One of the best things about selling software as a service (SaaS) or cloud-based applications is the lower barrier of entry. By not having to make the substantial, up-front investment associated with premise-based solutions, customers can defray costs over time and adopt new technologies without significant capital outlays. Unfortunately, with this blessing comes a curse—the need to make sure customers renew every year.

The most important renewal is after year one, when customers look back for the first time and review whether or not the utility derived from the purchase justifies continued investment. If they conclude that they haven’t made good use of the software/service, renewal is unlikely. When customers don’t routinely renew, their potential lifetime value can never be realized, the cost of sales will remain high, and the goal of an annuity-based business model is unobtainable. As such, we have a challenge: How can we ensure renewal by making sure customers have a positive adoption experience and find real value in our software/service?

A helpful way of tackling this problem is to look at how successful organizations land customers in the first place. World-class sales organizations understand and implement the concept of sales-cycle/buy-cycle alignment. To achieve this, critical steps in the typical prospect’s buying process are identified and mapped to sales activities that lead them through those steps toward a positive purchase decision. A well-designed sales plan will tightly coordinate the selling methodology that guides sales team behavior with the purchase-decision rationale that dictates the behavior of top-tier prospects (for more discussion of sales-cycle/buy-cycle alignment see our Sales Productivity Blueprint on building a successful sales plan). Here’s a diagram to illustrate the concept:

While this may represent the complete sales process for many products, it is woefully inadequate for SaaS or subscription-based services. Without further action, we are leaving customer adoption—and the likelihood of renewal—entirely up to them. To fully realize a customer’s potential lifetime value we must consider their full experience of purchasing and using our software/service. We need to expand our thinking of customer acquisition to include steps we can take to ensure their adoption and successful use of our software/service.

We can leverage the sales-cycle/buy-cycle approach to do this through understanding the customer’s adoption process and developing an onboarding process that aligns with it. This requires first identifying those customer activities that lead to widespread adoption and full utilization of our software/service. Some questions we can ask are:

• “What will customers most value about our software/service?”
• “What barriers are they likely to run into?”
• “Are there particular successes early in the adoption process that can help build momentum?”
• “Who/what roles in their organization might play a critical role in adoption?”
• “How will the customer track adoption and utilization?”

Next, we need to determine what we can do to influence the customer’s behavior in a manner that will move them toward successful adoption. Questions to ask include:

• “How can we help their internal communications to get the word out on what our software/service can do for them?”
• “What can we do to help them overcome anticipated barriers?”
• “What early wins should we target?”
  
• “What sort of guidance can we provide to facilitate the adoption process, particularly tips on who in the customer’s organization should be involved?”
• “What metrics can be established that will track adoption and how can we report this back to the customer?”

By clearly documenting the typical customer’s adoption process and what we can do to positively influence it, we are now in a position to define a methodology for onboarding them. Here’s a diagram of what this will look like:

By developing a well-disciplined, onboarding process in this manner, we can have a significant, positive impact on the customer’s overall experience of learning how to get the most out of our software/service. Most importantly, we are not leaving the fate of our renewal sales efforts to chance. Under this expanded framework of how we think about acquiring customers (diagrammed below), the goal of the second phase (i.e., after the initial purchase) is to have them conclude that they can’t live without our software/service when it comes time to renew. If users routinely adopt your solution and you’re already enjoying high customer retention rates, this expanded customer acquisition model can be reserved for customer whose usage rate starts out low or suddenly drops (you are regularly monitoring this, right? — for further discussion of how to protect renewal sales by tracking customer activity, see our earlier post on the topic).

An Expanded View of the Customer Acquisition Process

Who should manage the customer onboarding process depends on how your organization is structured. It may be the service delivery team, marketing may play a role, or it may be up to sales/sales operations. In any event, making sure that such a process is in place is vital for the company’s sales success. As people intimately involved with the first phase of landing a customer (i.e., the initial sale), sales operations professionals are in an ideal position to provide valuable input to the development and implementation of a successful customer onboarding program. Moreover, if one does not exist, you have an excellent opportunity to make yourself a hero to the sales team by leading the inception of one.