Getting SAASY

A discussion between Juliana Maurlanda and Andrew Visser about how to best manage both the cost of your SAAS apps and the relationship with your suppliers. 

Juliana Maurlanda: So this all started a little while ago.

I wrote a post about managing the cost of all those little apps we love.

Andrew Visser: Before reading this I’d not come across Juliana, but her post was liked by a connection and so appeared in my feed. Most comments were agreeing and liked the suggestions. But the post felt a little ‘off’ to me, so I wrote a reply:

And went to bed thinking that would be the end of it. 

It wasn’t.

 AV: We seemed to agree, but also disagree on some things, so I wrote a response to the response

AV: This also generated a response.

AV: At this point we connected on LinkedIn and after some discussion decided that the format was too restrictive and we should write a joint article where we could go into more detail.

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This is that article…

AV: I had originally penned a longer comment to the original post, but there is a 1250 character limit to LinkedIn comments, so it got truncated. I didn’t keep that original reply - might have gone a little overboard with my inner Marie Kondo…

For me the original post felt a little combative, trying to get one over on the sales-reps and account managers at your SAAS suppliers. Having been a sales rep and an AM many moons ago this struck a chord with me. (As a side note: I think being a B2B sales rep is something that, like working in retail or a restaurant, is everyone should try - it’s harder than you think) The tactics described felt like what you do with your insurance company at renewal time or your ISP when their service drops again. I’m old enough to remember a BS time (Before SAAS), when it was becoming a ‘thing’ it was supposed to encourage partnership between supplier and user by driving value in the things we use. 

If all you’re thinking about is the headline price of your IT then you aren’t thinking about TCO or the value you get from it. If we did that with all our tech nobody would buy the latest iPhone - we’d be using the cheapest thing we could find. We don’t do that - I’d bet at least half the people reading this use an iPhone, and probably a relatively new one. Both the iPhone and the nameless knock-off make calls, connect to the internet, have a camera and have apps and games. So why spend four or five times the amount? Because there is more value in that higher priced phone. It’s faster, more reliable, longer battery life, better camera with more features, more games and apps, etc. Oh, and maybe makes us look a little cooler… Most of us don’t use half the features in our high spec phones. We probably don’t even know many of the features it has. But we’re still paying for them.

I doubt your SAAS apps will make you cooler, but they probably have features you don’t even know about. Some of which might be beneficial to you. Talk to your suppliers.

After doing sales for awhile I got into the details of what the tools could do and became a pre-sales engineer. I’d often have customers who weren’t getting the best from what they owned. The business had changed, people who’d been trained on the tools had moved on and those left were stuck in a tool-rut using 20% of the functionality. Taking the time to talk, build trust, finding out about the business and do a little training got them out of the rut and using more of the tool’s capabilities. As much as I love to have happy customers, this isn’t entirely altruistic. Sales people know that it is far easier to get more business from customers who are getting great value from their tools than to get business from a new customer. They also know that the sugar high you feel from getting a bit of a discount is soon forgotten and the frustration of a poorly understood tool lingers. 

So, sure do an audit of your tools and talk to your SAAS suppliers. See if there’s some function you’re not using. If there’s something you need that they don’t have they can request it, or perhaps they have something in the works and you can beta test it - you’ll get free use of something new and have an impact on how it will work. 

And, if that audit is regularly finding tools you absolutely don’t use, maybe you need to look at your procurement. With SAAS it is very easy to start using a tool on a whim without evaluating if that shiny new tool is really needed, and forget to cancel it after the free or discounted month. I’m sure there are savings for all of us if we did that.

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JM: After our digital duel, I realized I really liked Andrew. 

He brought up some amazing points, 

I got his perspective. 

And it is a great one for bigger businesses. 

As much as I appreciate the value added sales approach and that increasing your time and efforts on existing clients was a better, more fun and efficient way to increase LTV and growth overall, it just did not capture my sentiment. 

I do protect my clients profits with full force.  

But there is a greater context that needs to be understood. 

1. The SAAS market for small business owners is really lacking the S portion, which is the service portion of the equation (I am going to try my hardest to not make an a$$ joke here). For most small businesses that do not fit into the “enterprise column” of the service tier do not get the privilege of building a relationship with their SaaS rep, because one will never be assigned to them. 
2. The SaaS/ app market is soooo fragmented that there is a lack of integration between operational enablement tools. Unless you have the cash flow to shell out 1k in consistent tech overhead with long commitment contracts it doesn’t make sense to have an integrated solution and your back att scotch taping systems together. With different technologies playing API cold war agreements, it makes loyalty to any application difficult. It makes plugging in new a new app with better features and better service easy. As a new app is born in the market place every 20 seconds, that is even easier. If the tech market doesn’t love and respect the small business user’s needs, why should they be loyal? 
3. Procurement. Ha! The idea of the SaaS Chop, is to start to have better cognisance and habits over procurement because it, well quite frankly, does not exist. The more awareness we have over the things we don’t need the better we will become at purchasing. 
4. In order for small businesses and agencies to stay profitable they have adopted flexible team models to protect their profitability. What this means when buying technology is that they are often trying to decide if it’s worth the additional, freelancer or contract worker. How to fit this model of users that expands and contracts into a fixed SaaS model has not been truly solved by the market, either. 

Owners have become much more sophisticated in their approach and knowledge of what they need to run their operation, so instead of shaming them for their continues search for better solutions that will make them more efficient- we should empower and enable them towards a growing market that is learning how to serve them. 

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AV: I secretly suspect Juliana and I agree on way more than we disagree on with SAAS, but since we’re approaching this from different directions we have, if not opposing views, then views that are off by about 90 degrees.

I agree the ‘S’ can be lacking for many SAAS users - providing service to customers can be expensive, and those that only generate a few hundred bucks (quid) of revenue is challenging at best. Most companies use FAQs, twitter and maybe live chat to provide some level of service, but it’s no substitute for a personalised 1-2-1 connection. Finding a cost efficient way of providing that would revolutionise SAAS - I have some ideas about this, but no way of testing if they’ll work or not. 

The fragmentation of SAAS does lead to a bunch of apps and the processes they’re used for being held together with sticky tape and The Force. This is so common, particularly at small companies and start-ups that I think it’s a law of nature. Probably something akin to the Second Law of Thermodynamics: Isolated systems spontaneously evolve towards thermodynamic equilibrium, the state with maximum entropy. In English: things are going to get crazy. There is a lot of inefficiency, friction and frustration in this - something I’ve written about in a different article - none of which are going to help you grow or be profitable. 

So while your SAAS apps might not play well together you can either shell out for someone to keep that chaos under control or pay people like me to come and fix it later.

Power is nothing without control.

Not a quote from Orwell’s 1984, but the slogan from a Pirelli campaign. However I think it applies to more than tyres. SAAS gives us enormous technological power, but without some controls over what gets implemented within an organisation the Second Law will quickly apply. You could easily replace ‘power’ with ‘flexibility’ There needs to be some control on what people are using to get their jobs done. That’s not to say you impose a 1984 style dictatorship, but you need to make some decisions on common tools - regardless of whether they’re SAAS or not. 

Let us know what you think in the comments.

Post Script: Since we had our 'duel' I have moved on and now run my own business to help companies get more from their technology https://www.dhirubhai.net/company/better-process-company and not just SAAS.