I have recently travelled back from two conferences, including the CCO Summit, hosted by Gainsight, and the Customer Success Summit, hosted by Totango. One discussion thread at both conferences was the ability to scale Customer Success organizations effectively. It was awesome to hear Totango’s Guy Nirpaz introduce Spark, which is how Totango intends to provide their customers a fast path to scalable value. In Nick Mehta’s kickoff discussion at the CCO Summit, he spoke about how one of the important themes for customer success was to become more prescriptive to our customers. Whether it is use of technology or improved process, the theme of “scale” was very evident.
In TSIA’s research, we’ve spoken about scaling leveraging technology and implementing prescriptive time, event, and value-based interactions that will help Customer Success organizations scale. With these themes clearly at top of mind within the customer success community, it’s important to talk about other ways that Customer Success organizations can move beyond the initial incubation steps of a high-touch CSM model.
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TSIA's success plan and playbook framework.
TSIA's success plan and playbook framework.
One way that traditional Sales organizations scale is by leveraging their partner community. Research has stated approximately 75% of revenue in the technology industry comes from third-party channels. So, how are we doing as a customer success community leveraging partners to scale? Hint: Not so good.
TSIA recently conducted research in which we reached out to our community to understand how OEMs (original equipment manufacturers) were working with their partner community. As look at a series of practices and metrics that would move the relationship forward, we would expect to see several advanced capabilities, including OEMs directly investing in CSMs at their top partners, charter alignment, shared playbooks, and more. It’s clear we have a long way to go, but at these beginning stages, we found three levers that stood as a good starting point to enable your partner community to stand up their own customer success capability. These include: enabling partners through education, avoiding channel conflict, and providing tools that allow the partners to scale more effectively.
Less than 30% of OEMs were providing direct customer success training or certification. However, for the OEMs that were providing this level of enablement, their total company growth rates were almost twice as high as those OEMs that did not provide the enablement. We think the basic level of training should go beyond Sales, Product, and Support. There should be a focus on adoption, as it is the heartbeat of customer success. Cisco is a fantastic example of a vendor who is making this a priority. On their SuccessHub website, I found almost 100 individual assets all focused on customer success enablement.
As simple as it sounds, creating discrete swim lanes and avoiding channel conflict has a monumental impact on company growth rates. Again, for OEMs who mostly avoided channel conflict, we saw growth rates almost twice as high as those OEMs that presented channel conflict.
When it comes to sharing tools and technology, it’s already common for OEMs to share the basics of sales and support systems. However, it was a minority practice to extend their customer success platform or to share adoption information either from the OEM to the partner or vice versa. With lack of visibility around tools and technology, amongst other practices, customers are caught at the center with potential misalignment throughout their engagement lifecycle with the technology and it hinders their ability to achieve their intended business outcome.
While the common theme typically is focused on companies who are trying to get their whole ecosystem rowing in the same direction, that isn’t always the case. It’s also important to note a small but very interesting counter-narrative to using partners to scale. While in the minority, we are monitoring vendors that are taking a more confrontational tone to their partner community by either evaluating or already concluding to lower discounts and incentives. The concept from an OEM perspective is to combine a digital channel sales model and a differentiated customer experience, either through CSMs or automated triggers in the technology. Thomas Lah and J.B. Wood put this concept on the table in their 2016 book, Technology-as-a Service Playbook, and we are starting to see it happen.
For more information about the connection between Services, Sales, and scaling Customer Success, contact TSIA today to see how membership in our Customer Success research practice can give you the tools, frameworks, and advice you need. I look forward to hearing from you and sharing our extensive research on this topic!
Read more posts in the "Blending Service and Sales Motions" blog series:
Post Date: March 29, 2018
Phil Nanus, is the vice president of customer success research for TSIA. In this role, he works closely with member companies to deliver research and advisory programs focused on helping them optimize their customer success organizations and effectively deliver customer outcomes. Throughout his career, Phil has held various positions related to enterprise software and IT services, including global leadership roles in customer success, support, professional services, managed services, and cloud services. Prior to TSIA, he was the vice president of customer success at Infor, where he led a team of Customer Success Managers (CSMs) focused on driving customer adoption of their technology.
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