SaaS Customer Support Options and Costs: All You Need to Know

Providing good customer support is very important for Software as a Service (SaaS) companies. It helps them keep and grow their customers. There are many ways SaaS companies can provide support. They need to carefully choose the best option that fits their budget and priorities. This article looks closely at the pros, cons, abilities and costs of the main SaaS support choices. It should help companies make a good plan.

What Is SaaS Customer Support?

SaaS customer support refers to the services provided by software companies to help users resolve issues with cloud-based applications. It is the primary interaction between SaaS providers and customers during onboarding, implementation, and usage. Support includes multiple channels like phone, email, chat, forums, and knowledge bases for users to get assistance. 

Key functions are responding to technical problems, assisting with configuration, answering billing questions, guiding onboarding and training, resolving account issues, and handling complaints. High-quality SaaS support improves customer satisfaction, retention and expansion, provides product feedback, and differentiates providers. As user expectations rise, optimizing support is imperative for SaaS success.

Is your product still under development? Have you taken into account all the cost considerations for SaaS development? If yes, it’s time to start thinking about all the details of customer support now!

Key Factors in Selecting a Support Model

When assessing SaaS support solutions, several dynamics should guide decisions:

1. Breadth of support channels - phone, email, chat, social media, self-service

2. Availability with time zone coverage and response time SLAs (Service level agreement)

3. Supporting tools and technology platforms

4. Agent staffing plan, training processes, expertise

5. Supervisory structures for quality assurance

6. Data, analytics and reporting capabilities

7. Security, compliance and data privacy factors

8. Current and projected budgets as the company scales

9. Personas and preferences of target customer segments

10. Integration with product usage data and workflows

Balancing these elements will lead to an optimized support approach aligned to the organization.

You can also try to reduce customer support costs. Zendesk reports that 67% of users would rather handle problems on their own rather than contact agents. Self-service alternatives enable consumers to receive assistance in a method that suits them best and reduce the number of complaints from irritated users.

It entails keeping up with large knowledge bases, pertinent FAQs, user groups, and additional instructional resources. It is advisable to provide advice to purchasers so they can investigate these resources in the appropriate voice. 

Using AI (Artificial intelligence) chatbot website tools and other virtual assistants to answer basic questions, give prompt answers, and refer users to human agents only when necessary is an additional choice. Clearly defining and adhering to SLAs for response and resolution timeframes prevents the backlog of requests.

In-House Support Models

Many SaaS companies initially keep customer support in-house when starting. Handling support internally provides tighter alignment with company culture and service ideals early on. With staff fully devoted to the product, in-house teams also foster deeper product expertise. However, solely using in-house resources for support does come with some limitations as the company grows. There are two primary in-house models, each with its pros and cons.

Dedicated In-House Teams

Agents can provide tailored, white-glove service reflecting the brand ethos when working directly for the SaaS firm. Having a dedicated in-house team solely focused on support requires significant upfront investment in hiring, salaries, training, and internal tools. As ticket volumes fluctuate, adjusting staffing levels can be challenging. In-house teams also have difficulty matching the robust analytics capabilities leveraged by outsourcing providers to monitor performance and satisfaction. Less rigorous oversight and quality assurance structures internally can inhibit consistency.

The costs of scaling in-house support through periods of rapid customer expansion or new product launches can become prohibitive.

Shared In-House Models

Some SaaS firms try to optimize costs by having their in-house support agents split duties between assisting users and product-related functions. While this shared model does allow lower salaries with staff multitasking, divided responsibilities can dilute expertise in supporting users effectively.

Having dual product and support priorities increases the risks of staff burnout and turnover. During spikes in user tickets or complex escalations, resource constraints emerge that on-site outsourcing partners could flexibly cover.

Overall, exclusively using in-house staff for support can hamper scale and oversight capabilities as SaaS companies grow. The costs, inflexibility, and analytical limitations of internal-only models prevent smooth expansion. Blending some outsourcing becomes key to supplementing in-house capabilities cost-effectively.

Outsourced Support Models

As SaaS firms evolve, partnering with specialized outsourcing providers for support unlocks valuable advantages. Third-party outsourcers have extensively trained agents dedicated solely to customer support, enabling them to handle surges smoothly. There are two main outsourcing approaches, each with varying benefits.

General Outsourcers

Leading outsourcers invest heavily in support infrastructure, analytics, and quality assurance programs, from which clients benefit. Their platforms, processes and staffing are optimized specifically for the unique needs of SaaS organizations.

General customer support outsourcers can provide some efficiencies from economies of scale. Their existing facilities and customer relationship management (CRM) platforms offer a quick starting point. However, their agents are usually spread across multiple clients and lack deep familiarity with individual SaaS products. Support becomes more one-size-fits-all rather than tailored.

Handoffs between outsourcer agents and internal product teams can also cause disjointed experiences.

Specialized SaaS Providers

Specialized SaaS support providers dedicate their entire business to partnering with SaaS firms. Their platforms, analytics, workflows, and agent training are customized specifically for SaaS. Deep product expertise comes from an exclusive focus on SaaS engagements.

Usage-based pricing enables flexible scaling to match fluctuations driven by seasonality, new releases, or growth spurts. Tight coordination with product usage data provides a 360-degree customer view to enhance support.

Although costs are higher than general outsourcers, specialized SaaS partners like Anthropic deliver greater alignment and scalability.

Ultimately, a blended strategy combining trained in-house agents for first-line support with outsourcers to handle overflow provides the ideal balance between customization and scale. As the product and customer base matures, revisiting whether insourcing or outsourcing makes the most sense allows SaaS companies to optimize support resourcing.

Optimizing Location Strategy: Onshore vs Offshore

Location is a critical factor shaping both support costs and quality of customer experiences. Many companies consider offshoring support to overseas locations to benefit from substantial labor cost savings. Offshore locations in regions like Asia and Latin America allow for the slashing of salary expenses, often to 1/3 of onshore costs. Regions with high English proficiency and advanced infrastructure can enable effective 24/7 follow-the-sun coverage at scale.

However, offshoring support overseas does come with the risk of service quality gaps. Language, cultural, and time zone differences between agents and customers can impair communication and understanding. Much higher managerial overhead is required for oversight and quality control. Negative customer perceptions of offshoring also persist.

Onshore support with teams located in the same country as customers provides advantages through tighter cultural and language alignment. Direct management and quality control are also simpler with nearby agents. But salary expenses for onshore agents are far higher, often 3x offshore costs. Providing 24/7 coverage is more difficult without large timezone gaps.

An optimized location strategy blends offshore and onshore support to balance cost savings with service quality assurance. For example, companies may keep first-line support onshore for faster resolution of common issues, then overflow to offshore for extended hours or specialized cases. As long as oversight is robust, hybrid onshore/offshore provides flexibility.

Must-Have Support Infrastructure

Sophisticated tools and tight integration with product data enable efficient, metrics-driven support:

• CRM for ticket management, assignment, tracking

• Knowledge management portal to leverage self-service

• Live chat, phone, email for multi-channel support

• Customer analytics to gauge satisfaction and churn risk

• AI-driven ticket routing and automated responses

• Integrations with product usage data, workflows, billing

Without robust infrastructure, support performance and optimization suffer.

Key Drivers of Support Costs

From staffing plans to tooling, many dynamics influence support costs. The number of agents required to meet demand levels and SLAs drives staffing expenses. The channel mix - such as the ratio of phone versus chat - impacts costs. Agent location also swings costs higher or lower. Platform licensing fees, integrations, salaries, and training add up. Strong quality assurance and management oversight are essential but add overhead. Factoring in these key cost drivers allows accurate budgeting and cost/benefit analysis of support operating models.

Calculating In-House Costs

For in-house teams, full costs include salaries and benefits for support roles, facilities and equipment; hiring/onboarding; ongoing training; support technology subscriptions; middle management oversight; churn and rehiring expenses. Totaling these outlays and dividing them by the annual support hours provided yields the average hourly cost to operate in-house support. This baseline helps determine the potential return on investment from outsourcing.

Comparing Outsource Vendor Costs

When evaluating outsourcing partners, calculating the total cost of service involves multiple factors.

• Per agent rates vary based on location, with offshore agents costing far less than onshore

• Contract minimums may enforce a baseline service fee

• Implementation and onboarding require an upfront investment

Ongoing costs are shaped by:

• The channel mix, such as chat, email and phone support

• Customer analytics, customized reporting and integrations add incremental fees

• Potential travel for on-site support

• Dashboard development expenses

• Multi-year contracts may provide discounts over shorter terms

Once all expenses are tallied, compare them against the in-house support costs calculated earlier. Outsourcers gain advantages from economies of scale and specialization. Factors in those qualitative benefits are flexibility, expertise, and variable capacity against sheer costs. Choose a partner that balances capabilities and value.

Optimizing Support Resourcing Strategies

Evaluating business context, needs and budgets directs ideal support resourcing strategies. Early-stage SaaS firms can leverage combined support/product teams before specialization. Lean startups need cost-efficiency.

Specialized SaaS support partners best serve growth-stage companies. Outsourcers provide expertise to handle expansion smoothly while the organization focuses on the product and sales.

Mature SaaS firms with stable volumes can potentially repatriate support in-house as they have the scale. Business process outsourcers are an alternative to provide cost efficiency at maturity.

Blending onshore and offshore support is an option regardless of lifecycle stage. Onshore teams handle urgent cases requiring cultural alignment, while offshore provide extended coverage at lower costs.

No one-size-fits-all all situations - revisit strategies regularly as the context evolves. Outsourcing provides flexibility to adapt as needs evolve.

Monitoring Key Performance Indicators (KPIs) and Customer Feedback

Ongoing metrics assessing client satisfaction, service levels and performance are crucial:

• First contact resolution rates and speed of response times indicate efficiency

• Customer satisfaction scores highlight the sentiment

• Tracking inquiry volume by channel informs staffing and costs

• Self-service usage demonstrates engagement

Other important metrics include:

• Reviewing case resolution accuracy

• Monitoring agent productivity

• Analyzing customer retention and churn metrics connects support to business outcomes

Both internal data and external signals, like online reviews, provide insights. Continuously evaluating these KPIs against targets ensures the chosen support model delivers on quality and cost objectives. As the business scales, maintaining standards requires diligent monitoring.

Conclusion 

In summary, customer support is a vital differentiator for SaaS companies that directly impacts retention and referrals. Thoroughly evaluating in-house, outsourced, and hybrid models enables the optimization of this critical capability. Revisiting support strategies is key as businesses scale to balance effectiveness, costs and satisfaction.