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Waterstone Management Group
Customer success has always been important for enterprise software providers. Over the past year, the tenor around customer success has taken on a sense of urgency, with over 70% of top software providers stating that it has become a top priority.
Before discussing these tips, it's important to first understand the two primary reasons for the increased attention to customer success by software providers. First, the economics are compelling as software providers and customers increasingly adopt the “as-a-service” subscription model. Second, customer expectations are changing. With expectations founded in their experiences with more intuitive consumer technologies, customers are upending traditional norms of provider-customer interactions. Today, customers want their products to be ready-for-use faster, to have help whenever they need it, to pay for only what they use, and to derive real value from the products.
The definition of customer success is broad, but in our view, it means ensuring that users adopt the technology and are able to quickly and measurably derive value from it. The transformation required to ensure success is significant and touches on all aspects of the post-sale customer interaction, from account management, professional services, and support, to renewals and upsell.
Despite all the buzz around customer success, software executives still struggle to get started, especially when it comes to deciding how to apply it within their company and getting initiatives funded and launched. To help, Waterstone has outlined practical advice around four key customer success priorities that providers should execute on immediately.
As product portfolios have become increasingly diverse and complex, so too have customer engagement models. Growth of product SKUs, M&A, multiple deployment options (on-premise, SaaS, dedicated hosted), and standalone support and service offers have all contributed to nuanced customer engagement models and, often, a fragmented customer experience. The charter and accountabilities of the various customer-facing roles are not clearly defined, such as those for account managers, technical account managers, and customer success managers. Mapping end-to-end customer workflows and specifying the responsibilities and hand-offs across the various roles are both integral to delivering a completely integrated customer experience. Such mapping has implications on organizational structure, including where these roles reside and the metrics by which they are measured.
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Knowledge of your customers’ business drivers is a pre-requisite to driving their success. That said, capturing your customers’ key performance indicators (KPIs), measuring them, and monitoring your solution’s impact is challenging. As a starting point, providers should leverage available product usage, adoption, engagement, and referral metrics as a proxy for success.
A number of listening posts exist that providers can mine to get a 360-degree view of their customers. These include sales calls, support interaction, marketing webinars, user forums, training participation, NPS surveys, social chatter, executive meetings, product usage data, etc. Furthermore, a number of technology platforms have recently emerged to help gather these metrics, create sophisticated customer success dashboards, and enable workflows to improve customer experience, reduce churn risk, and drive upsell.
Providers tend to underleverage these listening posts, hampering their ability to truly “know” their customers. Using Net Promoter Score (NPS) alone is not sufficient. Instead, providers should invest in efforts to get a comprehensive view of their customers.
Traditionally, the majority of services revenue for an enterprise software company is generated by the implementation of core products. Today, providers are under intense pressure from customers to implement their solutions more quickly and economically. To respond, providers must take a hard look at their processes to identify opportunities to automate and accelerate service delivery. In parallel, enterprise software providers should consider offering more product-independent (but related) services, such as revitalization, adoption, optimization, and value realization services, to compensate for the decrease in core implementation services. These services not only drive product-independent services revenue, but they also help ensure customers adopt more of the product and derive value from it.
While putting in place an effective customer success capability is important, the ability to scale effectively and efficiently is essential. There are three areas where technology plays a key role in enabling scale:
Below is an overview of the current customer success technology landscape and an example list of platforms that play a role in enabling customer success. It is imperative that software providers define their technology strategy to achieve scale in delivering customer success.
Customer success is top of mind throughout the software industry for a reason. The industry’s shifting market dynamics are compelling company leaders to reevaluate their business models. Providers that act now to implement a thoughtful, integrated approach to customer success will be well positioned to identify and capitalize on new revenue and growth opportunities.
Post Date: April 9, 2015
Dhaval Moogimane is a partner at Waterstone Management Group, with more than 18 years of business management and consulting experience that blends business strategy development, operations, and IT. He specializes in helping technology companies capitalize on emerging trends, drive growth, and transform from a product-led to solutions-centric business.
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