Archive | July, 2013

The Importance of a Framework for Customer Success

19 Jul

In my last post, I introduced the concept of an Effectiveness Model as a framework for engagement with your customers.  I introduced it in the context of four other steps to delivering value, but since it’s so fundamental to value delivery, I’d like to drill down on what it is and why it’s so important:


The Concept

The Concept is straightforward. As a provider of a solution, you should be doing more than just throwing software over the transom to your users.  In fact, as a SaaS provider, you need to be proving value to them on an ongoing basis. That’s today’s reality. If you don’t, you risk losing your customers to  competitors who will.  Harsh, but true. Providing a framework for mapping your customers’ progress, comparing their behavior (and results) to “best in class” companies, and showing a path of progress to best practices will help your customers remain engaged with you.  The idea isn’t new.  The “Maturity Model” concept has been around for years in a heavier weight format, and while more complex models and engagement levels apply in B2B, B2C solutions can also benefit from defined models that encourage additional types of usage and provide your customers with a roadmap to become more effective at using your product.

In the image above, each box represents a stage in an example Effectiveness Model for CRM.  The bullet points next to the boxes each represent behaviors representative of each phase.  The process of creating a maturity model for your industry and solution isn’t complicated, but it isn’t just something you can churn out quickly without some careful thought.

Identify 3-5 phases that are indicative of customers’ implementation of your technology.  You may want to start with the bookends.  For your first phase, identify the basics that someone absolutely needs to implement in order to get value from your application.  For your last phase, identify what the absolute, best-in-breed, thought leaders who have, or will implement, your type of technology are doing.  Then map out 1-3 interim phases that are indicative of how companies would progress through the phases.  The CRM Effectiveness Model I put together above is an example of what that might look like.

The concept is simple.  Getting it right, however, will take iterations, critical review, and more iterations.

The Name (Effectiveness vs Maturity)

While “The Industry” has traditionally referred to models like this as Maturity Models, I’ve stopped using that term in customer interactions and internally. I was once in a meeting with a large, strategic enterprise customer and presented the concept of a “Maturity Model” that my team and I had created. I thought nothing of it for a split-second, as these types of things had been called Maturity Models for years. My team and I had spent a good amount of time developing and iterating on a model specific to my company’s industry and showed them characteristics of “mature” vs “less mature” companies. As I listened to the words come out of my mouth, however, and observed my customer’s body language, I realized that the term “maturity” sounded arrogant and condescending. From that point on, I’ve referred to these as Effectiveness Models given that we’re simply trying to make our customers more effective. It’s ok for me to use the term “maturity” when talking to my kids about assuming more responsibility as they get older. It isn’t ok for me to imply to my customers that they are immature because they aren’t using automation and deep analytics. Trusted advisor trumps arrogant vendor. Every time.

Giving Context to Your Customer Communications

Your customers are busy. They’re struggling with priorities just as you are. Whether you know/like it or not, you’re competing for their attention every time you reach out to contact them. I think any customer facing team needs to be aware of two golden rules: 1) Make sure the customer goes in to the call looking forward to getting value from their interaction with you; and 2) Make sure you’ve delivered that value by the end of the interaction so that they are looking forward to their next meeting with you. An Effectiveness Model sets you up for success. Your conversations with your customers are framed around objectives that you’ve set out with them. Your standing meetings and conversations with them can then be framed around what they’re doing (and how you can help them) to make progress.

The Value of Demonstrating Progress

There’s always a need to justify ROI, and to the extent you can do it with hard data, by all means, continue to do so in a way that is meaningful to your customers: Point out how many transactions they’ve performed in your system; if there’s a way of quantifying end objectives, like e-commerce transactions that have resulted from use of your application, then be sure to communicate those. In addition to those concrete numbers, or in cases where the concrete numbers are difficult to capture, it’s important to show your customers progress towards stated objectives. The Effectiveness Model provides a picture and path with clearly defined behaviors and objectives to map that progress. You can use this as a way to both map progress over time as well as identify activities and strategies to achieve the next phase of Effectiveness. Demonstrable progress, together, is a great foundation for a loyalty-based relationship.

An Opportunity to Position Key Features of Your Solution

As you create your industry/company’s specific Effectiveness Model, you have an opportunity to define how key features in your product can help your customers advance along the model. Be extremely careful, however, to avoid being overly self-promotional here or to “force-fit” your features into the model. An Effectiveness Model is just a tool to help advance a trust-based relationship with your customer. The model needs to be genuine and in your customers’ best interests. The reality is that if you have a great product and if you understand your customers, you can make some wonderful, insightful recommendations for them that will provide them with significant benefits, increase their use of your product, and make them more loyal in the process.

If you’ve been using an Effectiveness Model with your customers, I’d be interested in hearing about your learnings and feedback from them. If not, what have been your obstacles to developing one?  Send me a dm on Twitter: @nfranco.  Thanks!

Demonstrating Value and Progress to Your Customers

9 Jul

Creating demonstrable value is the single most important objective of a Customer Success organization.  Renewals, upsells, references all happen when you have a relationship based on value with your customers.  While achieving that objective requires input and contributions from Marketing, Sales, Professional Services, and other parts of the company, the Customer Success function owns the primary responsibility.  Some companies do an incredible job at delivering and proving value to their customer base; however many companies (some would argue most) are working to put a model and plan together to demonstrate value for their customers.

The steps I propose for getting there are, at a high-level, very straightforward:

  1. Identify a Framework and Representative Behaviors for Each Phase
  2. Identify Meaningful Quantitative Metrics
  3. Perform a Benchmark
  4. Create an Improvement Plan
  5. Measure Against Plan, Provide Feedback, and Revise

Getting them right, however, is by no means easy. Each one of them takes thought, analysis of data, and iteration.  The metrics and behaviors you need to identify are going to be unique to your space – and if identified well, will actually be unique to your company, so that you can measure value based on true differentiators that you offer.

So I offer these 5 steps not to make the process look easier than it is, but rather to provide some guidance as you take on your most important task as a company: continuing to earn your customers’ business.

Step 1: Identify a Multi-Phase Framework and Representative Behaviors for Each Phase

Every exercise needs an objective, and ideally a roadmap to get there.  A framework provides your customers with a “bigger picture” view of the landscape and what they should be thinking about in order to be more effective at what they’re doing.  Frameworks also give customers some perspective on where they fall with respect to industry leaders and laggards.

Figure 1: Example of Maturity/Effectiveness Model

Figure 1: Example of Maturity/Effectiveness Model

One framework that works well is a Maturity (or “Effectiveness”) Model.  These models generally consist of 5 (plus or minus 2) categories that represent different levels of maturity/proficiency/effectiveness in your space.  In order to define these categories (or levels of maturity), identify behaviors that are characteristic of each of those levels and associate those behaviors with each level of proficiency/maturity as shown in Figure 1 above.

Customers can look at a framework like this and quickly conceptually grasp the types of behavior/activities necessary in order to advance along the model.  As you develop this framework for your product and space, ideally try to map some of the behaviors that are associated with maturity levels to features of your product, so that you can easily associate customer usage of valuable features with their progress along the Maturity/Effectiveness Model.

Step 2: Identify Quantitative Metrics that Matter and Can Be Measured

In order to objectively measure progress on an ongoing basis, you will need to identify relevant quantitative metrics that drive value, are measurable, and ideally are good indicators of customer health/stickiness.  For example, in the case of a CRM company, you may want to know your customers’ conversion rate of leads or opportunities in order to understand whether you might be able to help them become more effective with your marketing automation solutions.  In the next steps, you’ll compare this data to benchmark data for a given customer and measure improvement.  You can also compare these metrics to aggregates for “like” companies.  As you identify target metrics, you’ll need to distinguish which ones are considered “usage” metrics that you can obtain directly from your SaaS application and which ones will require consent and participation from your customers to obtain.

Step 3: Benchmark Your Customers on Day 1

It’s important to understand the specific stage where each of your customers fit in the model/framework you’ve created, and it’s also important to get some baseline data on quantitative metrics as well.  For larger, higher-touch customers, you should be able to understand this during a consultative sales process; however even with lower touch customers, you should be able to characterize/segment new customers based on system configuration, features purchased/implemented, and initial capture of the quantitative metrics you identified in Step 2 for that customer segment.

Step 4: Create an Improvement Plan

This step is critical and is a combination of art and science as it can be challenging to set targets at the right level.  Your primary objectives should be to:

  • Set targets that are based on incrementally improving from the baseline you measured;
  • Encourage practices and usage of product features that will advance your customers along the Effectiveness Model you defined in Step 1;
  • Create a structure and context for the ongoing digital and interpersonal communications you will have with your customers.

Step 5: Provide Constant, Ongoing Feedback on Progress Against the Plan – And Revise as Necessary

Now that you’ve defined a framework, key metrics, and a plan for improvement against a baseline which you’ve captured, you can engage with your customers in a meaningful way that is focused around helping them get value from your product and become better at what they do.  And you can measure their progress against defined objectives.

As a first step, you may want your CSMs to interpret system data and personalize recommendations to individual, high-value customers.

As you expand this offering to additional customers, you will need to define customer behavioral segments based on the metrics you’re capturing and provide those customer segments with extremely relevant digital content.  For example, if you’ve identified a subset of your customers whose systems data indicate that they haven’t been using a key marketing automation feature of yours and that their conversion data hasn’t improved since their baseline, you can begin a drip marketing campaign to them on best practices in marketing automation and how to use your product to improve those metrics.  That specific message should only go to that identified segment of customers, though, as you don’t want to “spam” your other customers with information that isn’t relevant to them. Your marketing team segments prospects based on behavioral data and delivers relevant content to them.  You should target communications to your customers using similar logic.  Great technology already exists to help you do this.

Helping customers improve and become better at what they do through their partnership with you is one of the greatest ways that you can demonstrate value.  You don’t need to demonstrate it for all customers on Day 1. In fact, the sooner you can deliver it to some customers, the better.  You can begin by implementing this model in a manual way with your most valuable customer segment, then roll it out to your broader customer base by segment – perhaps as you deploy additional Customer Success Automation and Marketing Automation tools. Hmmm… I bet a Customer Success Maturity/Effectiveness Model would fit in perfectly right about now…

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