Don’t Be a SaaS-Hole: How Silicon Valley Evolved Itself Into an Era of Zero Customer Service
During my travels, I have spoken with a number of East Coast business leaders who were evaluating online services to integrate into their companies. Listening to their complaints around previous products they had used, I quickly realized that Silicon Valley has become completely out of touch with its customers — and yes, that includes enterprise customers. Surprising, but true. Although we are iterating and building faster than ever, we have seemingly forgotten about the last “S” in SaaS — the “Service” in Software as a Service.
Tech companies in the Valley have become chiefly concerned with wringing out costs and, importantly, impressing their investors by demonstrating business momentum and growth of user numbers. In doing so, many companies have opted to run their customers through a low-touch, self-service experience. Certain human aspects of relationship are quickly being abandoned, just as it is with the use of texting and Snapchat to stay connected. Communication these days requires very little face-to-face time. However, this depersonalization does not work for companies and the enterprise, though many SaaS companies are reducing contact and service when they should be increasing it. The Valley has forgotten that a great user experience extends beyond the product, and delighting customers with a total user experience is at the heart of long-term sustainable business.
So how did we get here, and what’s the alternative? Let’s break it down:
How Software Ate Service
As we took our first baby steps toward going paperless, we learned quickly that we could build and use all kinds of services on the Web, from online banking and stock trading, to purchasing airline tickets and hotel rooms. Meanwhile, a new ability to contribute content and engage with other Web users led us to become social. It changed the landscape of the Web, and companies were quick to jump on the social bandwagon. The downside of these simultaneous shifts is that it caused people to become less connected and less intimate, as software companies realized that they could deliver software from behind their computer screens via the Web.
Companies started to focus their attention on cutting operating expenses with the goal of maximizing margins. A whole new era of Web tools for customer interaction came alive. Service platforms like Zendesk started popping up, and companies placed big investments in automating the customer experience. In fact, “automation” from marketing to sales to support is a higher order bit for every SaaS company. But these investments have inserted a larger barrier between themselves and their customers. Upset customers are now met with automated emails and tweets from a service platform that are supposed to calm them down and boost regard for the company. I can’t say that a vague email with my name filled into a blank space ever made me feel like a special and valued customer.
For some reason, this form of computer-generated communication was okay with Silicon Valley. Perhaps it was because it became the norm and tech companies felt they needed to stay as lean as possible while adapting to changing times. Or we were oblivious to the larger impact it would have on relationships outside our tech centered lives here in Silicon Valley.
How SaaS Is Seen Outside the Bubble
Outside of the Valley bubble, a very different market exists, with frustrated customers who hate what SaaS has done to their providers. Instead of taking pride in their company and showing appreciation for each customer, service agents are installed as a churn defense strategy. In fact, every SaaS company employs this kind of strategy so as to minimize the cancerous effects of customer turnover. Automating customer service is reactionary and the churn defense strategy is causing companies to invest in more avatars, more help desk platforms that integrate with social media and more internal customer success managers. But customers feel abandoned, and they’ve given it a name — “cloud-i-fied” — a term that they use outside of Silicon Valley to describe what happens when a provider’s lackadaisical approach to service says to them, “Hey customer: Deal with my service avatar and please don’t churn, because my investors hate churn and it kills my SaaS model.”
It has come to the point where live customer visits is the surprise and delight feature that makes other SaaS companies stand out. A great example of this is a line from a Discover Card commercial from earlier this year that reads, “Some companies just don’t appreciate the power of real conversation.” Real human interaction seems to be the new sacrilege in SaaS.
Where to Go From Here? SaaS 2.0…
I believe we need to learn from the past and bring life back to SaaS by using technology to help us drive down costs and create more fluid transactions, while at the same time using it to reengage with a higher level of service for our customers. Treat them right. Make them feel special again. Win them over.
Companies that create a concierge-like experience are standouts in the customer experience realm. Great examples of these are Uber, Lyft, and Virgin America. When you need a ride, an Uber or a Lyft driver is just a click away on your smartphone to take you where you want to go. Uber makes you feel important when they arrive at your door in a sleek black car, whereas Lyft makes you feel like you’re riding with a friend as the company prides itself on its fun and outgoing drivers. Both services allow you to rate your driver after the ride, an important feature that displays real-time company accountability and value of customer experience. A few feel that services like Uber are too expensive, but people are willing to pay that little bit extra to feel like they are being taken care of. Would you rather ride in a yellow cab that has a $50 vomit clean-up fee (as I saw in a NYC cab) or spend an extra $2 (if that) and take Lyft?
This is a wakeup call for SaaS companies that want to do business beyond Silicon Valley. They shouldn’t underestimate the value of actually going to see the customer and shaking their hand, walking in their shoes, meeting their employees or buying them lunch. The market is fatigued with poor service and the companies that can communicate and build relationships effectively will be the ones that maintain stronger customer retention and ultimately raise their bottom line.
There’s a hole in SaaS that we need to address. Help us out, and don’t be a SaaS-hole.
Jeff Cavins is the CEO of visual collaboration company FuzeBox. Follow him on Twitter @jeffreycavins.