by 
Matt Best 
Bill Bauer
How not having a good Professional Services attach rate in your SaaS business might be causing a 100% increase in churn!
SaaS businesses have typically focused so much on developing something fantastic, and many of them do, but how important is that to your end users and your service adoption?
Our product might be 100% of our goal and focus but, likely, less than 10% of our customer’s. And this isn’t going to change unless you help them!
What makes this even harder is the congestion and fight for the attention of our users across the full spectrum of products and services that they have at their disposal.
The 2023 Gartner Technology’s Impact on Seller Productivity Survey states that a massive 49% of sales professionals are overwhelmed by the Tech they are required to do their job; this sends leadership searching for ways to regain control over their team’s efficiency and effectiveness and often leads to consolidation in the tech stack.
And if that doesn’t do it, when the CFO starts to look at utilisation and your numbers are down, they’ll be asking, “do we really need this?”
It’s not all bad though, Professional Services (PS) might be your saving grace.
How can professional services help?
Statistics from the KeyBanc Capital Markets 2022 SaaS survey, show that the median gross dollar churn percentage for clients of SaaS companies who have a 0% PS attach rate is 13%. Whereas those with a 50% PS attach rate drops to 5%.
The key tipping point however is around the 25% PS attach rate – with the churn rate staying consistently high at 13% for all those clients with <25%, but dropping down to an average of 6% for those with more than 26% PS attach.
In SaaS, Professional Services is often seen as an integration partner or some similar technology partner who helps integrate disparate systems and data sets.
What’s seldom considered is the people change associated with new platform adoption. And it’s adoption and user engagement that makes your product really sticky – try prying a tool out of the hands of your top sales people or CSMs when they can prove that it’s helping them better serve your clients or win more work.
If you can find a professional services partner or build the capability yourself to help facilitate the people change aspect of your deployment and work to help your end users see the value in your service, this will, as proved by the KeyBanc survey, significantly reduce churn and make your product more sticky.
How can you integrate this capability into your business?
Building a PS business within your SaaS company may not be straightforward – do you have the expertise or the capital to invest?
Instead consider looking to those Professional Services businesses which exist in your market, where and how they’re already working with your clients or target market on people-oriented change and transformation.
These PS businesses could represent a productive extension of your existing team, strengthening their capability and presence in the market simultaneously.
This can truly be a win/win scenario.
When is the right time for PS?
It’s not 30 days before the renewal!
To ensure maximum success with a PS engagement, consider how you might include this as part of your upfront deployment efforts – your tool may be the most intuitive out there, but you still need people to change their own habits in order to adopt it.
By having a PS attached at this stage, you can manage a softer landing, with more hands-on support for your client and greater/deeper embedding of your solution in their workflow.
It’s also important to remember that in most cases, the internal client change required to integrate your solution can cost up to 5x more than the client is spending on licensing your service in internal costs. So the cost of this going wrong could be more than significant enough for your client to justify the use of professional services to ensure its success.
What’s next?
So where do you go from here?!
- Look out into your market and see which PS businesses are operating in your space and could compliment your service.
- Engage early and invest up front.
- Enable your go to market teams to understand the value of PS attach and incentivise them to ensure its uptake.
We’ve helped many SaaS businesses along their sales transformation journey. If you’d like to know more about how we could help your organisation please get in touch by emailing info@sbrconsulting.com or call us on +44 (0) 207 653 3740.
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