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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Customer Success – A Darwinian Approach in 2016

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Cameleon

Those who have crossed my path will have probably already met my mascot chameleon which I have affectionately called “Adaptus Rex”. Don’t worry, he’s tame! More importantly, as a dinosaur 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. Adaptus Rex has always been accompanied by my favourite Darwin quote:

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

Constantly inspired by this quote, consuming it without moderation, I have even placed it as a personal slogan on my LinkedIn profile!

The famous “survival of the fittest” (1) and its selection process is accelerated today in response to unprecedented environmental changes. In our natural world, the recent COP21 decisions here in Paris testify while in business, the technological 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, irrespective of our generation: baby boomers, Xers (like myself) and millennials. It’s simple. We either adapt, stay competitive and keep ahead or we don’t adapt with the risk of losing out!

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 (2), originally white, became predominantly black via a reproduction process. A 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 (3) 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, especially at this festive time !*

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 will not suddenly develop coloured shells and wings (well not in my lifetime anyway), this brings me to the emergence and 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, 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 and client longevity. As the SaaS model continues to grow with companies moving away from purchasing software upfront preferring to buy on demand, customer success promises a bright future ahead. Other B2B models 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. Out 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 right down resistant. Let’s face it, staying in a known comfort zone is so much more tempting than stepping out into unknown and potentially risky territory.

The role of customer success is to partner their clients, helping them 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 and its promises 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 essential for survival and for keeping ahead. 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. We perhaps approach each new business context with too much thought, emotion 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 in the dawn of 2016 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” and myself take this opportunity to wish you all great resolutions for change, new routines, adaptation and success in 2016.

*P.S. All my respect to snails. I did not eat any over the festive period!

References and further reading:

1) Explanations on “Survival of the fittest

2) The story of the peppered moths

3) How A Few Species are hacking climate change

 

 

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