Creating a Customer-Centric Culture To Successfully Lead and Implement Customer Success

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The success of your customer depends on the continued added value you create and the experience you deliver to them. Successful organizations are shifting from being product-centric to a customer-centric mindset and often adopting and delivering via a recurring revenue or subscription based business model. These models imply a long-term correlation between the added value gained and financial engagement of the customer. Indeed, the more value gained, the more likely the client is going to wish to continue and even increase the amount of their subscription investment. As quoted by Jason Lemkin:

“Customer success is where 90% of the revenue is”

After e-meeting each other on social media and appreciating our common passion for the customer centricity of things, we (Daniel Coullet and Sue Nabeth Moore) propose to share some thoughts around a customer success (CS) framework developed across the layers illustrated in the diagram below: C.S. – O.P.T.IN²:

OPT-IN²~Framework – Success Track Enterprise

The “C” and “S” are the strategic layers, meaning Customer centricity and Service alignment.  “CS” is also a common acronym for Customer Success.

O.P.T.IN²  refers to the CS objective of ensuring  customers wish to stay for good.  It is also an acronym which spells the operational chronological steps across which the defined CS strategy is operationalised:

 

O = Organisation, P = Process, T = Tools. For the “IN²”, in parallel to the former steps, there is an evolutive and agile initiative around INformation (data) as well as the on-going INtegration of the Organisation, Processes, Tools and INformation.

The above will be outlined across 3 articles, the first of which on the strategic foundations is below. The second will be on the operationalisation of CS and the third a concrete case study.

Many software companies in SaaS or subscription models today are doing their best to try and create customer success management organizations and are often reactively addressing the threat of churn. So let’s move forward by building a framework that will help us iterate to become a best-in-class company that proactively delivers continued great value and experience to customers.

What does it take to operationalize customer success so that you not only mitigate the threat (churn) but you also create the opportunity to fully align your organization to proactively partner your customer’s expected outcomes? In turn, this will then grow your business by increasing renewal and expansion, consequently reducing churn and fostering client advocates.

Strategic Foundations

We outline below what we consider to be two strategic pillars and some related best practices which create the foundations for a customer success organization to become successful : customer centricity and service alignment:

  1. Customer Centricity

In the age of the customer, the vendor-customer power has flipped. Before suppliers had the power to sell without being that concerned about the business outcomes of their customers’ investment. In the software world, this was particularly the case with the on-premise model. Now, with abundant knowledge and alternative solutions to solve pain points and the growth of subscription, customers  have the power to opt out more easily from their engagement – operationally, functionally, technically and financially. This means that company mindsets should move from being traditionally product focused to include customers as the key business driving force. As George Colony, Forrester CEO predicts, if a company is not customer-centric, they’ll simply be out of business between 5 – 10 years.

So, what are some of the key competencies and pre-requisites to become customer-centric? Indeed, there are divergent perceptions on the definition of customer-centricity but in the most simplistic terms, for us it means when the customers are partnered to achieve their expected business outcomes thanks to their investment in your solution and services:

A. Ensure a customer-centric vision top-down:

  1. Top management show buy-in, sponsorship and change management to empower a customer-centric strategic vision.
  2. Define the meaning of customer-centricity.
  3. Top management nurtures and promotes a customer-centric mindset across all the company organisation and cross-functional roles.
  4. Customer-centricity is also embedded as a mindset among internal “customers”. Cross functional roles partner as “internal customers” in the interest of their external customers. Each role knows the expected inputs and outputs of their respective contribution to internal and external customers.
  5. Customer-centricity is the company driving force which determines all behaviours, actions, reflexes and engagement with customers.

    Picture by curtesy of Kilpatrick Group
  6. Continuous adaptability is encouraged towards changing customer needs.
  7. Objectives and incentives around customer-centricity are aligned across the organisation and roles.

B. Know your customers:

  1. Understand your customer’s current needs and anticipate new ones.
  2. Understand different customer needs according to user profile (or persona) and their impacted stakeholders.
  3. Understand and empathise with customer domain challenges, contexts and pain points. Put yourself in your customers’ shoes.
  4. Anticipate and follow customer domain and market evolutions.
  5. Define and operationalise required client knowledge data (to be developed in our second article).

C. Foster customer experience (CX) principles:

  1. Define via internal collaboration a customer journey/ies and milestones from the customer point of view.
  2. Generate a frictionless customer experience (CX) across the customer journey via an adapted customer relationship.
  3. Align CX and CS principles to create the conditions for success. CX and CS are often treated as 2 distinct disciplines when in fact they complement and feed into each other.
  4. Align the above customer journey/ies with all your company organization, roles and responsibilities.

D. Define expected customer outcomes:

  1. Help customers express their vision of success and how your solution contributes.
  2. Help define and measure tangible business outcomes (per impacted profiles). 
  3. Ensure your solution, related services and engagement address the above (use cases).
  4. Communicate, partner and measure how your solution + services contribute to business outcomes.

E. Foster customer success principles:

  1. Define a clear mission statement (charter) for CS.
  2. Ensure all internal actors understand the role of CS as a strategic business pillar.
  3. Ensure each internal actor is empowered in their responsibility and contribution to CS.
  4. Align cross-functional incentives and compensation for CS.
  5. Determine appropriate and pertinent metrics/KPIs to measure CS in alignment with the strategy, e.g. adoption and performance metrics for customers and internal metrics for your company such as NPS, net retention rate, CLTV, churn rate, CSAT, time-to-value, etc…

2. Service Alignment

Ensure that the related services are aligned with the customer-centric strategy. While the use of the word “product” is still common place, e.g. “product to market fit”, “product development”, “product owner”, , “product run” etc…, we prefer to use the word “services” which holistically includes the product and the CX. In the business models of “X as a Service” for example, we consider that maintaining the previous wording and mindset of selling a physical “product” is rather a contradiction in terms. We prefer the term “service” and which englobes the product, the related services and adapted CX. The term “service” also infers that there are expected outcomes which will materialize as the services are consumed, as opposed to the word “product” implying just a means to an end.

A. Design the “Service”:

  1. Unite cross-functional teams to define the expected outcomes and experience at each stage of the customer journey per profile/persona.
  2. Design the product (UX), experience (CX) and services in parallel using a methodology such as Design Thinking to create harmonized value to the customers. In many cases, the experience and services are designed after the product which often creates a non-coherent CX and misalignment and friction between vendors and customers, putting customer success teams in a challenging position.
  3. Consider the CX like a “product” launch, using best practices and processes for software development such as design, quality assurance, and “service” owners,…

B. Design Service Engagement Models:

  1. Define engagement models per client segment needs with the appropriate number of touch points. Synchronize them between the digital, physical and product experience.
  2. Align the engagement models and touch points with your CX and CS principles.
  3. Align the engagement models with your internal key processes and related actors.
  4. Include the ability to measure adoption and performance directly in your product/services in alignment with the metrics defined in your strategy.
  5. Validate with customers their key moments of truth (MoT) during the customer journey which are crucial moments for CX.
  6. Instrument your customer feedback to continually understand if the design (outcomes and experience) are delivering what is expected.
  7. Adjust the above whenever necessary.

The above strategic foundations provide the base upon which the customer success organization can then be operationalised. While customer success is emerging in business as a strategic pillar of recurring revenue models such as SaaS, it is in fact applicable to any customer-centric company intent on generating win-win growth and profitability, irrespective of their business model. Indeed customer-centricity demands a proactive shift in culture and not just a reactive response to changes in business models. The product, the service and CX are all an intrinsic part of the success of the customer and together they will progressively become an inherent part of the storyboard for doing  “business as usual”.

In our next article, we’ll be pleased to share some further thoughts around the above  OPT-IN² framework which outlines more best practices in operationalizing proactive customer success with an agile mindset. This will be followed by a case study article.

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Mapping The Customer Journey with Engagement Models

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I’m honoured to have participated and co-hosted this Webinar on mapping the customer journey and engagement models with Gainsight’s Dan Steinman.

Ocean liner journey log book in 1904 (Le Havre – New York)

 

 

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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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Customer Success of Things (CSoT) – Part 1 – Some Definitions

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As we observe momentum building up in Europe around the emerging role of customer success, I’d like to share a few thoughts around this business metamorphosis we are witnessing. While this new role is still very much at experimentation stage as it positions itself in the recurring revenue business model, there are common themes around its practice and impact. This inspired me to create a series of some reflections around recurring themes and which I have called “Customer Success of Things” (CSoT)

What do we mean by Customer Success ?

Before we dig further into some common CSoT themes, a definition of customer success is fitting. The notion of customer success has different interpretations and maturity levels depending on countries, sectors, markets and company sizes. The role of customer success for example is quite different in a large enterprise organisation than in a start-up. There is however a common goal:

To fulfil the evolutive expected outcomes of customers through their multi-directional interactions around your company.

Customer success is a mindset and a series of on-going processes and interactions. A customer’s needs, expected outcomes and context at the beginning of their customer journey may change after contract signature or within the licence period. Proactive listening, observation and business-people-silhouettes-communications-netwo-6393095engagement is necessary to identify health and risk to ensure your solution and company services are constantly providing added value and adapting to signs of change. Customer success thrives on multi-directional positive engagement and communication:

1) Vendors towards customers

2) Customers towards vendors

3) Vendor customers between themselves

4) Vendor customers in exchange with other third parties (peers, prospects, stakeholders, competitors,…)

This CSoT series of posts will share some thoughts on customer success themes. The first one below continues the above definition:

“Customer Success” – Term with a Double Meaning

When On-Demand and SaaS first started (Salesforce.com being one of the pioneers), they observed that to retain client subscriptions it was necessary to proactively engage with customers to help them become successful with your company and solution. So they created the notion of “customer success teams”.

Customer Success Teams

The customer success team is commonly known as the group of actors who relay, usually after contract signature (though not always) to continue to proactively partner customers to achieve their expected outcomes. The foundations for success have already been laid early in the sales cycle by the marketing/business development/sales teams. The customer success team now continues the customer engagement and provision of added value over the whole duration of the licence period until renewal and beyond. Depending on organisations, renewal is also included as part of the role of the customer success team.

So whilst there is a group of people called “customer success team” dedicated to the contractual health and wealth of the customer, other teams have also played their part in the “customer success journey”.

This brings us to the second more holistic notion of customer success.

Customer Success – Company DNA and Global Objective

It has transpired that customer success is not about a team of people trying to please customers and reduce churn. The term “customer success” is a holistic cross-functional objective and responsibility. This teamwork-team-together-collaboration-business-communication-outd-outdoors-concept-48568990means that across the entire customer journey, every single actor has a customer success role to play with clearly defined responsibilities. A customer success mindset is in the DNA of the vendor company running throughout the whole organisation, e.g.

  • Management to define the customer success vision, objectives and tempo
  • R&D to evolve the product according to customer input and market needs
  • Marketing to prospect ideal customers + personas with success potential
  • Sales to close and prepare customers ready for on-boarding to success
  • Customer success teams to provide proactive engagement and added value
  • Support to provide rapid and pertinent replies to customer queries
  • Etc…

All teams play a customer success role as customers progress across their journeys to achieve repeated success. For this holistic view of customer success, this often means that existing internal roles are revisited so that each player has clear objectives, responsibilities and engagement aims at each stage of the customer journey. success-businessteam-sky-4289404In the recurring revenue model, the post contractual growth potential is so considerable that the traditional notion of pre-sales and post-sales activity is revisited. This necessarily impacts the internal organisation, responsibilities and internal relays.

Conclusion

There are 2 notions around the term “customer success”:

  • Customer success organisation = holistic responsibility and objective of the whole organisation to ensure the success potential and achievement of its customers as they move across the customer journey.
  • Customer success team = group of actors (usually after the initial contract but sometimes before) responsible for proactively partnering customers to reach their evolutive expected outcomes.

For this internal relay of actors across the customer journey, check out the boomerang recurring revenue flight.

Thanks for taking interest in this post. I look forward to joining you soon to share further thoughts in the “CSoT”series.

 

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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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