Differentiation of a Customer Engagement Model for Mid-market and Enterprise Customers in Software-as-a-Service Company

Abstract

It is critical for a Software-as-a-Service (SaaS) company to meet its customers’ expectations of level and quality of service and engagement or alternatively set their expectations right in order to meet them, as failure to do so can have critical consequences. It is also a challenge for SaaS firms to deal with numerous customers and their heterogenous needs. Faced with such a challenge, SaaS firms can look at segmenting their customers and differentiating their customer engagement model between more revenue-generating enterprise customers and less revenue-generating mid-market customers. To explore this problem area and develop a theory in the research field, the study aims at answering why and how a SaaS company should differentiate and customize its customer engagement model between smaller and mid-market customers and enterprise customers.

The empirical data was primarily collected through conducting qualitative semi-structured interviews with employees at the case company. Moreover, existing company processes were also analysed. The literature review together with the empirical results were used to propose and validate a theoretical framework and identify barriers in its implementation. The results uncover that there exist several external and internal factors that drive such a differentiation including differences in service needs of customers and differences in their profitability respectively. The study concluded that SaaS companies can use service modularity to offer more customization to enterprise while more standardization to mid-market. While there are certain limitations to the findings, the study is an insightful examination for academics and practitioners interested in the topic.