Not tooo long ago, I was meeting with one of EchoSign’s largest customers. As I was coming, someone else was leaving – Marc Benioff. He’d come (flying private I assume, and possibly straight from Hawaii) to … kiss the customer’s arse, as near as I could tell. The customer already had thousands and thousands of seats of Salesforce. It wasn’t a sales call. It was an in-person, fuel up the jet, arse-kissing call.
It did surprise me. I mean, Marc Benioff doesn’t have to kiss anyone’s arse. He’s a billionaire and the king of SaaS. And most importantly, he has people. Lots of people. Strong people. Who can go do arse kissing for him.
So what was up? It took me a while to process. Then came Dreamforce 2012, the first one I didn’t have to do booth duty in. Which gave me time to reflect. Then, Aaron Levie was kind enough to invite me to sit on a panel at BoxWorks 2012 this year (which was a superbly put on event), and I had a chance to talk to a bunch of customers that for the first ime, I wasn’t myself trying to sell to.
And then it became clear. Customer events are all about maintaining (not creating, but maintaining) attitudinal loyalty (whether everyone realizes it or not). Yes, sales reps will tell you they close the most deals of the year at Dreamforce. I head the same thing from an exec at Cornerstone OnDemand. But I think that’s really secondary.
If you haven’t explored the difference between behavioral and attitudinal loyalty, it’s one of the most important things you can understand in SaaS customer success. Basically, the theory states that customers are loyal for one of two reasons: habit, or habit+they love you.
- The classic example of Behavioral Loyalty is say United Airlines. No one loves United. But the customers are very loyal, in large part because they get hooked on the frequent flyer program.
- The classic example of Attitudinal Loyalty is say Apple. Apple treats us like dirt. Yet, we not only love them. More importantly, we want to buy all their new stuff.
And the key difference market researchers say between Behavioral and Attitudinal loyalty isn’t what you’d expect – the churn rate. The churn rate is actually similar. The difference is the upsell. Brands we are attitudinally loyalty to, we want to buy more stuff from. Apple comes out with a TV? We’ll take a look for sure. United comes out with a car rental program? No way I’ll waste 5 seconds looking at it.
And in SaaS, brands we are attitudinal loyalty to, we buy more from. We take site licenses. We buy more seats. We buy more modules, e.g. for Salesforce, the Service Cloud, and now, the Marketing Cloud. You may or may not buy. But if you are attitudinally loyal — you will take a look.
Ok, so what does this have to do with Dreamforce, BoxWorks, and Benioff’s courtesy call?
Well, here’s what I think happens with SaaS. You need to structure your team to evolve this way:
- At first, your customers buy your product because it is better. Often, 10x better than what is out there. Otherwise, why change?
- And in the beginning, they are in fact attitudinally loyal by definition. They bought something 10x better. It’s cool. They love your brand, so long as you keep adding cool features, and your site stay up.
- I think that works for about 12-18 mos. Great product = great success for your buyer/champion = attitudinal loyalty.
- And then … you have to kiss some arse. At least in the enterprise. You gotta get on a plane, and go kiss some arse. And for those you can’t get on a plane … you need a Dreamforce or a BoxWorks, or for EchoSign, a WebContracts conference. Whatever.
You can upsell in the first 6-18 mos. without it. But after that, you need to keep the personal connection going to maintain attitudinal loyalty. You don’t have to get on a plane. You’ll probably keep the customer due to behavioral loyalty. But they’ll fall out of love, and you’ll find it hard to sell them anything more, or anything else.
(Cross-posted @ saastr)