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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Digital Darwinism and Customer Success

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As we onboard 2021 and bid farewell to 2020, the challenges thrust upon us over this past year have demonstrated our immense resilience and capacity to adapt quickly in the face of adversity. Digital transformation is a prime area where we have shown our huge capacity to adapt.

According to a study by McKinsey & Company, digital offerings in 2020 accelerated by 7 years within the space of a few months as companies have surprised themselves with their capacity to pivot their digital initiatives in response to Covid-19.  The pandemic has forced companies of all sizes, B2B and B2C to leapfrog their transformation efforts. We are now raising questions about how to anticipate the new digital “normal”, what that will look like, how to maintain momentum and how to set companies up for continued success.

As we celebrate all those companies and staff that have been able to adapt their digital offerings to help their customers get through these unprecedented times and to address new market needs, let’s also keep in our thoughts all those domains, companies and staff that have unfortunately been directly negatively impacted by the pandemic, e.g. travel, hospitality, culture, dining to name but a few.

Let’s view this accelerated digital transformation context from a Darwinian point of view. This is a revised article that I wrote 4 years ago but which resonates more than ever now in the context of the abrupt changes of our current world. The following famous Darwin quote echoes loudly today in our response to the business disruption triggered by Covid-19 and our attempts to survive and resume some sort of balanced “business as usual”:

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

Those of you who have crossed my path will have no doubt been introduced to 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 his skin colours to adapt to different environments has inspired me in all of life’s challenges, continually adapting to the next phase of evolution.

Whilst history has mostly shown us the somewhat progressive driving force of technology in transformation, digitalization is creating an immediate impact and disruption, particularly so in response to the pandemic. With each new digital offering, there’s a promise of progress that is accompanied by considerable learning curves and adaptation. In some cases, the height of the step to adapt is higher than others, implying considerable change management efforts and learning to take on board new working practices. In other cases, the height of the step to adapt may seemingly be less but as we’re on continual moving sands, it’s difficult to use a yardstick to measure the required effort. Whatever the required effort, we either adapt quickly and survive (thrive for some) or run the risk of being left behind or even extinct! In the words of Brian Solis:

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.

Digital Darwinism has been accelerated with the disruptive impact of Covid-19 as we have been collectively catapulted outside of our comfort zones and plunged right into unknown territory. All of us, suppliers and customers alike have had no choice but to learn fast. 

These challenging times have also reinforced companies putting the customer right at the strategic centre, focusing on doing everything possible to help and retain the current customer base. This customer-centric strategy has highlighted the strategic importance of customer success and how it runs through the veins of all the company, where each and every role contributes to helping customers survive, perhaps even thrive.  Many companies have reinforced their customer success efforts, put into place special success task forces or crisis committees,  bringing sales, support, product and other roles into redefining roles and responsibilities in the “collective customer success team” effort. This company-wide team effort is now playing a vital role by helping customers pivot, step out of their comfort zones to adapt quickly to new and unknown situations where their ever-changing pain points are resolved.

Customer success partners customers to help them blend their invested tools and services into their working environment. This means that customer success professionals need to be experts not only with the tools and services offered by their company but also to know how these tools and services can become “camouflaged” in the customers’ new working habitats. 

It’s rather like Adaptus Rex’s capacity to adapt his skin colour according to different habitats. With our Covid-19 impacted habitat, our adaptation capacity has been tested to the extreme. It has not been like our previous gradual adaptation to digital offerings in continuous improvement mode. This time, our adaptation capacity has been triggered out of pure survival.  Customer success has played such a critical role in helping customers to adapt in record time to new environments and facilitate our collective metamorphosis. The real challenge of this rapid metamorphosis process is not about the technology itself. It’s rather about how the technology, digitalization and its promise fit into the fast-evolving organizations, processes, routines and behaviours. This is where customer success professionals have demonstrated their capacity to anticipate new customer pain points, learn and adapt to these ever-changing environments, transferring their knowledge to help customers develop new skills to meet their evolving goals and survive. 

To give some Darwinian evolutionary examples in nature, a famous story took place in my native northern England during the last major technological evolution: the industrial revolution. To ensure camouflage as a consequence of the sooty northern manufacturing towns, peppered moths, originally white, became predominantly black via a reproduction process.

Courtesy of Deposit Images

Another 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 which have a lower body temperature to keep cooler in response to global warming. This phenomenon is noticeable in France where I live where snails are still a culinary delicacy, whatever their shell colour !

Whilst we humans have not suddenly developed coloured shells and wings (although I believe I can fly) to adapt to this harsh environment thrust upon us,  we are being forced to challenge more than ever before our “business as usual”: business models, organization, processes, tools, behaviours and routines. Most companies have now adapted to operating with remote workforces, attending online meetings and events and investing in tools for remote collaboration, onboarding, team building and customer engagement. This last year has forced us into adopting new working habits that we would have not thought possible when we were celebrating the arrival of 2020 just one year ago!

Prior to Covid-19, we were adapting digital offerings in a rather progressive manner where “digital transformation” was being placed as a priority for business strategies. In reality, however, companies were often struggling to adopt digital offerings and make digitalization an inherent part of the company DNA. Unlike the instinct-driven metamorphosis of our friends Adaptus Rex, the peppered moth and the shell-changing snail, our response to change has always been complex. It is perhaps because we human beings are the most intelligent of creatures on earth (we are led to believe) that we have often approached each new business evolution, including digital transformation with too much thought, emotion, memory and resistance. It is also because we are not always conscious of the risks ahead or are simply not measuring the risk of staying in our comfort zone.

Courtesy of Deposit Photos

With our Covid-19 impacted environment, our adaptation process has been more in line with the instinct-triggered adaptation of our friends from the animal kingdom. Like the peppered moths of my native England, we humans face the challenge of adapting quickly to our accelerated digital environment in order for our business to simply survive. We need to rapidly “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 evolution! With remote working practices and collaboration for example, we’re still learning about the tools but also acclimatizing associated best practices, code of conduct, new routines and associated soft skills.

Customer success is a role to partner our fellow human beings to acclimatize as quickly as possible to our new surroundings and rise to the new challenges of a world propelled more than ever by technological and digital innovation to overcome a global crisis: whether that be to facilitate remote collaboration, to foster online payment, to facilitate eCommerce transactions, to produce vaccines and monitor their supply chain, distribution and impact, to use 3D printing to produce medical supplies, to use AI to monitor and anticipate important data including the spread and behaviour of Covid-19 around the world … and the list goes on.

Courtesy of Deposit Photos

As we embrace 2021, I’d like to congratulate all the companies, all their customer success staff (customer success teams and all roles of the company) that have adapted and delivered their offerings (digital and non-digital) to help their customers and their own companies to survive and even thrive over the past year. I’d also like to send thoughts to those companies, customers and staff in verticals that have been directly negatively impacted by the pandemic.

“Adaptus Rex” joins me to wish you all the best for 2021 with joy, health and continued business adaptation, evolution and success!

 

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Customer Success – It Takes Two Totango – Interview with Guy Nirpaz

Facebooktwittergoogle_pluslinkedinTwo TotangoInterview By Sue Nabeth Moore – Customer Success Evangelist, France

Sue: Why is customer success becoming so important when it is often perceived as an activity which has always been done but was not given the label “customer success”?

Guy: Customer success is often associated with traditional activities such as account management, professional services or support but the activity of customer success is linked to the maturity of the recurring revenue model. Companies with a recurring revenue model such as SaaS depend on their ability to retain and grow. The role of customer success is becoming just as critical as that of sales. Customers prefer now to have the choice of renewing their contract or not with a company. The role of customer success is therefore to do everything to make sure that the customer just keeps coming back.

Sue: Customer success seems more mature in certain regions and sectors. What are your thoughts for the expansion of this role?

Guy: Totango was initially created in Israel in 2010 as a response to ensure life-time value to the Telco industry, a sector heavily dependant on the recurring revenue model where churn prevention is critical.

In terms of geography, the need for customer success is everywhere. 40% of Totango business for example is outside of the USA, mainly in Europe but also in Australia, India and Brazil. Totango has been collecting and sharing best practices and creating events to evangelize customer success. We have noticed that the customer success machine has started to develop just by the number of participants. Our first Totango event in the USA in 2013 attracted 100 participants, the 2nd one in 2014 attracted 400, and the 3rd one in 2015 attracted 1000 people. This is a huge success for CS actors to network, participate in the interactive seminars and workshops and learn from their peers. Over 75% told us they’d be back! We’re excited to start the Totango road show this first quarter 2016 in USA and Israel.

Sue: What do you consider to be an ideal profile for a CS Manager ?

Guy: OK well let’s start by defining what they need to do. Basically their goal is to retain and grow customers. To achieve these 2 main outcomes, we need to look at the drivers and values. The 5 main drivers are:

1) On-boarding

2) Nurturing

3) Renewal

4) Up selling/Up-grading

5) Escalation

On-boarding is critical to success. It is often complex and fluid process and organizational and project management skills are required.

Depending on the size of the company, there are different CS organizations and roles. In smaller companies, the CSM is usually responsible for all 5 drivers, at least to begin with. As a company grows, the drivers are often split into CS management roles where CSMs are specialized, e.g. for on boarding, renewals, up selling and cross-selling.

The CSM drives and articulates business value at all times. Value indicators are measured on the business outcomes expected. It’s not about the product itself but about the business gains generated. Business curiosity and a talent for solving issues is also key. Engagement is essential in order to identify gaps for achieving this value.

The real challenge is how to articulate the customer success activity and engagement in a scalable way.

Sue: What for you are the main challenges for a company wishing to start a customer success activity?

Guy: First of all the CS activity must be aligned with the main objectives of the company – to maximize renewals and up sell. This should be done in a very pragmatic way to ensure profitability and growth. If the fire-fighter model is still in operation and a company needs to spend for example 1$ to generate 1$ of renewal, then the CS role is not moving the needle forwards.

It is necessary to invest heavily in the previously mentioned 5 drivers (see above) and to keep tabs on the value that customers are gaining from the product. This is applicable for all customers.

Sue: There are more and more actors on the customer success software market, yourselves included of course. What guidelines can you give as to when a company should invest in such software?

Guy: Usually for smaller companies, the CEO begins the CS activity themself. As a general guideline, as soon as there are between 20 – 50 customers, it’s a good time to start and think about investing in CS software and for the following 2 reasons:

1) It’s great to build the activity and capitalize from best practices rather than repeat the same mistakes made before by other companies.

2) At a certain point, it can become very quickly unmanageable to be in control of all the 5 main levers. Customer success software helps to structure and alleviate the multiple tasks, allowing greater visibility on customer activity, risks and the company engagement.

My advise is to invest in customer success software as early as it is affordable.

Sue: So what is your elevator (or rather “lift” – sorry I’m British) pitch for Totango ?

Guy: Our key philosophy is to drive value to customers. It’s necessary to know how your company is driving value. To do that, you need to understand the way that customers are using your products. Once you’ve mastered that, you can better retain and grow your customers. We built Totango on this foundation.

I’ve never been a fan of the customer 360° view concept. This implies that you’re in the middle of a circle without really knowing in which direction to look first. I prefer to consider customer knowledge and consequent success with the following main areas:

1) Utilization

2) Adoption

3) Measurable business outcomes

4) Operational aspects

5) Feedback, e.g. NPS

Success is the result of the company’s engagement and understanding of their customer’s gained value but also of their customer’s ownership on what’s going on around your product.

It takes two Totango! Tango 2

Sue: What are the main profiles of Totango’s current customers?

Guy: There are 3 main world-wide categories:

1) Start ups and maturing SaaS companies

2) Medium to large companies

3) Verticals : telco, data providers and infrastructure

Sue: What are Totango’s ambitions for 2016?

Guy: Our first aim is to make Totango software easily accessible to all client focused actors: CSMs, VPs, CEOs…

We aim to have a new release per month and celebrated 8 new releases already in 2015.

We look forward to the Totango Customer Success Summit on March 21st and 22nd in San Francisco. Here we’ll meet and exchange with like-minded actors in a very convivial, productive and inspiring event.

Sue: If you had a crystal ball, describe what you would see for customer success in 5 years from now:

Guy: Customer success will be more mature and we will know how to do it better than today. It will evolve like the role of digital marketing has evolved over the last 7-8 years.

As customers innovate and their expectations increase, customer success will also gain in importance, becoming equally strategic and sustainable as the role of sales. Customer success will be more efficient and scaled, facilitated by faster programs and software.

For Totango, I can foresee continued amazing growth and thank all our customers for their advocacy and for finding great value from our customer success software.

Sue: Thanks Guy for the interview. I wish you continued success and look forward to seeing you at the next Totango road show, why not here in France!

Guy: Yes with great pleasure. Thank you Sue.Facebooktwittergoogle_pluslinkedin

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.Facebooktwittergoogle_pluslinkedin

The Customer Success Movement Is Taking The Business World By Storm

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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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2016 : The Year to Boost Your Customer Success Strategy

Facebooktwittergoogle_pluslinkedinWith the arrival of the 3.0 marketing era where each client becomes ambassador to the greatest possible number of people, every company must ensure that their customers reach the outcome expected from their investment (i). Indeed, a satisfied customer is the best possible ambassador of your product or service (ii).

From this need, new business strategies have developped: Customer Experience and Customer Success depending on context.

The Customer Success framework was created by SaaS software companies in the US – the first of them being Salesforce.com. With the advent of cloud, the software industry has changed in depth:

  • In the business model, from selling a box to a subscription-based relationship
  • In design, from a watefall approach to agile development
  • In the implementation, from a heavy installation to a light set up
  • In usage, from an owner front end to a more intuitive web interface
  • In product updates, now available on CD or immediately through the interface
  • etc.

Customer Success is dedicated to partnering customers within this new framework to facilitate the achievement of expected outcomes. As an emerging role, this mission of underlining added value includes the implementation, use and deployment and can be extended to the design and marketing and sales.

To take the example of Salesforce.com, which stood out by creating the logo “no software” and was the first to set the goal of customer success at the heart of its business objective. Today, their signature is “The Customer Success Platform” with a stated goal of nothing less than a “Customer for Life” ! Indeed, it is a whole approach and organisation which complements the solution with features and tools dedicated to this objective and assigned partners working in a very active community. Almost every editor has been inspired by and followed their model: clients for life.

Ultimately, whatever the outcome expected by their customers – e.g. for marketing to optimise its website or its omni-channel interaction or for sales to optimise their sales process, etc. each editor must announce and keep their promise. This will result in customers becoming naturally inclined to act as ambassadors for their product or service  🙂

Happy New Year !

To go further :

(i) 3 Technology Trends That Are Transforming The Customer Experience

(ii) The Ultimate Moment of Truth and The Art of Digital EngagementFacebooktwittergoogle_pluslinkedin