Calling all Customer Success Actors

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In the context of an initiative in Europe to bring together customer success leaders to exchange on their experiences, we’d appreciate if you could take a couple of minutes to indicate what are your current top 3 customer success challenges. You’re of course welcome to reply whether you’re in Europe or not 🙂 The results will be published afterwards.

Customer Success Challenge Survey

Thanks in advance for your contribution.

The European Customer Success Community Team :

Peter and friends : OonaghEvinSue

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The Recurring Revenue “Boomerang” and the Customer Success Journey

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Recurring Revenue Boomerang.2

     Click on the image to view the recurring revenue boomerang…

Once upon a time, in the heart of England near to Sherwood Forest, we kid “gamers” (no consoles then) would spend our time in outdoor adventures. With the kids on the block we’d invent new games, role plays and mini Olympics and we’d be recognised for our success. I was proud to be crowned “Maid Marian of Boomerangs”!  I was fascinated by the deft of my boomerang whizzing through the air and spinning right back into my hands. It was magic and rewarding! The trick was mastering how to launch enough spin and orientation to ensure the boomerang would keep coming back gracefully into my hands.

Now that I’m all grown-up (well, in age at least), I’m pleased to be involved in yet another kind of “boomerang” activity, now more commonly known in business as “customer success”. Let’s face it, the role of the “boomerang team” would have sounded a little strange, don’t you think?

My enclosed infographic (my first) revisits the traditional marketing and sales revenue funnel metaphor with what I have called the “recurring revenue boomerang”. In traditional funnel depictions, as soon as the bottom of the spout is reached, i.e. when the contract is signed, this is usually considered the end of the journey. To compare to my childhood pastime, it’s a bit like my bosom pal “Robin Hood of Arrows” meeting his bulls eye targets! Robin Hood

In those days of bows and arrows, a customer implementing a solution had to spend a huge amount of money for the implementation phase and had to keep it several years, irrespective of the success because the investment (software acquisition cost) was huge. Now in the recurring revenue model, there is no more upfront cost. A customer can easily decide to opt out of using a solution early if it is not giving returns.

In a recurring revenue model, the contract signature is just a part of the way through the customer journey. The customer experience starts right from the outset of their interaction with your company and continues across their on-going journey with your product, company and internal teams. While customers continually gain business value from their renewed investment, vendors increase their customer life time value (CLTV).

Research shows that loyal customers are worth ten times their first transaction value and it’s 65% easier to sell to them than first-timers. As my infographic shows, gained life time value is a recurring process where both customer and vendor benefit in a business win-win relationship of health and wealth:

Demand ‘n’ Turnaround, Expand ‘n’ Boomerang!

The recurring revenue boomerang maps the typical macro milestones of the customer journey and which vary in name and granularity depending on the organisation. The revenue boomerang also shows the role of the customer success team in the vendor relay to partner the customer with their expected business outcomes, create loyalty and generate health and wealth for both customer and vendor alike.

The left arm of the boomerang (demand and turnaround) illustrates the typical macro “hunter” funnel relay activities between marketing and sales teams. The right arm illustrates the “farmer” type activities of the customer success team in relay with sales and marketing teams to reinforce expansion and the boomerang effect of returned gains!

The product team covers the whole customer journey. While this team may not be directly client facing, they are the innovative backbone of all team relay interactions: client feedback and requests, user product experience, competitor benchmarking, market listening, product advisory council etc. It’s simple, no product innovation and the boomerang will plummet straight to the ground with a great big plump! The financial team is depicted from the signature onwards. In the recurring revenue model, depending on the agreed payment frequency and organisation, this team also works in seamless harmony with customer success and/or sales teams.

So what do we mean by customer success?  Whilst the role of customer success may be perceived differently across countries, sectors, company sizes and business models, it is about vendors partnering customers to deliver a customer life time experience of business value and ROI to continually meet current and future expected outcomes. For positive returns and a boomerang effect, this is the result of vendor top down strategy, mindset and committed synergy between all company roles: marketing, sales, product, finance and customer success teams. This latter population is the name given to the actors who partner the client after contract signature to achieve their expected outcomes.

Depending on the company size, organisation, maturity and product implementation complexity, customer success can include several actors fulfilling different roles and names (professional services, delivery, support, on-boarding teams, account management, education, support, renewal teams, customer success…). To simplify my recurring revenue boomerang illustration, I have used the term customer success team to envelope all of the above.

For the customer to be successful and the boomerang to come full circle with returns, customer success starts right from the journey outset, when the boomerang is thrown with eagle-eye precision.

Let’s take a brief trip through the main macro milestones of the “recurring revenue boomerang” customer journey.

DEMAND

Awareness

Potential customers need to know WHY they should invest. They will be aware that your innovative product promises to solve pain points, facilitate achieving business objectives or obtain business gains by doing existing tasks in an optimised manner. Potential customers will also be aware of the impact of not investing in your product.

At this stage of the journey, marketing teams do a great job generating, nurturing and qualifying potentially successful customers with a product-people fit. Potential customers are now pretty savvy about your product and those of your competitors. This matching of the potential successful customer and raising awareness of the gains from your product is an essential first step in orientating the rest of the customer journey on the right trajectory. It’s like that sporty kid “Maid Marian of Boomerangs” putting on an amazing spin!

Consideration

Now that the customer is aware of potential gains, they desire to move forward and consider themselves in the future state, savouring the benefits and related operational considerations.

Marketing teams work in relay with sales at this point qualifying and nuturing potential customers to take them the next step forward.

Trial

The customer’s desire to find out more encourages them to obtain pragmatic knowledge on HOW your product meets the promise. A trial period usually creates the “wow” effect and gives an initial glimpse of what future gains and potential ROI could look like. Here the customer appreciates more the practical “How to do” relating to your product.

Sales teams play a key role in having the customer define what are the expected outcomes for a successful trial. In certain organisations, customer success teams may also participate, e.g. in a POC (proof of concept).

Decision and Contract

After a conclusive trial where expected pre-requisites are met, sales teams convince the customer of the gains in closing the contract and determine the further “How to Do” and “How to Be”. These include a projection into a future vision of how the product fits into the organisation, processes, methodology, tool landscape and roles and responsibilities of impacted actors. It also engages customer sponsorship and management buy-in, defining what success means and how progress towards that vision of success will be measured. For that, measurable key performance indicators will be defined.

Sales and customer success teams work in relay to ensure that the customer context, vision of success and expected outcomes are clearly defined. To keep to our metaphor, the well spun boomerang has now started to gain momentum on its outbound course.

TURNAROUND

Adoption

Customer “on-boarding” is the stage where adoption of the product should be firmly anchored.

Adoption is one of the biggest challenges in recurring revenue models. It impacts directly each individual user at their different speeds of changing their usual reflexes and routines. Swift initial adoption by all users will help ensure a smoother boomerang return for both customers and vendors.  At this stage and in addition to the usual excitement, it’s here when the first hands-on impression is engraved. This will often leave a lasting emotional perception, even influencing subconsciously the later decision to renew the subscription.

Customer success teams play a vital role in partnering customers to help maximise adoption and generate added value. Customer management buy-in and engagement is key. Relevant and measurable adoption indicators are defined, measured, and celebrated. Our happy boomerang has now made a U-turn and is at the beginning of the return journey, symbolic of initial returns.

EXPAND

Performance

While each impacted individual adopts the product at their own pace, they’re all now up to speed rowing together in the same boat and “cruising” at a rate of knots where initial business wins can be celebrated as a team.

Key performance indicators have been previously defined, implemented and are now measured.

Customer success teams partner their customers to continually optimise their potential of boosting business performance. Added value performance stimulates the customer’s desire to expand current investment and/or purchase new offers. For that, customer success teams relay with sales and marketing, according to the organisation, processes and roles. Our boomerang is now gathering excited momentum on its return journey.

Transformation

At the transformation milestone, customers are now “sailing”.

They use your product as a reflex in a “business as usual” like manner. The product has most probably become sticky in their processes and methodologies as full gains and ROI are now proved and increasing. The contract renewal will just be a formality and the customer will most likely wish to buy more of the same or try new packages.

Customer success teams work in relay with sales and marketing to keep the customer sailing at high speed with their business transformation.

Our boomerang is now on it’s advanced success return trajectory, enjoying all the benefits of its flight path.

BOOMERANG  Boomerang-in-Flight

Advocacy

Your customers are now successful and have achieved their expected outcomes, so they not only wish to buy more or even invest in new packages, but they also genuinely want to tell the world all about it. They have become natural advocates of your product, services and company and are “surfing” on the waves of their success. Their whole boomerang experience has turned them into becoming the best sales agents you could ever wish for. Customer advocacy of course can happen at any time of the journey in different forms (e.g. word of mouth referrals, reviews, business cases, participation in events, testimonials, NPS…) and as soon as the customer is thrilled and successful enough to want to spread the word.

Peer advocacy is worth gold. It not only creates credibility and legitimacy with potential prospects but according to McKinsey studies, peer word of mouth generates more than 2X the sales generated by marketing and advertising. The cherry on the cake, according to research by Deloitte, customers referred by other customers have a 37% higher retention rate.

Customer success teams partner advocates and relay with marketing and sales teams (depending on the organisation and processes) for advocacy programmes.

So now the boomerang has come full circle gathering on its trajectory all the health and wealth benefits for both customers and vendors.

In the recurring revenue model, the challenge is to proactively ensure the boomerang keeps a healthy flight path and is not grounded after  collision with other boomerangs or self-flying objects or destabilised by external forces: churn is the cruel and costly curse of the recurring revenue boomerang!

As in all good sports, the competition continues and the boomerang will be thrown again to generate further win-win returns. As in all good fairy tales, all the “Merry Men” live happily and successfully ever after…

*Check this out if you’ve ever wondered why boomerangs come back

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The Customer Success Movement Is Taking The Business World By Storm

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Star Wars Androids
Oscar.go.com – Star Wars Droids – 2016 Oscars

Interview with Gainsight’s CCO, Dan Steinman. February 2016

By Sue Nabeth Moore, Customer Success Enthusiast, Paris 

In the momentum around customer success, I’m pleased to share my recent interview with Dan Steinman, CCO (and Skywalker) from Gainsight. In keeping with the theme of the Oscars last weekend, this inspiring interview is split into a “SaaS Wars Trilogy” which you’re invited to follow over the next week. It also casts an avant-première at Gainsight’s new book – Customer Success – How Innovative Companies Are Reducing Churn And Increasing Revenue, to be officially published on 7th March. 

Trilogy Episodes: 

1) New Hope: SaaS Wars – A New Business Model and The Growing Importance of Customer Success

2) Innovative Vendors Strike Back – Vendors Organize Themselves for Customer Success

3) Return of “The Wall Street”– Evangelism of Customer Success Value and Return on Investment 

Episode 1 – New Hope: SaaS Wars

A New Business Model and The Growing Importance of Customer Success.

Sue: Thanks for accepting this interview Dan. Firstly, how do you define the role of customer success ?

Dan: I’d like to present my pictorial. Imagine that there’s a gap between what your product has the ability to do and how your customers are actually using it. Every company should have that gap. That’s because it shows that you’re innovating on your product. Customers can never keep up if you’re innovating at a good pace.

Customer success is there to narrow that gap, by bringing the bottom line closer to the top line. By getting your customers to use more of your product, this brings a direct correlation to loyalty, value and all those other wonderful things we want to happen: renewal, up sell, cross sell and advocacy…

Sue: I like the gap pictorial Dan. I know there’s a lot of momentum around customer success right now and Gainsight has even coined the so-called “Customer Success Movement”. Yourself, Nick Mehta, (CEO of Gainsight) and Lincoln Murphy have just written a book on the subject. Can you give us a little avant-première insight please? Is it going to be the “bible” of the customer success movement?

Gainsight Book on Customer SuccessDan: Well I would probably use the word bible pretty carefully:) Let’s say it’s the first book of the new customer success movement. The terminology of “customer success” has been used before. But in the new world order where subscriptions are king and customer success is a necessity in a subscription company, this is the kind of first book. It won’t be the last. I know of least three other people who are writing a customer success book. I’m proud that we got there first and that we’re taking on a leadership role.

The book covers different aspects. Firstly, the history of customer success and how we got here. It explains what the subscription tsunami is all about and how that turned into the customer success movement. The middle of the book deals with a lot of practical advise on how we do it, what we like to call the ten laws of customer success. At the end, we cast a look at what the next five or ten years will look like. From a tongue in cheek point of view, we think we’ll be seeing customer success droids flying around in Google self-flying cars ensuring that every customer has a customer success droid helping them do their thing. The total cost of doing customer success at the highest possible level will be around a nickel a year! So I don’t think that’s realistic but at least that is the direction that we’re trying to go in. By necessity, customer success will become more and more valuable in the subscription world that we live in.

Sue : That sounds like a wonderful futuristic world for customer success. I mentioned the bible and you talk about the ten laws of customer success:) So when will the book be published ?

Dan: Well I didn’t correlate that before and there are definitely no stone tablets provided with the book:) The book is completed. It’s on the printing press right now and available in Amazon. The official publication is March 7th so before the world runs out of paper, you can hurry up and get your copy now:)

Sue :Well I’ll definitely order my copy on Amazon and would love you to personally sign it for me*.

With all the current buzz, how do you position the role of customer success compared to more traditional roles, e.g. sales, account management, professional services, support, marketing … ?

Dan: Yes, a little history I think helps answer this question. The history has to do with the shift in the changing business model from the enterprise to the subscription economy. Let’s just use those high level terms. One of the main things that the subscription economy drives is the focus on customers.

In the enterprise economy, we used to be able to sell to a customer once and not really worry about revenue afterwards. In those days, 90% of all of the money was collected at the time of the first deal. Now that has flipped completely. Today less than 10% of all the money we’re going to collect from you is collected at the time of the first deal. The other 90% comes after that in the form of renewal, contracts and up sells. So if 90% of all the business I can potentially generate is after the first deal, we need a team of people who are going to help manage those customers to make sure they wish to renew those contracts.

It’s a little bit like taking subscription to the very basic level of magazine subscriptions. If I sell you an annual magazine subscription, I better do something which delivers value to you so that you renew your subscription. I can’t just ship you a piece of empty paper! I have to give you content, pictures and whatever exciting things you want in that magazine. The same thing is true now in the software world with a subscription recurring revenue. Customer success is not about delivering just another product but about delivering a value, an outcome and ultimately success. If I do that for you, you are likely to renew your contract. If I have more products to sell, you are likely to at least look at those and potentially buy them too.

Sue: We’re really witnessing a power shift where power is now in the hands of the client.

Dan: That’s absolutely right. There is a significant power shift from vendor to customer that has driven this customer success movement. Since you spoke about power shifts, there is another second shift inside of companies going from sales to post sales, basically from acquisition to retention.

In a SaaS company what usually happens after about four to five years of existence is that more dollars are coming from the installed base rather than coming from new acquisition sales. I like to use Salesforce as the analogy because they’re the most mature SaaS company. Next year Salesforce will be around a $10 billion company. Out of that, somewhere in the region of $8 billion will come from the installed base and not from new sales. That’s a significant power shift. So, if you’re the CFO at Salesforce, who are you talking to most about next year’s forecast, the one who has the $2B number or the one who has the $8B number?

Coming soon… Episode 2: Innovative Vendors Strike Back

*I have since ordered my copy of the book on Amazon for my Kindle….It’s a recommended read!

 

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