If you are a software vendor, consider this: What would it look like if you approached each sale like you were trying to raise investment capital instead of just selling a piece of software?
Knowing that most software buyers (ah, funders, in this case) have a wide variety of investment options available to them, does your organization represent the best overall software investment opportunity out there? Can your prospects find better, safer opportunities that will give them a higher overall return on their software investment dollars with lower risks?
Stop thinking of the people who buy your software as customers and start treating them like investors. They don’t just want software. What they really want is the best return on their software investments!
The old rules don’t apply!
Back in the days before SaaS, organizations implementing software treated their software acquisitions as a simple purchasing transaction. They were very focused on the costs of the software product. They focused just on the initial purchasing transaction, with little thought to the future.
When the SaaS business model first came on the scene, buyers continued to treat software acquisitions as primarily a purchasing exercise. They remained very focused on the overall costs, just now with the added benefit of shifting their cash outflows over several years. Over time they realized they could adjust their purchase quantities to reduce cashflow if they didn’t see the value in their purchase or if their needs have changed.
The new reality is that software buyers are making software investments, not purchases.
This awakening that buyers can focus on outcomes and value, and then adjust where they put their future software purchasing cash accordingly, is a massive shift in both mentality and fiscal practices.
With this shift, organizations are treating software buying decisions less like a simple procurement exercise and instead treating it more like an investment exercise. They are less focused on just the cost, and instead, they are more concentrated on the expected return and level of risk associated with the software investment.
After years of over-investing in software, wasting lots of cash on software and integration costs, suffering low user adoption and having their projects considered IT failures that didn’t deliver the expected business value, savvy software buyers realize they need to change how they make software investment decisions. They know they need to do more than evaluate the technical fit of the application.
Instead, they need to assess the overall vendor solution — the software, implementation team, technical support, and customer success services – to determine which one is the overall best investment. In effect, what they are doing is evaluating the ability and probability that the software vendor as a whole will make them successful and solve their business problems. Only after conducting this holistic analysis and comparing it to a similar analysis of other potential vendors will organizations decide with which company to spend their software investment dollars.
SaaS vendors need to quickly wake-up to the implications.
Historically, most software vendors have been incredibly product-focused. To software vendors, their products are sexy. To software engineers, building a cool piece of functionality is fun and exciting. And to many software executives, services are necessary, but not fun, scalable or profitable.
In many software companies, there is a bias to investing in building new features and functions in the application instead of investing in services, support, and customer success. For many vendors, the thinking is that the quality and price of the product is what will make or break a sale. While this may have once been true, it is no longer the case.
With buyers shifting their focus to evaluating the overall vendor solution and capabilities, a continued bias towards product will be the road to failure. Software vendors need to recognize the shift in buyer preferences and adjust how they set priorities, allocate internal resources, and position and sell their products accordingly. They need to realize that just having a great product, without the support and customer success resources customers demand (and competitors provide), will not make them market competitive going forward.
Software vendors need to stop treating prospective customers like they are making a simple purchasing decision and instead treat them like investors who are evaluating the complete software investment opportunity. Software vendors that similarly approach each sale to raising capital, that is, focusing on the business outcomes, minimizing risks, and explaining how you maximize the return on software investment, will be hugely more successful than those that continue to focus their sales efforts just on product features and price.
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 success.
This guest blog was written by Jason Noble, a UK-based expert in Customer Success. Jason is also a co-host of, “The Jasons Take On…” a monthly webinar and podcast program covering a wide range of customer success topics.
One of the biggest challenges when it comes to being (more) customer-centric is defining what we mean by that – and it can and does mean different things to different organizations. The reason being customer-centric is important is not only the obvious – that your customers stay loyal when they have good experiences and the product and sales are delivering on our promises, but also as our customers keep evolving and changing, so too are the ways that we operationalize that and support those customers.
A great way to think about customer-centricity that really resonates with me is – “A business is customer-centric when it delivers on-going growing value to and for their customers.” If you are customer-centric, it means you are observing that evolution that’s happening to your customer base, and you’re able to be very agile and nimble in responding to that as a business. I really like this way of thinking as it’s not just for the short term and the now; it’s about the what (the value) and the who (it allows for customers to include customers as we know them, our employees and team members and our shareholders and investors).
It’s not easy
Being customer-centric is easy to say but hard to do. It doesn’t come organically, and I’ve never seen an organization say they’re not customer-centric or that they don’t want to be even more so. It, of course, needs organization-wide buy-in and sponsorship, from sales, to finance, to operations, to support, to customer success, to delivery – it’s not one function’s or one team’s (or even one person’s) responsibility; it’s everyone’s.
To quote Dan Steinman from Gainsight – “We are now in the age of the customer” – and we’ve gone through the transition from technology to mobile to social and now to the customer. We’re moving more and more to being outcome-driven and not just product and technology-driven, and we’re shifting from the idea of ownership for products and services to usership and subscriptions. We see this more and more in both the business and consumer worlds.
We hear a lot about the idea of stickiness of services and using it as a measure of engagement and customers staying with us longer. I don’t personally like this term as it implies that they have to stay and don’t necessarily want to stay – which is very different. As a physicist at heart, I prefer the idea of an attractive force – like gravity – and our customers wanting to stay with us. I think it’s a far more powerful way of thinking.
We live at a time of unprecedented customer expectations both for business customers and our end consumers, and being customer-centric is critical, but why the recent focus now?
Think about your ultimate consumers – they are you and me, and our expectations have changed. Forrester’s research stated, “This new world requires leaders to think and act differently,” and George Colony, Forrester CEO, predicts that if a company is not customer-centric, they’ll simply be out of business between 5-10 years.
Being customer-centric shouldn’t just be a concept, and we need to approach it as part of our company vision and mission.
There is a gap
We’ve been trying to be more customer-centric for a long, long while, but only 14% of business leaders think they actually are, and only 11% think our customers would say we are. The Harvard Business Review in 2017 stated that “The most common, and perhaps the greatest, barrier to customer-centricity is the lack of a customer-centric organizational culture. At most companies, the culture remains product-focused or sales-driven, or customer-centricity is considered a priority only for certain functions such as marketing.” This is true in many instances still, but we are now beginning to see a shift and cultures change.
Think about customer outcomes
Understanding your customer and aligning their business interests with a customer-centric, prescriptive approach to realizing value from you is the fastest and most efficient way to growing product adoption. We need to shift our thinking from why we are selling to why our customers are buying from us and what the outcomes are that they are looking for. What do our customers want, and how do they want it? Change your talk track and understand your customers betters.
BA’s strap-line fits very well with this way of thinking – “To fly, to serve.”
We know the theory, and we know we need to be more customer-centric. The biggest challenge for many organizations is how to do it, at both the strategic organizational level and at the more tactical operational level.
I’ve worked with, and for many organizations going through their own journeys to be more customer-centric, at both large, well-established global organizations and more niche startup organizations and have been privileged to be in positions with them where I’ve been part of those customer-focused changes and have seen some amazing results. One of the more strategic changes that is crucial for success is getting your customer leadership at the right level. It’s great to see more organizations across different industries and sectors investing in Chief Customer Officer or similar exec level roles now, and the number has grown significantly over the last few years (and continues to grow). Having the right leadership gives you the voice of the customer at the leadership table, having someone focused on driving customer growth and value and bringing the customer conversations to the exec and board level.
I really like this concise definition of a Chief Customer Officer: “An executive who provides the comprehensive and authoritative view of the customer and creates corporate and customer strategy at the highest levels of the company to maximize customer acquisition, retention, and profitability.”
The customer leadership role “Chief Customer Officer or other “ gives you:
Visibility – to understand and see what is happening to your customers
Clarity – of what happens when a prospect becomes a customer
Balance – the 3rd organizational pillar (with sales and operations)
Focus – allowing sales to focus on new business
Feedback – into what is happening outside of the business
Signaling – the external messaging that we are customer-centric
Practical steps to being more customer-centric
At a more practical level, “things you could do more immediately” here are a number of key ideas to drive customer centricity in your organization:
Create a mission statement that impacts and includes
Be a customer for a day – good old role play (and across all teams)400
Visit your customers ? all execs and, even better, all teams
Create a customer community – customers talking to each other
Create a voice of customer program – and close the feedback loop
Bring your customer feedback into every meeting across the business
Democratize customer insights – make them visible to everyone
Have customer-focused goals and objectives for all teams
Hire for customer orientation and customer empathy
I really, really like Amazon’s mission statement:
Earth’s most customer-centric company
When amazon.com launched in 1995, it was with the mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” This goal continues today, but Amazon’s customers are worldwide now and have grown to include millions of Consumers, Sellers, Content Creators, and Developers & Enterprises. Each of these groups has different needs, and we always work to meet those needs, innovating new solutions to make things easier, faster, better, and more cost-effective.
Points 6 and 7 above can be very powerful when done well, and I’ve seen the idea of a customer feedback wall used very well and to great effect – where you include and share the very good, the good, the bad, and the ugly.
Do these ideas resonate with you? What things have you done in your organizations to drive the journey to be more customer-centric? And what has the impact been on your customers?
“Customer Centricity is a journey and not a destination.”
Jason is an established leader in Customer Success and SaaS, with over 20 years of global experience working across customer success, service delivery, account management, customer support, and professional services. He has held leadership roles with major global brands (including Sony and Reed Elsevier) and also worked with more niche technology startups and organizations, successfully building and leading global customer success programs and operations. He is a commercial customer success leader working at the Director and board level – to innovate and align technology functions and services – as the voice of the customer at the leadership table.
Come join us for our fast-paced, insightful, unplugged conversations with two leading “Jasons” in Customer Success. Jason Noble, a UK based visionary Customer Success executive and leader, and Jason Whitehead, a US-based Customer Success and Software Adoption leader, discuss a variety of topics and issues of importance in the field of Customer Success. Each month we explore a new and important topic related to Customer Success, so be sure to join each episode in the series!
Go to The Jasons Take On where you can register to join an upcoming episode live, watch the replays on YouTube or listen to the replay via podcast.
It is widely known that most software investments fail to deliver the expected business results and Return on Investment (ROI). Here are often-skipped, specific actions that CEOs, CIOs, and CFOs can take to get more value from their software investment.
Why this long history of failure? Either executives are not aware of the problem (unlikely), or they don’t know what to do to solve it (highly likely).
The problem is the approach
When I speak with leaders across a variety of organizations and industries about how they approach software success, the typical answer is “training.“
While relying on training consistently fails to deliver success, organizations keep turning to it as the go-to move, each time expecting a different result. Somewhere out there, Einstein is rolling over in his grave, thinking everyone is insane!
Its time to stop the crazy-train and start looking for new approaches that will deliver results.
Over a career spanning more than twenty years focused on helping organizations improve user adoption and getting more value from their IT systems, I have learned many tactics that make a massive impact on success.
You need to plan how you will achieve long-term software success
There is no way any organization can justify putting money into a software investment without having a clear, realistic plan for how they will get their value back out of it.
History has shown us that just doing a little system training ? at the time of go-live ? will not deliver the results you want. It is time for something new.
What changes can you expect over the next 10+ years?
Employees will join and leave your organization
Updates and changes to the software
Strategic priorities will change,
The competitive environment will change
New government regulations impact how you operate
You might be involved in an acquisition or merger
And many more
All of this constant change has a direct impact on the user adoption and value you get from your software. Merely relying on a little training, delivered at the point of go-live, is never going to give you the long-term software success you seek.
To get the ROI you want from your software, you need to have dedicated, skilled resources working to manage all of this complexity. You need to take action to sustain the effective adoption of your systems and ensure you achieve your desired business results.
While you won?t know all the specifics of what will change, you can and should forecast out what skills, resources, and funding you need to ensure the software delivers the results you need, over ten years. You need to require these resource estimates as part of your initial business case and carefully look at them as part of your funding approval decisions.
When I speak to executives about the original business case and forecasted returns they used to justify their software purchase, I always ask them what the assumed level of user adoption was. Inevitably they start to quickly look downtrodden when they realized they overlooked something straightforward, yet very important in their calculations. It is almost universal that most IT business cases assume 100% user adoption, from day one when they calculate the expected ROI. The assumption is that once the system goes live, they will immediately start realizing all of the cost efficiencies and increased productivity from day 1. And we all know this is not the case.
Use weighted user adoption to adjust your business case / ROI forecasts.
When developing your business case, you should explicitly state the level of adoption you expect for each year over the next 10+ years. How will drops in the rate of effective adoption reduce the benefits you realize each year?
Use this information to adjust the forecasted ROI from your system.
For example, if you know that the system you are introducing is going to be a significant change for the organization, you can discount the expected returns in the first year (or two) substantially. People need extra time to adjust to substantial changes in how they perform their daily job. During this initial adjustment period, adoption is typically low, and productivity usually dips.
Continuing out into the future, you should look at the return you get based on different levels of effective user adoption.
If you only get 70% effective use, does your project still make sense?
What about 50%effective user adoption?
Does the project still make sense at 30% user adoption?
Let history be your teacher
Are you not sure what is a realistic estimate for a sufficient level of adoption?
You can start by looking over current and historical user adoption rates and corresponding ROI of other existing applications in your organization.
What level of adoption do these applications have?
What percentage of the forecasted business benefits have they delivered?
Justify your adoption resource needs
Once you realize how significant an impact on the level of adoption has on your bottom-line results, it becomes easier to justify the resources required each year to drive and sustain adoption.
Many organizations have a project sponsor that is accountable for getting the initial funding and then getting the system live. However, very rarely is the owner accountable for ensuring the system is used effectively and achieves the measurable business outcomes and ROI used to justify the investment.
Assign a senior executive to be accountable for long-term adoption and success
One simple, high-impact tactic to deliver software success is to ensure a senior executive has an explicit, significant, vested interest in taking action and allocating resources to ensure the software is used to achieve bottom-line results.
You need to make sure there are real impacts for the executive for missing, meeting, or exceeding outcome targets.
To achieve meaningful results, you often need to tie compensation, promotion eligibility, etc., to the executive?s performance plan.
Oh, and if this executive leaves the organization or changes role, you need to assign this responsibility to their successor formally.
You need an ongoing user adoption and success team
Driving long-term user adoption and ensuring that business goals are achieved requires tremendous work and effort.
You need an internal team in place to make it happen.
Many organizations now setup internal Software Success Teams. (Some organizations call them User Adoption Teams, User Adoption Program Management Office (UAPMO), or Adoption Center of Excellence). Regardless of the name, you need a team that will plan, accelerate, and then sustains the level of user adoption that is necessary to achieve your business goals. This team needs to maintain effective user adoption, year over year, over the life of the system. This is no easy task!
Start managing software success long before the software is live!
There is a lot of planning and preparation that needs to happen to put in place an effective user adoption and success program. You need to:
Define what constitutes success in both the short and long-term
Build the success team and operating processes
Analyze the organizational barriers and drives of success
You need to begin preparing your organization to navigate change before the software goes live
You need to accelerate software adoption and get employees to embrace new ways of working at the time of go-live
You need to sustain full, effective user adoption over the long-term
All of this work takes time and skilled resources. The size and complexity of your software project will directly impact the amount of work required to drive success. The more complex and disruptive the software, the more time and resources that are needed to help you manage success.
We worked with one client that brought us in to help set up their adoption program several months before they even selected their software vendor!
New skills and approaches required
We work with a lot of internal technology teams, and most of them don?t have any experience in organizational change management or user adoption concepts and techniques.
While IT staff do not need to be experts in adoption, they do need to understand the general practices and the various touchpoints and dependencies that a valid user adoption methodology has with the technology team.
Similarly, very few people on the business side understand user adoption concepts and activities. Staff on the business side need to understand these concepts since they will need to be involved in many of the actions required to deliver success.
Train IT and business staff on user adoption practices
To ensure the best results, be sure that at the start of projects that all project members (including both IT and business team staff) are trained on the adoption activities that need to happen and why. Ensuring both IT and business staff share a common understanding of user adoption activities enables them to collaborate during the development and rollout process effectively.
You will also need to periodically refresh everyone?s understanding and remind them where they are in the process.
User adoption portfolio approach
To maximize your results, you will want to have a Software Success Program across all of your applications.
After you have experimented on building software success programs for a few of your applications, and have learned what works and what doesn?t work in your organization, then it is time to scale and mature your efforts. Eventually, you want to get to the point that you have an ongoing software success program across your entire IT portfolio.
There will be different levels of attention required for various applications. These will vary based on:
Level of investment. A
When rolling out new systems, there will be changes to the level of usage and value received from other existing applications.
New systems may divert attention from the use of current systems.
Functionality deployed in the new system may replace functionality in existing systems, thus lowering the use and value received from the existing systems.
Having a software success portfolio approach enables you to measure, monitor, and manage the costs, resources, and ultimate business value received from each application. You can now focus your resources and achieve the best overall results.
Taking these actions will significantly increase your overall effectiveness, maximize the value you get from your IT investments, and improve your bottom line.
The challenge is that this is new for many organizations, and they don?t know where to start. And there are many challenges along the way.
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.