6 ways to prepare for customer growth
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6 Ways to Prepare for Customer Growth
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The SaaS industry is projected to grow and the most successful companies will be the ones best prepared to handle explosive growth without degrading the customer experience.
Based on projections from IDC Corporate Research in 2013, the SaaS industry is going to see a 28.4% increase in yearly revenue through 2017.
2013 2014 2015 2016 20170
10
20
30
40
50
60
70
80
Projected Revenue of SaaS Industry
Reve
nue
(in b
illio
ns $
)
Graph based on IDC Corporate research in 2013
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Even with this projected growth, many SaaS companies will fail, with one of the largest factors being a decreased service level to their customers.
We’ve seen it with Devver, a service that turned developers’ existing desktop tools into cloud-based services. The company closed their doors in April of 2010 after seeing some significant growth. In response to their failure, the company posted an article called Lessons Learned with the following excerpt:
Focusing on growth and forgetting about your customers is one of the fastest ways to fail as a SaaS company.
“Our mistake at that point was to go “heads down” and focus on building the accelerator while minimizing
our contact with users and customers.”
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For companies like Workday, Zendesk and Marketo to be successful, they really had to be thinking ahead in terms of their plans to manage their customers when their growth was exponential. One day there were 3 people in customer care, and the next they had to be prepared for 30 if they didn’t want to disrupt the customer experience.
But how do you prepare for growth without over-spending?
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We’ve developed the following list based on our customers’ experiences with exponential customer
growth. It’s a ‘how-to’ guide for those of you expecting to experience business growth and are
committed to doing so without any disruption to the customer experience.
Use the following 6 tips to help your company prepare for growth
and success.
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654321 Classify the type and volume of the interactions
Evaluate the volume of each interaction type as a percent of your customer base and marketing activity
Standardize responses
Specialize staff
Leverage goals
Prepare for scale
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654321 Classify the type and volume of the interactions
Evaluate the volume of each interaction type as a percent of your customer base and marketing activity
Standardize responses
Specialize staff
Leverage goals
Prepare for scale
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Classify the type and volume of the interactions
What volume of each type of interaction are you receiving and what is the core reason for the contact? By classifying these inquiries, you’ll be able to start projecting volume based on how your customer likes to interact.
A simple matrix can help you understand why (and how) your customers are contacting you.
Customer Service Requests
Sales Inquiries Technical Support
Inbound Phone Call 15% 5% 15% Text 5% 10% 10%
Chat 10% 5% 5%
Email 5% 10% 5%
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654321 Classify the type and volume of the interactions
Evaluate the volume of each interaction type as a percent of your customer base and marketing activity
Standardize responses
Specialize staff
Leverage goals
Prepare for scale
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Evaluate the volume of each interaction type as a percent of your customer base and marketing activity.
By understanding the ratios that drive your contact volume, you can create a projection of the volume for the next 90-120 days. For customer service requests and technical support, look at the volume of requests as a percent of your active customer base.
For example, if you are currently taking requests from 10% of your 10,000 customers each month, and you expect to grow by 50% in the next 120 days, are you prepared for 1,500 customer interactions?
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Volu
me
of re
ques
ts
Days out 120
1,000Customer
interactions
1,500Customer
interactions
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Days out
Sale
s in
quiri
es
90
For sales inquiries, look at the percentage as a function of your marketing activity. Based on what the projected marketing activity will be in the future you will be able to project the sales inquiries volume accordingly.
For example, if you are planning to increase your marketing spend by 15% in the next 90 days, are you prepared for a significant increase in sales interactions?
This method won’t always be precise, but it will certainly help you continue to be customer-focused throughout foreseen growth.
10,000Customer
interactions
15,000Customer
interactions
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654321 Classify the type and volume of the interactions
Evaluate the volume of each interaction type as a percent of your customer base and marketing activity
Standardize responses
Specialize staff
Leverage goals
Prepare for scale
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Standardize responses
As start-ups and high growth companies become more stable, they begin building better processes around their business. Start standardizing your responses to customer inquiries. Templates and training information can build consistency in customer interaction. As a rule of thumb, attempt to template at least 80% of the typical customer requests you receive. You CANNOT (and should not) script or document everything.
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A good place to start when standardizing responses to inquiries is to record your best representatives responding to common questions and document their key points and phrases for discussion for the rest of the team. By recognizing your best representatives, it not only promotes employee engagement, but also heightens the performance of your team as a whole.
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654321 Classify the type and volume of the interactions
Evaluate the volume of each interaction type as a percent of your customer base and marketing activity
Standardize responses
Specialize staff
Leverage goals
Prepare for scale
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Specialize staff
As you continue to grow, begin building specialists. Some people will excel at sales but be terrible technical support representatives. Others will thrive with account inquiries but have a harder time with technical questions. Allow them to specialize and be the best source for your customers to seek out.
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654321 Classify the type and volume of the interactions
Evaluate the volume of each interaction type as a percent of your customer base and marketing activity
Standardize responses
Specialize staff
Leverage goals
Prepare for scale
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Leverage goals
Initially, focusing on an ideal customer experience makes it difficult to manage customer care with rigid metrics. As you mature, allow yourself to standardize and hold people accountable to more specific metrics. Conversion rate, upsell rate, One and Done %, CSAT scores, etc. should all be established in 90-day periods and evaluated for accuracy.
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654321 Classify the type and volume of the interactions
Evaluate the volume of each interaction type as a percent of your customer base and marketing activity
Standardize responses
Specialize staff
Leverage goals
Prepare for scale
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Prepare for scalePreparing to scale includes numerous things:
– Budget approval– Standardizing job description and hiring
methodologies – Preparing for HR to acquire new staff– Etc.(Look out for this topic to be discussed in greater detail in a future post titled HOW TO SCALE).
Based on your projections for future volume, identify where customer contacts are going to come from and prepare to scale. If you need to add personnel, it is almost always easiest to scale external employees into the lowest complexity programs and move current employees through the process of complexity.
6Level of
complexity (customer service)
Chat
Phone
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At this stage it is also wise to evaluate the potential of using an external partner. Contact center partners that specialize in helping high-growth companies expand can provide a range of advice as well as a safety net that gives you the ability to grow without the financial commitment of hiring internally, and without the risk of significant revenue loss if your growth estimates are inaccurate.
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Who is Incept?Incept is a conversational marketing firm that delivers the most effective customer acquisition and retention campaigns to maximize value per transaction by combining passionate people with sophisticated analytics and a shared risk business model that improves results.
Sam Falletta is the President & CEO of Incept, where he has developed successful customer acquisition and retention strategies for some of the largest brands in the world including Microsoft, Ford, Honda, and the American Red Cross. Incept has grown at an average rate of 25% per year for the last 7 years and been recognized as one of the Top Workplaces in NE Ohio by Workplace Dynamics. He is a national speaker on topics related to leadership, marketing and corporate culture.
Michael Somody is the Vice President of Customer Success of Incept. Mike understands that no two clients are facing the exact same challenges and opportunities, which means that no two strategies can be the same. He works with each of our customers to deliver impactful, cost effective solutions that turn their customer relationships into profitable growth.