More than half of Nordic SaaS companies do not keep track of their customer loss
Nordic Software as a Service (“SaaS”) companies need to focus more on a data-driven approach to Customer Success Management (“CSM”) to improve their business performance. This is one of the key findings from the CSM Survey Report 2022 conducted by leading software investor Main Capital Partners (“Main”). While 98% of the survey participants have a dedicated customer success function in their company, only 45% track churn activity on a monthly basis. The rest of the companies surveyed track churn yearly (32%), quarterly (4%) or not at all (19%).
“These findings are sub optimal and even alarming”, says Wessel Ploegmakers, Partner and Co-Head of the Nordics activities for Main Capital Partners. He added: “This said given the survey results show that 2 out of 10 companies have a churn rate of 8% or higher. In general, any rate higher than 4-5 percent should raise red flags, meaning the root causes urgently need to be researched.”
Customer success as a growth engine
Main Capital Partners conducted this survey to track the progress of the relatively new Customer Success Management function in the Nordic SaaS market. The results are clear: companies definitely have CSM high on their agenda and rightly so, says Ploegmakers. “Customer success and loyalty are among the key value drivers for SaaS companies, which rely for a big part on subscription-based revenues. Ensuring the optimal adoption of your SaaS-platform, while creating added value for your users is essential to preventing customer losses and driving growth.”
9 in 10 companies were found to have a structured onboarding programme in place for new customers. More than half of these programmes are highly differentiated, based on customer segmentation. Satisfaction is measured in detail, primarily through KPI’s like churn (57%), usage metrics (49%) and Net Promoter Score (34%).
Additionally, customer vendor relationships are strengthened through loyalty programs by almost 9 in 10 companies. However, some key elements of effective CSM are not yet properly embedded with churn tracking being one vital metric while personalisation of customer interfaces remains poorly tracked with less than half of the companies responding saying that they can demonstrate a highly or completely adaptive user experience.
CSM as part of the sales operation
CSM can also benefit from a clearer position within organisations. According to the survey, 45% of the companies stated that their CSM team sits within the sales department. This poses a significant risk, according to Wessel Ploegmakers at Main. He added: “The downside of integrating your CSM into your sales department is that sales tend to overrule customer success rates. The fundamental need to sell often impacts the objective to add real value to your customers.”
Main Capital Partners’ cross-border industrial network covers over 5,000 software companies in the Benelux, DACH and the Nordic countries with whom knowledge and experience is shared and analysed. Main chose to focus its latest industry survey on the development and current state of Customer Success Management – the function widely described as the future growth driver for SaaS companies in the Nordic region. The results reported came in response to 26 questions asked by Main Capital Partners to 53x C-suite managers at SaaS companies in Sweden, Norway and Finland. Many of these participants were present at the Main Insight event in Stockholm on November 18, 2021. Read more here.
CSM Survey Report 2022
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