Customer retention challenges? This company can help with ‘multidimensional’ data listening

Modern-day software-as-a-service (SaaS) businesses are racing to acquire new users and convert them into paying customers. The rush is great for the industry, but it’s also left many organizations looking at only half the picture.

Example: A broad focus on acquiring new paying customers but less on post-sale constructs — including customer success, customer care and professional services — will not only improve customer retention but also help growing the business at the same time.

When organizations don’t pay enough attention after the sale, opportunities to upsell or cross-sell to existing customers can be missed. In many cases, they may even overlook the risk of churn and lose their customers altogether. According to Mckinsey, if an organization manages to handle these aspects to perfection and ensures customer retention, it can see 20% growth every year without having to add a single new customer.

Currently, most SaaS businesses rely on heuristic rules and human experience (including intuition and guesswork) to determine customers’ health scores and direct retention and upsell efforts toward them. It is not only unreliable but prone to bias, leaving a large gap to be filled.

StepFunction drives customer retention with data

Founded in 2020, the California-based company, StepFunction, is working to solve this challenge. The company’s ML engine captures and learns from a wide range of customer behavior signals — product usage, support tickets, feedback, CRM — and identifies subtle relationships between points of data to provide an overview of customers’ intent in real time. Today, it has raised $5 million in post-seed funding.

“StepFunction plugs into any customer success system (Salesforce Service Cloud, ServiceNow, Gainsight, etc.) in the SaaS company and publishes opportunity (upsell) and risk (churn) scores for customers directly to the system. The solution does not disrupt the daily workflow of SaaS operators – the intelligence system determines the customers to target and the next best action recommendations are highly accurate,” said by Navneet Singh, CEO and cofounder at StepFunction, to VentureBeat.

The StepFunction tool includes a low-code growth wizard that enables organizations to capture operational data from systems of record through connectors. It then presents guided screens to assist in cleaning/normalizing/creating time series data and selecting a model for training and inferring customer intent, along with associated risks or opportunities.

“This level of customization and control allows the SaaS operator to choose the optimum [artificial intelligence] AI models for their specific business needs. The scoring results are published directly in the customer success system,” said Singh.

So far, the company has acquired five SaaS companies as customers. They use its offering to retain and upsell to more than 2.5 million SMBs, improving the value and predictability of their subscription revenues.

“StepFunction’s predictive target hot lists have been a game changer for us,” said Marina de la Torre, VP of customer success at Mitel, while sharing about the product.

“We’ve reduced costs (including delivery cost) while significantly improving save rates. Our CSM (customer success management) team uses their interpretable AI to directly drive CTAs and proactively to reach our long-tail customers. We have expanded the deployment across all six of our product lines,” he added.

Plan ahead

With this funding, led by Dallas Venture Capital (DVC), StepFunction will work to grow the company’s go-to-market capabilities and product development teams. It aims to triple its size and revenue by the end of next year.

“StepFunction continues to innovate with visual growth modeling, hands-free installation, and other business performance enhancements. On the back end, the company is also releasing regular improvements to action recommendations, the AI ​​model library, automatic management of data drift and business drift, as well as continuous machine learning updates,” providing Singh emphasized.

While some companies, including Toplyne and Ocean IO, are using AI to help SaaS players sell more, StepFunction says it’s one of the few focused solely on driving growth through its existing customer base. . The company says its advantage lies in the number of signals it can ingest, how it prepares data to be useful, its proven AI models, and recommended next best actions for in customer retention.

Competitive products are overwhelmed by the types of data in the systems and the sheer number of data signals available, it added.

According to Fortune Business Insights, the global SaaS market will exceed $700 billion by 2028. With this kind of growth, businesses can expect to see the development of more tools like this in the coming years.

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