Written by Atul Kamra, Managing Partner at SixThirty Ventures and Anders Norremo, VP of Customer Solutions & Insights at BitSight
Why Professional Services Matter Now
In SaaS, closing the deal gets you in the door. Keeping clients? That’s how you build a real business.
Deloitte reports that boosting retention by just 5% can drive profits up 25% or more in enterprise SaaS. The secret to that kind of stickiness? Flawless onboarding, seamless integration—and smart professional services.
And the time is now. Net Revenue Retention peaked in 2021-2022. While growth is achievable even with NRR below 100%, every dollar lost means that two need to be brought in just to stay flat.
On top of that, today’s enterprise buyers want more than just software. They want a partner who can fast-track adoption, reduce internal lift, and deliver deep, ongoing expertise. For SaaS providers, that’s a double win: stronger retention and higher ARR.
Where Services Supercharge the Value Chain
Professional services turn your team’s product knowledge into a revenue engine. When embedded into the sales motion, they lower friction for customers and unlock new margin for you. Two proven models:
- One-Time Integration: Fast, efficient onboarding that builds confidence and shows value early.
- Ongoing Consultation: Dedicated support for scaling, optimization, and long-term success—what enterprise clients are increasingly willing to pay for.
Pricing for Margin—and Growth
Most clients don’t have the bandwidth and expertise to implement or optimize new tech. That’s your opening.
By packaging your internal expertise and delivering it across accounts, you offer high-value services at a cost far lower than clients could build in-house. The kicker? When priced right, it’s profitable and scalable.
Try a dual-pricing model: upfront implementation + recurring services (typically not more than 10–20% of ARR). Done well, investors may treat that services revenue like ARR—especially if it drives retention.
A Strategic Edge for Product and Roadmap
Professional services aren’t just a delivery function—they’re a frontline intelligence tool.
Your services team hears what product teams don’t: the real-world friction, workarounds, and wish lists. They Experience what your clients experience…moreso than your Product teams. That insight tightens feedback loops, sharpens your roadmap, and makes your product more indispensable.
But this takes real talent—people who can both implement and extract strategic insights. Hiring and developing that capability? It pays dividends in closing product gaps, driving renewals and creating roadmap clarity.
The Hidden Valuation Boost
Professional services are an upfront investment in long-term ARR—and your valuation.
With discipline on delivery and margin, they pay for themselves fast. Deloitte found that a 10% increase in retention can drive a 30% bump in valuation. That’s real leverage.
Even the slickest platforms run into operational hurdles at the client level. Services let you meet that challenge head-on—boosting retention, deepening engagement, and expanding wallet share.
Why Founders Resist—And Why That’s Changing
Many founders steer clear of professional services. And on the surface, it makes sense: SaaS is all about scale, margins, and recurring revenue. Services can seem like a drag—messy, lower-margin, and harder to scale.
There’s also investor perception: Will services muddy the SaaS story? Raise concerns about revenue quality? Plus, there’s the operational lift—hiring, managing delivery, aligning incentives—across the organization beyond just client success teams.
But the thinking is evolving.
Smart founders now see PS not as a distraction but an accelerant. When done right, it shortens time to value, deepens engagement, and builds trust. It’s a wedge into the enterprise, a retention engine, and a customer insight goldmine. Even investors are coming around—especially when services revenue ties directly to ARR and customer success.
Bottom line: Professional services don’t dilute your SaaS model—they can supercharge it. The trick is to be deliberate: build offerings that scale, price them smartly, and align them with your long-term growth engine.
