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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Mapping The Customer Journey with Engagement Models

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

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

 

 

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Calling all Customer Success Actors

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

Customer Success Challenge Survey

Thanks in advance for your contribution.

The European Customer Success Community Team :

Peter and friends : OonaghEvinSue

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

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

What do we mean by Customer Success ?

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

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

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

1) Vendors towards customers

2) Customers towards vendors

3) Vendor customers between themselves

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

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

“Customer Success” – Term with a Double Meaning

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

Customer Success Teams

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

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

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

Customer Success – Company DNA and Global Objective

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

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

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

Conclusion

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

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

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

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

 

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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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