Gs-customerCustomer Success, NRR
Why Bridging the SaaS User-Buyer Divide Is Key to Improving Customer Retention Image

Why Bridging the SaaS User-Buyer Divide Is Key to Improving Customer Retention

By Scott Salkin

This post was originally published in Customer Think

The Customer Success Index 2022, a survey of more than 350 companies by Gainsight and RevOps Squared, recently uncovered some very interesting, if not troubling data on the state of alignment between SaaS users and buyers. In fact, in a review of NPS data, the survey uncovered a disparity whereby the satisfaction levels of users (NPS of 36) was a full 10 points lower than that of executive buyers (NPS of 46).

Why is this troubling? Let’s take a deeper look.

A Customer Stakeholder Dichotomy

At a granular level, the causes of this “satisfaction gap” could be as varied as the companies we surveyed. But overall, the most likely culprit is that companies are focusing too much on executive buy-in without taking into account the day-to-day experiences of end-users. As a result, many companies are nurturing a divide between two sets of stakeholders while forgoing the foundational principle that true customer success isn’t possible without user success.

At first glance, the dichotomy may look like a statistical hiccup. After all, if users are unenthused about the products purchased by executive buyers, why hasn’t this sentiment infected the ranks of management? Why hasn’t it eroded the perceived value that buyers think they’re getting from those products or services?

Perhaps it has. I’m willing to bet that if users were having better experiences – if CS teams and tools were focusing as much on adoption data and providing support for the features and functions most valuable to users – the NPS score of users and buyers would be significantly higher. Further, I’m willing to bet that unless many of the companies surveyed – and beyond – are quick to identify, diagnose and resolve this type of customer-stakeholder dichotomy, their sales and customer-retention efforts (Net Dollar Retention) will eventually suffer – and perhaps suffer greatly.

You Can’t Manage What You Don’t Measure

Because you can’t manage what you don’t measure, it’s entirely possible that the user-buyer dichotomy is actually more severe than the survey indicates. Twenty percent of the firms polled by the 2022 Customer Success Index don’t even measure NPS, and another 19% measure it just once a year.

One can only hope that these companies compensate for this lack of timely customer data by other means – e.g., with customer health metrics that track overall product usage, renewal forecasting, expansion opportunities, etc. If not, these firms are missing opportunities to gauge the true impact of product enhancements, improved processes, fresh user experiences, and more.

If a customer-stakeholder dichotomy like the one above – or one between different customer segments – is left undiagnosed and untreated, companies run the risk of seeing their adoption rates, renewal rates and both new and expansion sales plummet as poor user feedback worms its way to the top, where executive buyers will start to explore competitors’ solutions.

Bridging a Customer-Segment Divide

No company is immune to emerging dichotomies between different customer stakeholders or segments. Gainsight recently faced such a challenge after customer and prospect conversations revealed a gap between two market segments.

We discovered that Gainsight CS was widely perceived as the “Ferrari” of CS solutions. We also discovered that customers and prospects with more mature organizations, leaders and systems were the most likely to succeed with our solutions, and the least likely to be intimidated by the technology – and the transformations it could yield. By contrast, companies and leaders at an earlier stage of CS development often had a less favorable perception of Gainsight. Many of them were seeking a less complex and less expensive “starter” solution, with a view toward adopting Gainsight later – after they reached a particular stage of maturity. As a result, we were losing sales and renewal opportunities to cheaper, less robust competitors.

To bridge the customer-segment divide, we decided it was time for Gainsight to evolve, making it easier for businesses at any stage of their journey to start with – and scale with – our solutions. To that end, we launched Gainsight Essentials, which has made our CS tool easier for startups to buy, implement, use, administer and grow with. In other words, these customers can opt for the Ferrari’s horsepower when they need it, but they can start in first gear.

Your Customer Base is Your Best Source of ‘Intel’

To identify, diagnose and successfully bridge divides between different stakeholders and segments, it’s important to provide both the right channels and the right level of comfort to your customer base, so they can become a frequent and reliable source of insightful market intel. At the same time, it’s also important to:

  • Broaden your focus. Don’t limit your focus to product upgrades. And look for ways to enhance the customer experience. For example: For Gainsight Essentials, we selected a wide-angle lens and asked ourselves, “How do we enhance the experience? How do we make our SaaS easier to onboard, buy, and grow with? To develop a meaningful solution, we examined the entire customer journey and considered every customer stakeholder.
  • Test, collect feedback, refine – and repeat. Collect as much data as possible from customers and prospects, and keep returning to the “well” – again and again – to collect more. Test product and experience improvements in the field, test them with prospects, collect additional feedback, and iterate and reiterate as needed.
  • Simplify the complex (really!). The most successful companies don’t just pay lip service to “simplicity and ease of use.” They actually take the complex and make it simpler for their users – all their users. If you’re hearing complaints about user-friendliness from one subset of customers, don’t assume the problem is confined to them. Check with others in your customer base to determine how widespread the issue really is.

As I mentioned above, I believe wholeheartedly that true “customer success” simply isn’t possible without “user success.” It’s in the numbers. By the same token, your company’s success is impossible without the success of all your customer stakeholders and segments. When dichotomies are identified and diagnosed early, they can be a boon to your organization, encouraging product development, sales, and customer success to devise improved products and better customer experiences – innovations that can help your organization stay several steps ahead of its competitors.

Learn more about improving NPS. Download the Customer Success Index 2022. 

Leave a reply

Your email address will not be published.

Shares