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SaaS Solutions On the Rise, But Vendor Support Lags

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SaaS Solutions On the Rise, But Vendor Support Lags

February 06, 2013
By Tracey E. Schelmetic
TMCnet Contributor

The good news for the enterprise Software-as-a-Service (SaaS (News - Alert)) industry is that businesses increasingly value SaaS applications and more and more companies are adopting them. The bad news is that many enterprises report facing significant customer support challenges with their SaaS vendors, and this is leading to low customer satisfaction and poor retention rates.

The moral? It’s not enough to put an SaaS solution on the market; you need to support your customers just as assiduously as you created the application.

These are the findings from research by The Enterprise Strategy Group (ESG), whose new report, “SaaS with a Face,” surveyed 2481 global companies currently using SaaS-based e-mail management software.

The research group asked respondents about their usage and service satisfaction with these applications and providers. More than half of respondents (57 percent) reported slow and unresponsive customer service, ultimately resulting in only 58 percent of these respondents remaining with their current SaaS provider.

Only 37 percent of those surveyed confirmed they have a dedicated customer service manager for their organization, 27 percent cited difficulty with finding the right person to solve the problem at hand, just 25 percent said their SaaS provider offers dedicated online training, and 18 percent noted their SaaS provider missed service level agreements (SLA) entirely.

“The results of this survey show that inadequate customer support has the ability to quickly negate all of the promise offered by SaaS-based applications,” said Bill Lundell, Senior Research Analyst with Enterprise Strategy Group (News - Alert), in a statement announcing the study. “Businesses are crystal clear on the benefits of SaaS, especially for business-critical applications like email, but many providers appear to be providing inadequate levels of support. With more businesses potentially turning to SaaS applications and other hosted services in the coming years, providers will need to offer dedicated support and increased transparency around any product updates or issues in order to improve customer satisfaction.”

As more SaaS solutions are introduced and the marketplace becomes increasingly crowded, smart companies will look for ways to differentiate themselves from competitors. The ESG study shows that one way companies can do this is by building world-class support structures for their hosted solutions.

Edited by Braden Becker
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