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Why SaaS implementations fail: 11 customer implementation mistakes to avoid
The customer was understandably unhappy. Clearly, they weren’t getting the value out of the product that was promised during the sales cycle. Even worse, since the subscription starts at signature, they were stuck paying for two products.
How did things get to that point?
First, the company was a startup that was eager for a sale, so the CEO at the time had promised customized features that hadn’t been built yet to close the deal.
Second, no professional services team existed yet. That means the company was dependent on the development team to deliver those customizations.
Finally, these features weren’t on the roadmap. So, the product team instructed the development team that these promises were not a priority.
Yet the problem remained: these customizations were necessary to go live with the product. The customer was growing more impatient and had started taking out their frustrations on the customer success manager (CSM).
The 11 stumbling blocks of SaaS implementations
This might sound like a heck of a way to start a new job, yet it’s also not uncommon, particularly among startups. Many young companies simply don’t yet have systems and processes in place for many aspects of their business, let alone implementation.
With decades of experience in customer-facing roles, Jeff, who today is the CEO of Infinite Renewals, a management consulting firm, has successfully navigated many of these stumbling blocks over the years. In his presentation at BIG RYG, the Customer Success Leadership Conference, he identified 11 such issues that seem to happen more frequently.
1. Weak definitions of onboarding and implementation
Jeff believes the term “onboarding” is “too squishy” and hard to track with metrics. It can wind up being a paper “checkbox” exercise. Further, onboarding can be a continuous process lasting all the way to renewal.
By contrast “implementation” should be one distinct phase. It starts when a contract is signed and ends when the customer is live. A clear implementation timeline means it’s easier to map the implementation process to metrics. More importantly, it answers a burning customer question: “When can we turn our old vendor off?”
2. Implementation is often perceived as “free”
Businesses should charge for implementation, Jeff says. He admits this is mildly controversial, however, he says things that are perceived as free are not valued.
As a result, implementations aren’t measured closely and wind up sucking up more resources and time than they should. Charging for implementation fixes much of that from the beginning. Implementation fees can also be used to fund new hires dedicated to implementation.
Jeff recommends two techniques for handling objections to charging for implementation: sales should get non-quota commission for implementation fees and CFOs should treat revenue associated with implementations as non-recurring.
3. Customers with no sense of urgency
This is related to the previous two stumbling blocks, but it happens enough that it merits being called out separately. When a customer doesn’t have a sense of urgency, they start skipping important deadlines for meetings or tasks, which slows down the project.
If you define implementation as a separate task with a clear timeline and associated fees, it gives you leverage when the customer has no urgency. For example, you could charge additional fees if client requirements push you beyond the standard timeline.
Jeff says he’s never actually done that—he’ll waive the fees—but merely having them in place—reinforces the notion that implementations do take up resources with real costs. In turn, they bring a much-needed sense of urgency from all parties involved.
4. The customer is a “bad fit”
Any customer outside the ideal customer profile (ICP) is often referred to as a “bad fit.” The blame gets unfairly placed on the implementation, when really the product was designed for customers of a different nature.
Some of the investors at SaaS Capital have noted in their customer retention benchmark report this happens a lot among early-stage companies. They are so focused on new sales they are willing to close deals with anyone willing to write a check. As a company matures, this will eventually show up as churn in your gross revenue retention (GRR) metric.
Source: “Retention Starts in Implementation” workshop at BIG RYG by Jeff Kushmerek
5. Customer success is not involved in pre-sales
Customer success, or a solutions architect, should have an opportunity to engage with the prospect before the contract goes out. These functional experts can identify potential problems that will require additional resources.
Jeff gave the example of a customer needing a certain integration that a SaaS provider did not have. If the contract is pushed forward before discovering that, you might be on the hook to build the connector, much like the anecdote in his presentation opening.
Salespeople will push back on the notion that customer success should be involved in pre-sales. However, Jeff says salespeople have a vested interest too because they are who the customer will call when they realize the product can’t go live.
Many of these problems are identified early on and avoided when customer success is part of the pre-sales process.
6. Customer facing teams are not aligned
Everyone needs to be aligned with the implementation plan. That means sales, customer success and any customer-facing team that will be involved in the process.
You need the right people in the room to ask the right questions to scope a project properly. This is the time and place to identify any pitfalls and come up with a plan to address them.
7. Improper handoffs between sales and customer success
If the sales team is responsible for securing the deals, customer success becomes responsible for delivering on any promises made. It’s crucial to have a good handoff and review the contract, costs, deadlines, deliverables and anything else that was involved in winning a customer. Customer success should never be blindsided by a problem, or potential problem, the sales team knew about in advance.
8. Product dependencies
Product dependency was the root cause behind the story in the beginning of this post. It’s when a customer has a dependency on some sort of code—whether a customization or an integration—before they can go live on the product.
Most SaaS companies have a clause about this in their contract, but knowing dependencies will help you understand scope, level of effort and costs in advance. In turn, this will help manage expectations and ensure the implementation goes smoothly.
9. Executive leaders demand you “just get it done”
No one would jump out of an airplane without first checking their parachute—yet that’s effectively what leaders are doing when they say things like “just get it done.” Implementation is a process that can help customers get started properly and renew or languish and draw down resources for an ill-defined implementation plan that leaves customers unhappy. One “just get it done” will lead to another, leaving the team overwhelmed and feeling burned out.
10. Team members onboard customers differently
The best implementations are standardized, repeatable and scalable processes. Everyone cannot be off doing their own thing. Sure, some customers have unique requirements, but these should be exceptions. If they aren’t, it might be time to revisit that ICP.
Jeff suggests SaaS companies develop three primary implementation plays—small, medium and large—based on their level of effort and resources requirements. Each play has a certain cost and timeline. Anything that happens outside of those standard plays will require professional services, which costs extra.
11. Implementation teams not staffed appropriately
The lack of staffing for implementation teams is often directly correlated with the perception that implementation is “free.” The reality is that implementation isn’t free, it requires resources that come at a cost. Charging a fee for implementation will provide the budget to put the right team in place.
So how did Jeff handle that situation described in the beginning of this piece?
He and the team called for an internal realignment meeting. Everyone—including the CEO—got together to walk through the problem and plan a path forward. If a decision needed to be made, all the key players were there to make it happen.
“Essentially, we just walked through this internally, and figured out what we needed,” said Jeff. “At the end of the day, the customer signed up thinking they were going to get something that would solve their business problems, so we have these realignment meetings to figure out what’s the best way to move forward.”
Once the team was aligned internally, they got with the customer. They acknowledged their faults and presented the plan for getting the product live. The team made it clear that the past was the past and this was an effort at a fresh start.
If you enjoyed this article, you may also like, “How to nail implementation and customer success handoffs.” You’ll learn why a handoff is more than a mere passing of the baton, but a process that requires meticulous planning and documentation, the involvement of CS early on, and a deep understanding of the customer’s needs and expectations.