It is said that for SaaS businesses, it is 6 times more difficult to gain a new customer than to retain an existing one. These companies recognize that customer retention is paramount to their ability to stay relevant and even thrive. But what’s the magic formula that retains customers and prevent churn in SaaS companies?

There are always going to be problems with new releases of software, issues with implementations, and even overlooked customer concerns. The most critical determinant of your customer’s satisfaction and even their decision to stay or go, will always be in how your people interact with them when things go wrong. Only this can tip the balance in your favor and retain that customer.

Leaders think about and are challenged by perfecting the client experience to prevent churn. They almost always associate success in this area with hiring and training the right people and providing copious amounts of product knowledge and customer service training. But this is only part of the winning formula.

Spend a couple of years sitting right across from the client success team in a SaaS company and you begin to notice the attributes of the most successful agents. Those that are making the difference are ones that have a strong sense of purpose along with a formidable work ethic.

Those individuals are engaged in fighting for your success every day. Let’s be very clear, these people don’t say they are engaged, they are genuinely engaged and find meaning in trying their best to make your business more successful.

Unless your people are prepared and willing fight the good fight and wow customers in their daily interactions, those customers are not going to feel your love, no matter how much product knowledge and client success training you provide.

People with this sense of purpose are the bloodline and conduits of empathy. They make your clients feel appreciated and yes... loved. These high purpose people can smooth almost any issue because they are able to make your customer feel that they are well cared for.

Dr. Tim Baker, thought leader, consultant and author, wrote in 2018 about the Characteristics of high performing teams. He sighted a sense of purpose as a fundamental attribute of a high performer.

Individuals with a sense of purpose have the motivation that drives them toward a satisfying future. And a satisfying future inevitably includes doing good work every day.

So why aren’t hiring managers interviewing for “a sense of purpose” when hiring? In the SaaS space, this should be an important element of a broader people strategy.

When leaders begin to look at their employees in a more holistic way, they will realize how important it is to have the right people strategy to promote the amazing behaviors and attitudes that can catapult their business towards greater success and profitability.
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Published by

Ana Alfonso Pagliery, CEO/Board Executive

Helping clients buy, sell, separate, integrate, reshape, restructure or rethink their businesses, while achieving financial success. M&A | Investment | Partnerships​

Walk into any company and you'll see and feel the company's culture
brimming all around you. From the way you're greeted, the people you meet
with, and the way you are escorted during your visit, everything is the culture. That is because culture permeates and touches every aspect of the business,
and in doing so, becomes what employees, visitors, vendors, suppliers, 3rd
party service providers, customers and even competitors experience.

A company's culture starts early and grows organically. It is fluid, continuously
changing and strategically valuable. Behaviors, attitudes and mindsets over
time become habits and those habits shape the culture. Good habits are
favorable and bad habits are destructive. If you permit bad habits to take root,
they are difficult to reverse later on.
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Culture withstands adaptability, scalability, and unexpected market changes,
but only if the culture is at the forefront of priorities top to bottom and across
the organization.

Company executives are often concerned about whether they have the right people onboard. A recent CEO survey reports that a large percent of chief executives view talent and skills as the most important predictor of business success. But, hiring for talent and skills alone, without a focus on culture fit, is a recipe for subpar team performance that leads to turnover.

As Jim Collins, author of the book Good to Great points out "You have to have the right people on the bus." Once the wrong people are in, they can take down team performance and over time weaken the organization.

Yet, the wrong people are on the bus as the direct result of expedient and reactive hiring. Managers, trying to fill open positions, are largely left to figure out what the jobs require. Interviews focus on technical ability, but are not assessing “fit with culture,” an important criterion in hiring for performance.

Well-known recruiter Jörgen Sundberg puts the cost of onboarding an employee at $240,000. And, according to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of the employee's first-year earnings. For a small company, a five-figure investment in the wrong person is a threat to the business (Forbes).

Netflix is a team management company. They don't sugarcoat the importance of team performance as a condition for continued employment. It is this precision and management style that allows Netflix to pivot with market changes and remain resilient. Throughout, the company has always placed strong emphasis on hiring people who fit well within the team.

It's easy hire the candidate that seems most highly qualified. But hiring a superstar can be a mistake if they will be detrimental to the team's cohesive dynamics.

In fact, if a superstar is not a good fit for the team you should move on to the next candidate, until you find the right fit.

Growth companies specially should be attentive to fit as they scale.

​The idea that "internal competition is healthy for a company" is a myth (Forbes).

Internal competition breeds negative competitiveness, and this can be damaging.

Individuals with a "me" vs. "we" mindset take "your failure makes me look good" actions that are destructive to the team. These people are dangerous because once they get in they can rip the company from the inside and slump performance.

Demand independent thinking and risk taking because this is key to company
performance. However, make sure the team reaches consensus in decision
making and every team member has a chance to contribute.

Leaders have to be intentional and unafraid about diversity of ideas and
failure of trying new concepts. Teams with such leadership are 17% more likely to achieve high performance, 20% more likely to make quality decisions,
and 29% more likely to work collaboratively (Julie Bourke, author).

Take a page from the pros. In sports, signing athletes who operate with a "we"
mindset benefits team performance and ultimately the club. The same is true
in business. A "we" team member that values team performance over
individual accolades, helps the company succeed.
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Practice hiring for "we" as you add or replace team members and watch
productivity soar. 

Hiring independent thinkers that actively question and explore other options, prevents team stagnation and improves the quality of team decisions.

The best employees are not "yes" people. Create a safe space for people to question the process and voice their views. You want people who can rip up the plan and pivot while still delivering quality work (Reid Hoffman, co-founder of LinkedIn).

​Published by

Ana Alfonso Pagliery, CEO/Board Executive

Helping clients buy, sell, separate, integrate, reshape, restructure or rethink their businesses, while achieving financial success. M&A | Investment | Partnerships​

You've heard people say “anything is possible with hard work, talent and perseverance." However, there is a fine line between thinking something is possible and wishing it was possible. What tilts the balance is taking action. A mindset that does not slip into inaction is the key to successful attainment of possibilities. Without this, even great possibilities become just wishful thinking.
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In 2020, take action to maximize your possibilities and achieve what seems impossible

Over the past few years there has been a marked increase in the rise of growth companies across the globe. As they scale, these companies must ensure they have the right people and systems in place to maintain their speed of growth.

Culture, a key differentiator for these businesses, can be difficult to manage when a company scales from 10 to 1,000 employees.

CEOs and investors, concerned about the long-term impact of culture on corporate performance, are taking steps to ensure they are promoting the right mindsets, behaviors and attitudes to evolve culture and avoid problems.

No longer a "nice to have" benefit for growth companies, culture has taken center stage as a key metric in valuation.

• High turnover
• Incremental poaching of your top employees
• Difficulty recruiting
• Lack of positive image in the community
• Dissatisfaction of current workers
• Lack of communication and alignment
• Recruiters are unable to supply good candidates
• Excessive employment risk due to a toxic environment
• Disagreements among leadership
• Teams, leaders or managers lack management skills
• Difficulty closing sales and retaining customers
• Misalignment of vision and values
• Compliance issues

Your company culture is not only vital for growth, but defines competitive advantage and ensures the business has a favorable reputation in the eyes of employees, customers, prospects and investors.

 What's your company doing to evolve culture? 

According to a recent Glassdoor Survey 3 in 4 candidates consider culture the top differentiator when seeking job opportunities, Glassdoor surveyed over 5000 individuals, and more than half prioritize culture over compensation.

Over 90% of managers believe their organization’s performance management process does not correspond to the actual work done by their teams. Consequently there is a significant dissatisfaction with performance evaluations.
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​HR has struggled to address this challenge, using numerous methodologies and solutions, such as continuous performance management, pulse surveys, OKR and so on. Yet, none of these methods have been effective. This is because rater bias and challenges with adoption hinder the value of most methodologies and discourage quantifiable results in performance management.

Performance management becomes about the work and best way of working. The employee becomes an active participant in detecting and reporting potential problems. Managers gain visibility as to what aspects of the role employees are more successful in and can leverage this knowledge to align people according to the best use of their capabilities.

Bottoms-up performance management delivers a better understanding of how employees across the organization work and helps determine real contributions.

Employees are rewarded purely on their performance. Their performance goals and targets are clearly defined and communicated to them formally. Employees feel motivated and accountable for their performance and strive to achieve and even exceed the targets set for them.

With consistent year-over-year administration, Bottoms-up performance management results in critical information about the potential to scale, skill gaps and where development would make an impact.

The business can use this information to achieve more focused hiring to complement the existing talent pool, better understand how compensation dollars should be applied and who is promotable or transferable to other roles within the organization.

​The ripple effect of using a Bottoms-up approach to performance management provides visibility into ways to improve communication, processes, controls, and results in retention of key team members, who will feel empowered to discuss better ways of working and in doing so become committed to the success of the business.