Software Executive Magazine

December 2017

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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Page 38 of 43

future business challenges? Perhaps the next great fea- ture you introduce to the market may be a service. THE SERVICE MINDSET Adopt a service mindset for how you engage and retain customers. Whether you sell your software as a sub- scription or as perpetual licenses, think about the initial sale as the starting point for a long-term, profitable rela- tionship. Customers who can apply your application to drive tangible benefits to their business are most likely to continue to buy more products, renew maintenance agreements, renew subscriptions, and recommend you to others. The full revenue potential from a customer depends upon the longevity of the relationship. With a service mindset, product features are just the starting point but are never enough to fully deliver the software value proposition. Consider the following: ▶ Provide a software application that has the fun- damental features that your customers need – ask them, study their needs, learn how they measure their business' success. ▶ Make certain that new customers understand how they can apply your applications to their specific needs. ▶ Work with your customers to define a short, me- dium, and long-term success plan or journey map for the successful use of your products. ▶ Provide the services to help develop customers' skills so that they can use products proficiently. ▶ Don't wait for customers to contact you when there is a problem. ▶ Stay actively engaged with customers to make certain that they continue to realize benefits from your products. PRODUCT INNOVATION VS. APPLICATION Over the past several decades, the software industry has evolved in so many positive ways. As we enter the era of as-a-Service, we all need to embrace a service mindset. Regardless of the licensing model, the key to sustained financial success in the software industry is through long term customer relationships. Product in- novation will take us only so far in engaging and retain- ing customers. To fulfill the software value proposition we need to provide services to help customers apply our products to succeed in their business. S sustain a subscription relationship demands that cus- tomers realize a return from their software investment or at least feel that they are on the path to do so. It is not sufficient to assume that the features and functions of the application are enough to deliver the software value proposition. For a software publisher to succeed, the customer must be successful. Driving adoption and success is the most reliable method to ensure that customers can realize the full value of an application – perpetually licensed or offered as-a-Ser- vice. This is not something that innovative software products alone can accomplish. Complete fulfilment of the software value proposition is a service opportunity. MARKET LEADERSHIP THROUGH SERVICE Software industry leadership has long been evaluated on capabilities and price. These are important attri- butes and are essential to product differentiation. In the current chapter of the software industry, however, there must be an awareness that the utility of the appli- cation is paramount. A feature-rich product may be es- sential for some, but most customers use only a fraction of the available features. Customers do not necessarily need more features. If your product has the fundamental capabilities, then the most important differentiator you can offer is the ability to help customers quickly and efficiently use your products to drive their business forward through services. The ability to apply a product effectively has always been foundational to the software value propo- sition. This is not unique to software offered through a subscription. This is critical to on-premises, perpetual- ly licensed applications as well as SaaS-based offerings. As you consider what it will take to grow market share or increase license sales, think about what your customers really need. Do they need more features? Do they need enhanced security and performance? Or do they need the help and expertise to apply more ef- fectively what they already have to their current and T H O M A S J . S W E E N Y is the founder and principal of ServiceXRG. He leads research initiatives and publishes extensively about service industry trends and best practices. He helps companies develop and execute service strategies to strengthen customer relationships and optimize financial performance. Customers do not necessarily need more features. If your product has the fundamental capabilities, then the most important differentiator you can offer is the ability to help customers quickly and efficiently use your products. ... 39 SOFTWAREEXECUTIVEMAG.COM DECEMBER 2017

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