How Do Customer Acquisition & Provisioning Strategies Affect SaaS Adoption?
Before diving into the topic du jour, let me get some definitions out of the way:
Customer (Tenant) Acquisition: The act and associated strategies related to convincing a member of your target market to utilize your offering in exchange for money.
Customer (Tenant) Provisioning: After a customer has made a purchase decision, the workflow required to assimilate a new customer into your SaaS offering and grant them usage rights to that offering.
It’s important to understand that these two components are the key participants in the path to customer adoption. If you can put your customer hat on momentarily, realize that from the customer perspective your acquisition and provisioning strategies can mean the difference between coming in your front door or continuing down the street to another house.
I’ve generally held conversations about topics like provisioning from a technical standpoint (defining and implementing the workflow) with ISVs and members of the SaaS community; but the topic of customer adoption always decorates those conversations at some point. After all, any SaaS ISV (or company for that matter) worth their salt knows that adoption is the name of the game. Customer acquisition and provisioning strategies can impact adoption based on the accessibility of each workflow. Some questions that come up: Are the acquisition and provisioning workflows driven by the SaaS provider or controlled by the customer (i.e. can customers sign-up and get access to your SaaS offering online through a short automated process, or do they have to go through salespeople via a handholding process)? Why does this matter?
To illustrate the difference, think about public content sites that are successful: generally speaking sites that avoid requiring a user to register for basic access to a site (say, reading content on Digg vs posting content) will generally experience faster adoption because the hurdle to access the content and total time from a consumers first interest in a site to when they get to use the site’s functionality is minimized. Even in these trivial scenarios, users want access to functionality quickly. From the SaaS provider’s perspective, reducing the amount of time from when a prospect shows high purchase interest to when a transaction is made will boost adoption. When considering acquisition and provisioning strategies, SaaS providers should understand their archetypical customer.
Generally speaking, if a SaaS provider is targeting small to medium enterprises, offering the ability to sign-up online for your service (without having to go through an actual sales team) has huge adoption advantages. Some SaaS providers don’t put the acquisition workflow in the customers hands, instead opting for a high touch sales process. This tends to dampen adoption curves and leads to artificially high customer acquisition costs. Many times, your messaging and online collateral can establish and solidify a value proposition. Couple that with a “try before you buy” approach, and customers won’t feel as if you are “getting in the way”, making for a much more inviting sales and acquisition process. Once you’ve acquired a customer, however, how long does it take your company to assimilate them into your software? Some earlier SaaS providers had to (have to) setup accounts in their system manually, requiring significant human intervention. This slowdown might be viewed as a negative experience by your customer, particularly in today’s “sign up and go” world. I’ve captured my opinion on configurations of these two strategies and impact on adoption in the following diagram:
(bigger)
Do you agree or disagree with this high level analysis? Are you a SaaS provider that has chosen one of the configurations above, and if so, what is your opinion on how it impacted adoption?
Loading ...
Sinclair,
I’d also like to hear from some SaaS customers out there who are using a SaaS product and have gone through the acquisition process(es). The reason being that it would be interesting to gain insight into the psychological differences between the two adoption methods you mention.
The question boils down to:
Do customers prefer to “window shop” for SaaS apps, or would they rather have the ear (and hand) of a sales person up front?
In my experience, which seems to align with your point, adoption is easier (aka I am more likely to become a paying customer) when I have the ability to try before I buy AND avoid a lengthy and high-touch sales process. In fact, if I get the feeling that I will be bombarded with pre-sales pitching and pulling, I’ll tend to stay away. I’d rather try at my own pace, and ‘graduate’ into a paying customer with the solution that best fits my needs.
From the acquisition and provisioning point of view… I think you’re right, a simple automated process that tackles both of these components is ideal for the customer experience.