Your Customer Success Strategy is Key For Customer Renewals

SaaS vendors – or any vendor that sells on a subscription basis – know that retaining customers (CSM) is critical for growing revenues and ensuring the overall prosperity of their organization. The challenge is that historically companies have focused on the initial sale and building new relationships. Renewals were nice but not the top focus area.

Most companies have a process for closing the initial sales

Over the years, I’ve worked with lots of great sales and service organizations when they were implementing CRM systems. We spent a lot of time mapping out sales stages, defining sales activities, and building sales tools.

What was clear is that they have invested lots of time and money in creating a sales organization that knows what it is doing and can close deals. That is, they could close new deals.

But what about retaining customers?

But they don’t have a plan for what happens next

The rise of SaaS and subscription pricing means that customer renewal processes need to evolve too. SaaS vendors need to identify what needs to happen to make the customer choose to renew year after year. And they need to look at this from both their perspective and the perspective of the customer.

The image below shows the typical approach many SaaS companies take with renewals. Vendors tend to focus solely on the initial sale and then wait for the renewal period to come around. Sure, they will provide some customer support and will focus on maintaining the relationship with the buyer, but they do little to ensure the customer is getting value from the system, which is the main criterion on which customers base their renewal decisions.

And they lose a lot of customers at renewals – No CSM

The problem is this: the customer has a different renewal process.
That is, driving effective and sustainable user adoption and (therefore) getting measurable value/ROI are on the customers’ critical path for renewals.
If they don’t achieve these two things, they don’t renew. Period.

Including Customer Success Management activities after go-live is critical to renewals

Sustaining user adoption and achieving measurable ROI has always been the Achilles’ heel for IT projects. Prior to SaaS software, these problems fell 100% to the customer. Now, for the first time, the SaaS model means the vendor has a vested interest in helping customers solve these problems.
So, what is a SaaS vendor to do to help customers? Establish Customer Success Management (CSM) teams to help ensure customers achieve their goals and renew their subscription.

Quite simply, profitable SaaS vendors recognize CSM is on the critical path to customer renewals. And they must continue to provide CSM services over the life of the customer relationship; for once, a customer stops getting value from the system, and they stop renewing.


Do You Have a Customer Success Management (CSM) Program? You should.

If you are like most SaaS vendors, you have a great product developed, implemented, and supported by a team of gifted professionals. You can win new sales. Everything looks rosy.

But you have a problem. You keep losing customers at renewal time. And this is costing you big-time!

Customer Retention is Key to SaaS Vendor Success

The SaaS business model, with its low upfront costs and low, regularly scheduled payments, means that SaaS companies need to keep customers longer to profit. Every customer that cancels their subscription – or even reduces the number of licenses under contract – has a dramatic impact on your bottom line.

The simple truth is you cannot have a successful SaaS business if you have high churn.

The impact of customer churn is cumulative and drastically underestimated

According to the resources developed by SaaS Capital, customer churn has a cumulative impact on the vendor. Not only does it decrease revenues in the period during which the customer cancels their subscription, but it also reduces all future revenues.

For example, in their webinar, “No Churn: Keep Customers & Improve Your SaaS Company Valuation,” showed a comparison of two companies, one with a 95% customer retention rate and the other with an 80% retention rate.

  • After 5 years, the company with a 95% retention rate had revenue that is 40% greater, and a growth that is 50% higher.
  • By year 10, revenue is 80% higher, and the growth rate is 2.5 times faster.

Recurring revenue is a critical component of SaaS company valuation

With customer churn having such an impact on revenues and growth, investors are now looking very closely at customer retention when calculating SaaS company valuations. According to SaaS Capital, businesses are traded on a multiple of revenue (not EBITDA) and, “recurring revenue is a better proxy for future cash-flows than current income.”

Customer Success Management programs reduce churn, increase revenues

Given the importance of reducing customer churn, it is not surprising that you’re focusing efforts in this area. Effective CSM programs can help you reduce churn. And if your customers are getting more value from your systems, they are more likely to increase the number of licenses they purchase. All of this adds up to increased revenue for you.

Now the problem – how do SaaS vendors deliver the elusive customer success?

Sounds great, right? There is just one hitch. How do you create and deliver effective Customer Success Management programs?
This opens up a lot of questions

  • What tools, methods, skills, and resources do you need to facilitate customer success across your entire customer base?
  • How will you build this new capability?
  • How will you integrate this new service into your existing business model?

Resources to help with your Customer Success Management efforts

Once you realize that you need a Customer Success Management program, you then need to figure out what this looks like and how to build this capability in a quick, affordable manner. Success Chain can help. Contact us to learn more.


Does Your User Adoption Methodology Remove Organizational Barriers?


Many IT implementations suffer from poor user adoption because they did not take into account the barriers to user adoption that lie outside the users’ control. There are many organizational elements that, if not addressed, prevent people from using the system even if they want to do so.

Barriers to adoption may include things like lack of time for learning new processes or attending meetings, competing workload or other items given priority by management, misaligned rewards & recognition metrics that penalize people for adopting the system, inappropriate access rights within the system, undefined or poorly defined processes, or technical deficiencies within the system. Poor data quality may also reduce adoption since “garbage-in, garbage-out” makes the system generate reports meaningless for decision-making purposes.

If we want to maximize user adoption, we need to take a comprehensive approach to identify and removing barriers to adoption.

Unfortunately, most traditional Change Management programs are focused on the initial go-live, and they primarily involve providing training and communications. Traditional change approaches often ignore the critical aspect of removing adoption barriers.

We need to move beyond traditional change management methodologies to take a more expansive approach to evolve the organization and drive user adoption over the long-term.

When examining barriers to adoption, keep in mind:

  • Barriers to adoption may be different in each department or workgroup
  • Some barriers may touch multiple departments in your organization and thus require a coordinated cross-departmental approach to resolve
  • The users within each department are the people who can best identify the barriers they face, and thus you need to actively engage them in your process
  • Perception is reality when it comes to adoption barriers. You may need to address user perceptions as well as tangible barriers
  • New barriers may emerge over time, so you need to periodically review your organization to address any new barriers that may arise


Instead of employing a traditional Change Management methodology, use a more expansive user adoption methodology that identifies and removes barriers to adoption. Your user adoption program should begin long before go-live and continue well past the initial deployment in order to drive initial adoption and sustain it over the life of the system.


  • What barriers to adoption prevent people from using your system? Who has the authority and ability to remove these barriers?
  • Does your change management approach adequately address existing and future barriers to adoption?
  • How can you better engage your users to get their help in identifying and removing barriers to adoption?
  • What are the unique barriers to adoption in each user department/workgroup?
  • How will removing adoption barriers affect the level of benefits realization & ROI from your IT investment?
  • Would your organization benefit from a more effective user and software adoption methodology?

Most software projects fail to deliver the expected business outcomes because of the approach the buyer takes to getting the system live and driving adoption. Most buyer’s organizations don’t have the expertise, tools, and capacity to deliver their own success.  This short video explains many of the methodological and structural problems organizations face when dealing with software.


5 Things Every Chief Financial Officer (CFO) Needs to Know Before Moving to the Cloud

Moving to the Cloud, CFOs love cloud systems. They offer lower upfront costs, faster deployments, and the ability to directly expense costs without messing around with ugly depreciation schedules – it’s all quite appealing.
And that is nothing compared to the potential upside that cloud systems can deliver. Reduced costs, increased revenues, elevated time savings, improved quality, increased customer satisfaction, or whatever your ROI measures, cloud technology promises to improve your organization.

Sound too good to be true? It is. kinda.

What CFOs need to recognize is that cloud technology introduces new risks and often times additional expense, erasing all potential ROI.

Cloud systems are easier to deploy but harder to adopt

From the point of view of technical and infrastructure expenses, cloud systems are easier to deploy. Less time is needed acquiring servers, building out data centers, purchasing ancillary software, and hiring staff to support the system. Oh, and they can go live faster, too – cutting implementation times from months and years to just days or weeks.

The challenge is, the technology can often go live faster than the people and organization can adapt. Traditional change management programs take time and focus on preparing people for change. There simply isn’t time for this with cloud systems. With cloud technology, the systems can change faster than people. What happens is that your new, fast, affordable cloud system sits unused.

Weight your business case to reflect effective user adoption

Almost every business case I have ever seen assumes 100% user adoption. It’s not explicitly laid out as such; rather, it’s an implied assumption. The expectation is that everyone will use the system. And they will do so starting from the first day the system is live. After all, a system that isn’t used does not deliver any value, killing your ROI.

In reality, I have never seen an organization that has 100% effective, consistent system use. Often times it is closer to 25% – 45% effective use. Occasionally more, if they’ve done it right.

Oh, and effective user adoption doesn’t start on day one. Rather, people are normally slow to include the system into their daily work routines. Each day that people delay adopting your system costs you money. And this, as you know, hurts your ROI.

At Tri Tuns, we recommend that CFOs adjust the business case / ROI projections to reflect different user adoption scenarios. Does your business case stand up if you only get 40% adoption? 50%? 75%? What is the impact if there is a 6 -12 month delay before your people use the system? (BTW, research has shown that without direct intervention, it typically takes 24-36 months for people to use systems as part of their daily working practices).

Every dollar spent on training is wasted unless people use the system

This one is a no-brainer. Every dollar that you spend training users on systems that sit idle is a waste of your time and money. It costs you money to develop and deliver the training. It costs you money to pay your people to be in a training class. And there’s the opportunity cost associated with the time people are in training and not doing their jobs.

How does your business case hold up if people never apply what they learn in training?

This is too costly a risk for anyone not to plan for.

Your cloud vendor now shares your risk

You have user adoption risk. And it can cost you big.

The good news is that with cloud systems, a portion of this user adoption risk is transferred to the cloud vendor. Why? Because you will not renew subscriptions for systems that are not delivering value to your organization.
Increasingly cloud vendors are providing tools and services to help clients drive and sustain effective user adoption.

The bad news, most of them are very bad at it. User adoption is a people and an organizational issue, not a technical issue. And software vendors are tech experts, not people experts. So, while your cloud vendor may share your user adoption risk, they often lack the capacity to solve this problem on their own.

Tell your vendor your renewal criteria right up front!

Cloud vendors rely on renewals and long-term customer relationships in order to profit. If you want to see a vendor go into panic mode, let them know that you will not renew your software subscription. They will try all sorts of things – like give you free services or training – to retain your business.

One way to get your cloud vendor to help you attain your needed ROI through user adoption is to tell them exactly the business outcome you need to see in order to renew their software. And let them know when you will be making your renewal decision.

By letting your vendor know how, and when, you will determine if the money you spend on their software is worth it; they are in a position to help make sure that you achieve your measurable business result. If you get the value you expect from the system, renew fast and without wasting any time looking at alternatives or engaging in painful negotiations.


Using Customer Success Management (CSM) To Remove Barriers to IT User Adoption

When I speak with the leaders of Customer Success Management and IT User Adoption programs, they often ask about how they can make their program more effective for increasing customer renewals. This leads to a discussion about the focus, methods, and tools they use to deliver their CSM service.

More often than not, it becomes clear that the CSM tools and methods they use are part of the problem.

The goal of CSM is to help customers adopt your system

At its core, the purpose of Customer Success Management is to help your customers fully adopt and maximize the value they receive from your software or service.

Many times, the root-cause issue that needs to be addressed is that people are simply not adopting the system. This is almost never a technical issue. If your team of customer success managers can maximize and sustain effective user adoption, the value to the customer (and renewals to you) will follow.

First, identify all barriers preventing user adoption

Many people assume user adoption is a 100% discretionary effort on the part of the end-user. This leads them to focus all of their efforts on trying to help the end-user know how to use the system and see how it will make their lives easier. While this may make sense, it’s not a realistic expectation.

The reality is quite different. User adoption is not entirely a choice made by the end-user. There are many non-discretionary factors that can make users unable to adopt the system – even when they want to use it!

In our experience at Tri Tuns, almost every IT project has some organizational or system-related issue that actually prevents people from using the system. These issues fell outside the users’ span of control and required action on the part of management to resolve. Yet often, management was unaware of these issues or how they prevented system usage.

In order to be effective, your CSM methodology needs to help customers identify barriers to IT adoption. But how will you do it?

  • Do you know how to identify potential IT adoption barriers?
  • Does your current CSM methodology actively uncover all barriers that affect IT adoption?
  • If not, how will you change your approach?

Then, remove the barriers to IT user adoption

Once you have identified barriers to IT user adoption, how will you make sure your customer takes action to remove them? Sadly, driving and sustaining effective IT adoption is not a core capability of many client organizations. Even if you are able to help your customers identify barriers to adoption, it does not mean that they will know how to resolve them. You may need to help.

Change your customer success management approach

Like most initiatives, your CSM capabilities and approach will need to mature over time. Initially, your CSM team can be successful just by helping customers get minor increases in adoption and ROI. However, to maximize customer renewals and, if possible, expand accounts, you will need to adjust your approach to help customers fully resolve their IT adoption issues. To do so, you will need to expand your knowledge regarding the root causes of IT adoption and the most effective methods to influence it.


Putting the Customer back in “Customer Success Management” (CSM)

I spent some time over the weekend reading various blog articles and LinkedIn discussions about Customer Success Management. I also watched various online video presentations from CSM conferences and corporate websites.

At first, I was struck by all of the great issues and questions that illuminated the amount of work and complexity involved in creating an effective CSM organization. And as I continued to watch, I noticed another theme emerge. Nearly all of the discussions and videos were focused on how to make sure the vendor was successful. But wait, isn’t CSM supposed to be about helping the customer be successful?

Many CSM experts talk about what the vendor wants out of CSM

For the most part, many of the emerging CSM experts are talking about how to maximize customer renewals. They talk about topics like, “Should CSMs have a renewal quota” and “How should CSMs interact with the sales team?”

These are all important and valid discussion that you need to have when building your CSM team. But they are also very internally focused questions. They are all about what the vendor needs to do so that the vendor benefits. You can’t stop the discussion here. Actually, you shouldn’t even start the discussion here.

Very little talk of what will actually make the customer successful

Think back to the reasons you even first started thinking about setting up a customer success management team. It was because your customers were not successful with your product, which, in turn, led them not to renew.

Before you have any hope of ever solving the renewal problem, you need to solve the customer success problem. This requires that you understand both:

  1. The reasons why your customers are not using your product
  2. What actions you – and the customer – need to do to change this

Once you do this, then you can turn to the internal questions about to structure and manage your CSM organization.
Do you have a Customer Success Management program? If not, why not? If so, how has it affected your customer churn?
Please share your thoughts and experiences on the Success Chain community forums.


Differentiated Customer Success Management (CSM) Services

When speaking with Customer Success Management professionals, they consistently tell me they provide different Differentiated Customer Success Management services depending on the customer. Even basic customer segmentation has allowed them to prioritize their efforts and adjust their services to meet the specific needs of different customer groups.

Not all customers are equal

While all customers are important, they are not all equal. Some customers are more profitable. Some require more support and take more time. Some customers start small but with a huge potential lifetime value, whereas others may have limited potential.

When developing your CSM program, make sure you understand both the needs and the potential value of your different customers. And then prioritize accordingly.

Differentiated Customer Success Management for B2B or B2C

You will need to adjust your Differentiated Customer Success Management approach to meet the unique needs of B2B and B2C customers.

  • B2B customers often have less individual control and discretion when it comes to the systems and tools they use. In addition to individual user habits, you have to navigate a plethora of organizational issues, including internal business processes, incentives, policies, procedures, technical and data quality issues.
  • B2C customers tend to have a high degree of individual control and discretion when it comes to using your product or service. You may need to help them develop new habits that involve regular, sustainable use of your system.

Delivering B2B CSM services is more complex than B2C, but the revenue amounts at stake often make it a priority.

Differentiate size & budget

It will take some experimentation to determine the optimal size and budget for your CSM program. The type of Differentiated Customer Success Management services you deliver will influence the number of customer success management staff you need. It will also affect things like the amount of travel (face-to-face) service vs. the amount of remote (web and phone) service.

Many CSM programs start relatively small and then grow as the customer base grows. When you building your CSM program, be sure to include plans for how you will add additional capacity as your customer base changes and as their needs – and your software – changes.

Change your methods based on customer need and value

You can help customers be successful with your product or service in many different ways. For some customers, it may make sense to provide services that are largely automated and uniform. For others, especially those with a high potential lifetime customer value, you may need to provide more hands-on, customized CSM services. And, as your customers grow, you may need to adjust the level of service they receive.

Here are the top 35 questions you should expect your sales prospects to ask you when evaluating your customer success services!

Savvy software buyers know that the customer success services provided by alternative vendors and make or break their success. How do your customer success services stick up? Check out this free guide to learn the answers you need to expect your prospective customers to ask.? Are your customer success services competitive? When will you lose your first sales because your competitor has more effective customer success services?

Free Guide - Evaluating Competitive Customer Success Services
Get the Free Guide

Cloud IT Renewals Depend on Value Delivered, Not Costs

We are still seeing the impacts of the Cloud IT revolution. Cloud computing is changing many things about how organizations buy, deploy, use, and gain value from information systems. One of the most interesting and dynamic emerging trends is that for many organizations, the focus is shifting from the technology itself to the value the organization realizes from using the technology.

The move to “as a service” is also changing the way organizations make decisions regarding the initial purchase and the renewal of the software. If you ask someone who works in traditional service industries – lawyers, accountants, wait staff, bartenders – they will tell you that people decide to come back (renewals) based on the quality of the experience and the value the individual receives from their experience with the service.

This flips the traditional perspective of technology on its head. Once viewed and evaluated like a product you would purchase and take home to keep, technology is now viewed and evaluated as a service. Cloud buyers and vendors are slowly catching on to just how important value creation from the use of the software is for their success.

One software vendor I spoke to indicated that they were great at landing an initial sale, but they had over 50% turnover in their mid-tier market alone just because the system was not being used and therefore not delivering value to the client organization.

Will you renew your cloud subscription?

When you first decide to purchase a cloud IT system, you do so because of the promise and potential for you to realize the value in the future (after you start using it). Even with lower upfront costs, you probably put together a business case that defines your expected costs and expected return.

Before cloud systems became popular, many organizations only looked at their business case during budget discussions when making the initial system purchase. Once the decision was made and the money was spent, few organizations would come back to measure their actual ROI on their IT investment. There was little need to do so – after all, the money was spent and gone.

But what if you could get out of a bad investment before you spent all the money? With cloud systems, you can.

Cloud IT subscription-based pricing changes the buying decision process

Cloud IT, with its subscription-based pricing and defined contract periods, enables organizations to evaluate the value they are actually receiving from their cloud investments and pull out of bad investments. In essence, the contract renewal date inserts a logical breakpoint in the buying process. It also changes how you make buying decisions.

Cloud renewal decisions are different from the initial purchase decision

As I mentioned, the initial cloud buying decision is made based on expectations for future results. With no direct history with the system, you make your decision based on the word of others (the vendors, vendor-provided references, online reviews, etc.) and your confidence that you can get similar results.

Renewal decisions are made primarily on your direct experience. You evaluate your experience implementing the system, the level of adoption you have achieved, and any specific success metrics / ROI calculations. This experiential information then creates a context in which you evaluate the potential of the system to deliver additional benefits in the future.

Need to focus on cloud user adoption and ROI

So, what does it all mean? It means that clients (buyers) and cloud vendors both have a vested interest in making sure the cloud system is fully adopted, and there’s clear evidence of the value you received from the cloud system.

It means that having great functionality and a low price point is not enough to get you to renew your subscription if you aren’t getting any value. It means that there is a new standard for success when it comes to investing in technology solutions. And it means that you will need an ongoing program to drive user adoption, making sure you are getting the ROI you need.

After all, as soon as the system stops delivering the value, you will stop paying for it.

Most software projects fail to deliver the expected business outcomes because of the approach the buyer takes to getting the system live and driving adoption. Most buyer’s organizations don’t have the expertise, tools, and capacity to deliver their own success.  This short video explains many of the methodological and structural problems organizations face when dealing with software.

If you are looking to help software buyers create their own internal software success programs, Success Chain can help.  Contact us to find out what we can do for you.


Organizational Change Management (OCM) – Clarifying Change with an Action Plan

With Organizational Change Management (OCM) and the now-classic Seinfeldian “yada yada yada”, we have a phrase so many of us (still) use to headline a story and gloss over details is, like most comedy, a double-edged sword of both humor and truth.

Of course, the “yada yada yada” ceases to be funny when the all-too-common tendency to layout an OCM plan and leave out the details arrive on your desk in the form of a none-too-well thought out project, and you’re tasked with making sure it both works and is profitable.

That’s when this cartoon is also more painful than funny because now the truth is happening to you. This is why companies bring in third parties to drive OCM, better known today as Customer Success and Software Adoption.

Solving the OCM Problem, Delivering Customer Success

Third parties’ external perspective affords them the opportunity to assess the reality of the landscape and then build a logical, strategic, actionable plan. They eliminate the “yada yada yada” and put in real, detailed plans. They answer questions like:

  • How, precisely, will we get from Point A to Point B?
  • How will we identify the barriers to getting to Point B?
  • How will we structure this OCM plan, so you get the biggest bang for the buck?
  • Do we have the organizational capacity – infrastructure, personnel, and bandwidth – to measure and monitor progress toward the business goals?
  • If we moved ahead without a strategic OCM plan, what will a misstep cost? And is that something you can afford?
  • How will we make sure you get a short-term lift and long-term results?
  • How do we cut through the red tape and move ahead quickly in days in weeks, instead of months?

Real-World Example

Do the above questions sound familiar?  They’re from real situations we encounter all the time, and we find many clients are looking to jumpstart their organization’s internal changes (e.g., program implementations and technology adoption), usually with a deadline of yesterday.

For example, a recent client was about to launch a very expensive and very public (national) pilot program, simultaneously introducing the company’s new, proprietary software and changing their business model. They had a lot invested, and it’s not hyperbole to say the future of the organization was riding these changes. There was an incredible level of risk and uncertainty around whether or not people would use their technology and if they’d be successful.

They needed:

  • unknowns to became known
  • clarity about what issues were most pressing
  • a structured and benchmarked action plan
  • to know how best to organize and execute both the technology adoption plan and the re-org change management plan.

Being too close to their OCM project, being overworked just trying to get the system right, the client both couldn’t see the problem and didn’t have the time to figure out what to do. So in just a few days’ time, we delivered a Quick Start Strategy, replacing the “yada, yada, yada” and “insert miracle here” with:

  • precise, actionable plans of how to proceed
  • specific short- and long-term activities to achieve gains both short- and long-term
  • a sustainable success road map to guide them through the next phase of their program

In a nutshell, we helped them to take action to move forward so the whole company could move ahead confidently. As masters of their domain.

Most software projects fail to deliver the expected business outcomes because of the approach the buyer takes to getting the system live and driving adoption. Most buyer’s organizations don’t have the expertise, tools, and capacity to deliver their own success.  This short video explains many of the methodological and structural problems organizations face when dealing with software.

If you are looking to help software buyers create their own internal software success programs, Success Chain can help.  Contact us to find out what we can do for you.