A revisionist history of B2B software goes something like this:
- In the beginning, customers bought shrink-wrapped software from salespeople at software vendors.
- In the beginning, vendors made their money on service contracts. Vendors knew that contract signature essentially guaranteed predictable revenue and good economics.
- Then, Salesforce came along. B2B SaaS was born. The world changed.
- Now, customers buy access to SaaS platforms, not shrink-wrapeped software.
- Now, vendors have much more sophisticated economics, with higher upside for winners.
- Now, vendors are not selling those nice service contracts any more, but are still looking for predictable revenue -- and often hunting for silver bullet to guarantee their economics.
Anyway: enter usage data to the historical record and our conversation from the podcast. With the move to SaaS, usag data was novel way that SaaS companies can leverage their software delivery model, learn about their customers, and see into their customers' intents to upgrade, cancel, or renew. Some SaaS leaders would even argue that usage data is what got us "out of the trees" in the evolutionary leap from shrink-wrapped software to SaaS. They wouldn't be far from the truth either, I think.
But for all its power, usage data is not a silver bullet. It's a necessary but not sufficient requirement for customer success. Put differently: if your customers don't use your product, they're not going to pay their bills. But usage is not a 100% guarantee that those customers are successful and seeing value. It's not like a signed service contract used to be. Usage data is not a guarantee.
Today, usage data should be viewed as a tool in the toolbox, not an alpha and omega. To bridge the gap between usage and outcomes, we've created a whole new industry-in-an-industry: Customer Success. Customer Success is the human side of adoption and value, and it's a difference maker for many SaaS vendors in the hunt for steady revenue a good unit economics.
This topic was just one topic I had the pleasure of talking about on the Helping Sells Radio - an enterprise software podcast by ServiceRocket. Listen to the full podcast here: it's 40 minutes of SaaS, customer success, and growth chats.
I thought this was a really fun discussion with some really deep topic exploration. So, check it out!