Implementing Customer Success – An Organizational Balancing Act

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Following from our previous article on the importance of strategic foundations for creating a customer-centric culture to successfully implement customer success (CS), we’re pleased to follow on here about the company organization itself. We’re still aligned with the chronological OPT-IN² framework to which we previously referred, an acronym meaning: Organisation – Processes – Tools – INformation – INtegration.

While we saw in our previous article the strategic pillars of customer-centricity and service alignment, the organization of the company (the black bull’s eye of the above infographic) is the supporting backbone which will structure the progressive operationalization of customer success, allowing it to adapt and transform to a customer-centric and CS-championed company.

Without the organizational backbone firmly in place, there is a high risk that the CS strategy and tactical efforts will crumble.

We like to think of the fundamentals of the CS organization like a 3-legged stool, permanently supporting and keeping in balance CS operationalization as it is progressively implemented.

If all 3 organizational legs are not firmly balanced at all times, then the supporting framework topples over, bringing down the operational CS efforts supporting the customer-centric strategy. We consider that the 3 supporting legs are as follows:

  1. Charter
  2. Responsibility
  3. Executive Buy-in

Charter

Why is it important to have a customer success charter? This is an essential part of any customer-centric company as often the 2 correlated words of “customer success” are misunderstood or non-aligned across companies. It is essential to state loud and clear what is meant by customer success, what is its vision and what is the charter for its mission. The customer success charter will evolve as customers, vendors and their solutions and services evolve.

The vision for customer success is the strategy to drive a sustained dual growth engine for both customers and the vendor alike. Indeed, in the current business world where recurring revenue models and subscriptions are being rapidly adopted, the traditional seller-buyer relationship is gradually being replaced.

Picture Source – Lehigh University

These two parties have now evolved into a different kind of relationship, one of true partnership where they mutually help each other to grow and prosper: clients invest in a solution and/or service which will adapt and expand with their growing needs while the vendors benefit from their clients’ growth and consequent additional investment.

The vision of customer success includes above all what the customers need to achieve regarding their business performance. This corresponds to the mission statement of customer success, meaning how your company – corporate-wide – ensures that your customers’ evolving needs, required business performance outcomes and experience are met over time. The mission and charter of customer success evolve as vendor strategies develop and mature, adapting to the needs of their customer base. Customer success mission statements usually include an evolution of the following objectives as vendors and their customer base mature together: adoption -> performance and value outcomes -> transformation -> ROI -> advocacy. There are multiple internal corporate activities around these evolving objectives, resulting in the customers wishing to renew and expand their current investment.

“The vision and mission of customer success is a win-win viral spiral of health and wealth!” 

Source: Recurring Revenue Boomerang – Success Track Enterprise

To reach this vision, customer success must be viewed as a corporate-wide responsibility and which brings us to balancing our 3-legged stool with the second leg.

Responsibility

In the previous traditional seller-buyer relationship, our business mindset was conditioned by the seller owning the knowledge and power and practicing short-term financial wins (usually only for their company) based on short-term quota-driven selling incentives. In our current business environment, our mindset needs to adapt to the fact that this previous model has flipped: customers now own the power and knowledge and financial gains are achieved over the medium and long-term (for both vendor and customer alike).

As a consequence of this shift,  revenue generation is no longer the fruit of just pre-contractual marketing and sales activities. As sustainable revenue generation is now a long-term challenge, all cross-functional departments are responsible, working together in sync across the entire customer journey. In essence, customer success is a corporate-wide strategy which embraces all internal roles (marketing, sales, account management, R&D, product, support, professional services, customer success teams, finance,…) whether they are client facing or not. Even roles in the wings of the client stage are indirectly contributing to making customers successful, often serving internal clients who in turn, will directly serve external clients

Picture source: Team KR

So while all internal departments should be aware and made responsible for tactically contributing to the success of their clients, there is also the emerging function of customer success and which usually (although not exclusively) is positioned as a post-contractual team which partners the success of clients. As an example, marketing and sales team would work together in a seamless process by validating prospect needs, evaluating expectations and desired outcomes which would be communicated to the CS teams for a partnership delivery with clients.  

This customer success function is a critical role, working closely with all the other internal departments to continually communicate the voice of the customer so that the aforementioned main CS mission statements can be continually reviewed and aligned: adoption – performance – transformation – ROI – advocacy. The function of customer success proactively partners clients in an advisory role to help clients achieve their expected outcomes. This implies strong client domain knowledge as well as a clear understanding and insights in their evolving business, operational, functional and technical context.

Very often, the post-contractual function of customer success is parachuted as an add-on to existing established roles without reviewing the holistic impact of the CS corporate-wide mission. In other cases, confusion is created internally and externally when already existing roles such as support, account management, project management or professional services are renamed to the name of “customer success”, without reviewing their existing role and mission. For Customer Success to be efficient, the roles and responsibilities of all internal actors need to be reviewed, continually communicated and teams trained and incentivized on the changing scope of their contribution to the success of their clients.

CS is not the sole responsibility of a post-contractual department but is the shared responsibility of all internal functions. In the same way, no single function “owns the client”. The client is “owned” by the corporate collective and seamless process of engaging and delivering to meet expectations and outcomes. Each function contributes to the collective vision, while the customer success function acts as a critical pivot, acting as the voice of the customer to fine-tune and adjust the collective group music, rather like a conductor of an orchestra.

Picture source: BBC Proms

Having a privileged long-term partner relationship with customers, the CS function ensures that internal organization, processes and all contributors are aligned to continually deliver on expectations and play together in tune. This results in securing long-term health and wealth for their clients and their own companies. To ensure this harmonious sound of music, top-down buy-in is vital and which brings us to the third leg of our 3-legged stool.

Executive Buy-In

For a CS organization to be successful, it must be a strategic part of the corporate vision, infused top-down from executive management. This implies top executive buy-in cascading buy-in across the whole company, resulting in CS becoming the ADN of the new corporate organization.

To achieve this company-wide CS ADN, this implies a progressive transformational approach where change management and sponsorship is key to success. For a company’s organization to steer towards the CS vision, a new mindset, processes, behaviours and routines need to be adopted so that all cross-functional departments are aligned in their collective contribution to success. In turn, these cross-functional contributors need to be driven by appropriate and equitable goals, KPIs, incentives and compensation. As CS organizations mature, they will gradually reinforce their footprint, building up the business case for their “raison d’être” as a strategic revenue-generating profit centre.

The question is often raised as to where the CS function should ideally be positioned within the company organization. While this depends on the size and organizational evolution and history of companies, what is most important is that the CS organization is driven as an instinctive top-down mindset, irrespective of the company hierarchical structure. Indeed and as developed in our previous article, CS is more a question of a holistic corporate culture rather than of organizational hierarchy.

To conclude, the challenge of any CS-centric company is to permanently keep the 3 legs of the supporting organizational stool (Charter -> Responsibility -> Executive Buy-In) in perfect balance and aligned as the company grows and adapts to clients’ evolving needs.

If any one leg changes in size, disproportionately to the others, there is always the risk of the tool toppling over and no longer supporting the associated processes, people, tools and data. We’ll be glad to share our thoughts on these in our follow-on articles, continuing our reference to the OPT-IN framework to operationalize a proactive CS organization. Thanks.

Sue Nabeth Moore and Daniel Coullet

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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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SaaStr Europa Bienvenue à Paris

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Quel bonheur! It was thrilling to be able to exchange with so many passionate “SaaStrepreneurs” at SaaStr Europa in Paris last week (1300 attendees from 32 different countries including founders, CEOs, Cxx this and that, investors and of course a large number of customer success (CS) professionals ! What’s exciting about SaaS of things is that it impacts all aspects of “doing business as usual”: go-to-market, delivery, revenue generation, internal organization, valuation, customer relationship and partnership…

In such a context of the age of the customer, I’m grateful to be actively engaged in the emerging role of customer success in Europe. This strategic mindset is key in the SaaS business model and indeed in any other recurring revenue model where the customer is king or queen. When these are well served and partnered in reaching their own success, this generates win-win success for both customer and vendor alike. As quoted by Jason Lemkin:

Customer success is where 90% of the revenue is

and indeed successful customers wish to stay, invest more to generate more gains and then become raving fans of your solution. Oh, talking of which, Fraser Stark it’s always a pleasure to meet and exchange on the Influitive advocacy platform.

I was thrilled to meet my customer success peers and fabulous ladies from the other side of the pond Emilia d’Anzica and Sue Duris.

Emilia d'Anzica, Sue Duris, Sue Nabeth Moore, Peter Oosterwijk
Emilia d’Anzica, Sue Duris, Sue Nabeth Moore, Peter Oosterwijk

Thanks again for your customer success panel!

It’s always a pleasure to meet and share stories and experiences with my fellow customer success evangelists from this side of the pond: Dave Jackson, Jan Schlosser, Emilie Dubau, Hannah Chaplin, Nathalie Berger, Elisabeth Courland and fellow partner and customer success community builder Kate Forgione.

Kate Forgione, James Mayes
Kate Forgione, James Mayes

 

Dave Jackson, Emilie Dubau
Dave Jackson, Emilie Dubau

 

 

 

 

 

The speakers I heard were terrific and I thoroughly enjoyed the brain date concept where I was able to exchange tête-à-tête on the customer success of things with like-minded CS professionals. The networking was rich, each new encounter presenting a passionate “Saastrepreneur”, terrific story and incredible talent. A special mention to Peter Oosterwijk (the smiling guy in the blue shirt in the photo above), CMO of Curious Inc who has the gift of illustrating in cartoon style and in real time his key takeaways (see samples below from the customer success panel session). Dank je Peter!!

By Peter Oosterwijk
By Peter Oosterwijk
By Peter Oosterwijk
By Peter Oosterwijk

 

 

 

 

 

 

 

 

 

Some of my key takeaways :

  • Adaptation to new ways of doing business is key to be successful  in SaaS + recurring revenues + subscriptions.
  • “Nail a niche” (Aaron Ross) – Identify customers who consider you as need-to-have rather than nice to have.
  • To win, be a big fish in a small pond
  • Customer success trends in 2018:
    • Incorporation of emotional intelligence
    • Introduce customer success more and more into the products
    • CS will become increasingly recognised as a strategic role
    • CS will involve more than retention
  • Customer success professionals no matter where they are in the world find huge benefits in getting together to share and learn best practices from each other.

UN GRAND MERCI to SaaStr for coming to Paris (capital of love & innovation) to organise this first SaaStr event in Europe! La cerise sur la gateau – the stunning venue at Le Grand Hotel!

Vivement l’année prochaine!

Other useful links:

In addition and if you’re a customer success professional in Europe, you may be interested in the following links:

Customer-Success-Europe : who organise regular CS events in Europe, the next one being in Dublin on 3rd October.

Customer SuccessCon London – on 4th September

Paris customer success Meet-up – on 19th June

Lisbon Meet-up – next date TBC

Customer Success Network – where you can find an on online community which connects CSMs across Europe.

CSM Portail – A francophone community

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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, Portugal 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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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) – A Darwinian Evolution Approach

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To continue the CSoT (Customer Success of Things) blog series and as we onboard 2017 with new resolutions to transform our habits, let’s keep indarwin mind our digital transformation context and take a Darwinian look at the role of customer success to facilitate this exciting evolution.

It is not the strongest of the species that survives, nor the most intelligent, but the ones most responsive to change (Darwin)

Chameleon
Chameleon – “Adaptus Rex”

Having always been inspired by this Darwin quote, those who have crossed my path will have already met my mascot chameleon which I affectionately call “Adaptus Rex”. He’s tame and as a prehistoric descendant, he learned to survive environmental change! His capacity to modify colours has followed me through all life environments and challenges, adapting to the next state of evolution.

The famous Darwin concept of “survival of the fittest” (1) and its selection process is accelerated today in response to unprecedented environmental changes such as global warming in our natural world while in business, the digital transformation is taking us by storm.

Whilst history has always shown us the progressive driving force of technology in transformation, digitalisation is creating an immediate impact and disruption. Each digital change brings a promise of progress or new experiences and which are accompanied by considerable learning curves and adaptation, irrespective of our generation: baby boomers, Xers (like myself) and millennials. It’s simple. We either adapt, transform and evolve or we don’t with the risk of being left behind or even becoming extinct! In the words of Brian Solis (2):

Each business is a victim of digital Darwinism, the evolution of consumer behaviour when society and technology move faster than the ability to exploit it. Digital Darwinism does not discriminate. Every business is threatened.

In nature, the famous evolutionary story took place in my native northern England during the last major technological transformation: the industrial revolution. To ensure camouflage as a consequence of the sooty manufacturing towns, peppered moths (3), originally white, became predominantly black via a reproduction process. mothsA recent example in response to current climatic change is the shift of snail shell colour from dark to light. Snails have developed lighter coloured shells (4) which have a lower body temperature to keep cooler in response to global warming. This phenomenon is noticeable here in France where snails are still a culinary delicacy!

In business today, we’re lucky enough to be facing another incredible transformation, this time in human form. The digital revolution and the related technological innovations are forcing us human beings to challenge our behaviour, routines, processes and even our business models.

Whilst we may not suddenly develop coloured shells and wings to adapt, this brings me to the vital importance of the role of customer success as a lever to facilitate our collective metamorphosis. In today’s professional environment we are constantly trying to keep pace with the impact of digitalised innovations: cloud, big data, IoT, predictive analytics, machine learning, Artifical Intelligence, 3D printing and mobility to name but a few.

Customer success emerged and evolved in the Silicon Valley as a logical response to the introduction of the cloud subscription economy. Cloud exposed painful gaps in how existing companies were interacting with their customers. These pain points were filled with the role of customer success to encourage customer engagement with solutions, continued added value, client longevity and advocacy.

As the SaaS model continues to grow with companies moving away from purchasing software upfront preferring to purchase on a subscription basis, customer success promises a bright future ahead. Other non-SaaS recurring revenue companies have also been seduced by its strategic importance and are investing in customer success.

With the continuous flow of new digital technologies to our business environments, it seems that my favourite Darwin quote has never rung so true. comfort-zone-24Out of all the animal kingdom, though we humans are definitely not the strongest, we are perhaps the most intelligent (open to debate…) but when it comes to responding to change, we are generally slow or resistant. Staying in a known comfort zone is so much more tempting than stepping out into unknown and potentially risky territory.

Success is on the other side of your comfort zone (Orrin Woodward)

So this is where customer success plays its role by partnering clients, helping them step out of comfort zones and adapt to new and unknown situations where gains are promised. The aim is to either obtain better results than before or create new positive experiences which could never have been imagined without innovative technology. The real challenge of this adaptation process is not about the technology itself. It’s rather about how the technology, digitalisation and its promise fit harmoniously into the future organisation, processes and methodologies defined for achieving desired outcomes.

Like the peppered moths of my native England, we humans face the challenge of adapting in our digital fast paced environment. We need to “camouflage” the new technology and associated behaviour, blending it into our daily habitat so that it becomes the accepted “norm”, at least until the next one presents itself.

It is perhaps because human beings are the most intelligent of creatures on earth (so we believe) that our response to change is more complex than our animal neighbours.

internet-strategy

We perhaps approach each new business context with too much thought, emotion, fear and memory rather than acting on our instinct, like my friends Adaptus Rex, the peppered moth and the shell changing snail.

Customer success is a passionate role to partner our fellow homo sapiens acclimatise to their new surroundings and rise to the challenges of a business world driven by technological innovation. Afterall, the word “success” derives from the latin “successus”, meaning “an advance, a good result, happy outcome.”

So as we move into 2017 with the human tradition to make resolutions (myself included) to change certain behaviours for improvement, there’s no better prospect for customer success to partner these desired outcomes, helping companies transform their performances through the challenges and gains of the digitalised environment.

“Adaptus Rex” joins me to wish you all great resolutions for your digital adaptation, transformation and evolution to success in 2017.

If you’re setting up or expanding your customer success organisation in Europe, we’d be pleased to help out : Success Track Enterprise.

Other Customer Success of Things Blogs : CSoT blog stories

For further Darwinian reading:

1) Explanations on “Survival of the fittest

2) Digital Darwinism – How Disruptive Technology is Changing Business For Good

3) The story of the peppered moths

4) How A Few Species are hacking climate change

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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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Customer Success – The Return of “The Wall Street” – Interview With Gainsight’s Dan Steinman

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the force awakens
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This is Episode 3 of the “SaaS Wars Trilogy” interview with Gainsight’s CCO (and Skywalker), Dan Steinman. We look at the evangelism of customer success value in business models.

Sue: Let’s look a bit more at Gainsight now as a company. I noticed that a lot of your current clients are B2B software companies such as Box, Marketo (your previous company), Clarizen, HP, etc.  What is Gainsight’s position to attract other recurring revenue model clients who are also thinking about including customer success in their organization?

Dan: Yes that’s a good question. We currently have all sized clients ranging from relatively small and medium sized clients (200 – 300 employees) to larger enterprise organizations. It’s true that we do focus on B2B and have not yet focused on B2C because the B2B market is so different from B2C. SaaS companies are the sweet spot because they are the pure subscription model and we can easily track how they use the product. However, any company doing subscription-based products and services is becoming interested in customer success and not necessarily software or technology companies. Let me give a couple of interesting examples in our customer base.

1) We have a client called Bright Horizons. They’re neither a software nor a technological company and they probably don’t even know how to spell SaaS:)

They build and manage day care centers, offering their services to very large corporations who benefit from having a day care center on site as a perk for their staff. For example companies like GE, Ford and Chevron. What’s interesting is that it’s a B2B business because they’re selling to B2B corporations on a subscription basis with annual renewals. There’s also a bunch of up sell opportunities in addition to selling the usual day care center facility: e.g. the possibility to benefit from other services such as after-hour child care, tutorial services, on site child nurses etc. So from a business model point of view, they function like a SaaS recurring revenue business.

In addition, the product can be measured to follow whether it’s being used or not. For example, how many kids are being dropped off per day and how many hours they are spending at the center. The team that manages those relationships at Bright Horizons is called the “customer success” team. That’s not just because they thought that was a cool sounding name but because they thought this term described exactly what they do.

2) Another example is a company called Fitbit. Everyone knows them as a lot of us are probably wearing one on our wrist. It is B2C for the most part but they also have a partner business activity which is B2B. They sell to large corporations who provide Fitbit watches to their employees, either free of charge or highly subsidized. The idea is that if the physical fitness and health of employees can be tracked, it might be possible to convince their insurance company to lower the rates.

So here’s another great opportunity which has all the makings of the customer success world but which is neither a SaaS nor software business. There’s a B2B relationship which needs to be managed, product usage, adoption and gains to be tracked as well as up sell opportunities with Fitbit upgrades.

Every company in the world is moving towards subscription because the market, Wall Street, the City and investors just love that model so much.

Sue: What is your elevator (I mean “lift”) pitch for Gainsight Software?

Dan: If I was in a “lift” in a London skyscraper with 30 floors, I would probably take about 2 minutes and say something like this…

Gainsight’s technology is designed to help companies more effectively manage their customers. This has become increasingly critical in the subscription economy. Gainsight will provide actionable insights to Customer Success and Account Management teams to allow them to touch the right customers at the right time with the right intelligence, ultimately driving adoption and value. Tangible benefits of doing this will include lower churn rates and improved identification of upsell opportunities. In other words, net retention will increase. Gainsight will also allow scalability that cannot exist without automation – touching long-tail customers that otherwise would not be touched and optimizing the time spent with high-value customers. The bottom line value proposition is critical and simple – maximize customer lifetime value.

Sue: Well I would love to see your technology for myself.

Dan: Yes, I know as a user it does live up to this description because when I was at Marketo, I was actually one of the first users of Gainsight.

Sue: It’s great to be a first-hand advocate. I read that Gainsight was rewarded with a $50 million funding at the end of last year. That’s a tremendous recognition. What are Gainsight’s short term plans?

Dan: It’s funny with your British accent that you refer to that as a reward and yes we really think we earned it:) We’re pleased that Gainsight has now raised over $100 million. This is a testament to our value proposition and which is obviously resonating with investors. We know there’s value for what we’re doing and for what we want to do.

When you raise figures that big, it’s usually associated to growth and indeed we have a growth plan with big goals for our revenue as a company.  We intend to break into new markets, verticals and geographical regions. A decent percentage will also go into marketing and sales because we think we have a good product-market fit and a good execution process on the marketing and sales side.

We hope to reach the point where we can make a decision as to whether we want to be a public company or not.

Sue: What about your plans for here in Europe Dan?

Dan: Well the plans are pretty open for the time being. As you know Sue because you referred to me dressing up as Austin Powers,  we did our Pulse conference in London in October last year. There were 450 very excited people who were totally energized wanting to meet, talk and learn about customer success. It was like an experiment for us as we were asking whether the timing was right. The resounding answer was “Yes it’s time”.

There’s a lot of need, interest and opportunity for customer success in Europe. Sometime this year we will officially make a move into Europe and start actively marketing and selling there with local presence as well.  We haven’t specifically determined what date or month that’s going to happen but it’s definitely this year that we’re going to make a move. We’re going to need a big presence in Europe to be a good global company. So yes Sue, the Americans are coming 🙂

Sue: I’ll look forward to that. Good luck for your future evangelization events, the next Pulse event being on May 10th in Oakland. We’d love to see you here in Paris soon 🙂

Finally and as a sequel to your book, in five years time, what do you think you’ll be writing about on customer success?

Dan: The future of Customer Success is hard to see clearly (the crystal ball is cloudy) but there are some very predictable aspects of it:

1. It will continue to grow in importance and stature as the world moves to subscriptions.
2. It will expand far beyond the core SaaS market into traditional businesses and B2C (where it’s already being done under other names in many cases).
3. The power shift from vendors to customers will continue.
4. The internal power shift from Sales to Retention will continue.
5. The rise of the Chief Customer Officer will continue.
6. We’ll see more leaders of Customer Success ringing the bell on Wall Street on IPO day.
7. Customer Success experience and results will lead some of those involved into CEO roles.
8. Automation will continue to assist in making the people part of the business (which will never go away) more effective.
9. Customer Success technology will become part of the standard infrastructure of virtually all companies – CRM, Marketing Automation, ERP, CSM.
10. Customer Success will continue to be a great career choice and will continue to attract more really talented, high-quality people into the discipline.
 
Those who understand it and embrace it will thrive. Those who don’t will get passed by.
Sue: I’m excited about the prospect of contributing to this great “awakening force”. Thanks Dan for this awesome interview!
 
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Innovative Vendors Strike Back – Vendors Organize For Customer Success

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Episode 2 of my interview with Gainsight’s CCO, Dan Steinman:

Vinylemag.com
Vinylemag.com

Innovative Vendors Strike Back – Vendors organize themselves for Customer Success

Following on from Episode 1: New Hope: SaaS Wars – A New Business Model and The Growing Importance of Customer Success.

Sue: So who do you think should own the role of customer success Dan?

Dan: It’s a really interesting question. Literally I have seen customer success organizations in different entities: sales, services, product, marketing and in a separate stand-alone organization. I believe that customer success is going to ultimately become so important that it’ll be more and more a separate organization for most companies, reporting directly to the CEO. It’s one of the reasons that the role of Chief Customer Officer (CCO like myself) is in vogue. That’s the person the CEO is going to hold accountable for the entire customer life-cycle and customer retention number. Whilst you want someone high level to own your sales number you also need someone to own your retention because it’s so critical to the long term success of the company.

I think for an ideal organization the following 3 roles reporting to the CEO are key:

– CRO (Chief Revenue Officer) who owns the acquisition process via marketing and sales.

– COO (Chief Operating Officer) who owns operations and finance and maybe engineering.

– CCO (Chief Client Officer) who owns customer success, professional services and support and perhaps the renewals.

Customer success can work in any organization and so there’s no right or wrong. But I think the evolution will take us where customer success will become this stand-alone organization.

Sue: We’ve also seen the emergence of different customer success roles, often called customer success managers (CSM). What for you does it take to be a great customer success actor ?

Dan: Yes I have a pretty long list after having managed CSMs over a number of years and so I’ll give the highlights. Firstly, I think it’s obvious but if you’re going to be dealing with customers, you have to have the right personality and demeanor to do that. That’s not just about being likeable. You also have to be able and willing to take some level of punishment. That’s because this job is often dealing with customers who are not always delighted. There is an element of pain which comes with that and so you have to know how to live in that world. In addition, the 2 skill components that you have to either find or build are:

1) A high degree of product expertise. At a user level, I can help you use my product better because I really know how to use it in an optimal way.

2) The second one is equally as important or even arguably more important and that is domain expertise. If I’m selling a marketing solution like we did at Marketo, my CSMs had a thorough knowledge of marketing processes. So if you are selling accountancy software, you may want to hire accountants and teach them how to use your product.

Sue: Yes that is really important for your credibility with your customers and their trust in you.

Dan: Yes, they love talking to people who have actually done the job which you are trying to do and who can truly empathize. There’s so much power in words when you know exactly how they feel.

Sue: So a typical great CSM needs to be a Jack of all trades.

Dan: Yes and there are a lot of skills in managing customers and product expertise as well as supporting and consulting team skills. It’s all about bringing all these together in one place with people who are very passionate about their customers. It’s not that I want to see CSMs going to hospital but I kind of expect them to feel ill if their customers aren’t really doing well. For the great CSMs, it’s a very personal thing. It hurts in your stomach when your customers aren’t happy. Great people in every job are like that. A great sales person for example anguishes over their deals. Great CSMs are just the same.

Sue: I empathize with that. It’s all about how you interact and the real concern and passion you feel for what’s happening with your customer’s success. It’s not just another routine job.

Dan: That’s right. It becomes a craft. It goes beyond a job and almost becomes a hobby. I think about it and work on it in my apartment in my spare time. I’m always determined to be better at it even if no-one else notices except me!

Sue: Indeed it gives you a great sense of satisfaction knowing that you’ve created added value.

Coming soon… Episode 3:

Return of “The Wall Street”- Evangelism of Customer Success Value and Return on Investment.

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The Customer Success Movement Is Taking The Business World By Storm

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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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