The Hidden Benefit of the SaaS Model

The result of the SaaS model is that the customers have to be priority

Posted by Tejus Parikh on March 17, 2015

At WideAngle, we recently had a release with one of a CTO's nightmare scenarios. The release shipped with a bug that caused a key action to occur multiple times. When users started reporting issues, customer success, product, and the CEO jumped into action. More than pride in our product, the unquestioning support from the entirety of the team came from the fact that supporting our existing customers was the best business decision. This is one of the great hidden benefits of the SaaS model.

Key team members jumping to fix a relatively small problem is not the traditional way. Our issue was an annoyance, but not a show-stopper. In the old Enterprise sales world, it was far more important to keep pushing on feature X that was going to sell customer Y. After all customer A has already paid. If anything, they just realized the importance of the service contract. Unless it was an issue so severe that they might never buy your software again, it would get logged but probably not solved.

The result is that the customers have to be priority #1. If something is effecting a large number of customers, it must be solved.

The SaaS world is different. Unless your company is very early or in the middle of a tremendous growth phase, the current customer base is going to account for far more revenue over the next quarter than the new customers in the pipeline. This is doubly true if you have a positive net churn. The result is that the customers have to be priority #1. If something is effecting a large number of customers, no matter how minor, it must be solved. If a new product initiative designed to acquire new customers introduces regressions, it doesn't ship. Period, no arguments.

This is a huge benefit to customers. Customers stay important after they open their wallets. This is also a huge benefit to the companies providing services. Nobody really wants to create bad software or push broken code, but the reality when new features are the only path to the next check, the pressure to push on questionable timelines will always exist. Monthly customers shift that burden, because you can't afford not to think about them. Having the customers' needs aligned with the companies' is one of the biggest (and somewhat hidden) benefits of the SaaS model.

Original image is CC-licensed [original source]

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Tejus Parikh

Tejus is an software developer, now working at large companies. Find out when I write new posts on twitter, via RSS or subscribe to the newsletter: