the future of saas is on-demand: use experts to drive growth and engagement

The Imperative of a Gig Economy Strategy for SaaS in 2021

For Software-as-a-Service (SaaS) businesses, neglecting a strategy centered around the gig economy as 2021 progresses is akin to overlooking the rise of the internet in 1990 or missing the shift towards mobile technology in 2010.

Revolutionizing Customer Experience with On-Demand Expertise

Currently, prominent SaaS companies are leveraging on-demand specialists to fundamentally change how customers interact with their services. This approach is demonstrably boosting revenue streams and improving post-sales customer retention rates.

Furthermore, the insights gained from these interactions are being utilized to refine and enhance product development. Staffing Industry Analysts (SIA) estimate the global gig economy is rapidly approaching a $5 trillion valuation, fueled by the ongoing digital transformation of project-based staffing.

The Trillion-Dollar Tech Services Market

Industry leaders such as Amazon AWS and Qualtrics have been actively investing in on-demand expertise for several years. A 2019 report by Million Insights predicted that the tech services market would reach a value of $1 trillion by 2025.

This substantial growth is largely attributable to the increasingly emotional nature of consumer behavior.

The Power of Brand Attachment

A 2013 Gallup report revealed that customers with a strong emotional connection to a brand spend 23% more than other customers of the same brand.

The Cost of Disengagement

Conversely, a 2015 study by The Economist Intelligence Unit found that over 80% of executives believe their companies lose potential sales annually due to inadequate customer engagement.

Enhancing Engagement and Gathering Insights

Integrating human experts directly into software solutions allows companies to connect with customers more effectively, resolving issues with greater efficiency and personalization.

Simultaneously, valuable data is collected regarding how to improve product intuitiveness. This represents a mutually beneficial scenario, but requires a shift away from the assumption that solely adding new product features will address all customer needs.

Feature Utilization Rates

In reality, over 80% of newly released product features remain unused.

Examples of SaaS Leaders Embracing the Gig Economy

Leading SaaS companies are already actively participating in the gig economy.

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The Limitations of Software Alone

Software companies prioritize the release of new products and features to deliver cutting-edge technology and gain a competitive advantage.

However, despite their best intentions, a significant number of these features fail to generate meaningful customer engagement. This is because, regardless of how sophisticated the software is, its capabilities are inherently limited.

Often, new features are simply insufficient when it comes to fully understanding and resolving the customer’s underlying problem.

Four Core Drivers for On-Demand Experts

There are four fundamental reasons why on-demand experts are now essential for any business.

The Critical Importance of Customer Retention

Modern customers, facing significant time constraints, often struggle to fully grasp and utilize the complete range of features available within a product or service.

It's common for users to engage with only a small fraction – frequently less than 20%, and potentially as low as 5% – of the total functionality offered.

This limited adoption directly hinders both customer retention and the potential for service expansion, as perceived value is diminished when capabilities remain unexplored or unknown.

The Financial Benefits of Retention

The financial advantages of prioritizing retention are substantial and should not be underestimated.

Research published by the Harvard Business Review demonstrates that even a modest 5% improvement in customer retention rates can lead to profit increases ranging from 25% to 95%.

Therefore, focusing on enabling customers to maximize their use of a product is paramount to achieving sustainable growth and profitability.

The Demand for Immediate Results from Customers

For businesses aiming for growth and enhanced customer service, understanding customer intent and pinpointing their desired results is crucial. However, individuals typically don't communicate these needs clearly when interacting with automated systems; societal conditioning often discourages such directness.

This disparity is readily apparent when comparing how people phrase queries for search engines – highly sophisticated algorithms – versus their interactions with another person.

The contrast is significant enough to inspire online humor, exemplified by memes like “if Google was a guy.” Human specialists excel at deciphering customer intent and recognizing desired outcomes.

They can assist customers and allow businesses to swiftly identify and address valuable unmet needs before competitors do. Essentially, demonstrating empathy holds greater importance for individual customers than continuous product improvements that frequently fail to align with actual requirements.

The Importance of Understanding Intent

Successfully scaling a business relies on a deep understanding of what customers are trying to achieve. Customers rarely articulate their needs explicitly to technology, a behavior reinforced by years of interacting with machines.

Consider the distinct ways people communicate with artificial intelligence compared to human representatives. This difference highlights a fundamental disconnect.

Human Expertise and Competitive Advantage

The ability to interpret customer intent is a uniquely human skill. Experts can translate unspoken needs into actionable insights.

This allows businesses to proactively identify and resolve critical gaps in service or product offerings, gaining a significant advantage over competitors. Prioritizing customer understanding over simply releasing new features is often more effective.

The Significance of Structured Digital Data

We now live in an age characterized by an abundance of readily available data. However, this wealth of information can often lead to misdirected analytical efforts and optimization strategies. Structured customer intent data, derived from Enterprise Intelligence (EI), represents a distinct signal.

This unique signal empowers the development of sophisticated AI/ML solutions specifically designed to enhance customer experiences. A compelling illustration of this principle can be found in the operations of Stitch Fix, a fashion curation platform.

The Stitch Fix Model: Blending AI and Human Expertise

Stitch Fix leverages intricate algorithms for a variety of tasks. These include pairing customers with suitable stylists and generating prioritized lists of available inventory.

Despite the power of these algorithms, human stylists are central to the decision-making process. They apply understanding of social conventions, adaptability, and interpersonal skills – all facilitated by a bespoke interface.

This interface is engineered to maximize stylist efficiency and simultaneously provide the company with real-time feedback for algorithm refinement.

A Collaborative System for Continuous Improvement

The interplay between human stylists and computer systems at Stitch Fix fosters continuous improvement across multiple areas. These include algorithmic styling accuracy, stylist training methodologies, and the interface itself.

This symbiotic relationship ensures ongoing optimization of both the technological and human elements of the business, leading to a more effective and personalized customer experience.

The Rise of Hyperspecialization

A growing trend indicates a shift towards increasing specialization, particularly as technology firms concentrate on specific market segments and offer highly focused solutions. Generally, broad-based, horizontal platforms eventually encounter limitations as they achieve scale, a phenomenon illustrated by the widely recognized unbundling of Craigslist.

Andreessen Horowitz posits that platform expansion leads to the growth of its constituent submarkets. This expansion often results in a diluted product experience, catering to the broadest possible audience. Consequently, users become dissatisfied, and previously overlooked niche markets become viable opportunities for new, dedicated companies.

Technological innovation frequently outpaces our capacity to effectively implement it. Therefore, incorporating human expertise into critical decision-making processes serves as a safeguard against potential downsides. Often, the challenge isn't a lack of user understanding, but rather a lack of perceived need for a particular feature or update.

The Value of On-Demand Services

On-demand support services can effectively pinpoint customer requirements, delivering value precisely when and how it’s desired. This approach allows for a more refined understanding of user needs. It helps to avoid wasted development efforts on features that ultimately go unused.

Specialization allows businesses to focus their resources and develop deep expertise within a defined area. This focused approach can lead to superior product quality and customer satisfaction. The trend towards hyperspecialization is reshaping the competitive landscape.

• Horizontal platforms often struggle with scalability.
• Niche markets present opportunities for new companies.
• Human expertise is crucial for responsible technology implementation.
• On-demand services refine understanding of customer needs.

Ultimately, the future of many industries will be defined by a move away from generalized solutions and towards highly specialized offerings. This shift will require businesses to adapt and embrace a more focused approach to product development and service delivery.

Connecting Human Insight with Digital Solutions

The increasing demand for specialized knowledge and readily available experts highlights the significant value of human expertise in addressing customer challenges. Establishing digital trust is paramount to leveraging this value, necessitating the provision of highly skilled professionals capable of delivering reliable, consistent results alongside a personalized approach.

A crucial step involves enhancing our ability to understand customer needs and desired outcomes. Instead of solely focusing on popular search queries and overwhelming users with irrelevant online content, we must prioritize the swift and effective delivery of expert guidance. The increasing preference for direct human interaction is becoming increasingly clear – customers are stating, “I want to speak with a human!”

Providing on-demand access to expert knowledge recognizes the inherent distinctions between human-to-human and human-to-machine communication. This approach offers a solution that effectively bridges this gap, fostering differentiation and competitive advantage, while simultaneously providing software development teams with valuable insights for improved customer service.

Experience demonstrates the effectiveness of this model when implemented correctly. While at Microsoft, the launch of Microsoft Experts provided unprecedented access to customer insights. Currently, MURAL’s evolving on-demand strategy is empowering our members to unlock their creative potential and collaborate with teams in innovative ways.

Therefore, it’s essential to consider: What form does your organization’s on-demand support system currently take?