What Every Cloud Vendor Knows (Or Ought to)

Last week while I was the Gartner Portals, Content and Collaboration Summit, I noticed a sea change when I talked to vendors, especially cloud vendors who rely on subscription revenue. They invariably told me they have to help their customer succeed or they can just move on at the end of the contract.

This has shifted the power in the sale from vendor to buyer and vendors are taking steps to ensure their customers are satisfied and successful using their products.

It’s always been in any vendor’s best interest to make sure their customer succeeds of course, but this notion has become much more pronounced in the age of the subscription model. While it may not be a simple matter to move from one cloud vendor to another, chances are it’s easier than it would have been to rip and replace bad on-premises software –and cloud vendors clearly recognize this.

And the end result is a lot more hand-holding to ensure success and the creation of executive titles like Chief Customer Officer to show just how serious they are about this.

In fact, last week when I spoke to Anthony Foy, CEO at Workshare, a company that helps law firms and others manage, secure and collaborate around documents, he said it’s imperative to work with customers to make sure they are using the tool optimally, integrating with other systems and generally taking advantage of the functionality the tool offers them.

To that end his company has created a C-level position called Chief Customer Officer and offers two types of customer support: one that is reactive to answer customer inquiries, but they also have a customer success department that proactively looks for ways to engage with the customer and help them succeed.

“It’s about change management and making a conscious decision to set up a customer engagement process,” Foy explained.

Whitney Bouck, senior VP and general manager for the enterprise at cloud storage and collaboration startup, Box, says she has been saying for some time that it’s imperative for cloud companies like hers to create a partnership with their customers to ensure customer success because even though switching vendors usually comes at a price, it’s much lower than it used to be and as such the barrier to switching is much lower than it once was.

Bouck says while they are careful how they hand out c-level titles at Box, they do have a senior VP in charge of customer success, Jon Herstein. Bouck told me that Box assigns a free customer success manager to every account that has more than 50 licenses.

They also have various levels of consulting services to work with customers on more complex problems around integration and usage.

“The vendor has huge responsibility to make sure customers are happy and successful,” Bouck told me.

David Goldberg, a senior technology executive, who was speaking at a session on transitioning to the cloud last week at the Gartner PCC Summit encouraged customers to form a partnership with their cloud vendors, and let them know what they want and need from the product.

“Help them understand what you need and drive features. If you can be urgent enough with your needs, you can drive those [changes] to you much faster,” he explained.

It’s also important to remember that cloud sales don’t necessarily go through IT, and cloud vendors recognize this shifting sales dynamic. As such, Scott Kuport and Preethis Kasireddy pointed out in a recent Andreessen Horowitz blog post that there is an even more pronounced need for good customer support.

“In many cases, the departments forge an even closer relationship with their SaaS customer support rep than they do with their own IT,” they wrote in the blog post.

It is worth noting that Kupport and Kasireddy wrote in their blog post that switching vendors might not be a trivial matter precisely because it’s not in the IT realm anymore. “Because SaaS usage is at the departmental level, there are often many more users in a company than there have historically been from traditional software products, making switching costs even higher,” they wrote.

As a result, long before the sale happens, customers will be looking at how well these vendors support them, and if they don’t prove helpful enough, they may never even get as far as the sale.

That’s why every cloud vendor knows customer support is key when it comes to customer acquisition and retention –and for cloud vendors retaining those customers once they get them is essential to their business model.