The success of your customer depends on the continued added value you create and the experience you deliver to them. Successful organizations are shifting from being product-centric to a customer-centric mindset and often adopting and delivering via a recurring revenue or subscription based business model. These models imply a long-term correlation between the added value gained and financial engagement of the customer. Indeed, the more value gained, the more likely the client is going to wish to continue and even increase the amount of their subscription investment. As quoted by Jason Lemkin:
“Customer success is where 90% of the revenue is”
After e-meeting each other on social media and appreciating our common passion for the customer centricity of things, we (Daniel Coullet and Sue Nabeth Moore) propose to share some thoughts around a customer success (CS) framework developed across the layers illustrated in the diagram below: C.S. – O.P.T.IN²:
OPT-IN²~Framework – Success Track Enterprise
The “C” and “S” are the strategic layers, meaning Customer centricity and Service alignment. “CS” is also a common acronym for Customer Success.
O.P.T.IN² refers to the CS objective of ensuring customers wish to stay for good. It is also an acronym which spells the operational chronological steps across which the defined CS strategy is operationalised:
O = Organization, P = Process, T = Tools. For the “IN²”, in parallel to the former steps, there is an evolutive and agile initiative around INformation (data) as well as the on-going Integration of the Organization, Processes, Tools and Information.
The above will be outlined across 3 articles, the first of which on the strategic foundations is below. The second will be on the operationalisation of CS and the third a concrete case study.
Many software companies in SaaS or subscription models today are doing their best to try and create customer success management organizations and are often reactively addressing the threat of churn. So let’s move forward by building a framework that will help us iterate to become a best-in-class company that proactively delivers continued great value and experience to customers.
What does it take to operationalize customer success so that you not only mitigate the threat (churn) but you also create the opportunity to fully align your organization to proactively partner your customer’s expected outcomes? In turn, this will then grow your business by increasing renewal and expansion, consequently reducing churn and fostering client advocates.
Strategic Foundations
We outline below what we consider to be two strategic pillars and some related best practices which create the foundations for a customer success organization to become successful : customer centricity and service alignment:
- Customer Centricity
In the age of the customer, the vendor-customer power has flipped.
Before suppliers had the power to sell without being that concerned about the business outcomes of their customers’ investment. In the software world, this was particularly the case with the on-premise model. Now, with abundant knowledge and alternative solutions to solve pain points and the growth of subscription, customers have the power to opt out more easily from their engagement – operationally, functionally, technically and financially. This means that company mindsets should move from being traditionally product focused to include customers as the key business driving force. As George Colony, Forrester CEO predicts, if a company is not customer-centric, they’ll simply be out of business between 5 – 10 years.
So, what are some of the key competencies and pre-requisites to become customer-centric? Indeed, there are divergent perceptions on the definition of customer-centricity but in the most simplistic terms, for us it means when the customers are partnered to achieve their expected business outcomes thanks to their investment in your solution and services:
A. Ensure a customer-centric vision top-down:
- Top management show buy-in, sponsorship and change management to empower a customer-centric strategic vision.
- Define the meaning of customer-centricity.
- Top management nurtures and promotes a customer-centric mindset across all the company organisation and cross-functional roles.
- Customer-centricity is also embedded as a mindset among internal “customers”. Cross functional roles partner as “internal customers” in the interest of their external customers. Each role knows the expected inputs and outputs of their respective contribution to internal and external customers.
- Customer-centricity is the company driving force which determines all behaviours, actions, reflexes and engagement with customers.
- Continuous adaptability is encouraged towards changing customer needs.
- Objectives and incentives around customer-centricity are aligned across the organisation and roles.
B. Know your customers:
- Understand your customer’s current needs and anticipate new ones.
- Understand different customer needs according to user profile (or persona) and their impacted stakeholders.
- Understand and empathise with customer domain challenges, contexts and pain points. Put yourself in your customers’ shoes.
- Anticipate and follow customer domain and market evolutions.
- Define and operationalise required client knowledge data (to be developed in our second article).
C. Foster customer experience (CX) principles:
- Define via internal collaboration a customer journey/ies and milestones from the customer point of view.
- Generate a frictionless customer experience (CX) across the customer journey via an adapted customer relationship.
- Align CX and CS principles to create the conditions for success. CX and CS are often treated as 2 distinct disciplines when in fact they complement and feed into each other.
- Align the above customer journey/ies with all your company organization, roles and responsibilities.
D. Define expected customer outcomes:
- Help customers express their vision of success and how your solution contributes.
- Help define and measure tangible business outcomes (per impacted profiles).
- Ensure your solution, related services and engagement address the above (use cases).
- Communicate, partner and measure how your solution + services contribute to business outcomes.
E. Foster customer success principles:
- Define a clear mission statement (charter) for CS.
- Ensure all internal actors understand the role of CS as a strategic business pillar.
- Ensure each internal actor is empowered in their responsibility and contribution to CS.
- Align cross-functional incentives and compensation for CS.
- Determine appropriate and pertinent metrics/KPIs to measure CS in alignment with the strategy, e.g. adoption and performance metrics for customers and internal metrics for your company such as NPS, net retention rate, CLTV, churn rate, CSAT, time-to-value, etc…
2. Service Alignment
Ensure that the related services are aligned with the customer-centric strategy. While the use of the word “product” is still common place, e.g. “product to market fit”, “product development”, “product owner”, , “product run” etc…, we prefer to use the word “services” which holistically includes the product and the CX. In the business models of “X as a Service” for example, we consider that maintaining the previous wording and mindset of selling a physical “product” is rather a contradiction in terms. We prefer the term “service” and which englobes the product, the related services and adapted CX. The term “service” also infers that there are expected outcomes which will materialize as the services are consumed, as opposed to the word “product” implying just a means to an end.
A. Design the “Service”:
- Unite cross-functional teams to define the expected outcomes and experience at each stage of the customer journey per profile/persona.
- Design the product (UX), experience (CX) and services in parallel using a methodology such as Design Thinking to create harmonized value to the customers. In many cases, the experience and services are designed after the product which often creates a non-coherent CX and misalignment and friction between vendors and customers, putting customer success teams in a challenging position.
- Consider the CX like a “product” launch, using best practices and processes for software development such as design, quality assurance, and “service” owners,…
B. Design Service Engagement Models:
- Define engagement models per client segment needs with the appropriate number of touch points. Synchronize them between the digital, physical and product experience.
- Align the engagement models and touch points with your CX and CS principles.
- Align the engagement models with your internal key processes and related actors.
- Include the ability to measure adoption and performance directly in your product/services in alignment with the metrics defined in your strategy.
- Validate with customers their key moments of truth (MoT) during the customer journey which are crucial moments for CX.
- Instrument your customer feedback to continually understand if the design (outcomes and experience) are delivering what is expected.
- Adjust the above whenever necessary.
The above strategic foundations provide the base upon which the customer success organization can then be operationalised. While customer success is emerging in business as a strategic pillar of recurring revenue models such as SaaS, it is in fact applicable to any customer-centric company intent on generating win-win growth and profitability, irrespective of their business model.
Indeed customer-centricity demands a proactive shift in culture and not just a reactive response to changes in business models. The product, the service and CX are all an intrinsic part of the success of the customer and together they will progressively become an inherent part of the storyboard for doing “business as usual”.
In our next article, we’ll be pleased to share some further thoughts around the above OPT-IN² framework which outlines more best practices in operationalizing proactive customer success with an agile mindset. This will be followed by a case study article.
Picture Source – Vecteezy
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Co-Founder Success Chain / Top 100 Customer Success Strategist 2021
