Simplifying customer success

Why CS should scrap on-boarding programs, QBR’s and customer journeys

Why does CS exist?

At its heart, customer success is simple: understand and repeatedly deliver the goal for which the customer bought your product and, as a result, deliver a positive return on the investment for both the customer and the supplier.  

Simple to understand but difficult to deliver.  It’s a challenge because doing it well requires a rich and deep knowledge of the customer’s goals, tasks and challenges. Suppliers then need to know the practices most likely to address their tasks and challenges in order to guide them to their goal.  Finally, the supplier has to work out how to deliver that guidance to different players in the customer at the time and in a format to suit each individual.  And do all of that profitably for all target customers.  

This is what success plans should deliver.  It’s worrying therefore how few CS organisations make this their focus.  When an active CS community was asked about their success plans, members reported that very few of their companies had them.  Of those that had, many were overly simplistic; focused on adoption and lacking meaningful measures of customer outcomes.  

Look at what most CS operations do.  We build on-boarding and adoption programs.  We design interventions based on a shallow understanding of customers, which we use to guide customers through a linear journey.  We plan quarterly business reviews (QBR’s) to discuss key issues with customers, whether customers want them or not.  We build health scores that track multiple data sources, although these rarely include the achievement of customer goals.  Many of these things are an improvement on what went before and should be commended.  But I think customers deserve better: they need better if we are to retain their trust and their business and that requires a laser-like focus on delivering their goals.  It requires a reliable and repeatable success planning process for every customer.  

Success planning 

In the desire to do right by the customer, I think we have complicated things and lost the essence of customer success.  We do things we think are right for customers but that make little or no contribution to their success.  We need to focus customer success around one process, the customer success process.  Everything should be subservient to implementing personalised customer success plans for every customer.  

This does not mean scrapping everything we currently do but we need to question what the work we do and align whatever remains to delivering a personalised success plan.  

Five-step success plan

I believe any customer success plan follows five stages:

Success Process

Discovery is a continuation of what we have learned during sales about the company’s organisation, processes and challenges as they relate to our product.  A key focus is how different players will measure success.  The discovery elements of on-boarding are included here. 

Benchmark and goals is about setting the customer’s goal and understanding the delta between that and their current performance.  There are often multiple goals to match the different roles in the customer.  We should advise customers on what is a reasonable initial goal based on our understanding of best practices.   

A Success plan is an agreed, personalised project plan that sets out what both supplier and customer do to achieve their goal.  It is specific and includes the responsibilities of different players.  On-boarding forms part of the early stages of a success plan.  

Collaboration is the process of guiding the customer through their success plan.  It requires an understanding of the context of the different players to drive specific guidance to suit.  Guidance is delivered though practical resources and advice based on a deep understanding of the best practices.  Wherever possible, this guidance is delivered in the product and is role and context specific.  

The success dashboard reports on two elements:  progress of the success plan and performance of the measures agreed.  The dashboard seen by a user is role specific.   

Once the first cycle is complete, the process starts again as we seek to guide the customer to ever greater levels of value.  At some point, the returns my be asymptotic but that should not stop us trying.  

CS’ red thread

Establishing a success plan process, following the five stages set out above, either removes the need for or at least provides a meaningful context for everything we do to guide customers to their goal. 

The success process replaces or subsumes anything associated with delivering value to customers.  

Customer journeys: The customer journeys and the associated playbooks I have seen tend to be linear interpretations of what a supplier thinks the customer needs to do.  I have long argued against these proposing data driven next best actions instead.  The success plan is the journey steps out the changes the customer needs to make to achieve their goal, so why have anything else?  

On-boarding: Starting new customers on the right footing early in the relationship is vital.  I am not suggesting scrapping the steps needed to do this.  I do however think the effort and concern put into the early stages needs to be reflected across the whole success delivery process. Getting off to a good start is important but so is getting to the finishing line.  I think we need to define on-boarding as a success plan milestone and measure it in terms of what the customer has achieved in delivering their responsibilities in it.

QBR’s: I am not a fan: Too many tell customers what they already know and are more about feeding our need for reassurance rather than a valuable event for customers’ decision makers.  A good success plan includes this important role and provides much of the information needed through role specific dashboards.  The planning process also drives interventions based on progress towards it in a timely way and not restricted to some arbitrary event.  Any reviews that are needed should be part of the flow of the plan process, typically the result of significant events or key milestones.  

Success plans also provide the focus for enabling processes, namely:

Health scores: Health scores have to include the factor that has the greatest impact on customer loyalty: the value customers get from using your product.  That value is why they bought and probably what sales sold them.  Health scores should include two elements of success: the actual results they are getting in their chosen outcome and progress towards completing the success plan.  Other data are important, particularly in understanding the causal relationships between activity and outcome but they are proxies of success not the real thing.  The success planning process provides both these elements.  

CS metrics: Very few CS dashboards include customer success.  The vast majority I have seen contain only measures of how well the company is doing: NRR, portfolio sizes, logo churn and the like.  These are critical and you should certainly continue to measure them but they are lagging indicators.  I advocate a two column CS leadership dashboard.  The first column reports on customer success with measures such as % customers achieving value, average $ value generated, time to value.  The second is what most companies already have, the financial and productivity measures generated by delivering successful customers.  

Product development: Anyone who has followed my work knows that I think the success process should be built into the product.  Having a primary process clarifies the work to be done by customers and thereby how the product can be used to guide them.  Data that describes an intervention to help the customer complete their key tasks and challenges can be identified with practical resources to assist. 

Staff development: The argument above equally applies when people are the source of support for the customer.  Each element of the success plan is translated into the tasks to be done by CSM’s and the competencies needed to deliver them.  

Voice of the Customer: Success plans provide a great framework for structuring elements of voice of the customer.  Key milestones in the success plan are candidates for event-based feedback/reviews.  This will help track customer sentiment in phases before measurable value has been delivered and identify strengths and weaknesses of the success plan.    

Placing the primary focus on the success plan process, the vehicle through which value to customers is delivered, creates clarity of the end-to-end process and the other essential enabling activities.  

Real benefits  

There are real benefits in building the CS operation around the success plan process:

  • It reinforces CS’ core purpose – to create successful, loyal customers that deliver profitable growth.
  • It focus the CS operation: if an activity doesn’t contribute to making customers successful, why have it?
  • It aligns measures with purpose.
  • It makes it easy for our people and customers to understand their role in delivering success. 

Complexity is an enemy to efficiency. Aligning around the success process removes duplication and provides greater clarity of role responsibilities. It increases the focus on what really matters to customers.  What is there not to commend about that?

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Did we really do those things?  I know hindsight is 20:20 vision but looking back at how we used to think about and practice customer success seems quaint and somewhat crude compared to how we now operate.  I am old enough to remember the days when setting up a CS capability was focused on adding a team of people to work with customers to help them achieve their goals and generate a return on what they spent on our product.   I’m embarrassed to say I did it myself and it worked – at a cost!  

When I look back, it seems wrong that we didn’t get to the root of the issue sooner – a product that should deliver what customers buy it for out-of-the-box.  Just like today, they only wanted, needed, to achieve their goals and deliver a positive ROI.  The old people-led approach worked, sometimes, but at a significant cost to both margins and customer satisfaction.  Customers thought they were buying a product that delivered what our sales folks had promised – a benefit, a desired outcome, a return on their investment.  It seems odd now that the only way we thought that could be done was by constantly phoning and emailing the customer, not really thinking they just wanted to get on with their job.   We all too often confused our need to contact the customer with what they really wanted.  Just think of all the work we have saved, for the customer and us, by building the success process into the product.  

Do you remember those playbooks everybody spent ages developing?  How arrogant we were to think that we could guide customers based on sketchy or non-existent research into their challenges and needs.  We even described customer journeys with phrases like ‘Land, Adopt, Expand, Renew’ – confusing what we wanted a customer to do with what they needed to do.  The basic idea of expert guidance was sound it’s just that we were lazy in how we implemented it.  Instead of putting the time and money into building a real 360, single view of the customer and researching in depth the work they do and the challenges they faced, we pushed customers down a path of our design.   At least now we drive next best actions in context, using a very rich customer data set and the role of customer research means we know far more about them than we did back in the day.  It might not be perfect but our advice is much closer to the customer’s current context.  And we do most of it in the product.   

Given the number of times it has happened, we again underestimated the impact technology would have, particularly AI. Building meaningful CS processes into the product gave us access to stacks of data on customers’ goals and how effective they have been in changing their processes and organisation.  Without this, AI and machine learning, which is so central to what we do struggled to identify the patterns behind real success practices.  No longer are we limited to looking just at product usage, although that is a still a very important piece of the jigsaw.  The ideal of software that learns how to achieve outcomes and automatically corrects itself, without human intervention is getting closer.

Fewer still saw how technology developments would lead to Google and AWS becoming the dominant players in the customer success software market.  We should have seen it coming; it had happened many times before.  For example, the first AI applications were built from scratch by developers as part of a specific application before becoming libraries that anyone could use and then services embedded in hosting infrastructure.  Customer success as an infrastructure service that you plug-in and configure is still in its infancy but I only see it growing.  

It is strange that at the time that Google were introducing Edge TPU, AI on a chip, we were still thinking that the success process could only be delivered by people.   Of course people still matter and play a vital role but the success coaches we now employ are a far cry from the product-centric CSM’s of old.  We have developed the role into a high level, high-skill change coaches whose focus is often around the psychology of change.  Whilst we have fewer of them, CS coaches are highly paid and highly valued by their employees and, more importantly, by customers.

What next?  I’m the wrong person to ask: I’m a historian not a futurist but try this if you want to know what I think about product-led customer success

Product-led CS ebook

Anyone who follows my work will know how passionate I am about CS and particularly in placing the product front and centre of delivering customer success.  After getting some great feedback on the idea and many requests for more information, I have produced an e-book covering the main points.  Download your free copy.

I am particularly excited by the work of some companies (unfortunately yet to be disclosed) who are working on building products that deliver CS ‘out of the box’.  I am confident that they are the vanguard of many more to come.

I would love to hear your thoughts; just add  your comments below.

Tagged :

A to Z of Customer Success

A bit of fun!

Artificial intelligence.  Including machine learning, the technologies that are going to make the biggest impact on CS over the next five years.

Best practices.  How successful companies with you ideal customer profile address the challenges your product addresses.

Context.  The customer’s current situation – the starting point for your advice and guidance, even if it doesn’t fit with your pre-determined customer journey.

Data. The fuel that underpins the insights and actions that help drive customers to achieve value.

Experience.  How the customer feels when interacting with your company.

Feedback.  The all important voice of the customer and employee; too often confused with surveys, which is just a small part of feedback.

Guidance. Advice delivered primarily through your application that helps customers achieve their goals.

Health score.  The model of how much a company is likely to continue to do business with us.  Problem is, most health scores don’t include customer ROI, which is the heart of customer health!

Insights.  What we derive from customer data that helps to understand and guide customers to achieve value.  

Jobs to be done. Understanding the customers’ tasks, metrics and challenges as a foundation for designing your product to guide the customer to success

KPIs. How your customer measures their work and the value of your software in achieving their goals

Learning. Training is not enough; study & practice is how the Chinese define learning

Mutuality.  The place where the success for customers and the company profitably co-exist.

Next best action.  A process for determining the next action for a customer based on customer data. A superior approach to pre- determined customer journeys.  

Outcome pricing.  A customer pays in proportion to the value they gain from your application.  It takes customer success to a whole new level!

Product. The primary vehicle for guiding the customer to achieve their value.

Quality. Like beauty, it’s in the eye of the beholder – your customer!

Retention.  The expected outcome of continually delivering customer value.

Single customer view. Everything you should know about your customer; often not what you currently do know!

Trust.  The basis of a sound customer relationship.  

Up-sell.   Increasing net revenue retention by selling more to existing customers.

Value.  How the customer measures the ROI of your product.

Win-back What is required when the customer has decided to leave.  A sign of poor customer success.  

X-sell. Increasing net revenue by selling additional products to existing customers.  (Okay I cheated a bit).  

Yes!  What you want customers to reply when asked “Have you achieved your goals?”

Zero logo churn.  One of the goals of customer success.  

Balancing people and product for profitable growth

This blog is a summary of an upcoming e-book “Product-led Customer Success”.

As CEO of Clicktools, one of the UK’s first SaaS companies, I was always seeking better ways to deliver profitable growth.  I have been an advocate of customer focus since the late 80’s: actions therefore were always based on the premise that what we did had to be good for customers AND the company.  We appointed our first customer success manager in 2004, following the lead taken by Salesforce and went on to build a very successful team of CSMs. Gross revenue retention was mid-90s and net revenue retention well over 100%.  Given that success, would I do the same if I was building a SaaS business today?

No: let me explain.

A B2B SaaS company sells a product that helps the customer achieve a goal; to deliver benefits. These benefits are the focus of the marketing and sales process and delivering those promised benefits, the customer’s desired outcome, is the whole premise behind the philosophy of customer success.

As a product company, it should therefore be an inherent part of the product.  Unfortunately, most B2B SaaS products don’t deliver.  Instead, CEOs build a team of people to fill gaps in the product’s capability.  Worse still, this knee-jerk response is seen as the best practice.  Think that through: so called best practice is to add recurring cost to your business and constant interruptions to your customer to address a failure to deliver on your value proposition – a product that helps customers achieve their goal.

If I were starting out again, my first response would be to look at how the delivering customer success can be built into the product.  Here’s why.

  • Helping to achieve the customer’s goal is a B2B SaaS company’s raison d’etre. It must therefore be the primary goal of the product itself.
  • We are approaching the point where contacts and notifications swamp our attention and reduce productivity.B2B customers are using an increasing number of apps, the suppliers of which each want time.  A buyer just wants a product that helps deliver their goals. A backlash to the interruption economy is coming.
  • Technology to deliver self-service customer success has come on leaps and bounds. The development of applied AI and machine learning, will further enhance the ability to deliver contextually rich guidance.  The companies that build success processes into the product will use these technologies to enhance their understanding of what drives success, furthering their advantage.
  • The basis of self-service customer success is a deep understanding of customer’s objectives and the changes they have to make to achieve them. The depth of understanding required to deliver self-service CS is itself a source of advantage.
  • Done well, it is a path to scale at higher margins. Recent researchby Notion Capital and Frontline  shows that many (but not all) self-service based SaaS companies are delivering leading financial performance.

What does it take to embed customer success into the product?  The starting point is a deep understanding of what the customer is trying to achieve (their desired outcome), the challenges they face in achieving their goal and how the best players overcome these challenges to achieve their goals. This of course includes the role your product plays in their work.  This understanding is the basis of customer success, however it is delivered.

Not helping the customer address the changes they have to make is essential to delivering customer success and thereby the retention, revenue and referrals business growth needs.

Deep customer understanding is the basis for building four capabilities into the product:

  • Discovery: Building a picture of how the customer currently operates
  • Goal setting: What the customer is trying to achieve, including guidance on     achievable and stretch goals.
  • Success plan:  The steps the customer needs to take and how the product is best configured to help the customer achieve their goal.
  • Working space:  A simple goal and activity tracking capability supported by delivery of contextually rich advice and guidance.
  • Success reporting: A dashboard showing progress towards the desired outcome, highlighting out of norm activities.

People tell me this is too complex.  I disagree.  I readily admit it will take work and some trial and error.  I think the problem is that much of what we describe as customer success is in fact supplier success; meeting our own retention and revenue goals, irrespective of the success the customer achieves.  It also seems that we can afford people to do this important task but we lack the vision productise it.

The sub-title of the blog is ‘Balancing people and technology to deliver customer success’.  I do not see product-led customer success as the end of the CSM. I do however see a change in the number required and what they do.  Much of the basic work of customer success; guiding product use, setting goals, process change advice will become part of the product.  CSMs will focus on the higher order challenges of change: helping customers build the case for change, shoring up their courage and providing examples of success.  It sounds a bit airy fairy but they become change counsellors more than process experts.

I am not saying no to people delivering CS; just don’t make it your first and only response. When your CEO comes to you at the next budget cycle and asks you how many more CSMs you need, say ‘None but I would like a small development team please!’

Building a sticky B2B SaaS business

SaaS = Success as software

The importance of retention to a B2B SaaS product is well understood.  Typically, a company thinks about building a customer success team to address churn when product/market fit and scalable acquisition have been mastered.  I fundamentally disagree with both the timing and approach.  Retention is so vital to growth, and therefore shareholder value, that it has to be built in from the off and a CS team is not the right way to begin to address it.  The primary vehicle for delivering retention and up-sell has to be the product.  Stickiness, ensuring retention, should be central to the design of the product and the business from the beginning.

B2B customers only buy your product to achieve something: they have a goal in mind.  Achieving those benefits and outcomes are what good sales people focus on.  The real challenge is that currently your product alone can’t deliver a customer’s goals.  The customer also has to change in some way.  They may need to change their processes, metrics, skillsets and/or the way they organise.  In some cases these changes may be minor; sometimes they can be significant.

Guiding customers through these changes is the role of customer success and should be an inherent part of your product.  After all, their goal is what customers are buying. It seems natural therefore that the product is designed to facilitate this.  Unfortunately, most B2B SaaS products don’t deliver.  They build a team of people to fill gaps in the product’s capability.  Worse still, this knee-jerk response is seen as the best practice.  Think that through: so called best practice is to add recurring cost to your business to address a failure to deliver on your value proposition – a product that helps customers achieve their goal.

Sticky by design

There is an alternative: build a product and a business that delivers success by design and is therefore inherently sticky.  Much of what I suggest is about expanding the product to take on tasks that are done but through other, typically people-based channels.  Anyone with experience of product support will recognise this as case-deflection: moving agent-based advice to self-service.  Let me add that I do not foresee the end of CSMs.  They will continue but in fewer numbers as more and more advice and guidance is productised.  The problems they focus will be of a higher order, requiring greater understanding of business processes and the psychology of change.

It starts with your choice of business

You have an idea for a new app and decide to build a B2B business.  I have done that and it’s not easy; especially if you have a young family to support.  Before you go all-in, ask this simple question:  does your solution address a problem that a company must fix if it is to service and grow?  In other words, is your solution a must have or a nice to have.  Sticky businesses almost always address the former.  Don’t ask yourself – you thought of the idea and of course you believe it is a winner.  Instead, ask the decision makers in businesses that would be your ideal customers.

Built on a deep understanding of customers goals and work

I think this is the part of the product design process that is most often missed.  We focus on what our app does and even how the customer uses it but not enough on their work.  Building a deep understanding of the jobs users do; what they do well and particularly why they struggle to achieve their goals guides how we can help them drive the changes they will have to make.  The goal is to develop a best practice process the customer can adopt to achieve their goals using your product.

For each use case, map out a typical customers process, highlighting the key challenges and the metrics used to track the process.  Use further research and discussions with customers to build out a best practice process.  Overlay your product’s role in this process: this will show where you need to provide guidance.

Where the CS process is at the core of the product

This is the heart of the concept of CS2.0 and as such requires explanation in depth.  I will therefore cover this in a separate article but here is a summary.

CS processes break down into the following stages:

  • Discovery: Understanding how the customer currently operates, including performance
  • Goal setting:  Establishing the objectives or desired outcome
  • On-board: Configure the app and train users
  • Track & advise: Collaboratively monitor goal progress & advise on change (see below)
  • Success: Confirm desired outcome and reset!

The key is to provide this capability in-app without making the process too cumbersome.  Many companies provide added-value content but do so outside the app.  The problem here is that the information is often out of context.  Delivering the content in-app, removes this by relating advice and guidance to what they are doing.  It will also force you to focus on the essence of the advice; the practical things customers must do to achieve value.

If this seems onerous remember this is about how you enable the customer, not additional work.  The approach is also more scaleable at higher margins than building an extensive CS team.

With tools to enable collaboration

To achieve their goals with your product, most customers will have to change the way they work.  The product’s job is to help them.  A shared workspace where you and customers can collaboratively solve problems will become part of most B2B apps to enable this.  The collaboration structure is configured around the changes the customer needs to make.

That is ridiculously easy to use

Your product might do everything your customers want but if they struggle to use it, churn will grow.  How many training sessions have you had to use Facebook or Twitter?  Software that just works out of the box is an expectation.  Recognise that different users will have different needs, capabilities and experience.  A one-size fits all approach will not work.  New or inexperienced users mayweed more help and guidance.  The key to this is a switchable interface: CS guided for new users and task based for experienced users.  Better still, let the user design the interface they want and tune it as they progress.

And exploits nudge theory to form habits

Positive reinforcement and suggestions help customers to form the habits needed to make and, more importantly, sustain the change.  This might exploit gamification, league tables and mini-case studies to suggest and reinforce good practice.  These prompts are not directional

That enables multiple use cases

Take a lesson from the Hubspot playbook.  Initially focused on inbound marketing, they have expanded their value proposition into adjacent challenges.  They now sell a broader marketing capability, sales opportunity management, CRM and they are about to enter the customer success space.  Note that most of these are ‘must-have’ processes.

Multiple use cases gives multiple points of contact in the customer.  It embeds your application in multiple  processes, making it more difficult to strip out the application.  It also helps improve net revenue retention by providing cross-sell opportunities.

That are sold in-app

Make it easy for the customer to see the additional functionality, products and services you offer in the app.  As they master their goals, show them how you other offerings can expand their success by enabling them to achieve their goals better or easier and tackle new goals.

With extensive and simple integration

The number of applications in use in a company continues to grow: no application can exist in isolation because processes are inter-connected.  Integration is therefore essential and, of course, increases stickiness.  My first SaaS business grew by providing the best CRM integration on the market.  We made a virtue out of not having functionality that competitors had in their software by stressing the importance of a single customer view and the challenges with multiple systems.  85% of customers bought Clicktools because of the power and ease of the integration.

Don’t reinvent the wheel; there are many ‘integration as a service’ products on the market.  Ensure you have a rich API that enables two-way exchange of information.  Key to this is that your product has rich and robust API’s.  A good API allows your customer to link your product into their technology stack.  This again makes removing your application more difficult to remove.

Which exploits a rich ecosystem

Your product is unlikely to provide all the functionality a customer needs and you don’t have the time and resources to build it anyway, so don’t.   Salesforce recognised this early and created the AppExchange to fill gaps customers needed.  It is now a multi-billion dollar business in its own right and many have copied the model.  You should too.  An ecosystem improves stickiness by making it easier for customers to meet their specific needs whilst you focus on your core business.  It also provides great data on what functionality customers need, guiding roadmap and acquisitions planning.

It will happen

I am confident that product-based customer success will become the dominant model of customer success for four reasons:

  • Customers are getting fed up with constant, low value interventions driven by the supplier’s need to ensure retention and sell more.  Much of what goes under the guise of customer success is really supplier success.  Great customer success prompts customers to buy because they see the value they are getting.  It is win:win selling.
  • Product-led CS scales at higher margins, generating improved financial performance.
  • Embedding the CS process into the product provides richer data on which customers achieve success and the steps they take to get their.  Making this data available to technologies like machine learning and AI which will improve the quality of advice and guidance that can be provided.  Eventually, we will reach the stage where the data is rich enough and the application won’t advise the customer what to do, it will just do it.
  • But mainly because it focuses products on the essence of customer success in a B2B SaaS context: delivering the customer’s desired outcome out-of-the-box.  That is the promise companies sell but so far the vast majority have failed to deliver.

What will stop it happening?

Too few companies understand deeply their customer’s goals and the challenges they face in achieving them.  They lack the basic understanding of what drives customer success.

Many, particularly older SaaS companies, will struggle because they lack the joined up data and organisations needed to deliver this agenda.  The biggest barrier is one that has dogged companies for years: legacy mindsets!  I can hear the naysayers already saying that this is pie in the sky, that people-based relationships are the key: that there is already too much on the roadmap.  They argue that their customers and products are too complex.  Ask the same people how they respond to constant interruptions from suppliers wanting to help them or if they understand their own goals and the plans they need to put in place to achieve them.

Most of what companies put in place in the name of customer success today is to address failings in building a business and, particularly, building a product for customer success.  I do not expect companies to solve this challenge in one go.  It will take an iterative approach; building understanding, testing and proving solutions before chopping the top off the next bit of the iceberg to appear.

Most of all, it will become mainstream because it is already happening.  I am talking to a number of startups that are taking this approach from the off.  If you are doing this, I’d love to hear from you.


Graphic from Pixabay

The robots are coming

The role of AI in Customer Success 2.0

It is one of the most talked about subjects in technology – artificial intelligence.  According to some, it is going to revolutionise the world.  Kevin Kelly (of Wired fame) describes AI as the second industrial revolution in an insightful TED talk.  This blog examines how AI will change the field of customer success; specifically the contribution it makes to the development of CS 2.0, where the product is at the heart of and the main delivery vehicle for customer success.

Let me begin with a grossly simplified view of the elements of AI.

Data capture and categorisation -> Machine learning -> Propensity modelling -> AI applications.

Data capture and categorisation

AI without rich data is an oxymoron.  Tools for smart capture and categorisation of data are the foundation of AI.  In the field of CS, a single customer view has always been; with the advent of AI is not optional.  Tools are emerging that capture data from documents and others that use AI to rate the quality of data.  And of course we are all aware of AI based intelligent assistants that recognise and respond to speech.  These will be used increasingly in a business context.

Machine learning

Machine learning is the automation of pattern identification in large data sets.  It answers questions like “What product usage data correlates with churn  are the characteristics and activities that correlate with retention?” or “What customer characteristics lead to churn?”

Propensity models

Propensity models use the patterns identified via machine learning to predict outcomes.

AI applications

These are applications of AI to do specific tasks.  These may be full automation of tasks or automation used to guide people in the completion of their work.

Here are a number of tasks where AI applications will contribute to customer success.  Many of these are already in use, although most are still a minority sport.

  • Conversational discovery.  Natural language interactions to collect information on the customer’s goals, challenges and modus operandum.
  • Customer ROI guidance.  Delivered in the application itself, AI will identify the actions a customer should take to achieve their objectives/desired outcome.
  • Personalised implementation plans.  On-boarding tailored to a specific customer’s situation and goals
  • Next best actions will replace playbooks.  Playbooks are typically a company’s interpretation of what a customer should do next.  Next best actions use more granular data patterns to understand context and suggest an action.
  • Customer health/engagement scoring.  AI driven health dashboards will improve the reliability of scoring and will self-adjust as continuous machine learning identifies changes in the underlying data.
  • Feature targeting.  Identify customers that can gain greatest benefit from new features and should therefore be targeted first.
  • Sentiment analysis. Discerning the behaviour and intent from the content and tone of customer conversations.
  • Upsell targeting.  Listing the customers most receptive to additional purchases and why.
  • Content curation.  Identifying the content which will be positively received by which customers.
  • Dynamic pricing.  Suggesting the best price for up-sells and renewals.

Here and now

I am not suggesting that these capabilities will be widespread this year, not even next but I think many underestimate the maturity, sophistication and speed of development of the technology.  Here’s a few things to take note of.

  • Research from IDC into the use of AI in CRM suggests that 55% of companies expect to have implementations (not pilots) established next year (2018).  This will generate additional revenue for the companies using AI of $1,100 billions by 2021.
  • AlphaGo, a Google AI programme beat the best two Go players in the world in 2016.   It was coached on how to play.  Its’ successor, AlphaGo Zero was just given the rules of the game and learned how to play itself.  It took AlphaGo Zero just three days to reach world beating standards using a fraction of the computing power.  Professional players say it uses moves never seen before.  This is what neural networks do and they do it far better and faster than people can.  Imagine giving an AI tool a set of business principles and letting it learn how best to deliver customer success.
  • AI tools are widely available and will become a utility within five years.  The IDC report above suggests spending on AI will grow to $46 billions by 2021.  That is more than the forecast market for CRM, itself one of the biggest technology markets. In November 17, Salesforce launched MyEinstein, a tool to allow administrators, not developers users to build their own AI applications.  Almost all customer success software has, or have plans for using AI in their applications.
  • Andreessen Horowitz, one of Silicon Valley’s leading technology investors believe that AI is a fundamental platform of the same order of importance as cloud and mobile.

AI and competitive advantage

Whilst the technology is vital, I don’t think it is the real source of competitive advantage.  Given its ubiquity, how can it be?  Sure, early movers will gain an advantage but technology that everyone has access to won’t sustain that.  There are two factors that will create the winning edge in the use of AI in customer success.

The first is data – the richness of the picture that companies can build about their customers.  Single view of the customer has always provided an edge.  AI provides the means to extract meaning out of much larger and more diverse data sets.  The more dots you have, the more patterns you can spot.

This is reliant on the second source of advantage; mutuality – a true customer first culture.  Mutuality is not just a belief that customer satisfaction or even their success drives what a company does but about taking actions that are good for the customer and the company.  It is about using the customer’s data to their benefit, not just yours.  It is about doing the right thing for the customer, not just selling them anything you can.  Customers will soon have the means to control access to their own data and will increasingly restrict access unless they can see something in it for them; unless they can see that the company is doing the right things for them.  Remember, it doesn’t matter how good your AI applications are, they are useless without data.

Changing CS

AI will radically change the customer success landscape.  Routine tasks will disappear: chatbots are already replacing the support team and that will extend into the simpler, routine tasks of customer success, particularly as more and more companies build this into their application.  So what of the CSM?  Well if they spend their time doing routine tasks like on-boarding, training and low-level process change; they will also go.  If they are change mentors, guiding people through the human aspects of change, then they will stay.  In proportion, we will need more of these.  We already do it is just that we can’t afford them given everything else a CSM has to do.

Make no mistake, AI will improve productivity and that will impact jobs.  In the early stages, AI will augment people but as confidence in systems grow, AI will take over some tasks.  Whilst I have concerns about individuals who won’t or can’t adapt, I am not fearful of the overall impact.  President John F Kennedy said “We believe that if men have the talent to invent new machines that put men out of work, they have the talent to put those men back to work.”  Throughout history, new technologies have changed work and jobs but the overall effect has always been growth.   People just do different things.  Question is, if you are in CS, what are you going to be doing?

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Buying success from day one: The role of Ideal Customer Profiles

It is widely accepted that customer success starts with product and sales.  I have covered product here and now I want to talk about the importance of Ideal Customer Profiles (ICP) to customer success.

A personal prejudice: I dislike personas as beloved of many marketers.  Too many examples I have seen describe Tony or Antoinette, a 35 year old marketing manager with a degree in business studies who is striving to improve campaign performance  etcetera etcetera .…  Weasel words that do little to help me find, win and retain a customer, even in a consumer business.  I want hard facts and data on which I can build content and campaigns across the customer lifecycle.

Before I get into the detail of an ICP, let me share an example showing why they are so important to customer success.  I worked with one company that believed any B2B company was good business.  Sales went after everything that moved.  As a result, the company had very high first year churn, a significant percentage of which was down to customers that would never achieve success.  Not only were they not satisfied, many were downright angry and told everyone they could find about it.  Instead of CSMs delivering value, they were dealing with customers that wanted out of a 12 month contract that would never deliver for them  Contrast that with the view of Greg Goldfarb, MD of SaaS VC Summit Partners.  He says companies should …”not accept a booking until customer has met CS rep / accepted CS plan and vice versa.”  If CS is an integral part of the sales process, there is no way of winning a customer cannot that served.  Marketing, Sales and Customer Success all share the view of what makes an ideal customer.

For me, an Ideal Customer Profile (ICP) has the following elements:

  • Target markets: High level view of the types of companies we want to do business with.  In addition to basic stuff like industries, size and location, think about factors like life-stage, business model, culture.  Be creative!
  • Target roles: A detailed view of the specific people we want to sell to and serve.  I am talking job titles, challenges/issues, where they look for help and guidance, what groups they follow, what events they attend.  Build this picture for each of the buying roles: Decision Maker, Influencer and Users.
  • Engagement scoring: If you have done the work on target market and roles, this part comes easily.  Again by role, list out the factors that will make them more and less engaged with your company.  List these for the target market, role and the situation the individuals are in.  Remember, the customer’s context is the thing that drives engagement most.  Engagement factors include how they respond to the next element of an ICP, your content.
  • Content map and sales tools: Content is king in today’s world but context is queen!  Content is only good if it is delivered to the right people at the right time.  Your content map should address each of the target roles across the customer lifecycle: from initial interest through the buying and customer journeys.  I separate out sales tools as things that are used by your sales, account management and customer success teams to differentiate from things that can be shared with customers.
  • Success plan: What steps will be needed to make the customer successful.  This is not a detailed adoption plan but an overview of the post sale activities.  This is a combination of discovery and expectation stetting.

You can get my ICP workbook here.

You will have noticed that I said buyer journey.  Another of my pet hates are one-sided sales processes.  Most that I have seen describe what the company does with little regard for the customer – the prospect.  I just think this is bad salesmanship.  How can you sell successfully without understanding the issues, challenges and processes the buyers (an increasing number or people are involved in B2B purchases) have to go through?

Developing this style of ICP must be done with participation from Marketing, Sales and Customer Success as it will applied across all disciplines.  Ideally, the debate is founded on data about:

  • the lifetime customer value of different customer groups
  • cost to acquire and serve different customer groups
  • the addressable market size of different customer groups
  • speed of progress in the pipeline: you win good deals quickly and loose bad ones slowly

ICPs are not about reducing the available market but targeting those customers that the product and company are best suited serve.  Nor is this about favouring CS over sales.  The decision about ICPs is a strategic choice about how to maximise the growth of the company.

PS Watch out for my blog on using Engagement Scoring in churn calculations.

Product first; team second – if at all: Building products for customer success

Product is one of the biggest gaps between theory and practice when it comes to customer success.  The problem in most companies is that customer success is added as a function or team to help the customer achieve success with the product.  Just think about what that really says.  We have built this product to help you achieve something but we need a team to help you achieve something.

In fact, in many companies it is worse than that.  They need two teams to help you.  Customer Support is often the first team to be established, responsible for helping customers use the product.  That is often followed with a separate Customer Success team who add value by ensuring the customer achieves their desired outcome.  You are effectively telling customers you have built a product that can’t be used and won’t achieve the results they have bought it for without help.  Sounds strange when you put it like that doesn’t it but I bet that is what you have in your company.

I believe the starting point should be success built into the product and it starts at the outset of the business with product/market fit.  The initial product concept should be clear about customers’ desired outcomes and how the product will deliver it.  This might include:

  • Discovery process to identify the desired outcome (use case) and key data about the customer and their process.
  • Setting an achievable goal.
  • Automatic configuration of the product to achieve the goal.
  • Automated walk through of how the product is used to achieve the customer’s goal.
  • Reporting on goal achievement and how best to use the product to achieve it.
  • Data mining and machine learning to identify and prompt practices that underpin goal achievement.

Some say that this approach is overly ambitious and I am not saying it easy.  I also say fortune favours the brave and suggest the world is full of examples of people doing things that others said can’t be done.  Some of the most commonly used applications are built with a deep understanding of the customer and what they are trying to achieve.  Ever tried to contact a customer success team at Amazon, Facebook or Twitter?  Resources to help the customer do exist, it’s just that the overwhelming emphasis is on heading off the need for a success team by focusing on product first. [I will return to the true purpose of a customer success team in a future blog.]   What most companies suffer from is a legacy mindset that says customer success equals a team.

There are significant advantages to productising customer success:

  • It forces the product team to have an in-depth understanding of the customer and their goals.  This can only mean a better product.
  • It is infinitely more scaleable and therefore, in the longer term, more profitable.
  • It plays to the increasing demand for self-service.  People want things to work for them, not to have to have constant calls or emails to achieve what they purchased.

This has significant implications for how the product is defined, how the roadmap is controlled and how resources are allocated.  It also suggests that a head of customer success should have a strong product orientation as well as being hugely committed to understanding and delivering real customer success.

In a future blog, I will share a checklist for building a success based product.

What are your thoughts?  Would love to hear from you.