Services Credits Improve Customer Experience and More Key Insights
This article is part of a series on professional services credits. We discuss the intricacies of services credits as one way companies can structure and sell professional services. The first two posts focused on what are service credits and how to automate the management of services credits in Salesforce.
In this final post, we explore the key business insights shared by Scott Sunday based on his 9 years experience with establishing and using services credits as a model for selling and delivering professional services at two SaaS companies. Currently, Scott is the Chief Customer Officer at BigID.
Scott Sunday began by emphasizing the necessary changes both companies and customers have to make to maximize the benefits of using a subscription model based on services credits. He highlighted that, like any change, people, technology, and processes are core to successfully implementing services credits.
“It’s a paradigm change, not only for the company, but for customers as well depending upon what you’re selling.”
Help Teams and Clients Reframe Mindsets on Services
Educating and messaging to customers—and enablement teams— is a critical part of moving to a services credit model. He explained that a mindset shift is necessary for everyone involved to understand that one credit doesn’t always equate to one hour, i.e., a credit’s value might vary by the type of service and underlying capabilities required to deliver it. Scott emphasized:
“It’s necessary to enable not only your internal teams, but also your customers on the concept and understanding around credits. That’s number one and sometimes that’s the hardest thing about moving to a services credits model.”
“Credits don’t necessarily always translate to hours. One credit doesn’t equal one hour all the time. Two credits for education might equal an hour of education. And one credit, used for coaching, might equal one hour of coaching.”
Scott likened services credits to “disney dollars” because it’s easy for everyone to understand. At Disney, they used to have “disney dollars” you could buy up front and then you can use them anywhere along the way based on what you want to do. Services credits are like that for professional services.
Let the System Do the Work of Tracking Services Credits
Companies moving to a services credit model often quickly look for a way to automate tracking them. Scott’s company was no different. After talking with several consulting partners and not finding a readily available solution, Scott found Rick Pearson at CLD. Rick understood the challenges of manual services credit management and was able to quickly articulate a solution that would work for Scott’s business.
Scott emphasized that having a robust system capable of handling credit-based transactions is important—especially one that fits well into overall professional services operations, as the services credit model impacts everything from sales and customer success to billing and revenue recognition.
Simplified Buying Process and Versatility
A critical benefit services credits provide to customers is the flexibility to easily leverage different services as their needs evolve. Scott shared that service credits can minimize contract complexity by providing a way for customers to dynamically specify how they want to use credits versus contracting for a given service and later having to initiate change orders as their needs change.
This echoes what Rick shared in the first post, the services credit model “works well for both providers and consumers by offering a flexible method to access various services without having to rework contracts.”
Look for Improved Customer Experience
In addition to making the buying process easier for customers (where a good customer experience begins), Scott shared that another significant gain with services credits is an enhanced customer experience.
“Services credits remove hassles, roadblocks, and paperwork by making it easier for customers to access the services they need, when they need them, to do their jobs better.”
With services credits, enterprises buy services up front and team members can self-select the training and resources they need to supplement their knowledge of the new product.
“As the customer goes through the lifecycle with the implementation of your product, especially if it’s an enterprise grade product, their needs change. What they thought they’d need when they first bought the product and your service, might turn out to be different in six or nine months — they end up needing something else. So for the customer experience — with credits it’s easier for them to utilize the credits elsewhere and still get value.”
Credits Don’t Have to Expire
Scott goes on to say that expiring services credits are not as big a deal as in the past—there appears to be a downtrending in the amount of expiring credits—because customers are finding creative ways to use them, leveraging them across multiple service lines, e.g., coaching and education services, before they expire.
In some cases, an organization might allow for some rollover of credits, but generally should be motivated to encourage customers to use their credits before they expire to ensure they are deriving value from the product or service offering. Large amounts of unused and/or expiring credits could be an indicator to the provider of slowing customer adoption or business value.
For SaaS companies, success is directly correlated to the use and adoption of their products. If customers are not using the product or don’t understand how to use it, there is an increased risk of customers not renewing or the provider having a tougher time negotiating rate increases and selling additional services. So tracking the use and non-use of credits can help companies by providing early visibility to customer adoption of the services as well as highlight risk of customer attrition.
Keys to Successful Implementation of a Service Credits Model
Modularize Service Offerings
Most SaaS companies have services for consulting, education/training, and possibly coaching. By taking the approach of bundling or snapping together modules from each practice, it’s easy to build up a packaged use case. Two use cases Scott mentioned were Governed Data Lake and Report Certification.
The graphic below illustrates the notional bundling of Consulting modules + Education Modules + Coaching modules for the Report Certification use case. The diagram layers the corresponding education and coaching modules. Together, it builds up the basis of a use case package.
Ultimately, sales teams can tailor packages to a client’s needs while still maintaining control over the estimate.
Leverage the Whole Team
When shifting focus from traditional hourly concepts to implementing the services credit model, it’s important to leverage the operations team in the implementation and to include peer organizations and services leaders in the selling process. Scott also stressed to be sure that the system works seamlessly, as it forms the backbone of running the business.
Partner with the Right Team with the Best Experience
To successfully implement services credits management, Scott also suggested finding a partner who understands the intricacies and acknowledging the complexity of implementation. He noted the prevalence of technology companies to assume they know it all and can self-implement and warned against this pitfall.
We hope Scott’s experience and insights assist you in your professional services journey. At CLD, we’ve helped several organizations systematize how they manage services credits. If your company is considering moving to a services credit model, contact us, we’d love to help you.
