customer Success becomes an even greater asset when they share customer feedback with all of the other departments, which is essential for others to contribute to closing the Success Gap.
To some, it might seem like the Sales team does not have much influence in helping their company close the Success Gap. However, salespeople are the evangelists the company needs to share the vision for future customers. In order to sell to qualified buyers, salespeople need to know how their company’s best customers have already minimized the Success Gap and generated a positive ROI. Salespeople have special insight into prospects needs and expectations through the candid conversations they have. Often, prospects will share insight into which features they see are lacking, or are holding them back from buying the product. This is information that Sales absolutely must share with Product Managers. Why? Because this insight is invaluable to Product Manager’s ability to both evolve the product to meet the needs of users as well as stay competitive in the marketplace.
The job of promoting a company and their products is much easier said than done. In the world of SaaS, where the Success Gap lives, Marketing heavily leans on Customer Success to understand how the company’s best customers use their products so that they can target prospects who will be amazing customers in the future. This dependency is nearly identical to how Sales leans on Customer Success, but Marketing has a more difficult job with it because they are oftentimes not speaking first-hand with customers or prospects. To overcome this, case studies of successful users need to clearly explain why they invested in the product and how they used the product to achieve greatness.
Take this information and run with it
If you think the Success Gap exists in your organization start tackling it by understanding how your customers accomplish their goals with your product, and learn as much as you can about how they complement your product with other resources. From there, think critically about the contributions each department needs to make to close the gap. Collaboration between department heads is key, as well as sharing information amongst all cross-functional teams so that everyone is equipped in closing the Success Gap and improving their customer’s experience.