Too many startups focus on the first S in SaaS but forget about the second one. When software and service aren’t equal priorities, building a successful company is impossible.
When I moved to Silicon Valley in 2007, self-serve software was all the rage. Everyone wanted to create products that sold themselves.
More than ten years later, there’s still a sense that startups can develop a product, lean back, and let the software do all the work. PLG (Product-Led Growth) is all the rage these days, and while I believe in the idea (Close is and has been a PLG company before that term existed), I see way too many "experts" conflating PLG with the notion that "sales is becoming obsolete."
But that's rarely how it works. To succeed in the SaaS world, you must build a product that solves your customers’ needs, not just your own.
Self-serve software is excellent, but startups need humans for sales, support, and success. The people you hire provide just as much value as your product.
This is especially true in B2B. The more complicated the buying process—and the higher the cost of implementation—the more you need to invest in both sales hiring and growing your support & success teams. Until computers start making all the buying decisions and learning to close a sale independently, you can’t rely solely on automation and the self-serve model.
David Sacks recently published a SaaS org chart for different stages—and while that's a rule of thumb rather than a prescription on how to do it right, it shows that a huge part of a successful SaaS is actually about the "humans" rather than the software.
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Let's look at this:
- Team Software: 17 people (under the CTO and Director of Product)
- Team Service: 21 people (under the Director of Customer Success and VP of Sales)
That's not even factoring in marketing, which often serves customers and prospects.
Keep in mind that the reality here is different for different companies. At Close, for example, our engineering and product team is by far the largest, with 24 people, whereas (ironically) we have a sales team of two, a customer success team of four, and a support team of five. We're a very product-focused company and always have been.
Product-led growth is all the rage these days, and as you can see, we have been a PLG company from day 1. PLG is compelling to many because your product will sell itself (and you don't have to deal with people).
Allowing an enterprise-level prospect to purchase your software point-and-click isn’t responsible. There’s too much at stake. Too many factors ultimately dictate their success, including costs, onboarding, training, and whether or not you’re actually a good fit for each other.
Most self-serve products today don’t account for these kinds of complexities. That’s why enterprise solutions usually require a call or demo before you talk about price. Product transparency is crucial for high-stakes buying decisions. Prospects need to play around with your product before they know whether it’s the right choice for them.
So, What’s Best for You—Self-Serve or Full-Service SaaS?
The truth is, it’s probably a combination of the two. While a significant part of our revenue comes from the self-serve model, we’re also dedicated to providing exceptional service to all our customers, regardless of size or budget.
Selling self-serve software has apparent benefits. For one, it scales beautifully. Phil, our Head of Product, once described it as “the big money-making machine in the clouds.”
Prospects can make their own decisions and take control of their success with very little commitment from your team. You don't have to hire and manage large sales, support, and success teams. Plus, you generally incur fewer costs with self-serve software to sell your product at a lower price.
There’s also a specific customer segment that prefers the self-serve model. Many times, these prospects are highly technical users. They don’t want a lot of hand-holding—they can do their research, solve their problems, and make buying decisions without much fuss. These are great (and easy) customers to have.
But There’s also a Downside to Self-Serve SaaS
The biggest downside is that you risk losing touch with your customers. I’ve been using the acronym FOMTO—the fear of missing touch—but I'm not sure it's caught on yet.
When you lose touch, it’s tough to create customer intimacy. Why is this important? Because customer intimacy generates real insights. That’s how you truly understand your customers—you know what they care about, the language they use, what challenges they face. It's an ever-evolving process. You have to fight for this every day.
The other downside to focusing only on the self-serve model is that you miss genuine opportunities to build a distinctive brand in a crowded market.
Features aren’t really what separates most SaaS products anymore. Design is getting commoditized, too. It’s harder and harder to stand out from the crowd. Almost anybody can create new software or launch a startup.
So the best way to out-compete your competition is to understand your customers better—which means you must provide better service than anyone else. It would be best to run towards yours while they run away from their customers. By focusing on the human element of your business—and by injecting a personal touch into your brand—you’ll appeal to prospects and customers alike.
That’s why Close has succeeded in the most crowded SaaS category. We’ve built a great product, but we’re also dedicated to our customers in a way that most other CRMs are not. People feel strongly about our software. They care about our product and brand, and that’s a real competitive advantage for us.
Understand Your Prospects and Customers
How do they research software? How do they trial software? How do they make buying decisions? What experiences are they used to? What experiences are ideal?
When you understand where they’re coming from before kicking off your lead generation efforts, you’ll know what kind of service to offer them. And your entire team plays a role in this process.
Sales know whether prospects prefer a phone call after trial signup or if they prefer to schedule demos on their own. Success knows when to check in with customers and how to get the most out of those conversations. Support knows how to assist throughout the entire customer lifecycle and can do so using various methods and techniques.
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While we're on the subject, hiring talented people for your support team is important. They're not just there to resolve tickets. Find technical people so they can communicate with the product team and solve problems quickly.
They should also understand selling so they can pass along opportunities to your sales team. They should know the ins and outs of retention and churn so they can identify any red flags for the success team.
Here are a Few Simple Ways to Provide Great Service
Send all Communication from a Personal Email Address
Avoid sales@, marketing@, support@, and reply@. I don’t care if it’s a newsletter, welcome email, or error message. When you communicate with prospects and customers, always ensure there’s a person behind the message.
We send hundreds of thousands of emails every week, and they all come from steli@close.io. Why? Because I want to hear from you. I want to be in touch with our customers. Many people think I won’t see their feedback or questions, but they’re wrong. I reply to every single email.
Spend Time with Your Prospects and Customers
Call trial users after they sign up. Conduct webinars so that customers get the most out of your software. Meet customers in person—I know it takes time, but I’ve never visited a customer and regretted it. If anything, I usually regret that I don’t go on more customer visits.
Host customer meetups so they can network with you and other customers. Start a conference to share knowledge, gain insights, build customer intimacy, and learn how to serve your customers better.
Share Support Responsibilities
Take the time to do some customer service yourself. Establish support cycles where founders and other teams work on support activities. You can do this once a week, once a month, once a quarter—whatever works best for you. Support rotations help everyone understand the challenges and frustrations of long-term customers, not just the new ones.
Software + Service = SaaS Success
If you only focus on the first S in SaaS, you’ll never build a sustainable and profitable company.
That’s why we don’t just call ourselves software startups—we’re SaaS startups. That second S is crucial. Nowadays, it’s the only way to stand out from the crowd.
Unfortunately, service is undervalued by most SaaS startups. But if you truly understand your customers—and you provide incredible service with every interaction—you’re going to create immense value for them, and, in turn, they’ll help you build a long-lasting and successful company.
Want more great SaaS advice? Get your free copy of SaaS Sales for Startup Founders right now. Learn how to optimize demos and trials, increase customer lifetime value, and sell like a SaaS sales pro!
