Customer success changes everything about how your business works

Profile picture for user pwainewright By Phil Wainewright September 9, 2019
Summary:
Customer success is even more important than customer experience, but few companies are thinking about it - and even they need new XaaS processes and tools

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We hear a lot of talk these days about the importance of customer experience, but what's even more important is customer success. The concept originated among Software-as-a-Service (SaaS) vendors, who realized that they needed to invest resources in helping their customers get the most out of their products. It's now relevant to every business — read on to learn why.

These digitally connected software vendors quickly understood that customer experience alone isn't worth much if the ultimate outcome is a disaster. A customer may be delighted at the point of purchase, but if they're not making full use of the product six months down the line, it's not going to deliver the promised outcomes.

I'm sorry to say that, in the old world of traditional licensed software, this pattern was almost the norm. But SaaS vendors couldn't get away with such shoddy outcomes because their business model depended on customers renewing their subscriptions every year. They soon learned the importance of helping customers become successful with their products.

The XaaS connection to customers

These lessons are now becoming relevant to all businesses because of the phenomenon of XaaS — pronounced 'X-ass' — short for Everything-as-a-Service. As digital technology permeates every aspect of business operations and customer relationships, every enterprise is now forging a continuous digital connection with customers. This fundamentally changes the nature of the relationship between sellers and buyers. It sets up a virtuous cycle of ongoing engagement, monitoring and improvement of the product or service. Now we all need to care about customer outcomes:

  • Engage — What does success mean for your customers?
  • Monitor — Are they experiencing success?
  • Improve — How can your business, product or service help them be even more successful?

Amazingly, the tools for this still barely exist, more than two decades since the very first SaaS vendors got started. Despite the prevalence of the SaaS model and the huge investments currently going into customer experience (CX) tools across all industries, discovering customer goals and measuring outcomes is still largely a manual process in most SaaS companies — and is pretty much neglected in most others.

Where are the customer success tools?

I got thinking about this over the weekend after reading my colleague Jon Reed's report on a new customer success tool from customer service and CX vendor Freshworks. As the SaaS vendor's Head of Product Management Param Vora explains, its high-touch customer success team — which deals with its larger customers — works to goals that are defined in terms of customer outcomes:

Build an initial relationship, get their goals, use the goals as the unit of work, and make sure you are taking these goals to success. The better you do this with them, the less pain, the more leaned-in you are.

But the company has only recently started to build out its ability to automatically collect and report data around these goals, he goes on:

Even in my CS org, I cannot quantify how much we helped customers. And that's a big pain point around the industry. So what we've added to our model is the ability to capture this data both qualitatively and quantitatively.

At least that's a big improvement on mainstream customer satisfaction measures, which as Jon says, "feel stale — and pretty far from real-time." Most companies are barely aware of the experience they're delivering to customers, let alone what outcomes their customers are achieving. Many of the parameters that should be collected just aren't even thought about.

Transforming for customer success 

Whereas customer success is an established concept in the SaaS industry, in most industries it's a very novel concept. That means that, typically, the day-to-day operating processes of most companies aren't oriented around customer success and in some cases even mitigate against it. This was certainly the case when digital videoconferencing vendor LifeSize adopted a customer success approach, recounts Chief Customer Success Officer Amy Downs:

We had to redesign the entire company. Customer support was like a complaints department. [A customer-centric approach] was not in anyone's DNA at the company in any way. We had to shift the attitude and culture of the company to think with the end user in mind first.

So I think a large part of the reason why customer success tools don't exist is simply because most businesses haven't been thinking about it. All of the conventions and tools that exist were designed for an earlier era when only the transaction mattered and the ultimate outcome was just left to chance.

What that means is that when most businesses today start thinking about how they go about recording and measuring customer success, it's not just going to be a matter of buying or building some software tools. It will mean thinking about existing processes throughout the organization, and how they will need to change or transform to support these goals.

Success for our customers - and theirs

We're going through an exercise of this sort at diginomica at the moment. We've decided to look for a freelancer to give us some support around customer success — by the way, if you're reading this and think this might be you, please ping my colleague Derek Du Preez on Twitter or LinkedIn. What is interesting about this exercise is that it forces us to really think through what success looks like for our customers.

First of all, I should clarify who are customers are. As a digital media business, we serve two constituencies. Our customers are the partners who fund our business in return for having their branding on our site and other related services. But our readers and subscribers are our lifeblood, so we have to be concerned about what success looks like for them too. At another level, the core of that readership are either prospects or customers of our partners, and so there's a sense in which we act as part of their customer success intelligence network — and it's not always easy reading.

Anyhow, we're initially focusing on building up our customer success efforts for partners. We want to make sure they are successful with their Partner Zone branded content. The support we're looking for will help out on content chasing and editing, social media amplification and analytics/reporting — but one of the interesting side-effects of thinking this through has been to realize that we need to do more to understand and document each partner's goals, which vary a lot.

In turn, that help will free up more time for the core team to provide more analyst-level services, which, without giving away too much of our secret sauce, also form an integral part of the diginomica proposition. What I can say is that, for several of our partners, it's closely linked to their need to better understand what success looks like for their customers, and to engage in conversation with them about those goals.