Recently, I had the opportunity to present on the topic of the “Customer Experience Economy” to a group of partners at a Google conference. It was important to me to provide some actionable takeaways that would help the audience accelerate the evolution of their customer success best practices. As the world, more specifically, the world of enterprises, is transforming … again. We are well underway in the “Customer Experience” economy — where your clients expect more VALUE and are more focused than ever on how quickly you deliver quantifiable business OUTCOMES.
There are key changes in the market place that are driving the shift to Customer Experience. Most notably, the shift to the cloud has changed nearly everything about the way prospects and customers research and make purchase decisions. In the past, revenue was collected up front, we had time to show value and we had money to invest in solution development and value differentiators.
But now with the cloud, that has all changed. Empowered customers expect a new way of doing business with you. The idea of brand loyalty is ancient history, as cost to switch vendors is lower and competition is fierce across every industry. We are all challenged to think differently. Sell differently. And deliver customer success differently. We must evolve—or die!
However, a slow evolution is not acceptable—speed and agility is critical not only to survive, but also to thrive. When today’s customers demand immediate value, you must be prepared to deliver. Here are 5 tips that will help create winning customer success best practices:
Tip #1: Utilize a Revenue Lifecycle Management (RLM) framework and maturity model to benchmark where you are today
It is critical to have a framework by which you can benchmark your approach to customer success across five key areas — technology, data, KPI’s, people and process. As you go through this process, it’s important to keep in mind that “One Size does not fit all” —> think about the outcomes the solution you are selling needs to deliver for the end customer. It starts with understanding how to “create a successful end customer”. By understanding where you are today, you can evolve faster by investing in and implementing customer success best practices where needed. A maturity model helps you focus on continuous improvement and evolve faster.
Tip #2: Create a customer journey map that clearly demonstrates outcomes and the path to achieve them
By mapping your entire customer journey – as it is today, you will get a better understanding of what is missing and what data you will need to fill those gaps and improve the customer experience. There is A LOT of information out on the web to help you with your customer journey mapping. However, most of it focuses on mapping out the purchasing or acquisition experience. In recurring revenue business models, you need to focus on mapping out the entire customer lifecycle – with the emphasis on the revenue lifecycle pillar. By starting with an understanding of the customer experience, you can be sure to pull data from all available sources.
Tip #3: Data has a significant impact on the customer experience and lowering your cost to deliver customer success
As we migrate solutions to the cloud, the handoff between what is sold and what is delivered is more important than ever. We are also learning that outcomes continue to evolve as the partnership with our customers evolves. Our customers EXPECT just to know this and delivery on these changing outcomes. We must be aware of how products are USED and we must use end customer feedback to deliver insights that allow our customers to rapidly shift their strategies. It is important to leverage usage data or things like usage (TLUs) to drive the customer journey. Learn more in our blog on creating a data-driven revenue lifecycle.
Tip #4: Continuously innovate to improve products, services and processes to lower the cost to serve, while simultaneously growing revenue faster
Customer success is not a set it and forget it strategy. As technology is changing the market faster than ever before, you must innovate continuously to keep up. This is only possible if you are utilizing the right performance metrics. Measuring churn or customer retention is a lagging indicator. Sure, it is very important, but it can only tell you that there is a problem, not where the problem is in the customer journey. Your customer health score is critical to facilitate innovation in customer success. And yet, many companies continue to rely on a red, yellow and green traffic light indicator. Learn more in our blog on creating customer health scores that work.
How quickly is the customer getting value from your product and/or services? Have all deployment/implementation milestones been met and on-time?
1. Customer Time to Value 2. Activation % 3. Onboarding On-Time Rate
Are customer end users using the product? Are they using the highest value “sticky” features? Are they using the highest value “sticky” features? What is the relative health of your customer based on key criteria identified?
4. Adoption Score 5. Product/Feature Usage 6. User Loyalty
Upsell + Cross-sell
Are there opportunities to sell more and how successfully are you upselling additional offers? How many leads, by number and dollar, are you converting to new product and/or service sales to your existing customers?
7. Expansion Bookings 8. Net New Bookings 9. Value Expansion Rate
Of those customers who come to a decision, how many are renewed versus lost? Of those customers who come to a decision, how many are renewed versus lost?
11. Retention Rate 12. Churn Rate 13. Customer Health Score
How many, by number and by dollar, of your customers are renewing for and extended term? Of those customers who come to a decision, how many are renewed versus lost?
13. Resolution Rate 14. Close Rate 15. Final Renewal Rate
Tip #5: Consult with post-sale customer engagement experts
It is important to learn from those who have gone before you. Take the time to learn from experts in customer success best practices and recurring revenue. Quite often, partnering for success will accelerate your evolution and help you scale your customer success organization faster.
Learn how the key components of a customer success best practices deliver value throughout the customer lifecycle in the customer experience economy by downloading our How to Create a Customer Success Plan White Paper