Last week I wrote about monetizing Customer Success.
More often than not I find Customer Success organizations hesitant to implement a tiered service offering for the fear of how the market will perceive these paid for service models.
However, a well-defined service model that clearly delineates between adoption versus consulting services and which offers value at every level, has many strategic benefits that make them well worth considering within a Customer Success structure.
This week I share questions that I received from a Director of Customer Success about creating a tiered premium service package along with my responses.
Premium Services Packages
Hi Kia. I would like to implement a premium service model that our customers pay for as part of their annual subscription. With that said, I have a few concerns about their effectiveness and branding to the marketplace.
We are a SaaS application and provide numerous ways for our end users to learn the application (webinars, group training, on site trainings, a knowledge base, one-on-one guided walk thrus, etc.). We were recently acquired another company and we are now close to a 400-person company and $120M, as you can imagine scalability is on the top of our mind. Some of these service offerings are much more scalable then the others.
Here are a few of my questions:
How does the market perceive "paid" service models? Especially SaaS models.
Should we offer service tiers? Different options available for different annual fees?
What are customers willing to pay for- 24/7 support, quick response time, custom training, hands on learning?
I have a lot more questions and a plethora of ideas but from our conversation and your previous experience with Oracle I thought you would be a good resource to see if this is even a "good" idea.
Hi Melissa*. My general comment, when organizing what services (paid or not) to deliver to customers, is that they be well defined and offer value. If those two criteria are met then the market will respond to them positively.
I also like to use services as a way to create some clear boundaries between what's offered with the subscription in order to be successful, and what is above that and should be charged for. It makes it easier for CSM's to also service customers when there is some framework (instead of doing "everything and anything" for the customer when in some cases they should be paying).
That said, here are my answers to your questions:
Paid service models are becoming the norm again (they used to be well understood pre-SaaS and are becoming popular again). In terms of perception, as I note above, if the value is understood and the services help customers realize their outcomes, then my experience is that customers are more than willing to pay for them.
Depends on the types of services your organization needs to offer. A tiered model works well when you generally do the same for all customers and provide a deeper level of detail for program elements at the higher tier levels (e.g. bronze, silver, gold). There are also yes/no offerings like Premier Support. A customer either receives the service or they don't. These add-ons are usually for services that cover dedicated resources, concierge services, faster response times etc. That is, you could have a customer on the highest tier of subscription services and also have premier support. In terms of what to offer, I'm a raving fan of first understanding an organization’s customers: why they buy and what they need to be successful. Then figuring out what services to offer to support that, and then figuring out pricing.
Again, if the customer sees an ROI on the investment they'll be willing to buy it (as their return will be greater). The question then is not what are they willing to pay for, but what things of value do you offer that will give them such a great ROI that they'd be foolish not to buy it? The willingness question comes up if an organization is just copying what the market is offering. Then it becomes a price competitiveness issue.
Does your organization have a monetized CS service model that is wildly successful? Connect with me at kia@thedesiredpath.com and let me know!
*not their real name