As we all know, SAAS caters to a very wide range of audience often trying to solve one problem at a time with each tool in the market but there can be no one solution that could solve all the problems in a single go. To take care of this problem, companies offer something called Professional Services who provide custom solutions such as integrations, migration from a previous system, product customizations as per business requirement etc., at a certain cost per hour.
Why is it important?
While the whole world is shifting from services to a try-before-you-buy SaaS contracts, companies often have started neglecting the level of impact Professional Services could have on the revenue. Here’s some data from top public SaaS companies that implemented this model:
How Professional Services can help you scale:
Targeting SMBs as SAAS customers is quite easy since their processes in place are a simple. Of course you could make more revenue out of it but you are equally at risk of them churning out because money invested in the contract just a few hundreds of dollars. What could you do to escape this vicious cycle? One solution with the least risk factor is to target Enterprise customers. Though these companies are open to subscribing to a SAAS product, there are complex existing systems/workflows in place that need to be integrated and here’s where Professional Services come in – hero of the day, saving a high MRR deal that might have potentially gone down the drain.
Similarly, it also lowers risk of customers churning due to technical aspects as they help in relaunching the solution after customization as per the requirement.
What not to be done by while running a Professional Services Team?
The most common problem teams face is accepting any and all the requests customers put forth – this could lead to unrealistic expectations and solutions that aren’t efficient and it is always better to reject requests if it does not make sense. Although this could lead to a loss in revenue, this will eventually support the company in the long run.
Comparably, with the aim of delivering value, it is the job of professional services team to identify if taking on a project does justice to the product and the customer – asking questions such as, 'Can this be included in the product as a feature?', 'Are there other solutions we can offer other than building a custom web application?’ tc CRMs are a classic example of this scenario. A customer switching from CRM X to CRM 1 might be asked to pay for data migration while CRM 2 might have it as a feature within itself.
In the end, it all depends on what type of market the company is targeting. The goal is to address customer requirement and if it is within your boundaries, Professional Services does the job.