WaterSmart is a software-as-a-service (Saas) company and a vendor to over 50 water utilities. As a company that employs a lean and mighty team of 40, we also make use of dozens of software providers to help us build our product, run our sales & marketing, and take care of our employees. Often we are able to learn a lot from our vendors – we take particular note when we experience a seamless onboarding processes, smart pricing plans, or great user interfaces. A recent customer service experience with a vendor was also a learning experience – mostly in what not to do.
WaterSmart is nearing the size at which we could save money by switching to a different health benefit and payroll structure. We’ve been pretty happy with our current provider, but it is a good practice to regularly evaluate other options as we grow. In considering other vendors, only one of the five companies we contacted thought they could save us money - I’ll call them “Company B” to protect the guilty. Company B’s price quote came in at $40,000 less than our current provider and they promised to provide the same level of service we currently enjoy. Compared to our current provider’s website – which was serviceable but not sleek, Company B’s website was very modern, well designed, intuitive. Seemed like a good time to move.
Looking back, we should have noticed a few red flags…
Lower Price than Any Competitor
We know that we are nearing the size where we can likely save money by switching to a different benefits model, but every other company told us we weren’t there yet. The typical breakpoint for savings occurs around 50 employees (slightly more than we currently have). No other vendor we contacted thought they could save us money, and they told us straight out. Company B was the only one to offer the cost savings, and when asked why their price was so much lower there didn’t seem to be a clear reason.
A good reference is worth 1,000 times what a sales person will tell you. We did ask Company B for references, but they told us “We don't have references that we give out, only to respect our clients privacy. But you can always refer to our (website and read) testimonials from our clients.” The website had some nice quotes, but no actual human beings we could call and talk to.
When we finally decided to move to Company B, we immediately hit a roadblock. When we had talked to them about the transition, they recommended we make the switch as soon as possible to start saving money. When we followed their advice, we discovered that switching immediately would cause issues with deductibles and health spending accounts for current plans. Even though this is their business, Company B didn’t point out these (in retrospect, obvious) considerations.
It should be clear by now that the transition to Company B was a disaster. When we finally were ready to make the switch, we found that the cost savings didn’t live up to the promises. More tellingly, the onboarding process was a mess – there was no clear plan or regular check-ins, our Company B contacts did not get us crucial documents in time, and were often not responsive to our emails. We started to worry that if we felt this neglected during the onboarding phase, how would we feel once we were stuck with them? In the end, WaterSmart made the last minute decision to pull the plug and stay with our current provider. Luckily, they understood – helping the entire time, even as they knew we intended to leave them.
This experience was a great reminder of how important two things are that software companies don’t always emphasize: Integrity, and customer service.
What We Learned
We appreciated the vendors who told us at the outset that switching to their service wouldn’t save us money or would be hard on our small team. Company B was different – they probably knew that this wasn’t the best decision for us, but they were willing to tell us what we wanted to hear to make a sale, and in doing so they lost their integrity, and they put us in a bad situation – if we hadn’t been able to stay with our current provider at the last minute we might have jeopardized health coverage for many of our employees.
Company B also did not provide any real customer service. This is something that a lot of software companies – especially Saas companies, overlook. It’s a software-company bias to spend time on the product, and Company B’s user interface looked great (we never got to the point where we could actually use it – so we can’t say how well it worked). But they obviously skimped when it came to making sure there were people to guide us through the process, respond to our questions, and take personal responsibility to make sure that our employees weren’t left high and dry.
WaterSmart spends a lot of our time thinking about how we serve our water utility customers – how we provide more value to more utilities, and how we can do so cost effectively. While we are a Software-as-a-Service company, we recognize that customer success is predicated on human resources, high quality customer service, and a commitment to business integrity. We are constantly improving our product and working to recruit new customers, but we also make sure to not promise more than we can deliver. We also make sure we have actual people to be there for our water utility partners when they need it. Not all software companies are the same, and we’re certainly not perfect, but integrity and customer service are two things that are prerequisites to success that we will never skimp on.