Churning and burning
Recently, I saw a tweet from an influential SaaS pundit. In this tweet he was slamming a well known B2B SaaS company he had bought from. He instructed his followers to “never buy” this product. This influential SaaS guy heads up an influential organization that signed a two-year deal with the SaaS vendor in question. He was raging that the second year billing hit his credit card “without permission”. He goes onto justify that “We are not even using the product...”
I know a bit about both the parties involved here. The vendor-company provides a top-rated product used by thousands of companies. The pundit/customer most definitely has broad reaching use cases for that product. In this argument, I found myself drawn to defend the vendor; after all a deal is a deal and these are both sophisticated parties. Imagine if you applied the same rant to your car lease, “Hey Nissan, I leased a car and didn’t drive it all winter, so I don’t feel like paying!”.
The truth is there are entire classes of B2B software that can’t generate value if the buying organization does not use the products. The CX departments of those B2B SaaS companies burn a ton of effort training new customers, driving best practises and being proactive with every customer stakeholder. They know customers get results with their product, but those customers need to adopt that product first; at least in part. Bottom line, those SaaS vendors often don’t make money until year two of a contract. And neither party succeeds if the product goes unused.
I think that is what happened in this case. And I was mad that the pundit’s first move was to publicly decimate the vendor’s brand. It’s a bit like paying for a gym membership with a full complement of trainers, and then never going to the gym and complaining loudly that you got no results. The more intelligent public challenge would have been to advocate for a different pricing model; perhaps one where usage is rewarded with value more incrementally. That is pretty rare in enterprise B2B SaaS and probably for good reason; so many of the initial costs are born by the vendor. Still, I think a lot of things can be solved with better pricing and lack of adoption is a terrible failure shared by both parties. So, it’s worth continuing to explore how to optimize. This is way better than just complaining about it.
