Customer Success for On-Premise?! Yes, but…

January 02 2017 0comment
In the technology industry, customer success management is developing into a vital department. Setting up a customer program involves ensuring the success of your customers and, thereby, keeping them as customers for the long term. Recently, many companies are moving from on-premise to SaaS. Today, we will explore the differences between customer success program for SaaS vs. On-premise products. We engaged Noy Bar from HP Enterprise (HPE) and Anna Connell from Proofpoint in exclusive interviews on this topic. Proofpoint is a software company that provides SaaS and on-premises solutions for inbound email security, outbound data loss prevention, privacy protection, email encryption, electronic discovery and email archiving.

Irit Eizips: Today we’re going to compare on-premise and SaaS customer success programs. Both of you have experience in working for companies that have both on-premise and SaaS products. Do the customer success programs differ for on-premise customers than they do for SAAS customers?

Anna Connell: Yes – but only in that historically we have not had a formal customer success program for on-premise customers at all.  It doesn’t matter what you really call it – but a customer needs to use your product, perceive the value and feel in partnership enough with you to continue using and expanding their usage of that product.  So you have to think, how will you do that? In the on-premise scenario the customer paid a lot to buy something and is running it in-house but you may not know how.  In the SaaS case, they’re “renting” your solution. Product updates and changes impact SaaS clients immediately. To a degree, you have much more control over the customer experience of your SaaS product than that of an on-premise one. SaaS clients also didn’t spend a ton of cash to buy your product upfront and own it outright.  Therefore, they may be less invested in your product. 

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Most companies have an on-premise #CustomerSuccess program that typically comes in the form of TAM (Technical Account Management) services

Traditionally, most companies that have SaaS products have similar customer success programs. The difference between a Customer Success program for SaaS products and the one built to serve on-premise clients is not night and day. For example, often, the customer success program for SaaS clients will also include TAMs as the elite level of proactive support. 

However, the main difference between SaaS and On-Premise CSM programs is this additional group of people who engage with customers in a proactive way to find and resolve any customer health issues as well as share best practices, new product features and so on. These people add value and develop a relationship with customers. They do in a manner that’s not specifically related to a support case or a bug that needs to be fixed or a renewal contract that’s due.  This group of people is called Customer Success.  In my experience, depending on the size of the account, the customer success manager is assigned to multiple accounts and is separate from the team that renews the customer’s contract. The Customer Success Manager’s role is expected to proactively reach out to customers, develop a relationship and use the SaaS usage metrics available to watch for movements in customer health. The Customer Success Managers (CSMs) are also the ‘quoarterbacks’ for their customers within their own organization. In effect, the client now has a bigger voice within their vendor’s organization. 

Irit Eizips: Do you have different teams that handle on-premise and SaaS products? Does that create any challenges?

Anna Connell: Yes and yes. I’ve had some customers who have both on-premise and SaaS products, usually purchased at different times and often by different divisions. At my previous company, our  However, for on-premise clients, we only had a Technical Account Manager (aka TAM) offered as a paid service.  TAMs tend to engage with customers at much more technical levels and need to really dig into customer environments with the help of the customer – so they are a more expensive billable service.

At times, we have had the customer success managers assist the on-premise clients a little just because of the relationship. However, if the customer wanted deeper and more technical engagement then we needed to bring in a TAM. This worked because each team knew what they were responsible for and the two teams (CSMs and TAMs) played off each other well.

Finally, in my opinion, if you have a TAM (or a higher level of dedicated technical support) you should charge for it.  However, having a ‘non-quota carrying’ customer success manager for both SaaS and on-premise customers is a good idea (whether dedicated or “just in time”).  The CSM group is there to serve your customers, and your company by engaging with troubled accounts, being proactive, watching out for trouble spots and being an advocate for add-on services.

Irit Eizips: What challenges did you experience when transitioning on-premise customers to SaaS?

Noy Bar: There are two main challenges when moving customers from on-premise to SaaS:

  1. When transitioning from on-premise to SaaS, some customers have concerns about security. As such, the company needed to prove things we weren’t required to deal with before, simply because it is a new delivery model. When transitioning to SaaS, customers sometimes worry about having their information on “the cloud”, which is still a relatively new concept. However, once we resolved this challenge, we had to deal with the next one.
  2. When transitioning from on-premise to SaaS, some customers have concerns regarding any functionality changes. We need to be prepared to answer questions like: ‘What does the SaaS platform provide the customer that is better than the on-premise platform?’, ‘Does it provide a better cost? Better functionality? Backward compatibility?’


When migrating customers from on-premise to SaaS we made efforts to make the SaaS version appealing

When migrating customers from on-premise to SaaS, we placed a big emphasis on product functionality, and we made efforts to make the SaaS version appealing in order to encourage our customers to move away from their on-premise platform. We invested a lot in customer education, product demos, etc. We set up dedicated R&D and product management programs to validate the SaaS functionality vs. that of the on-premise version. These activities, as well as others, were done to ensure we facilitate the transition and help customers migrate independently, with the help of professional services, or with the help of our support teams.

Irit Eizips: How does the role of the customer success manager differ when handling on-premise vs SaaS? What skills are needed to be successful with on-premise clients vs SaaS clients?

Anna Connell: The main difference I see is for the quota carrying renewals type customer success managers (or renewal managers). 

For SAAS customers, the person responsible for renewals needs to be able to resell the value of the product each and every time they engage with the client.  It’s a much more value-add and sales-driven role and the conversation of just price adjustments is not appropriate.  Our goal is to have the customer success team empowered to talk about the product and value to tell the customer why they should stick around.  They should upsell seats and service levels.  In a situation where there’s an opportunity for a larger deal with an existing customer, which will require a more complex sales cycles, I recommend letting a field sales representative (aka Account Executive) to handle the lead.

As oppose to SaaS, the on-premise renewals manager is there to maintain the relationship and ensure that it is maintained in such a way that she can sense if the customer is becoming more distant.  Price increases over time can suffocate a relationship, and the on-premise renewal manager should be mindful of how they handle that.  While the renewal manager for SaaS products may need to ensure the customer is still using the product and is engaged, on-premise renewals management is about efficiency and making the process easy for the customer. As such, regular meetings with these customers are key and are mainly driven by sales and renewal discussions.

Irit Eizips: How would you recommend using data to reduce churn or increase adoption?

Anna Connell: To do this well, for both SaaS and on-premise, you MUST capture what value the customer is planning to get out of your solution and what are the business drivers for your customers at the time of sale.  Ideally, you should narrow this down to 4-5 scenarios and specifically focus on the ones that your solution was picked for over the competitors’ solution.  Then track how you’re delivering against those over time.

In my previous roles, we had SaaS customers who managed their sales process by tracking entitlements and license keys using our system. This made it easy for us to track how many entitlements they sold and how much revenue they generated through the use of our system.  However, it is much harder to track how much value the client places in having this process managed by our system. The challenge was to find a metric that we can track and show the client that without our product. A metric that can show that the client wouldn’t have been able to process x number of transactions as quickly as x per minute as they would have otherwise or a metric that would show that we continuously improve the transactions processing rate over time.  In other words, to demonstrate value, we will have had to find a metric that would demonstrate the superiority of our solution over the competitor’s.  To accomplish that, one needs to have both customer and product knowledge.

At Proofpoint, we are about protecting our customers from security threats.  Therefore, if our product is working very well (which it does) our customers see no threats and feel no concerns about their security.  While that’s great and it’s what we want, we need to ensure that our customers understand the value of what we’re doing behind the scenes to deliver on the business reasons they bought us.  Without reminders of your product’s value (especially one that’s meant to run in the background and reduce impact on the customer), you run the risk of having your customer under-valuing your solution.  As such, our SaaS Customer Success Managers need to make sure our usage data highlights the things that our customers find value in and what they would lose if it was gone.  There’s a little bit of truth in the adage “out of sight, out of mind”.

Irit Eizips: What are some of the Customer Success metrics you focus on in on-premise programs or when you simply don’t have usage data?

Anna Connell: When no usage data is available, there are a couple of things I recommend having the customer success program focus on:

  • Voice of customer metrics, including: NPS, Support scores, feedback from customer meeting, etc.
  • Financial metrics: Renewal rates, early renewal rates (important!), customer churn data, account add-ons

Irit Eizips: Tell me about your initiatives for the Voice of the Customer? How important is that program in SaaS vs On-premise?

Anna Connell: The Voice of the Customer program is important for both SaaS and on-premise. However, I believe, it is more critical in when no usage data is available.

On-premise customers often can’t vote with their feet as fast as the SaaS customers.  They invested a lot in your product upfront and their support cases are being addressed, but not as fast as they’d typically like. Moreover, as a customer success manager, you might not be aware that they only use your product in one small part of the organization, which might be starting to become de-funded. In fact, they may be seething about your product and those support cases, but you won’t know about it until years down the line when they’ve engineered your product out.  Therefore, it is critical to have a feedback mechanism and get customer feedback before the customer churns.  Once feedback is received, it’s important to take the time to analyze your customers’ comments and the rate of response to surveys.  Low response rates may also indicate a churn risk.

On the other hand, SAAS customers vote with their feet more quickly, especially if your product is not highly integrated and complicated to install.  The voice of the customer is as important, but it may come in smaller and more frequent touch point (CSMs may fill this role) because you generally need to act more quickly to customer feedback.  You can and should be using whatever usage data you have as part of your overall customer feedback as well.

Irit Eizips: Do you find that customers have different expectations from customer success in SaaS vs on-premise?

Anna Connell: Customers want to know that they are important to you and that you, their vendor, cares.  Customers have gotten used to being in constant contact with their SaaS vendors than on-premise clients are. This creates a need and expectation to provide the vendor more input and feedback in SaaS customers.  Think of a backend on-premise solution, how often do you know it is even there or what it is for. Now think of each time you log into a SaaS solution. The customer experience difference is huge.

Irit Eizips: How do you measure the results of your customer success team and share best practices? Does it differ between SaaS and on-premise?

Noy Bar: I see two main ways to measure the success of our Customer Success groups:

1) How much were we able to grow our customers?

There are many growth channels we measure for our customers including:

a) Functionality usage growth – to make our customers use more of what they already own and also to create stickiness

b) Organizational growth – to have as many teams as possible standardize on tools that will serve the organization better

c) Role based growth – to increase collaboration between the different roles using our products

d) SaaS growth

e) Product growth – to increase out foot print within the accounts we work with

The customer success managers are aware that they are being measured against these measures. Each win is related to one of the above and is celebrated with the entire team.

2) What activities did we do the most, and why?

For example, if the team mostly conducted roadmap sessions, we work with marketing to enhance awareness of our roadmap through customer campaigns and webinars. If we handled mostly upgrade issues, we consider building an upgrade program or involve professional services more. By identifying trends in our customer success activities (which we track as calls to action in Gainsight) we are able to improve our processes while learning about our organization and our customers.

As for sharing best practices, we conduct a roundtable during a weekly meeting which has proved to be very fruitful. During the weekly meeting, each of the customer success managers shares a “story about a customer”. We share best practices, advice and learn from each other. In addition, we also have “team challenges”, where one of the customer success managers might raise a challenging situation they face with a client and solicit advice on how to solve it from the rest of the team.

We also try to engage the other client-facing teams by sending them public ‘thank you’ notes for helping us with a client. The public thank you notes help get the other teams motivated. The process also helps spread the word of a good practice followed.

Irit Eizips: If a new customer success executive walked up and asked for your advice, and you only had a few minutes to give them your best tip, what would it be?

Anna Connell: It depends. The first thing I’d ask her is “What do your customers need to be truly successful at using and expanding their use of your product?  How can you attain that?”.

In general, I don’t believe each customer must have a dedicated customer success manager, but all customers can leverage self-serve tools that provide them insights into what your solution is doing for them. 

Moreover, you need to be able to afford your infrastructure. If there are different levels of support which provide additional meaningful value to customers, then charge for them.  However, don’t underestimate the need to have a customer advocate who is there to ensure that your customers are really getting the value they expected to get from your product.  The world is changing and people have lots of easily adoptable choices now.

In addition, the customer success as well as renewals management roles are tough.  These professional contributors listen to the problems and issues of our customers, and yet in the face of that, need to bring in revenues and uplift customers.  I think it’s imperative that a lot of coaching is done on how to deal with challenges and overcome objections as well as empower the customer success and renewals team to act in the best interest of the company and the customers.  I’ve seen too many rules placed on CSM and Renewal officers and that hamper their ability to grow and their desire to succeed. 

Give your customer success managers coaching and set them up with a mentor.  It works.

Finally, treat the team with professional compassion – it’s a tough gig.

Key Takeaways

In this blog we have explored the main differences between customer success programs for SaaS and on premises products.

  • Both programs offer technical account managers (TAMs) as an additional paid service, but CSMs working with SaaS clients tend to be more proactive in their work. However, both CSMs and TAMs work towards creating value for the customer.

  • Transition from on premises to SaaS can be a difficult one. One of the main areas of concern for the customers is security, which can be combated with close transition follow-up and customer education.
  • SaaS clients tend to expect more frequent contact with CSMs and provide more input and feedback to the vendor. They also tend to have higher expectations for their Customer Success Manager.
  • Customer success metrics for SaaS and on premises clients differ as well. The focus of CSMs for SaaS clients is to help them grow in terms of product usage, yet for on premises customers the focus is on scores for NPS, support, feedback from customer meetings, renewal rates, churn and account add-ons.
  • While the voice of the customer program is important for both SaaS and On-Premise customer success programs, it is critical to implement for on-premise.


Irit Eizips
Written By:

Irit Eizips

Irit Eizips brings deep expertise in the area of Customer Success. As an early member of Gainsight's executive team, Irit has been pivotal in shaping Customer Success methodologies and best practices. For the past 3 years, Irit has been voted as a top Customer Success influencer and is frequently featured as a speaker at conferences and Customer Success public events. Irit serves as CEO for CSM Practice, a global Customer Success consultancy firm. The firm specializes in working with customer success leaders to accelerate the creation and implementation of Customer Success strategies, derive extensive value from Customer Success technology solutions as well as certify and train customer facing teams in becoming more proactive and efficient.