Software as a Service? Better Focus on the Service!

In a survey of technology buyers, SiriusDecisions found that while b-to-b organizations continue to invest in sales tools such as sales force automation, configure/price/quote and sales analytics, barely 50 percent say their investments have either met the expected benefits or delivered the expected return on investment.

All too often, technology purchases go through the cycle of launch, initial adoption, enhancements and decline. The continued rise of cloud-based models (e.g. software as a service) is only accelerating this cycle, because they make it easier for customers to switch technologies. Purchases are shifting from large transactions with complex, expensive deployments to relatively low-cost trials, pilot programs and phased rollouts.

For vendors operating in a software-as-a-service environment, end-user engagement and value become critically important, as the recurring revenue model drives the shift of profitability from upfront to the entire length of the customer lifecycle. Implementation (and disconnect!) costs are typically low, and the focus is on licensing, number of users, use over time and renewals.

This means that the burden of sustained success is shared between the buyer and the vendor. Winning the deal, celebrating, passing out awards and moving on to the next deal are not enough. Executives, sales operations and IT will quickly hear from dissatisfied users and begin to question the investment. If vendors can't deliver measurable benefits, the customer will abandon the product.

The focus must change to customer lifecycle management and ensuring that customers recognize value over time. The account management role must change from sending out invoices and quarterly calls with IT to a focus on user adoption, business value and retention. Vendors must actually spend more time, money and resources AFTER winning the initial deal to realize the revenue.

For both providers and buyers of sales technology (or technology in general), it doesn't matter if the product walks, talks and makes coffee if end users do not, will not or cannot use it. 

For sales organizations that have deployed or are considering the purchase of cloud-based technologies, the tool must not only work but also must be successfully and continually utilized by end users.

To paraphrase an old quote: “In the land of software as a service, service is king.”