As customer success managers we all strive to develop that ultimate product stickiness, which leads to ultimate customer loyalty and account growth.
But how does that ultimate product stickiness look like?
Let us take an example of the simple Point of Sale (POS) Software product. Imagine three customers, demonstrating three different behaviors.
Customer A | Behavior #1: High usage
Customer A is booking 500 orders every day. That is pretty much what he does on the POS system.
Customer B | Behavior #2: Wide Usage
Customer B is booking 300 orders every day. And occasionally checks the business report, tallies his stock once every quarter, and updates his staff attendance sheet in backdated in bulk for the entire quarter.
Customer C | Behavior #3: Wide Usage and Regular Use
Customer C is booking 100 orders every day. Has set up his business report to be delivered every day and conducts an analysis on a weekly basis. He also tracks staff attendance on a daily basis using the POS advance features. Every fortnight he tallies his stock.
On a quick look it seems that Customer A with High usage is the most important customer since he uses the system to do maximum bookings. Especially, if you calculate the ROI as Subscription Fee / Bookings done.
ROI = $ Subscription Fee / # of Orders Booked.
But the reality is that is that he will have the least overheads in switching system and moving to a different software vendor as compared to Customers B and C. Since he only has to retrain his staff on only one of the key tasks and has to move limited type of data to the new system (Note: the volume of data transfer does not matter when you are dealing with software).
Customer B, on the other hand, is much better placed than Customer A, but even his usage is erratic. His dependence on the advanced features is extremely limited.
Customer C has the lowest usage and will get the lowest ROI score based on the above definition. But, since he is using all the advanced functionality on a regular basis, his dependence on the system is the highest. His cost of switching systems will be the highest among the three customers mentioned.
Customer C’s cost of switching system will be the highest among all of the customers mentioned. So, product stickiness will be the highest.
He will have not only have to re-train himself and his staff for learning all of the functions in the new system (should he ever want to switch) but will also have a difficult time transferring the data since it cuts through many modules of the software. His transformation will take time, effort and will hurt him the most. Thus, making him the most sticky customer of all.
Customer’s Product Stickiness Score is something that every SaaS company should calculate, over and above a standard health score, which mostly depicts high or regular usage.
Think of Product Stickiness as the measure of Feature or Module Utilization during a 7-day or 15-day period or an equivalent shorter interval.
So, Product Stickiness is a bit like going to the gym. It’s about exercising all parts of the body, every week.