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:

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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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

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.