Top 6 Challenges CX for the SaaS Industry (and How to Fix Them)
By David Cunningham
Many of us remember when setting up a new workstation meant inserting CD after CD and watching progress bars crawl across the screen. The process was slow, painful, and depended on access to physical media. We didn’t have smartphones to bide our team, either. Thankfully, the software industry has changed dramatically in the last 20 years. And the rise of software as a service (SaaS) is a major part of that.
Users began to go from zero to productive in a matter of minutes as the idea of installation became obsolete. The SaaS market has continued to evolve since its inception, and the COVID-19 pandemic has further accelerated expansion. According to Statista research, the SaaS industry has grown over 70% in the past three years and is projected to continue growing at least 15% per year.
But as the industry expands, so does the competition to attract customers and drive revenue. In a saturated market, standing out based on features or technology is difficult, if not impossible.
Improving customer experience can be a key differentiator if executed strategically. But, most SaaS companies face a host of unique challenges in meeting—and exceeding—their users’ expectations.
Read on to learn more about the CX challenges SaaS brands face in 2022, and the steps you can take to stand out from competitors.
CX matters in SaaS, more than you think
CX has been a hot topic for years in consumer-facing industries like telecom, healthcare, and air travel. But in B2B markets like SaaS, too many people believe in the antiquated notion that purchasing decisions come down to pricing and features, or that a sales rep can smooth out a deal with a steak dinner and bottle of wine.
The B2B world has changed. Gartner research found that SaaS customers complete over 60% of the buying process without engaging the vendor. And while pricing and features are important, ignoring CX will put your brand on the fast track to failure and irrelevance.
Your customer might be a Fortune 500 company, but your users are living, breathing human beings that rely on your software to do their jobs effectively and efficiently. They interact with your product regularly, and if they’re dissatisfied or experience too many pain points, that frustration will eventually percolate up to decision-makers.
Challenges in the SaaS industry
While SaaS has made users’ lives easier in many ways (slow installation and full hard drives are relics of the past), it has its own set of challenges. Customers have options for almost any type of software imaginable, and if you fail to deliver a top-tier CX, they’ll jump to a competitor that better meets their needs.
Here are six key challenges in SaaS that are forcing brands and their CX to adapt, evolve, and grow:
1. Commoditization of SaaS
Unless your brand is in a bleeding-edge niche, you’re probably in a crowded space where software is largely commodified.
When there are 20 or 30 SaaS products that do roughly the same thing, you have to fight for your share of an established market. There are countless CDPs, CRMs, and data warehouse platforms at a user’s disposal. And that makes growth and profitability all the more challenging.
2. Market consolidation
Consolidation naturally occurs as any market matures, and SaaS is no different. Technology titans like Microsoft, Intuit, and Square all spent over $10 billion on SaaS acquisitions in 2021—and those are just the biggest deals of the year.
With each purchase, they throw the full resources of their companies behind the newly acquired brands, quickly shifting the balance of power in a market.
3. Usage-based pricing and monetization reengineering
The idea of paying for only what you use makes a lot of sense on the surface. Why waste money on software licenses you don’t need? However, the model presents two challenges for SaaS providers.
First, revenue projections become considerably more complex without the certainty of user contracts. Second, clients can face surprising bills if they don’t thoroughly understand the pricing model. So, being transparent is critical.
4. Hybrid work and dispersed team management
COVID-19 forced companies to embrace tools that facilitate remote work. While many offices are reopening, a recent survey of HR leaders revealed that 90% of employers are planning to allow hybrid work schedules.
As companies rethink their workforce and workflow, your SaaS product will need to offer solutions flexible enough to meet evolving needs and team compositions. And, if your own company is going remote, you’ll need to take appropriate measures to ensure a seamless transition.
5. Service decentralization and unbundling
Just as the idea of installing software from CDs has died, so too has the monolithic suite of tools. Customers crave the ability to pick and choose software from different providers to create a seamless stack.
SaaS brands not only need to deliver a strong product, but it must also be able to integrate easily with other platforms.
6. Privacy and compliance changes
In a privacy-first world, security and regulatory compliance can’t be afterthoughts. Customers rely on your software to help them stay compliant in handling customer data–and keep data secure and protected.
As laws evolve, your team needs to respond quickly. That means frequent product updates to keep pace with the changing legal landscape.
Finding stability in an evolving SaaS ecosystem
Keeping pace in an over-saturated market can be tough, especially given the rapid pace of the digital world. The biggest advantage you can leverage is your CX. Features and pricing are commodities, but a rock-solid relationship with your users is unbeatable.
These five strategies can help your SaaS brand stay ahead of the competition:
1. Create a flawless onboarding experience
When someone decides to use your product, you want to make it as easy as possible for them to adopt and use the product. In fact, research shows that focusing on addressing customer issues in the first engagement can reduce churn by up to 67%.
Provide users a clear and easy-to-follow path to get started, give them access to self-serve education and support options, and offer guided onboarding for customers who prefer a more hands-on approach.
2. Make your customer support team amazing
Customer support goes beyond responding to user complaints. Instead, approach support as an ongoing process and relationship you want to nurture. Ensure that users are getting the most out of your product with feature-focused workshops, regular customer check-in emails, and periodic team calls to discuss changing needs.
3. Improve your website and mobile app UX
There are few things more frustrating than navigating a clunky or complex UI. Your website and mobile app should be clean, easy to use, and give users quick access to what they're looking for.
Most importantly, your product can’t be desktop-focused. Mobile devices account for over 50% of online usage and your customers expect a smooth UX, whether they’re on their laptop, tablet, or phone.
4. Leverage, pursue, and encourage customer feedback
Give your customers ample opportunities to tell you what’s on their mind—and when they do, listen. Put together focus groups to discuss how users are interacting with your product, send out regular surveys, and incorporate feedback opportunities at every turn.
By stitching together layers of feedback, you can target key areas to improve and focus on expanding what your customers love about your product.
5. Constantly monitor CX metrics
Your customers generate thousands of digital touchpoints every day while using your product, creating a window into silent feedback.
By monitoring real-time analytics KPI dashboards like DAU, MAU, and user sessions, you can spot pain points that are leading to fallout. Discover and anticipate issues before they impact a huge portion of your user base, and use these insights to make rapid and informed decisions.
Improve your CX with Scuba Analytics
To succeed in a competitive SaaS market, you need more than a great product. You need to deliver a five-star customer experience, and your brand needs the ability to understand its users.
Enter Scuba Analytics. Scuba Analytics is a continuous intelligence platform that helps you leverage the power of your data to elevate your CX. It enables your brand to:
- Use real-time analytics to monitor the customer journey.
- Interactively switch from high-level views to granular usage details.
- Rapidly discover pain points to reduce friction and customer churn.
- Delve into complex data with intuitive tools that don’t require assistance from IT or data scientists.
- Set up customized alerts to monitor customer metrics and spot problems as soon as they arise.
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