SaaS Customer Success: Outsourced vs In-House Solutions

Outsourcing vs In-house Customer Success Solution

Consider the following statistics:

  • 72% of the businesses say that improving customer success is their number one priority
  • 86% of buyers are willing to pay more if they receive a stellar customer experience
  • More than two-thirds of companies now compete mainly on the basis of CX

Companies are increasingly becoming customer-centric, focusing on long-term locked-in contracts. 

Consequently, this means that they are consistently upgrading their offerings to match the needs of their target audience.

The competition is even higher in the SaaS landscape with customers having more choice than ever. 

Businesses need to find new ways to improve retention and reduce churn. It’s never too late for customers to move on to another company that is providing a better experience. 

This is where customer success comes in. 

Customer success is mainly focused on building long-lasting relationships with customers. It is not only about alleviating customer pain points but also noticing such roadblocks before the customer does. 

If you are an expanding venture, your focus would be on acquiring new customers. 

But over time, you would want to focus on scaling and that begins with ensuring that your customers stay with you.

Many customer-facing organizations outsource their customer success function on a regular basis. 

But should you outsource your customer success functions? 

A difficult question to answer, but if you have a thorough understanding of where you want to be, such a move might just be what you need for SaaS customer success.

When to Opt for Outsourced Customer Success?

Various factors help SaaS-based companies make a move. Below are some reasons that have helped organizations, and can help you, to make the move.

1. You Want to Focus on Your Core Business

Setting up a new business unit means added responsibilities. 

You need to hire, train, and retain talent as well as ensure that they have avenues to upskill. The process is time-consuming, and expensive if you are doing it from scratch. 

Additionally, your bandwidth is limited, hindering your attention to other focus areas. Consequently, outsourcing becomes a natural choice.

2. You Want Faster Growth

Depending on the industry you are in, some business units will be contributing on a bigger scale to the overall business growth. 

This is especially true of product-led ventures where product management holds the business together.

Focusing on every business unit might also slow you down. 

This is where you can outsource your business or specifically sales functions and put your attention in advancing the flagship unit. Simultaneously, your outsourced function would receive similar attention from the agency and grow.

3. You Want to Achieve Business Excellence

Many SaaS businesses often lack the expertise in ancillary units such as customer success, finance, and back office. These BUs then run the risk of staying stagnant, reversing the business growth in the process. 

Hiring an agency that operates in these areas with the highest level of efficiency is what you would need.

4. You are Looking at Long-term Collaboration

When you outsource customer support services to a third-party vendor, you might be looking at a long-term partnership, rather than a quick solution. 

Outsourcing makes sense when you want to keep your customers for a decade or so. 

With an agency handling that function for you, you can focus on optimizing other processes, chart your course for new revenue streams, and achieve better efficiencies.

Why Should You Consider Outsourcing Customer Success?

Why Should You Outsource?

Working with an outside organization to meet your customer success goals is a viable path for your business, especially if you are in the early stage and need guidance from experienced professionals who have been there before. 

1. An In-depth View of Metrics

Many SaaS businesses only look at all-in renewal rates total YoY to assess the effectiveness of their efforts. 

But this approach only measures the total value and provides an incomplete picture if we consider the role of customer success in SaaS. 

When you outsource customer success, your Customer Success Managers (CSMs) will help you understand your value plus volume. They track logins, feature usage, number of support tickets, resolution timelines, survey results, NPS scores, and risk level to provide you with a granular understanding.

2. Utilization of Complex Data

Successful organizations make use of their technology and insights to get a complete view of their business and pipeline. But the lack of a cohesive approach leads to inefficiencies in policies and processes. 

Your CSMs make use of necessary data to address the concerns of the customer, delivering a more holistic conversation where your customer feels heard and their expectations catered to.

3. A Time-saving Approach

Experts who specialize in customer success have examined and operated in the landscape and know it thoroughly. And as they operate in these channels in much larger capacities, they deliver quality service on a better timeline. 

Scalability will not be an issue since they have done all the legwork for you.

And it is not just onboarding where you save time. In fact, an outsourced customer success team can ensure that customer issues are solved quickly and efficiently.

4. More Consistent Communication

A prime way to ensure continued satisfaction is to communicate with your customers outside the renewal cycle. 

Because if you reach out to your customer only at the time of an upsell, chances are that they won’t make a purchase. You can be in a good place if you check in on them every quarter. 

Your customer success team can help you here by standardizing your communication strategies. They would be reaching out to your customers, asking questions and taking in feedback, and providing you with critical insights about your product or service.

5. Making Way for Industry-level Expertize

Perhaps one of the most critical benefits of partnering with an outsourced customer success team is the access you have to their depth of knowledge. Customer success is rapidly evolving and your partner can be the key to understanding this space.

With the right outsourced partner by your side, you will learn about top-notch practices that are dominating the marketplace. 

As you move to have an in-house customer success team, these lessons will help you to scale quickly.

5 Important Things to Consider Before Outsourcing Customer Success

  • By now, you must be considering outsourcing as a viable option to ramp up your customer success function. After all, the option looks preferable compared to building an in-house team. But keep in mind some pertinent points before you make the jump
  • Make a clear assessment of your leadership to decide if they can manage an outsourced account
  • Create a list of key metrics to track and gauge the effectiveness of your outsourced customer success team
  • Evaluate the functions under customer success that you want to outsource. This can range from processes to tools to an entire team
  • The stage that your company is in matters as well. Early-stage companies should refrain from outsourcing as they are still building on customer expectations.

The Bottom Line

Wherever you fall in the spectrum of build or outsource, the value of organizations with a clear focus on customer success cannot be overstated. 

A TSIA report highlights that over 70% of the organizations have established a dedicated customer success function unit in their company. However, the same report also states that establishing and scaling customer success functions continues to be a challenge. 

Outsourcing places a focus on creating a customer-centric business model, where businesses benefit from an increase in ROI and higher customer satisfaction rates.

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