Reduce churn and achieve the SaaS Growth Trifecta: Improved product adoption, faster time to value and increased utilization.
Customer churn is costly. It’s six to seven times more expensive to acquire a new customer than to retain an existing customer. In addition to being a key indicator of company health, customer retention is a key revenue driver. A five percent increase in customer retention can increase company revenue by a whopping 25% to 95%.
This article dives into ways to combat customer churn through strategic customer enablement that speeds up time to value and ultimately drives revenue for your organization.
In this article:
What is time to value and why does it matter for SaaS companies and ISVs?
Time to value (TTV) is the time it takes for a customer to realize the benefits of using your software or product. It’s a critical metric for SaaS companies, as it influences customer satisfaction, retention, loyalty and advocacy. The faster you can deliver value to your customers, the more likely they are to stick with you, use more of your features, build trust, upgrade to higher plans and refer others to your solution.
However, achieving a fast and effective TTV isn’t easy. SaaS customers face many challenges and barriers when purchasing and adopting new software, such as:
- Longer and more complex sales cycles with multiple stakeholders, decision-makers and influencers involved. Deal sizes greater than $125,000 typically take six or more months to close.
- Software bloat and overload with too many features, options and integrations to choose from.
- Buyer's remorse and FOMU (fear of messing up), with doubts and regrets about their purchase decision and anxiety about using the software correctly. In fact, 56% of “no decision” deals are due to FOMU, and 60% of software buyers regret purchases in 12 to 18 months, increasing churn threat.
- Lack of engagement and motivation with low interest and enthusiasm for learning and using the software. Skillable research revealed 67% of technical professionals want real-world, practical application in their learning program.
- Knowledge and skill gaps with insufficient or outdated training and support resources to help them master the software.
- Technical issues and bugs with glitches, errors and crashes that disrupt the user experience and cause frustration.
All these factors can lead to poor product adoption, delayed TTV and increased customer churn. According to the SaaS Management Index, companies averaged $18M in annual license waste in 2023 – a 7% increase from 2022 – and are only using half (49%) of their provisioned licenses.
For SaaS companies measured on the Rule of 40, that waste shows up directly in both growth and profitability metrics. Learn how hands-on labs connect to Rule of 40 performance.
So, how can your organization avoid being among the 51% of unused licenses that are on the chopping block come renewal time? It’s time to modernize the customer enablement playbook – not only to improve product adoption, but also to drive ongoing utilization with the goal of increased sales and revenue.
What is the difference between product adoption vs. product utilization?
Product adoption refers to the process of users starting to use the software. Depending on the complexity of the software, this may mean simply downloading an app and creating an account or completing an onboarding program. Meanwhile, product utilization refers to how frequently and effectively users are engaging with the software on an ongoing basis.
Measuring both product adoption and product utilization is important when creating and evaluating SaaS key performance indicators (KPIs). Specific metrics may include time spent in the software, number of features used and customer engagement with enablement resources.
While product adoption is the first measure of success, utilization is a better measure of customer engagement as it relates to renewals, expanding usage and even paying for additional features or products.
Evaluate your customer enablement playbook.
Now, how can you build a customer enablement program that not only provides excellent onboarding during the adoption phase, but also supports throughout the customer journey to increase utilization? There isn’t one singular answer. It requires a multifaceted approach.
Enterprise software is multifaceted and complex, and so are enterprise customers who are comprised of unique individuals with a spectrum of learning preferences. Creating SaaS and ISV (Independent Software Vendor) customer enablement should also be multifaceted – think of it as an ecosystem of complementary approaches – many of which you probably already have in place.
Here are a few key components of a multifaceted customer enablement ecosystem. Use this as a starting point for going beyond SaaS onboarding best practices and driving utilization.
1. Get started with documentation, how-to guides and videos.
Documentation, how-to guides and videos are an important foundation for enabling and educating your customer base. These essential resources provide critical information and instructions on how to use your product.
In isolation, these resources are not enough to drive proficiency and engagement, but they are perfect fodder to fuel additional enablement methods that reach more customers in differentiated and engaging ways.
2. Give a tour with digital adoption platforms.
Tools that provide guided tours and walkthroughs of key features and workflows are commonly found in today’s software. Digital adoption platforms help customers familiarize themselves with your product’s interface and functionality. However, these feature tours lack the ability to let customers practice and apply what they’ve learned.
What if you could enable customers to practice and/or test their skills and knowledge in a realistic and safe environment that mimics your product’s live setting? (Hint: you can… skip ahead to #4!)
3. Empower your Customer Success Managers (CSMs).
With time and resources at a premium, tech companies need to find ways to help CSMs shepherd more customers from signed contracts to engaged users.
All too often we hear about time-strapped CSMs regularly providing one-off training for clients because the existing documentation and guides aren’t enough to drive proficiency. In an attempt to quickly help customers, CSMs end up making DIY demo videos, preparing decks, grabbing screenshots … only to find out that engineering has updated something in production and now their materials are already out of date. This creates a huge bottleneck for progressing accounts from newly activated to fully matured.
Businesses need to help CSMs educate customers in a scalable way that doesn’t require massive updates each time you have a product update (which, let’s face it, is all the time). So, how can your organization shift from reactive support to proactive success strategies? Let’s start with your customer training program.
4. Scale customer training faster with hands-on learning and virtual labs.
Give customers the opportunity to experience your software benefits firsthand in hands-on virtual software labs. These safe practice environments enable customers to experiment and build proficiency with your software by doing vs. viewing. You can embed documentation and videos into the lab experience allowing customers to get even more value out of your content by connecting it to a hands-on experience.
- Build familiarity and confidence with your software product by allowing your customers to explore its features, functions and benefits in a guided and interactive way.
- Prepare your customers for real-world scenarios and tasks by exposing them to realistic and relevant challenges and problems that they need to solve using your software or product.
- Provide immediate feedback and validation by showing your customers how well they are performing, what they are doing right and wrong, and how they can improve their skills and knowledge to gain more value from your product.
- Generate data and insights by tracking and measuring your customers' behavior, actions, progress and outcomes in the hands-on learning environment, and using them to optimize your customer enablement program and product development.
- Reduce friction and support costs by minimizing the need for live training, technical support, product documentation and other traditional enablement resources that are often costly, time-consuming and quickly become outdated.
Hands-on labs can also complement existing instructor-led training (ILT) and virtual instructor-led training (VILT), as well as automate previously time-consuming tasks like scoring and feedback.
Where can software labs fit into the customer enablement journey?
Hands-on learning can drive results throughout the customer journey. Where you choose to start depends on your organization’s goals and KPIs.
Consider the customer enablement use cases outlined below as possible starting points to increase time to value with hands-on learning. All of these use cases are opportunities to create and support brand evangelists who help increase your product’s favorability within their current and future organizations.
Example SaaS Growth Trifecta KPIs.
Pre-sales demos, trials and proof of concepts (POCs)
Showcase your product’s value proposition, unique selling points, capabilities and persuade (and reassure) potential customers to buy from you.
KPIs:
- Increase net new customers
- Sales cycle duration/time to close
- Sales velocity
- Demo/conversion rates
- Time from demo to close
- Volume of demos per opportunity
Onboarding and training
Teach your customers how to use your software or product effectively and efficiently, and help them achieve their goals and desired outcomes.
KPIs:
- Faster product adoption
- Increase utilization
- New customer support ticket volume
- Training resource utilization (e.g., videos, labs, ILT)
- Onboarding completion rate
New feature releases and platform updates
Upskill your customer base quickly and drive utilization of new features.
KPIs:
- Increase utilization
- Increase renewals
- Reduce support tickets
Upselling and cross-selling
Introduce your customers to new features, updates, integrations, add-ons, and encourage them to upgrade to higher plans or buy more from you.
KPIs:
- Account expansion
- Increase revenue from existing customers
- NRR (net revenue retention)
Certification and assessment
Validate your customers’ knowledge, skills and job readiness, and provide them with credentials and recognition for their achievements. For example, see how Quest Software uses hands-on learning to drive partner enablement and validate their partners are ready to sell and implement their solutions.
KPIs:
- Certification growth rate
- Time to certification
- Pass/fail rates
User conferences and events
Showcase and drive engagement with new features, platform updates and in-person certification testing. These events are also an opportunity for your product managers and engineers to observe and interact with users in real time.
KPIs:
- Increase utilization
- Engagement and certifications
- Session attendance
- Demo engagement
- Post-event product trials or leads
We help top organizations like Microsoft, Tableau, Tanium and Hyland Software host hands-on software enablement sessions at user conferences and events to create immersive experiences for customers.
Learn more about Skillable’s virtual labs at events.
Ready to modernize your customer enablement playbook?
See how hands-on labs can help you improve product adoption, accelerate time to value and increase product utilization.
