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Chris Bliss

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SaaS Is About Three Things: Service, Service & Service.

The explosion of SaaS offerings ranges from contact management and email to ERP and Sales Force workflow is mind blowing. I demo software every single day and I’m constantly amazed at how much of this stuff is out there.

Of course, just like everything, 80% of it is derivative schlock – a copy of a copy of innovative software created nearly a decade ago. The best example is project management software. After 37signals hit a grand slam with Basecamp (which is kind of like the Superman of PM offerings) dozens of imitations came out with new ones coming out still. Some of it is as good (think Batman or The Flash) but the majority of it isn’t (little kids wearing capes).

What’s left is that 20% that has genuine quality and serious competitive advantages offered. Where does that leave you and me, the small business owners looking to navigate these myriad choices? It’s Toyota vs. Honda all over again…

This question reminds me of when I used to live in Manhattan. There were two competing Indian restaurants in the East Village, one on the ground floor and one on the basement level of the same building. I began asking customers exiting from both places what they thought of the food. The responses were to be expected – pretty standard faire neither terrible nor amazing. The two rival hosts caught wind of my interviews and began bartering for my patronage. “Free wine with the meal” said the man downstairs. The man upstairs countered with “free wine and dessert!”  They both ended up with standing offers for free wine, dessert and naan. Ultimately, I chose upstairs because I got word from a disgruntled couple that the downstairs man had offered those free items and yet never received them, while the family leaving from upstairs was pleased with their service and rice pudding.

Service is the defining factor for the next generation of software providers. Some of them get that, most don’t. Customer service isn’t just shiny websites and smiles. It’s keeping promises and honoring the service agreement. Let’s not even get into the Zendesk fiasco

Simply put, the traditional product model doesn’t exist anymore. SaaS vendors depend on the service model just like a restaurant. The product is the software, but what is being sold is the delivery method and service.

We are beginning to see a division of SaaS providers who get the “service” part and are separating themselves from the pack. Today, there are talented developers in spades, every SaaS shop has a few but there just aren’t that many well equipped customer service representatives out there. Some companies like Zoho CRM are making a lot of fanfare and winning customers with flashy lights and optimistic promises. It remains to be seen not only if they can back up their claims, but if they can remain transparent enough to engage their customers effectively.

No SaaS offering is fully developed. The whole point is that the system will always continue to evolve and get better. Currently there just isn’t an application out there that stands absolutely above the rest but they’re all trying hard to get there. Customers understand this – they get the whole idea of updates and growing. The whole point of SaaS is that customers agree to enter into a partnership. That’s a mutual agreement which takes trust and understanding. When vendors fail to understand this relationship, customers see immediate red flags. Nothing kills a SaaS provider quicker than an unresolved security or data corruption issue. A dying community is bad for cash flow, but even worse, for consumer confidence. The deal breaker comes at the end of any problem when you start to hear “why do I trust my business data with these people?” Trust is hard to regain.

And it’s not just damage control where vendors need to establish good communication, its growth as well. Updating and how updates are disseminated to the user base are critical to keeping moment. Whether it’s updated weekly, monthly or quarterly, customers should understand that this is a journey to make together with their feedback included.

Business is about people on both sides of the deal. Service models only heighten that importance. Talented developers are finding that it’s not just 0s and 1s or CSS that is crucial, but team and community building. When choosing your SaaS provider, browse their forums, send them direct emails. Find out who’s on the other side.

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Chris Bliss works at VM Associates, an end-user consultancy for businesses looking to move to the cloud from pre-existing legacy systems.