We are sharing this blog from Everest Group, a global research firm, with guest bloggers Divya Baweja, Rananjay Kumar, and David Rickard.
To meet the complexities of the software as a service (SaaS) world, leading providers are revamping their outdated support models to help enterprises achieve success in Industry 4.0. Technical support teams now have expanded roles in customer success, relationship management, and delivering other value-added services for clients. Read on to learn how the next evolution in technical support is turbo charging SaaS adoption.
For more on our continuing coverage of how digitalization is changing technical support functions, also read The Evolution of the Technical Support Engineer Job Role.
Customer support has been the “issue to resolution” function for many decades. When a customer calls with a problem, the support team works to resolve it as quickly as possible. In traditional perpetual licensing models, technical support is focused on operational metrics such as “the time to close a ticket” instead of offering an enhanced customer experience to improve customer retention and lifetime value. Legacy customers are accustomed to opening tickets when they notice an incident and expect companies to react quickly.
However, with the emergence of Industry 4.0 – characterized by technology-intensive transformation and the convergence of cyber and physical systems – enterprises have significantly shifted how they leverage technology-based solutions. In the experience-driven outcome economy, customers expect companies to monitor their solutions proactively to ensure outcomes are delivered as promised. This means companies should automate their monitoring, alerting, and self-healing capabilities to resolve most issues before customers notice them.
SaaS adoption is one of the key driving forces behind the emergence and success of Industry 4.0. Leading technology/SaaS vendors realize that traditional “break-fix” technical support models are outdated in the new environment and failing to evolve their existing technical support models is a major cause of dissatisfaction among SaaS customers. Hence, they are investing in revamping their technical support models. Let’s learn more about this interplay between SaaS adoption and technical support.
SaaS adoption and its impact on enterprise buying behavior
SaaS adoption is increasing exponentially across the globe. The global SaaS market is expected to grow at more than 100% CAGR through 2026, reaching a market size of US$300-400 billion. This increased adoption is driven by factors such as zero upfront/CapEx cost, reduced IT-related operating and maintenance costs, the ability to easily ramp up/down operations, adherence to best practices, and built-in functionalities providing users with ease of operations.
However, the increasing adoption of SaaS-based operating models has significantly influenced enterprises’ buying behavior, ultimately propelling SaaS providers to rethink their technical support strategies. Below are two key changes in buyer behavior and how they are impacting providers:
- Shift from product to service mindset – No longer can you sell a technical solution with a perpetual license and consider your job finished. In a SaaS-based solution, revenue depends on the customer’s subscription and consumption of services. This is a dramatic shift in the treatment of SaaS-based solutions from a product to a service-based model with the quality of technical support determining the working relationship with the customer, affecting retention and lifetime value
- Low client stickiness – With increased adoption of interoperability standards and heightened competition, the cost of changing from one SaaS provider to another has been drastically reduced versus on-premises solutions where switching costs previously locked clients into continuing with a specific service provider. This negligible switching cost has reduced client stickiness, making it essential for providers to help customers quickly realize value and deliver a differentiated experience to drive renewals and sales growth in a SaaS model
Evolving expectations from technical support
With negligible switching costs and a plethora of options available, technical support is becoming paramount to the SaaS solution’s success. A well-designed and well-implemented technical support model can help customers achieve desired objectives and increase revenue through differentiated technical support or even indirect lead generation by uncovering opportunities to cross-sell or upsell. Accordingly, the scope of technical support services has broadened beyond the break-fix solutions to involve the following dimensions:
1. Value-added services
Additional value-add opportunities include:
- Proactive and omnichannel support – Proactive customer service and omnichannel customer experiences are the new standards for supporting customers and can differentiate your product from the competition. Customers today demand self-service for addressing low-complexity queries, which reduces the number of inbound issues and support tickets. Addressing customers’ needs, challenges, and concerns before they occur shows customers you are invested in their success, promoting customer loyalty and retention. With the growth of digital channels, omnichannel support is necessary to offer customers a consistent, seamless, and integrated experience regardless of the channel to create a unified brand experience
- Product usage and feedback analysis: While the support function has always had access to detailed customer data, the ability to correctly capture, read, and apply the insights learned from this data — both directly and from support automation tools — can transform a support organization into a marketplace pacesetter. Customers expect technical support providers to continuously analyze their usage patterns and then use that knowledge to augment products and services to fit their needs
2. Act as customer success ambassadors
Technical support’s role has broadened beyond addressing customers’ queries and concerns to building customer loyalty and fostering long-term customer relationships. Now, technical support specialists also act as customer success ambassadors (also called Customer Success Managers (CSMs), ensuring customers receive the needed tools and support to achieve their goals. CSMs strive to have an in-depth understanding of the customer’s needs and are responsible for communicating customer behavior/feedback to sales, marketing, and product teams. They help the organizations by:
- Ramping up utilization: The technical support team acts as the SaaS provider’s brand face, ensuring customers quickly realize value and have a differentiated experience, which is vital to driving renewals and sales growth in a SaaS model. Keeping clients engaged is difficult if they don’t see the value in your products. They guide clients on product capabilities and use cases in which those capabilities can be leveraged
- Cross-sell and upsell products/services: CSMs understand their customer requirements and can identify the best fit opportunities to upsell or cross-sell to their customers, as well as decide which features, functionality, or additional products would best suit each customer. When customers are ideal for an upgrade, CSMs can meet with them to explain why the additional purchase will be helpful
The shift in operating model for technical support
While the enhanced role of technical support is integral to the overall product experience and many factors are driving it, not all enterprises can deliver superlative technical support on their own. This can be due to multiple factors such as cost and geographic constraints, shortage of relevant in-house skills, inability to scale with product growth, failure to implement a true omnichannel experience, lack of accelerators to drive efficiency, etc.
Thus, enterprises are increasingly relying on both in-house and outsourced teams to offer technical support. A strategic third-party partner can bring technical domain skills, innovation, and customer success expertise to deliver an outstanding end-user experience and improved value realization for clients to supplement the capabilities of in-house employees.
As SaaS vendors explore the best fit from among the potential third-party technical support service providers, assessing providers’ potential strengths and shortcomings is important. For example, it may make sense for a SaaS vendor to partner with traditional contact center providers for high-volume low-complexity scenarios such as in a B2C environment. On the other hand, if the technical support required is characterized as low volume and high complexity such as in a B2B environment, then SaaS vendors may prefer to go for specialist technical support providers with strong domain experience and a highly-skilled talent pool.
As SaaS offerings become more ubiquitous, it will be critical for SaaS vendors to ensure technical support teams progressively evolve. In a SaaS set-up, enterprise technical support includes a range of activities, such as complex platform support activities and analytics support for product enhancement, proactively addressing customer needs through self-service, as well as understanding customer needs and behavior for enhanced value realization of products.
Enterprises need to continuously invest in skill development of their in-house teams, which includes domain-specific learning, and experience with specific tools, as well as seek partnerships with third-party technical support providers to address customers’ heightened expectations for technical support. The technical support team – in-house or outsourced – should act as the brand face when engaging with the end client and reflect the technology solution providers’ values and brand promise.
Interested in learning more about our approach to specialized technical support and our exceptional tech talent? Let’s talk.
If you have questions or would like to discuss the strategic role of technical support in driving SaaS adoption and how it is evolving, please reach out to David Rickard, Rananjay Kumar, or Divya Baweja.