Business Mutualism: Customer eXperience and Customer Success Enrich Each Other for Business Health

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A series of articles by Sue Nabeth Moore and Helene Duneigre, October, 2017

Sue is a leader in Customer Success (CS) and is evangelizing it in France and the rest of Europe.

Helene is militantly in favour of Customer Experience (CX) which she has promoted and organised for years.

Sue and Helene met in Paris and listened with curiosity to each other’s convictions and practices and found them to be very close, yet different and decided to write about it.

Here’s part 1 and introduction to our series of perspectives on the proximity, comparison and emergence of a business mutualism between CX and CS: 

Helene about CX Stories:

A few months ago, AmazonGo video became viral. They opened a store where thanks to an app in their smartphone, customers come, shop and leave without going through cash desks. There are not even any cash desks in the store by the way!

On April 10th 2017, a disturbing video, about United Airlines this time, got watched thousands of times across the world. It showed a traumatized 69-year-old customer who paid for his ticket and asked for nothing but to be be flown to his destination. He was dragged off the plane and injured as airport police got called by the aircraft staff and dealt with him like a criminal, only to make room for transferring partner airline staff.

On the one hand, we witness what may be the ultimate shopping experience: customer extreme convenience and user friendliness, enabled by sophisticated technology behind the scene.

On the other hand, we witness extreme – and difficult to believe – excess of strict adherence to process and total lack of human empathy by company staff. This, followed by a very poor speech from the CEO later in the day, demonstrating that when a fish rots, it rots from the head down.

These are both examples of customer experience. The best and the worst. Customer Experience is indeed all about how your customers individually perceive interactions with your brand, self-assess their satisfaction compared to their initial expectations, share their story with friends and network and eventually remember afterwards their related emotions.

Sue about CS stories in the making of…:

Being relatively new, the storyboard for CS in Europe is “in the making of” as companies investing in CS are keen to build their ROI business cases.

Whilst CS is currently often associated with SaaS, the first customer success teams saw the light of day with CRM software companies, somewhat frustrated with the poor adoption and relatively low obtained value. The first CS organisation was a non-SaaS company called Vantive in 1996, followed by Siebel on Demand in 2004 and then in 2005, Saleforce gave birth to their “Customers for Life”. If Salesforce is the best-known success-story for CS (80% of their current revenue being driven from their current client base), this emerging role is applicable to any recurring revenue model (SaaS or not) as well as any business wishing to distinguish themselves by making their customers want to stay longer, invest more and advocate on your behalf.

Sue to Helene: What is the definition of Customer Experience?

It is the sum result of how the customer perceives each of its interactions with the company during the whole journey of purchasing and then using its product or services over the duration of their relationship. This perception covers rational assessment as well as emotions. It is highly subjective and individualized.

Helene to Sue: What is the definition of Customer Success ?

Customer success is a company-wide mindset and approach to operationalize and generate win-win growth, for customers and consequently for suppliers. CS is preoccupied with achieving the evolving desired business outcomes of customers as their internal and external contexts change, presenting new challenges and opportunities via their interactions across the customer journey.  In the words of Lincoln Murphy:

“Customer success is when customers achieve their desired outcome through their interactions with your company”

CS therefore includes CX and aims to obtain customer desired outcomes via controlled operationalisation. In a recent Webinar with Dan Steinman, we explored the following equation relating CS, CX and CO (Customer Outcomes):

CS = CO + CX

Sue to Helene: Who should work on Customer Experience?

Well, when you think about business, you’ll agree that there are no parameters more important than customers. All companies thinking seriously about their long-term performance should be working on their CX.

Traditional companies may have forgotten the customer priority as they are too busy with internal and administrative challenges, regulations, strategy, financial reporting, stock exchange volatility and so many other topics. New entrants, be it already mature digital companies or fresh new start-ups, are focussed on customers as priority.  This is one key reason why they are dangerous to established business.

CX references often come today from Amazon, Apple, Uber, Airbnb.

If you look around, you can find your inspiration with lots of others. Nespresso, Maïf, Leroy-Merlin, Midas, Ventes-Privées…    are set leaders. Others are improving quickly and smartly: Air France and its digital services, SNCF Voyages, La Poste…

Helene to Sue: Who should be interested in implementing customer success and when?

All recurring revenue companies should be preoccupied with introducing a CS approach. Value is obtained by customers over time through a 3-step succession of adoption , performance and transformation. When customers measure positive ROI during the transformation stage, they will wish to remain loyal and invest more in order to grow more.

CS is not only applicable to software companies and is increasingly more practiced in other typical subscription sectors such as media, telecom and insurance but also in more industrial sectors where IoT and AI enable to measure customer consumption patterns and behaviours.

CS should be anticipated and implemented as soon as companies start acquiring paying customers. The acquisition and contract signature is just the beginning of the customer hands-on experience. The on-boarding stage is critical in ensuring the desire for the customer to adopt new ways of doing business and the consequent customer journey milestones and engagement are key to pave the way to success. If these success milestones are not deliberately traced and the customer journey is perceived as a haphazard mystery tour, then there is a big chance that the customer will lose track and go astray to other places.

Sue to Helene: Why would a company spend time and money in CX?

There are several reasons:

  1. Ensuring that customer experience is aligned with the brand promise and their expectation is the healthiest way to build loyalty. This also means it is cheaper and more profitable to recruit new customers.
  2. Sustained differentiated experience leads to growth and improved market share.
  3. Many surveys and research demonstrate that companies serious about CX are financially performing 5 to 20% better in their sector.
  4. CX strategy contributes to giving sense to employees.
  5. CX culture can even lead to new and more profitable business models, for example the subscription service model developed by Michelin for truck kilometre service, or else the management print service model adopted by the printing industry.

Helene to Sue: Which benefits can a company expect from working on CS?

The reasons you indicate for CX above are also applicable to CS and in addition:

  1. CS enables customers to grow as a result of facilitating the achievement of their desired outcomes.
  2. As a consequence of the above, CS allows suppliers to grow.
  3. CS allows to operationalise a customer-centric strategy based on driving results. This includes defining customer journeys based on segments, scaling customer engagement and aligning internal roles to meet desired customer outcomes.
  4. CS acts as a company financial catalyst. It allows the collection, analysis and actioning of pertinent customer data to control costs, forecast revenue and detect risks and opportunities.

Conclusion

In our current evolving business environment, CS and CX cohabit side by side mutually benefiting each other in a kind of business mutualism:

Mutualism Example
Samlung Fotos

the challenges of B2B are inspired by best-in-class B2C CX practices, while the B2C world is evolving their CX approaches into brilliant models and practices where the likes of Netflix and Fitbit have become CS/CX rock stars.

CS and CX share the common ground of customer loyalty and delivering pristine experiences and pertinent engagement across customer journeys.  Whilst CX is concerned with delivering an end-to-end positive emotional and rational experience to reach satisfaction and lock loyalty and love, CS extends that to include driving business outcomes and ROI – in a word – success!

Together both CX and CS create a win-win business situation:

“CX locks consumer/customer engagement and CS locks business outcomes”.

Coming soon… join us in our next perspectives on CS and CX.

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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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