July 5, 2018
Through our research, conferences, and various publications, TSIA has been talking about how essential it is for Services and Sales to work together to land and maintain profitable relationships with customers through all stages of the customer life cycle. But something that I really feel the need to emphasize is why this focus on cooperation between these two functions has become so essential.
The fact of the matter is, the economics of the existing business models within the technology industry are changing. To meet this change head on and come out successful on the other side, tech suppliers must shift their focus toward providing an unparalleled customer experience, which starts with ensuring that customers are able to adopt their technology purchases to receive the maximum value. Effectively doing this requires improving your internal culture to promote cross-functional collaboration so that customer growth is no longer a question of whether the account belongs to Sales or Services, but how the entire organization is helping the customer achieve their desired outcomes.
If you were to wax just one fender of your car and make it shiny but leave the rest of the car alone, people won’t say “Wow, I love that fender!” They’ll say, “What’s wrong with the rest of your car?” While this example might seem obvious, why then are today’s technology companies only choosing to optimize only the SaaS portion of their business but not taking the same steps to optimize the on-premise portion?
A common misconception about these industry-wide changes in economics is that it only impacts the customer experience of subscription-based offers. For companies that have both on-premise technology and a SaaS portfolio, you need to be able to provide your customers with a consistent experience that blends Sales and Services across all areas of your business and offer portfolio. There are millions of customer touchpoints within your company that will need to be optimized to ensure a seamless and streamlined customer experience, no matter which business unit they interact with. Unfortunately for some companies, this is easier said than done.
It used to be that Sales would set up a demo with a customer to talk about the product and its features. In the new outcome-based business landscape, Sales now has to first discuss the goals the customer has, then match products and features to what the customer hopes to accomplish with their technology purchase. This means that Sales now has to not only know every aspect of the products within the offer portfolio, but they also must fully understand more customer verticals and the potential desired outcomes of those verticals.
For companies that have both on-premise technology and a SaaS portfolio, you need to be able to provide your customers with a consistent experience that blends Sales and Services across all areas of your business and offer portfolio.
To support this, Services must be able to track the customer’s progress towards their outcome in a journey map. The information that both Sales and Services tracks about the customer and their actual behaviors when using the product can then be leveraged by Marketing and Product Management to better understand what is valuable to customers, leading to product improvements and better understanding of the needs of said verticals. This is why many organizations have created a Customer Growth team within their organization, consisting of traditionally siloed organizations: Services, Sales, and Marketing. Together, they rally together in a new partnership that leverages their unique talents and specialties to grow customers.
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What your cross-functional Customer Growth team might look like.
What your cross-functional Customer Growth team might look like.
But what is the generally accepted timeline on making these changes? When TSIA asked the chief sales officers at some of the largest enterprise tech companies within our membership community, an overwhelming 92% agreed that they’ll need to significantly adapt their sales and customer engagement models within the next 12-24 months. To accelerate the blending of Services and Sales, there are two things to keep in mind that can help facilitate the conversation:
This notion of coming together to work toward a common goal of making customers healthier and grow faster is a concept that you need to have ingrained into the culture at your company. Forget who owns the account, forget whether Sales is more important than Services, you’re now just two strong, powerful players helping the customer achieve their goal.
In TSIA’s LAER model (Land, Adopt, Expand, Renew), we talk a lot about how Services and Customer Success teams have the power to innovate and optimize the Adopt, Expand, and Renew portions of the customer journey, but how do we innovate and optimize the Land aspect?
LAER: Land, Adopt, Expand, and Renew.
We know that Services interacts with the customer 5-15x more than Sales, giving them unrivaled insight, and valuable data, on how to match products and services with the outcomes customers want to achieve. It’s a given that this unlocks cross-sell and upsell opportunities, it also paints a more complete picture of the common pain points of specific verticals, which can be applied to landing prospects. To optimize the Land aspect of LAER, you’ll need to take what you know about existing customers and help Sales apply that knowledge to the prospect universe.
This will also help make Sales more effective and more efficient at landing sales. When you think of it, a good chunk of time is spent in researching the customer, understanding the common challenges of their vertical, curating the right content to have that sales conversation, and even determining whether or not the customer is in the best place to make their buying decision. This Services-provided data can dramatically reduce the time it takes Sales to qualify that lead and identify opportunities.
The joint power that Sales and Services has to sell outcomes is an industry breakthrough, but many organizations are struggling with knowing where to begin. This is a topic that TSIA has helped many companies within the technology industry overcome with a customized approach to our Executive Advisories. Other topics we can help you with related to the concepts brought up in this blog post are:
Our workshop brought tremendous value to our organization by helping us create a common, shared understanding, as well as align on what 'best-in-class' looks like.
Ashley Haynes-Gaspar Executive General Manager, Global Support, GE Digital
I personally have worked with TSIA members and their teams to implement strategies for optimizing all aspects of their organization for LAER and getting Sales and Services to be on the same team. If you’re interested in receiving help in this journey, talk to us about our Executive Advisory and take the guesswork out of applying these best practices to your specific organization.
J.B. Wood is president and CEO of TSIA. He is a frequent industry speaker and author of the popular books, Complexity Avalanche (2009), Consumption Economics (2011), B4B (2013), and Technology-as-a-Service Playbook: How to Grow a Profitable Subscription Business (2016), and has appeared in leading publications, such as Fortune, The New York Times, and The Wall Street Journal. He works with the world's largest technology companies on strategies to extend their innovation platform beyond the lab and into the customer experience, particularly in the age of cloud and managed services.
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