Only 8% of SaaS companies will stay alive … here’s why.

It’s dark. 

No one’s here. You flick off the lights and head toward the elevator. You feel alone. Except, you’re not.  

Millions of Americans are just like you, standing inches away from layoffs. It's enough to make a seasoned SaaS exec feel nervous. After all, $136 billion is wasted on customer churn per year¹... 

So, with a recession in the wings … it’s time to act. 

Here’s how to win. 

First, a quick overview. 

You’re facing a need to grow. The truth is 92% of the software companies with 20% annual growth — will not exist in a year.¹ It takes a lot to fuel growth and, in a recession, … it takes even more. That means, now is the time for you to double down on customer retention. 

So, here's the thing...  

You probably have a client success team. If they succeed, they stand to reduce about 67% of customer churn,² take care of your customer needs quickly, and manage expectations.  

That’s great.  

But, at what cost? 

Remember, for most companies, client success is 11% of revenue.³ That's no drop in the bucket. In fact, 35,000 startups have had to lay off 22% of their customer success team in the last two years because their costs were too high. So, you may already be in a tough situation. 

Let’s try something new.  

Picture this. 

You can teach Every. Single. Customer. How to use your software, at the click of a button. Get users engaged and measure their use with your product — all without any human interaction.  

It’s possible.  

So much of what Client Success Managers (CSMs) do can be optimized. Frankly, it should be. Imagine what would happen if your CSM team was able to get 20, 100, or 500 hours back in their week. How much of that time could be repurposed to provide a white-glove experience to your VIP clients?  

Focus on what matters. 

With automation, you can stop stalking small accounts. Your small accounts churn more often, are harder to engage, and require too much CSM time to manage. 

So ... 

Let automation do that, instead.  

Use a learning management tool to engage your software users, especially the smaller accounts. That way you can re-direct your CSM team to the high-end clients who provide 80% of annual recurring revenue (ARR).  

Free up their time to work on what matters most.  

You’ll see the cost of sales go down, and retention increase. Because when every software user (big and small) knows how to use your product, they stick around, and that means... 

Your ARR goes up.  

References:  

1. http://www.mckinsey.com/industries/high-tech/our-insights/grow-fast-or-die-slow  
2. https://www.gravysolutions.io/post/customer-churn-rate-and-retention-top-25-stats-you-need-to-know#:~:text=19.,for%20SAAS%20businesses%20is%200.75%25.&text=20.,report%20less%20annual%20churn%20rate. 
3. https://www.saas-capital.com/blog-posts/spending-benchmarks-for-private-b2b-saas-companies/#:~:text=What%20percentage%20of%20revenue%20do%20SaaS%20companies%20spend%20on%20customer,10%25%20from%20the%20previous%20year.  
4. https://layoffs.fyi/2020/05/05/what-roles-have-been-most-affected-by-startup-layoffs/