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The Customer Engagement Model

27 Jan

Proactive customer engagement. It’s a tenet of Customer Success. We all do it to some extent – some of us better than others. The question is “How do you best go about structuring that proactive engagement so that you can scale a team and provide a consistently great customer experience?” The answer is “With a good Customer Engagement Model.”

A good Customer Engagement Model needs to be flexible in two key ways:

  • It needs to accommodate different phases of the customer lifecycle; and
  • It needs to support both scheduled and unscheduled interactions with customers

In a prior article on Time to Value, I pointed out that it’s critical to keep momentum going once the initial sales deal is closed and ensure that you aren’t diverging from your customer’s original path to reaching their objectives. Your Customer Engagement Model should, therefore, start at the time of sale in order to maintain momentum and achieve a first “quick win”.

Good Customer Engagement Models should also help keep you focused on answering the three key questions you need to know about every customer:

  1. How is our customer measuring value?
  2. Are they achieving that value?
  3. Are we providing an experience that will result in loyalty and advocacy?

Irrespective of whether your company provides high personal touch Customer Success or whether your Customer Success model is more self-service, your proactive engagement with customers should be governed by an Engagement Model. A good Engagement Model helps you understand: A) what the engagement “moments” are for customers throughout their lifecycle; B) who in your organization is responsible for interaction with customers at those moments; and C) what the objective or expected outcome is for each of those moments.

I’ve illustrated what that model looks like conceptually in the image below:

EngagementModels_20140126.001

The Phases:

The first key point of an engagement model is that it needs to work across two very different phases of the customer lifecycle, the Onboarding Phase and the Ongoing Usage Phase.  The first phase, onboarding, is the much higher intensity, much more critical, and much more interactive of the two. I think of these two phases very much like the takeoff phase and the cruise phase of airplane flight. In the takeoff phase you’re in close proximity to the ground, there’s quite a bit at stake, it’s the phase where more incidents happen, and it generally requires a high degree of pilot focus. During the cruise phase of flight, it’s important that pilots monitor their instruments, ensure they’re on course, and pay attention to external factors. They can’t ignore that they’re flying an airplane during the cruise phase; however the workload, intensity, and immediate consequences are lower than during the take off phase. Pilot’s don’t need to give the airplane nearly as much of their attention during cruise as they do when they’re screaming down the runway, getting it airborne, dealing with heavy air traffic, and monitoring for even the slightest anomaly – which could have dire consequences if left unchecked. During cruise, a pilot can leave the cockpit to use the restroom. During takeoff, on the other hand… not so much.

The Onboarding Phase:

The Onboarding Phase serves two purposes:

  1. It ensures that your customers are getting off on the right foot and are set up for success with your solution; and
  2. It creates a logical opportunity for both you and your customer to think about, articulate, and agree on how you’re going to measure value in the ongoing phase.

In a “high-touch” customer engagement scenario, much of the onboarding phase may be done by a CSM or someone from the customer onboarding or training team. The customer needs to become familiar with your solution during this phase, and you need to ensure that they’re able to be self-sufficient when using it.

A “low-touch” customer engagement scenario will have the same objective, but will achieve it more with automated marketing/email campaigns, automated measurement and exception handling of early adoption indicators, and automated training for the customer.

In both the high and low touch models, it’s critical to measure early indicators of user adoption and determine what course corrections need to be applied. The method for measuring the indicators and for communicating to customers needs to be much more automated in the case of a low touch engagement model.

In addition to ensuring adoption and self-sufficiency, the onboarding phase in a high touch B2B/Enterprise Solution world provides an opportunity for you to validate key assumptions with your customer on how they are going to measure value and how they’re going to quantify the success of their implementation of your solution. If your sales process is value based, you have probably already begun identifying use cases, measurements, and customer ROI expectations. You may very well have also quantified the expected ROI from adoption of your solution. The bad news is that too many companies don’t do any further measurement once the deal is closed.  A good onboarding process not only ensures that a customer is adopting your product but positions you as a partner to help ensure they’re making progress against their stated objective.

Example Engagement Moments during the Onboarding Phase (some of which are included in the sample model above) include:

  • A kickoff meeting to ensure that the customer meets your team (either virtually or face to face, as appropriate)
  • Confirmation that the customer has dowloaded / activated / or logged in
  • Initial Product Training
  • A formal review of the first set of metrics delivered by your solution. These should provide an indication of the customers adoption, usage, and effectiveness (how well they are doing x, not just that they are doing x).
  • A checkpoint with the customer to ensure that they understand how the product works and that they feel self-sufficient

In the spirit of Time to Value, it’s vital during the onboarding phase that the process moves as quickly and efficiently as possible and that customer momentum is maintained in the process. I’d strongly recommend two things to manage momentum:

  1. Once you have defined your Engagement Moments, measure the time that it takes each customer to progress from one to the other. Analyze your metrics and determine whether there are any systemic delays in any of your phases of onboarding and work quickly to get to root cause.  I’ve had teams shave weeks off of implementation/onboarding by measuring individual phases, identifying root cause for the delays, and then fixing the process.
  2. Set escalation triggers if you don’t see adoption events occurring with your customers according to expected timeframes during the onboarding phase.  If your customers haven’t created x accounts in y weeks for example, that should trigger proactive engagement on your part – in addition to the predefined moments in your plan.

The Ongoing Phase

The focus of the Ongoing phase is to ensure that your customer is achieving the objectives identified in the Onboarding phase and that you’re keeping a pulse on their experience.

Engagement Moments in this phase can be categorized into one of two types: 1) Time-based; or 2) Event-based.

Time-based Moments

Time-based moments are ones that you can put on a calendar, such as a Quarterly Business Review, Monthly Metrics Review, Annual Account Review, or even Weekly Meetings for your highest of high-touch customers. Time-based moments are great ways to keep your customers interacting with you for the duration of the lifecycle – as long as you clearly set expectations and provide valuable feedback to them during those engagement points. If you aren’t continuously providing value to your customers during these moments, they’ll lose interest and stop attending regular calls/meetings, so be careful not to over-schedule them, and be sure to provide relevant engaging content in each of these engagements.  Dan Steinman from Gainsight recently wrote an informative blog post characterizing a good Quarterly/Executive business review.

Event-based moments are ones that are triggered by the occurrence of an event (or non-event in some cases), such as a customer logging a high-severity case with your Support Desk; a new product release from your company; a change in leadership or executive sponsorship at your customer; a poor or mediocre survey response; an absence of support cases over a defined period of time; a decrease in overall usage; or a decrease in key usage metrics from a given customer. The purpose of event-based triggers is to help you react quickly and appropriately to events that can influence the health of the customer relationship –  for better or for worse. In either case, the sooner your team reacts to the event that triggered the engagement, the better off you’ll be.

Customer Engagement Models are unique to companies, products, and customer types. An Engagement Model for an enterprise customer with a highly complex solution will look very different than one for a consumer with an off-the-shelf SaaS offering and both will engage different parts of the organization. Logically breaking down that model into two key phases (Onboarding and Ongoing) and defining the Ongoing phase in a way that supports both Time and Event-based moments of engagement with customers should help you optimize for your products and customer types. You will likely end up with more than one engagement model for different customer segments.

Have you employed a Customer Engagement Model and what methods or tools have you used to ensure that the model is consistently applied across your customer base?

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When in Rome…

31 Dec

I was recently in a meeting in Europe and found myself talking to an experienced enterprise sales leader from another company about Customer Success. She asked me “How do you approach Customer Success in different countries and cultures where there’s a need for face to face interaction?  In the US you do so much by phone: Inside sales, Automated support, Customer Success Management, and here relationship building is still important. We need the face time.”

Which got me to thinking…

While I certainly don’t advocate running a high-touch, high-cost business model for customer success if the revenue model doesn’t support it, creating that personal relationship is incredibly powerful. As many US companies begin to expand their Customer Success efforts into other markets, it’s essential to recognize that each geography can provide some valuable lessons and examples for others. Organizations can learn quite a bit by exporting and importing best practices across regions. I’ve certainly learned by observing interaction models in different markets and applying best practices from one region to others. Taking this approach benefits both your company and your customers.

As you look at taking the “best of” from each of your regions, you’ll find that you can increase touch in some regions while increasing efficiency and scalability in others. As you dissect how and what to apply across geographies, it’s important to understand what makes each approach successful.

The Case for a Higher Touch Model:

Many of the effective Customer Success models outside the US are higher touch (more face to face) for a few reasons:

  1. The culture dictates it;
  2. In many countries it’s easier due to the higher concentration of businesses in fewer regional city centers
  3. It works. As much as we do over the phone and online in the US, in some cases it’s still important to build personal relationships through face to face interaction.

So when the opportunity arises, it’s important to engage with customers in as personal a way as you can. In many cases, an in-person meeting with a large customer is a great investment of time and money. It also proactively sends the message that the customer is worth your time and effort.

Other Ways to Connect:

As our conversation progressed, we also agreed that it isn’t possible to meet every customer face to face, and it certainly isn’t possible to meet any customer face to face 100% of the time. In every case, though, it’s important to connect with your customers in a way that is A) relevant and appropriate to them; and B) true to your company’s brand and mission. For example, companies who do content marketing extremely well don’t need to have face to face interaction with the vast majority of their customer base in order to connect with them.  Companies like MailChimp, HubSpot, and ZenDesk build incredible connections with their customers via mainly digital communications. Their messaging is so good and so authentic that as a customer you feel like you’re a connected insider.

Authenticity and Relevance Trump All:

Whether its face to face or through broader communication, you need to connect with your audience in a relevant way.  You have quite a bit of information about each of your customers. Make your communication with them relevant, whether you’re targeting digital content based on their behavior or you’re tailoring a detailed Quarterly Business Review based on their specific metrics.

Even in the case of broader-based digital marketing or one-to-many communication, it’s critical to both create targeted content for your specific audience and to deliver that content in an engaging, authentic, personal way. I’ve attended webinars with solid content, but disconnected, impersonal presenters. In almost all cases, the disconnectedness of the presenter unfortunately trumped the relevance of the content.

Engaging with someone face-to-face, especially one-on-one (or few-to-few) inherently creates a strong connection. In the cases where you’re engaging digitally with customers en masse, you need to do so with a compelling, consistent tone and voice. Many of us will communicate with the largest segments of our customer base primarily through a digital channel. We have to make that channel engaging, personal, and authentic. Send the message to the group, but communicate with the individual.

Do something different

As you think about face to face meetings, it’s worth noting that not all face to face interactions need to be at your customer’s site.  If your office is in a major metropolitan area, chances are your customers might find themselves in your neighborhood occasionally.  If so, host them for a corporate visit.  Do your quarterly business review with them in your offices. Introduce them to some of your executives who they wouldn’t otherwise meet if everyone needed to travel to the customer site. Share your vision with them. It’s easy for us to fall into routines with our customers, so by holding meetings in a different context or venue, you have the opportunity to create memorable experiences.

As you engage with your customers, how are your learnings and practices from one geography creating more personal, authentic, relevant, and memorable experiences worldwide?

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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:

EffectivenessModel_CRM

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!

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Renewals, Up-Sells, and Cross-Sells: CSMs, Sales, or Online?

18 Jun

One of the most common organizational questions/challenges facing SaaS companies is figuring out which group has responsibility for up-sells and cross-sells. Is it CSMs or Sales?  If Sales, is it the same sales team that does the hunting for new customers?  If it’s some combination, where do the lines get drawn?  Before getting into the framework for making this decision, though, I think it’s important to clarify the primary purpose of a CSM organization in a SaaS company: Ensuring customers are getting value from the SaaS offering.

Value: The Primary Role of the CSM

The framework I’m proposing makes the fundamental assumption that the primary objective of a CSM function should be to help a customer base achieve measurable value and results from a company’s product or service.  Without that value-based foundation, any renewal, up-sell, or cross-sell attempt is an uphill battle.  The objective of the CSM function should be first and foremost about creating and maintaining a value-based relationship across a set of customers, whether high-touch or low-touch.  That foundation then breeds loyal customers, advocates, and additional revenue.

So… if the CSM role is fundamentally about the value relationship, how involved in the up-sell, cross-sell, and renewal transactions should they be?

The reality is that every organization has different characteristics and there is no one “silver bullet” organizational structure for Sales vs CSM responsibilities.  One way to approach the question and determine what’s right for your company is to look at the key factors that determine how that responsibility is distributed across the following three potential groups or methods:

1) Web / Self Service

2) CSMs

3) Sales

Roles1

Figure 1.

The Service Dimension: Complexity of the Customer Service Interaction

CSM involvement (and value) in the sales process will be greatly influenced by the amount of assistance/interaction your solution requires in order for your customer base to really get value.  Is it completely self-service, self-installing, requiring zero human interaction or does it require significant assistance, mentoring, education and coaching by someone on your CSM team?  While there is no absolute way of measuring degrees of complexity, you may want to ask yourself a few questions like: “Can my customers (or some segment of my customers) achieve value without the interaction of a CSM?”; or “Is my company’s product meant to be completely self-service without the need for any human interaction, or is there a heavy Services and consultative component required for my customer base to obtain real value from my product?”  This line of questioning will give you an idea of how much value a CSM would provide in the upsell, cross-sell, or renewal opportunities.  If a high-touch CSM relationship is necessary to help customers get value from your product, a similar interaction model is likely necessary in order to position the value of additional services or offerings.

The Sales Dimension: Complexity of the Transaction

Some solutions have a low-friction commercial aspect to them.  Think online transactions.  Low-volume, online purchases from a published price list clearly fall into that category.  A small business user signing up for MailChimp, or an individual or workgroup signing up for DocuSign can be completely accomplished via web-based transactions with little (or no) human interaction required.  Enterprise, high-volume, or non-standard pricing scenarios, however, will require interaction and likely negotiation with a sales rep.

While each of these dimensions is straightforward in and of itself, looking at your offerings across both dimensions can give you better insight into how to structure your organizations.  Also note that this framework isn’t intended to apply to your entire company and/or product line.  It can be applied to individual customer segments, markets, product lines or service categories.

The scenarios also tend to get more interesting when you look at high complexity service offerings which also have high complexity transactions.  An example of this would be a high volume / enterprise agreement with a customer for a highly consultative solution offering or managed services provided in addition to the SaaS platform.  Any modification to this kind of agreement will require custom pricing, negotiation, and a consultative sale involving an expert in the deal.  In this scenario, Sales and CSMs might team together in a manner similar to Sales and SEs would for new business opportunities.  This scenario is represented in the upper right hand corner of the charts.

The Third Dimension: Revenue

There is an obvious third dimension here, and that’s the ACV (or CLV) of a customer.  In those cases, the quadrants would shift closer to the axes for high ACV/CLV customers as they would warrant a higher touch, while the quadrants would shift away from the axes for low ACV/CLV customers as they would warrant a lower touch (see figures 2 and 3 below, respectively).

Figure 2

Figure 2

Figure 3

Figure 3

So… while there is no single answer for assigning responsibility across the organization.  This framework provides a way to help distribute responsibilities based on some key factors.

Which factors have you used in determining how to structure your organization’s up-sell and cross-sell responsibilities… and how have you addressed compensation and incentives in each model?

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