Assume the Customer Knows Everything

One of the biggest frictions that comes up as you scale is … hiding things.  Sales comes under pressure to hit the quarter, and wants to overdiscount (and hide the overdiscounts).  Ops and engineering can feel like it’s easier to hide downtime and other issues from customers that weren’t online during the incidents.  Marketing can be tempted to hide certain editions that generate less revenue.  Etc. etc.  Customer success can be tempted to overstate how secure and reliable the app is to nervous customers.

There’s one rule I’ve come up with to help unite sales, customer success, marketing, and product:  Assume Every Customer Knows Everything.

By that, I mean:

  • Make sure your sales team assumes every customer knows everyone else’s discounts.  This ensures they are at least fair, and in the end, this will lead to higher NPS and net revenue retention.  If you are giving Facebook a crazy deal at $50k and quoting Google the same deal at $250k, is that OK?  If it truly is, so be it.  I.e., if Google would be OK with it. But assume at your first customer conference, on a webinar they do to help you, on a recommendation call … that eventually at least, they all find out.  All your customers know what each other pays.  So special discounts for very early customers are probably OK.  But a sales rep jamming a crazy discount in later to make the quarter?  Don’t allow it if your other customers wouldn’t see it as fair.  If it doesn’t come back to haunt you, well, at least it might.  It will hang over you.
  • Make sure your customer success, support, product, and engineering team assume every customer knows about every bit of downtime.  Put up a real Trust page.  Share it all.  This may add short-term stress, but it will add long-term strength.  Assume every wart and bump you have, your prospects and customers know about it.  They are signing up for a 10+ year journey with you as partners, not just folks buying a product today.
  • Make sure your entire team assumes your customers know about all the permissions and data access in your app.  What customer data can your support team, dev team, and others access?  Assume your customers truly understood that on the day they buy.  Would they be OK with it?  If not — make changes here, quickly.  It’s their data, not yours.
  • Assume your customers know every corner you’ve cut on compliance, security, redundancy, etc.  Is your HIPAA compliance pretty barely there?  Are you sure your keystore is properly encrypted?  Is anything not encrypted at rest?  Have you run penetration testing?  Talk honestly with your engineering and ops team here and assume all your gaps have been disclosed.  How would you feel?  What would you fix first?
  • Assume your competitors know.  No matter what, assume whatever weakness you have, also your competitors know or will know soon.  How will you combat it when they introduce all your weaknesses into every competitive deal?

This is a tough exercise — you can’t run it every single day, or you’ll go a bit nuts.  So many things will always be at least a little wrong in every startup. 🙂

But make sure this thought process goes into every discounting conversation, every special deal.  And into every at least quarterly review of your roadmap and product and engineering gaps.

Just assume they know.  Customers don’t expect perfection.  But they do expect transparency, honesty, and a roadmap to always doing better.  Share as much of it as you can, hold the team to the same standards you’d want if you were buying your own product.  And a year or two out, you’ll see better results.

What To Do When A Customer Wants to Cancel A Contract

(note: an updated SaaStr Classic post)

Published on March 16, 2021

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