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“My company continues to invest in build new product features. Meanwhile, my Customer Success Managers spend more and more time dealing with product performance (speed) issues. The right product-roadmap is probably a balance, but the product team isn’t understanding the impact of our product’s poor performance on our ability to retain customers. Any suggestions on how I can help them see the light?”

I received the above question from a VP Customer Success and thought I’d take a quick time-out from the latest “Stop the Check-InSanity” best-practices in Customer Success to address the question directly. Here’s my take… which of these 2 options (or are there other options?) will have better results:

Option 1: Make it clear to the executive team that existing customers are citing product performance as a hindrance to renewal. An example:

Dear CEO and VP Product — I continue to find that product performance is causing us to lose customers. I spoke directly to several accounts that told me that they were contemplating a switch because of performance issues. We need to fix this… My customers are frustrated that it’s timing out and they can never get things done! What can I tell them / do you have any updates on this item?”

Option 2: Amplify your customer’s voice by humanizing customers and what they mean to the business. Here’s an example:

“Dear CEO and VP Product — Our customer feedback shows that product performance is the most important issue to our customers. We’ve found that 27% of the customers that mentioned performance over the last 18 months have subsequently churned, resulting in $1.2M hit to our bottom line this quarter. Looking at next quarter we can expect another $1.45M lost if this continues. Here are representative comments:
“The system is very slow. I have heard other organizations complain about system response times as well so I don’t think it’s just me.” – [Name], Detractor, Key Influencer, Tier 1 Strategic Account [Name], ARR = $452k
“System is slow during peak usage times and often times out.” – [Name], Detractor, Key Influencer, Tier 2 Growth account [Name], ARR = $185k
“Faster speed running reports and simulations.” – [Name], Decision Maker, Tier 2 Growth account [Name], ARR = $140k
“Improve core application performance time” – [Name], Detractor, Key Influencer, Tier 2 Growth account [Name], ARR = $132k
“Improve performance speed.” – [Name], Decision Maker, Tier 2 Growth account [Name], ARR = $90k

Assuming you have a voice-of-customer platform in place, such as TopBox, then humanizing and financially-quantifying the data should be easy. Including context — such as name of the respondent, role/persona, and value — enables colleagues see customers as human beings that contribute to your business. And for many businesses, direct ARR may not be enough to move an executive to your point-of-view, so you probably want to build a coalition that incorporates a broader definition of value/ROI for creating more advocates/promoters:

  • Advocacy / Marketing: Are existing customers producing referrals? What is the cost per lead for referrals compared to other sources? Do referral leads close faster and/or at higher ARR? What would it be worth if the percentage of Promoters (happy customers) improved by 10%?
  • Cost-to-serve / Support: How many calls are received about this issue, and what does it cost to handle them?
  • Finance: What is 3-year future value of high-scoring (happy & successful) account in a given tier/segment, vs. the future value of an unhappy or silent/disengaged account

And when following up with customers on their feedback, be sure to ask some probing questions so you can truly get to root-cause:

  • What did you experience, exactly? What did you expect instead?
  • What is the impact of this issue? Can we quantify it?
  • What would be the result to your company if we could successfully address the gap?

IMHO it’s like that old game of telephone — cut out the middleman (you!) and let your colleagues directly hear the voice-of-the-customer. What do you think, and/or are there other options you’d suggest?

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NOTE:  Last week’s blog, Stop the Check-InSanity: How to Make Ongoing Customer Interactions a Win-Win, was so well received that I decided to elaborate this week. Stop the “Check-InSanity”​ and truly focus on retention – here’s what works best based on my 20+ years of doing this work…

For B2B companies, revenue from existing customers can be as much as 80% of growth. That is, retention and expansion is the name of the game. Is your company truly focusing on retention? Or, are you chasing renewals?

Some Definitions:

  • A focus on retention means doing the things that make renewals a non-event.
  • “Chasing renewals” means trying to catch-up with decision makers to address concerns and issues at the time of renewal…when there’s scarce time to actually do anything to improve.

Some Facts:

  1. The subscription economy has changed Sales to “Land, Retain, Expand.”
  2. Happy and successful customers are far more likely to be retained. Make sure you are creating happy customers that perceive success.
  3. Recognize that there is no “customer” in B2B (and I’m not talking about B2b for selling to small business) – it’s a group of contacts in the account, that all have different perspectives, expectations, and requirements.
  4. The key: Since people change jobs all the time, your company ought to have relationships with multiple people in the account. Engaging with only with 1 person in the account puts you at significant risk (especially for large/strategic accounts): What do you do when they leave? Is there a sufficient set of relationships that enable a smooth transition? Are you absolutely sure that person is really representing *all* interests in the account?

Smart, successful companies know how they are meeting the different perspectives, expectations, and requirements of the different customer persona that are involved in your products and services. To that end, it’s critical to measure and improve the Percentage of Buying Committee Members That Are Happy and Perceiving Success.

Screenshot from TopBox that highlights the 3 key dimensions of account health: Engagement and Sentiment from the right contacts, the right time. Click https://waypointgroup.org/topbox/ for details

You could ask your Sales and CS teams about customer sentiment, but by doing so you’re missing a huge opportunity to engage the key contacts in the account. Besides, we continuously find that the account team hasn’t properly engaged the key contacts in the account to know sentiment with confidence. As a result, they aren’t growing footprint (i.e. just relying on 1 “Champion” contact), have blind spots, will be taken aback when a key contact leaves their job, and are likely to be surprised when an account churns.

There is a better way. Customer Success teams must:

  1. Recognize that acquiring feedback from a customer is engagement. Be concerned if they aren’t providing feedback. In fact, our research finds that silent accounts can be up to 14x more likely to churn than accounts that do provide feedback, even when that feedback is negative!
  2. Embrace feedback: Recognize that the customer is in an ideal position to tell you what’s working and what isn’t. Set up listening posts, especially (1) following the implementation phase to ask if they feel that the onboarding effort teed them up for success, and (2) ~5 months before renewal so you have sufficient time to address issues and concerns well in advance of renewal (and repeat that cycle each year to refresh the plan with the latest members of your Buying Committee since teams change over time).
  3. Communicate directly with the key contacts in the account to convey your commitment to addressing their feedback. Chucking a survey invitation over the wall from an automated system IS NOT sufficient!
  4. Leverage a B2B-specific voice-of-customer platform such as TopBox to scale your process. These platforms not only allow your CSMs/Account Teams to more scalably request and act on customer feedback, but also enable the rest of the company to hear the voice-of-the-customer directly, with visualizations to address root causes. Don’t debate with Leadership and/or Product what you “believe” the right improvement investments should be — show them the data!
  5. Commit to being transparent: Especially for large/strategic accounts, leverage your Champion in the account to help you gather feedback from the people that matter most. Share the feedback from the account, and use it to drive updates to the account plan. BTW, if you think being transparent is equivalent to “exposing the warts” then realize that they are already talking to each other anyway… you might as well be a part of the conversation.

Next stepDownload this whitepaper to get the details and gain templates for the process. The paper includes a case example, a “cookbook” step-by-step description of the process, and templates ready for you to use.

Bottomline: It’s the job of the CSM to ensure revenue retention and expansion. Ensuring customers are happy and perceiving success, value, and frictionless experiences makes renewals a non-event. And sampling 5-10% via a survey isn’t enough — companies that do this well achieve 60%+ participation (response) rates, making it easy to have a focus on Customer Success throughout the company.

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“I’m just checking in to see how things are going. Is there anything I can be doing to help?”

Ever been confronted with a question like that one?  If so, I suspect you either ignored it or responded pithily, “Everything’s fine.” In other words, a waste of time.

Yet CSMs often communicate with their customers this way.

We know that every interaction with a customer is an opportunity to strengthen relationships. And if they’re not strengthening relationships, then it’s likely that they may be eroding relationships.  After being asked the “check in” question, would your opinion of the CSM have improved? Everything may be “fine” but does that mean there’s no improvement to be had?

Here’s a better way to “check in” with your primary customer contact (a.k.a. Champion or Coach), assuming you are willing to take action to strengthen the relationship:

  1. Remind your champion that you are dedicated to improving their experience and success (that’s the job of the CSM, right?).
  2. Ask, “If I send you a link, would you be able to make 3 to 5 minutes to answer a few targeted questions to help us understand what is working well and what needs to be improved? I’m committed to following up with you to address concerns or gaps. This process
    1. Makes best use of your time,
    2. Helps me understand where to focus, and
    3. Enables me to amplify your voice across the company so my colleagues will also understand where our best improvement opportunities are.

Will you participate?”

I’ve never heard of a Customer Champion saying anything other than, “Yes.”

Of course, you will need an effective questionnaire and simple follow-up process.  Drop me a note: We have free templates for these that I’d be glad to provide (which are also in my book, Failure Sucks!).  And TopBox, our SaaS platform for B2B Customer Engagement, provides an efficient method to automate the end-to-end process.

Oprah Winfrey said it well: “I’ve talked to nearly 30,000 people on this show, and all 30,000 had one thing in common: They all wanted validation.”

People want to feel like they’ve been heard. Customers are people.

And even if you already know what they are going to tell you, collecting the feedback (data) in a structured way allows you to engage with your customer, be 100% confident that you are optimally focused, and enable the rest of the company understand gaps that ought to be addressed in a more scalable manner.

So demonstrate that you care.  You may not be able to do everything that customers request, but successful CSMs capitalize on what’s working well and help their customers implement appropriate solutions to address gaps. What’s more, CSMs will equip their colleagues around the company with real data – evidence – from customers that help the rest of the company make good decisions.

I’ve only scratched the surface of tips and tricks that strengthen customer relationships. Ready to take action or learn more?

  1. Acquire the right templates: Drop me a note or schedule time so I can help you avoid reinventing the wheel. No selling here: It’s free!
  2. Get the book, Failure Sucks: More For Your Customers Than For You. A B2B Guide to Customer Success.
  3. Ready for something more advanced? Learn how to engage ALL of the right contacts in your key/strategic accounts AT SCALE (think Decision Makers, Budget Holders, Exec Sponsors, Key Influencers, Power Users, and more).  We all know that loss of an Executive Sponsor is one of the most common reasons for customer churn, so increase your footprint by using a simple technique to develop the relationships in the accounts that matter most by engaging the right people, in the right way, at the right time.
Image courtesy Mike Acton at medium.com
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What’s a good NPS score?  How do we compare to other companies like us?

I’ve been asked these questions too many times to count.

I wish I could just say something like “30” but it’s not that easy in B2B.

The key metric, especially for growing B2B companies, should be an accelerated rate of profitable growth.  When it’s trending up, NPS should be a leading indicator of expansion opportunities, reduced churn, lower cost to serve, and a higher volume of prospects in the top of the funnel from positive word-of mouth.

On the other hand, if your NPS is trustworthy (more on that below) and improving but financial metrics are flat or declining then your company probably isn’t activating those promoters. Remember, unlike B2C companies there are few opportunities to “promote” a B2B provider. You don’t generally see people talking about accounting software, construction equipment, or business intelligence products at cocktail parties. Have you provided your promoters with opportunities for exposure?

“But my boss wants an NPS benchmark,” I hear you say.

  1. One sector, our B2B SaaS clients, range from around 5 to around 35.  But a higher NPS isn’t necessarily always better. There are costs involved to improve (i.e. optimization should be the mantra). A bottoms-up approach to NPS targeting is the best way to view the aggregate score and how well your company is doing.
  2. Benchmarking should compare apples-to-apples. NPS reflects a company’s ability to meet customer expectations across the spectrum of interactions, so different B2B solutions should have different expectations of their NPScore.  As a B2B example, is it effective to compare your software company against “any” other software company?  Savvy business leaders would recognize that things like solution scope, size and complexity, maturity, valuation, market position, specific sector, and price/margin all impact perceptions and expectations of a vendor, and therefore impact the measurement of any company’s NPS. Would you compare QuickBooks against Oracle Financials, just because they are both used for financial accounting?

So, what we recommend is:

  1. Analyse for internal benchmarking: This approach probably means an apples-to-apples comparison, including similar survey methodologies. Does one segment of your customer base have a higher NPS than others?  Does one account in one segment have better NPS than other accounts in the cohort?  Why? What are the practices and/or customer expectations that are different in one versus another?
  2. Be sure to activate promoters. That’s the key to accelerating growth in B2B. Since B2B folks aren’t likely to act on their own, engaging those promoters to work on your behalf is the “money move.”
  3. What is the cost/benefit of an improvement?  Is a higher NPS worth the investment? What are the key drivers of NPS for a given segment, and what would it cost to improve them?  What are the resulting gains worth based on #1 and #2 above?

In other words, take a moment to educate your audience when comforted with the question of “How does our NPS compare?” Hopefully you’ll have a compelling response that highlights the ROI of improvement, and not just a comparison of scores.

But you still want a benchmark…

  1. Most accurate benchmark would be a 3rd-party blind study asking target contacts to rate companies with which they have direct experience. By ensuring the study acquires perceptions of like persona (e.g. stratified sample of decision makers or administrators or end users, etc) across a set of directly-competitive companies using a consistent methodology you’ll see how your company stacks up against others. This is expensive and rarely worth it. Instead, consider purchasing industry studies from 3rd-parties like Temkin Group (who shows NPS for tech companies ranging from -22 to +43).
  2. Less accurate from an “industry” standpoint (but if someone really “wants to know” a comparison): if there are direct competitors sharing a customer’s wallet, or in a situation where your customer contacts work with a number of different vendors (i.e. where your customer contacts have a direct basis on which to compare your company against others), you can add one question in a relationship questionnaire to find out how they think of your company relative to the other companies with whom they work. With that you’ll at least be able to see how well your firm meets customer expectations relative to the others they engage. Hopefully your firm is at the top of their list.
  3. Internal benchmarking is the best direct apples-to-apples comparison and least expensive. Compare one cohort of your customer base to another to discover bright-spots that can be replicated to other parts of your company. What causes one group of customers to love your firm, and another to be the opposite?

Concluding considerations:

  1. Understand the “why” behind the question: Even if you have an NPS of +100, does that mean you’re “done” with driving improvement?  Maybe… or, what will your competitors be doing? Or, if you’re not in a competitive industry then maybe a -100 NPS is just fine. The taxi industry thought they could treat customers like garbage until Uber came around…
  2. What’s the advantage of working with a promoter versus working with a detractor? Promoters tend to be less costly to serve, not to mention easier on employee morale. But that comes at a cost… understand and communicate if a higher is NPS definitively better.
  3. Critically, is your NPS trustworthy? Does your Net Promoter Score represent the business and are you really hearing from all the right people? If your own score comes from 50% of your buying committee members but a comparison score comes from 5% of their end-user population, then you certainly aren’t comparing apples-to-apples.  NPS can decline as response rate improves, not to mention differences in respondent persona, so where and how you measure NPS is critical.  Given low response rates from most B2B NPS efforts, you may be surprised to find your NPS coming from less than 5% of your total company revenue and/or from a mixed bag of persona or non-influential customer contacts. How can comparing that un-trustworthy number to other studies with different methodologies yield anything but more Fear, Uncertainty, and Doubt?

So, what did I miss?  Why do so many business leaders want to compare their NPS other companies — does that tell them something that I’m not understanding?

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Customer Success is typically defined as, “ensuring customers achieve their desired outcomes while using your product or service.”  If you’re relying on this explicit definition to drive retention and expansion then you’re missing a better opportunity.

The key to scalably accelerating profitable growth is by creating truly loyal customers. And the shortest path to true loyalty is by demonstrating that the people within your company are listening.  Here’s why that’s true and how to make this critical, emotional connection with your key customer contacts to strengthen relationships and drive true loyalty.

Attitudinal Loyalty Accelerates Profitable Growth

Do you really think of this as loyalty?

We all want loyal customers. Consider that there are two types of loyalty:

  1. Behavioral loyalty, which is often the mantra of B2C companies that measure loyalty through repeat purchase behavior, and
  2. Attitudinal (heartfelt) loyalty, which must be the mainstay of B2B companies because
    1. We all understand the notion of “trapped” customers due to high switching costs (i.e. unhappy customers may still buy from you but are unlikely to expand, are likely to be working behind your back to spread negative word-of-mouth, and will find a replacement that will later come to your surprise);
    2. Companies don’t have emotions; people do. The “customer” for most B2B providers is really a Buying Committee — a collection of people with differing roles/persona (decision makers, budget holders, business influencers, architects/designers, program and project managers, end users, etc.). There are few opportunities for the people in your customer accounts to actually demonstrate “repeat purchase behavior” because purchase decisions generally fall to teams and not individuals.
    3. We know that people leave their employers to go to new companies, and you ideally want those people to take you with them.
    4. Critically, you’re probably finding that the Buying Committee members differ from year-to-year as people change jobs. This means that the players have less skin-in-the-game because the initial decision wasn’t theirs.  You’re also likely to find less alignment on this team on this team around the required processes to acquire desired outcomes.
    5. Your company also has employee turnover. I sure hope your Customer Success / Account Management teams aren’t relying on the customer to provide the lay-of-the-land when getting introduced into the account. Your company needs clear processes that capture and self-document what’s working, not-working along with the plan forward.

True (attitudinal) loyalty goes deeper than retention. There are many reasons businesses will continue buy from a supplier and exhibit behavioral loyalty. A renewal isn’t enough to demonstrate loyalty:  Those people that are attitudinally (truly) loyal will drive their organizations to buy more, expand into your additional product lines, tell their friends and colleagues to buy from you, serve as a reference, and be less costly to serve.

Demonstrate Listening to Create Loyalty

On her final broadcast, Oprah Winfrey shared this key learning from 25 years as host of her show:

“I’ve talked to nearly 30,000 people on this show, and all 30,000 had one thing in common: They all wanted validation. If I could reach through this television and sit on your sofa or sit on a stool in your kitchen right now, I would tell you that every single person you will ever meet shares that common desire. They want to know: ‘Do you see me? Do you hear me? Does what I say mean anything to you?” – Oprah Winfrey

B2B == Complex Relationships: Who Has a Full Picture of the Account Relationship? The customer certainly does… are you listening?

The beautiful thing is that all companies ought to have a robust customer feedback effort anyway.  Who knows best what problems / concerns / issues your customers are experiencing? Who can tell you clearly what is working well and what should be improved?  Who can tell you if the customer is happy or unhappy, and why?  In all cases the answer is CUSTOMER. Sadly, most companies seem to think they know better, coming up with solutions to problems that may or may-not be the top priorities (or may not even exist). But even when working on the things that will better serve customers, if your company isn’t demonstrating listening then you’re missing out on the opportunity to drive true loyalty.

Proper execution of this process results in:

  1. 1:1 improvements: Customer Success / Account Management teams will more easily strengthen relationships with the key contacts in the accounts that matter most: decision makers, influencers, and other leaders that can drive growth (think expansion into new divisions and/or products, not just more licenses to the same).
  2. 1:Many improvements: Product, Service, and Support teams drive the optimal set of product and service improvements (not just what they think could be most effective).

If your objective is to accelerate profitable growth (and why shouldn’t it be?), then your customer feedback program ought to go well beyond just measuring Net Promoter Score (NPS) / customer sentiment and instead be oriented to capture the voice-of-customer.  We like the H-E-A-R framework:

  1. Harness a coalition to ensure the company is ready to listen: With whom do you need to partner inside your company to ensure listening? I hope you don’t just want a vanity metric… I think we’re all tired of those NPS press releases that promote a company’s own artificially-high/gamed Net Promoter Score. Product, Service, and Leadership all probably need trustworthy and representative feedback to drive priorities.
  2. Engage the right contacts in the account to acquire feedback. No point in trying to get feedback from the wrong contacts! You’ll probably want to engage your account teams to help validate the list and help show that their feedback will be addressed and not go into a black hole. Warning: Don’t be so focused on end-users that you’re skipping the Buying Committee members.
  3. Act!
    1. Enable front-line Account / CSM teams to examine the feedback from (at least) each strategic account, individually (“1-to-1”): At least for those accounts that are critical to your company, CSMs have an opportunity to show the key contacts in the account that their feedback matters (i.e. that you listened to them). Use a solution like TopBox to make this easy with insights that show the areas in which the CSM can best make a difference (not to mention that systematically capturing feedback will self-document what’s working well or not, enabling others around the company to assist or takeover when the CSM moves into a new role). Make the time to show them what you heard with this Business Review / Success Planning template to use with your customers. Once you’ve highlighted their feedback results, it becomes easy to establish a plan with each of your strategic accounts to decide what needs to be done and who’s going to do it. No doubt there are workarounds, different approaches and best -practices, customer education and training, and existing roadmaps that your customer will want to know about.
    2. Analyze the feedback by segment (“1-to-Many”): Understand where the optimal improvement opportunities lie by using the right tools to identify those patterns across accounts that require attention from Product, Service, Support, Marketing, etc. Just because something scores low doesn’t mean that an improvement there will drive the biggest bang-for-the-buck.  Key-driver analysis becomes critical here.
  4. Reveal the results. Close the loop by showing your customers that you heard them. Even those customer contacts that didn’t respond will be interested to know what you heard and what you are doing about it.  High-growth companies have created sections in their website to showcase their customer listening. Even without taking that step, don’t you owe it to your customers to let them know that their feedback didn’t go into a black hole?

An Insight-to-Action process drives ROI, starting with candid DIALOGS centered on your customers’ needs

Summary:
  1. True loyalty isn’t just retention. There are many reasons why a customer may stick with you yet be unhappy and likely to spread negative word-of-mouth or jump ship at the first opportunity.
  2. Loyalty is an emotional bond that enables your customers to work on your behalf, drive expansion opportunities, spread positive word-of-mouth, help you innovate, and be easier to serve.
  3. True loyalty comes from demonstrating that you hear your customers. Stop talking about yourself and listen.
  4. Leverage the H-E-A-R framework. Demonstrated listening comes from asking for feedback and then following up to address what you heard. For strategic relationships, think of this activity as 1:1, working with the key contacts in the account to drive the right plays. For the long-tail of small accounts, an effective analysis of all the feedback is critical so you can explain how you are addressing what they tell you. After all, if you asked for feedback, then you should care to listen to it. If you don’t, know that surveys without action do more harm than good.

Bottomline: Make the time to get the feedback; hear what your customers (i.e. the contacts/persona within your accounts) are thinking and feeling. Then confidently know that you’re doing the right thing(s), closing the loop with your customers to show how you are listening.  You will then reap the rewards of customer loyalty:  easier renewals, new expansion opportunities, accelerated sales via more referrals, better customer references, and the thrill of knowing that you’ve been able to help your customers succeed (since, after all, Failure Sucks! More For Your Customers Than For You)

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Back in 2003 a mentor told me, “Steve, you get 1 point for highlighting a problem/concern. You get 5 points for highlighting a solution to a problem. You get 10 points for addressing a problem. You get 100 points for proactively addressing a problem before it becomes an issue. So, if you want to win in your career then don’t come to customers, managers, or colleagues with problems. No one wants to hear about problems. Your ideal posture should be to communicate how you resolved/addressed issues. Be the solution.”

Still seems like good advice for all of us.

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Written by Mark Pecoraro

Product teams have many different ways to get input on product direction: strategic direction set by the Board/CEO, sales requirements (that next BIG deal), market strategy, and the list goes on.  They also get a mouth full from the Tech support team, that generally operates a reactive break/fix posture.  However, as a Customer Success professional, I have learned that I have an opportunity to take the voice of the customer and be the conduit back to the product team to drive and prioritize where the focus of the product needs to be, from a customer perspective.

Having a “good” product is critical for customers to be successful and keep Customer Success Managers out of being a mis-labeled support team.  What do I mean by “good” product? (we all think our product is awesome, right?)  A “good” product is one that delivers what sales promised, deploys easily & quickly, is high quality, has an intuitive UI, plays nice in your ecosystem of data & applications, and ultimately provides the end customer with a valuable outcome and user experience for which they originally purchased the product.   For products that fall short in these areas, no reasonable amount of CSMs can be a band-aid that will scale up with your company.  I once had a CEO tell me about his 30-person CS team, of which 20 were really tech support folks “masking product deficiencies”.   Having seen that movie before, I knew his CS team had a long painful road ahead of them.

So, how can you take the voice of the customer efforts, and use that hard-data, from the mouth of paying customers, to drive product changes?

Most of us are familiar with Net Promotor Score (NPS), and the resulting data that gives you Promoters (score 9-10), passives (score 7-8) and detractors (score 0-6).  You ultimately end up with a score that ranges from -100 to +100.  NPS usually has a comment field that asks why you gave the score you did.  Using these comments, both good (promotors) and bad (detractors), can prove to be extremely vital feedback to your product team.

Recently, I completed a CS Automation implementation for a SaaS eCommerce company.   They had no Voice of Customer programs, so that gave us an opportunity to start with the basics.  We implemented some transactional surveys starting with how their on-boarding experience went and how we did in technical support. They also had never done a NPS program, so using the new CS automation platform, we started sending out NPS surveys to the customer base of over 3000.

In this specific VOC example, the NPS efforts were very effective at getting us data on product related issues and we suspected this would be the case from the on-set of the program. The reason for this was our NPS survey was largely targeted at hand-on users of the application, which meant for this case in particular, we would receive feedback from 1000s of users within the enterprise customer base.  This effort was distinctly different than the transactional surveys we executed at the end of the on-boarding process and after each technical support case was closed.  Those surveys were targeted at feedback for very specific interactions we had with the customer.   The transitional surveys had multiple questions (4) and were specifically targeting feedback on our performance so we can find areas to improve upon in our processes.  The NPS effort was an on-going program, intended to monitor the progress of our relationship with the customer, and the systemic root causes of that feedback.  Once an NPS survey was responded to, we didn’t survey that specific user for a minimum of another 120 days.  Over time, we intended on getting users to continue giving us feedback so we could track the NPS score progress, but just as important, our progress with the underlying reasons for the ratings, and a closed loop process into the company to take action on the primary drivers of the NPS VOC program.

After three months of data collection, the NPS score for the overall customer base left something to be desired.  The real question that needed to be addressed was “What was the root cause driving the NPS number?” We have tons of comments associated with the ratings customers had given us, but we needed to figure out how to distill that down into something that’s actionable. We created a taxonomy that allowed us to categorize the comments into some basic buckets. Having been in the software industry for long time, I’ve come to realize there’s a very limited number of buckets that these comments fit into, although it seems overwhelming when you’re just looking at the raw data.  We used a pretty simple, but effective taxonomy.  These tags can be associated with any score from 0 to 10 and any comment can have as many tags as it takes to get the essence of what the customer said.  If the rating was low, you can bet that the tag had a negative connotation.   However, if the comment was associated with a high rating, then it probably had a positive connotation.

 

Sample NPS Tagging Taxonomy

On-boarding
Training
Data issues
Value
Adoption
Cost
Partner
Prod – UI
Prod – Features
Prod – UX
Prod – Performance
Customer Support
Customer Success

These tags are fairly generic to most SaaS companies. Your company might add, subtract or modify this list for your business, but for the most part, this encapsulates the main buckets that I’ve seen for most SaaS/software organizations.   As we would get responses back from the NPS surveys, we had a process to look at all the comments, regardless of score, and each comment would get one or more tags that was appropriate for the comment.  As an example, you could get a promoter that loves support and a detractor that hated support, and they would still get the tag “customer support”.  With the comments now normalized with these tags, you could start to take groupings of say the detractors, (the ones that rated 0-6) and see what tags were most prevalent in those comments. The same thing would apply to folks who scored us a nine or 10. We would then rank order how many times the tag was used in those feedback buckets.  With this data now neatly organized and presentable, we were then in a position to start to push it back into the organization. The CEO was absolutely thrilled that he had data he had never had before:  A 360° view the customer, their health, and some simple voice of the customer programs that unfortunately showed there’s lots of work to be done. Customer Success leaders were now in a position where they were not just handing over raw data but also presenting the customers’ priorities from their own voice in the form of feedback about the company.  When we presented this to the product leadership, they saw this as an incredibly positive opportunity to take action where we were having the biggest challenges in the business.

The data doesn’t lie.

The data became an additional, informed vector for product to now influence decisions about priorities and resource allocation.   There were clear themes in the data that was showing certain product issues were causing negative impact on the customers. By being transparent with this data, we were able to help influence & prioritize feature requests, invest more time and energy into quality, and focus on other areas that were points of concern for our customers that they expressed through their own voices.  The product leadership was so interested with this data, they asked this customer success team to actually start setting up feedback sessions with the customers so that engineering could dive deeper into some of the customers that had further valuable input. Based on my experience, the importance of gathering VoC extends to more than just retention and upsell opportunities. The value of collecting feedback and proving to your customers you will take action with it in areas such as product, can have incredible effects on the next iterations of your product, in turn improving your company overall.

To learn more about our guest blogger Mark Pecoraro:

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CS Leadership

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On June 19th, 2018, a few of us Waypointers attended the inaugural Customer SuccessCon Denver, hosted by Mikael Blaisdell’s Customer Success Association. Our own Steve Bernstein was joined by Paul Piazza, Senior Director of CS at Reciprocity Labs, for a chat centered around driving a Customer-centric culture and enabling CSMs to collaborate with the rest of the company to drive the right improvements.  achieve company-wide buy-in for your customer success initiatives. Click here to watch the discussion in its entirety, but if you can’t spare the 25 minutes right now here are some of the highlights:

3:30: Paul Piazza explains where to start

10:07: What to do with items outside your span of control

12:00: What about NPS in B2B, and How feedback can predict churn

19:05 Difference between a survey and a program

22:10 Driving up response rates

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When I work with Customer Success teams to embed proactive processes to strengthen customer relationships, concerns raised are typically centered on, “I don’t have time for that.”  When I dig more deeply, I usually hear about how busy everyone is with

  1. Responding to email
  2. Closing renewals
  3. Following up on customer support requests
  4. Helping customer contacts with training
  5. Working CTA’s from the Customer Success platform that has identified

These are all noble and important activities. And each of those activities is about driving a great Customer Experience (CX).  So, my follow-up is, “To what extent do these things drive Customer Success (CS)? All these activities are certainly designed to help the customer be successful. But how do you know if those things are actually doing that?”  You may feel that you’re driving customer success with CX activities, but

  • Companies buy your products and services because there’s a promise of ROI. Even if you’re supplying commodity products, they buy from your company over others because they need to do more with less and believe that your company will help them achieve that better than others.
  • The more your company helps your customer see the business result(s) that your products and services drive the more they will rely on you. “See” means more than measuring the business results; it also means communicating the results and making sure the right people know all about the ROI. By the way, those people will also tell their colleagues about the success the company has achieved with your products and services (at least those colleagues inside their company, if not externally at meetups, conferences, and other events) because they want to show how successful *they’ve* been.
  • Who is “the customer?” Perhaps you’re working on behalf of power users, architects, IT managers, procurement and legal folks, etc.  Are those contacts *exclusively* your customer?  Nope, you also need to consider the needs of the Buying Committee members such as key influencers and decision makers: Aren’t these folks at least as critical to your company’s success as end users and other day-to-day working contacts? Actually, the argument can be made that Buying Committee members are even more important to serve than end users.
  • You don’t know for sure if any of the things you are doing are genuinely “moving the needle.”

So, what should the Customer Success organization do? Consider that old expression, “If not me, then who?”

  1. Responding to your email is important. But are you getting email from the right people about the right topics? Or are you back-stopping another department that *could* be handling these emails?
  2. Closing renewals is important, but is the Customer Success function really the right organization to be handling paperwork to close the renewal? Are there other people inside the company that *could* be handling that function more optimally than the CS function?
  3. Etc…

In other words, each of those activities listed at the top – each of which are important elements of the customer journey and part of the Customer Experience (CX) – has someone else within your company that *could* be handling them. For whatever reason those activities are getting done by the Customer Success team. Maybe the customer simply doesn’t know who to go to for which purposes? Or perhaps the customer sees CSMs as free consulting? Or maybe the rest of your company merely doesn’t see that they have “broken” CX processes that cause the CSM to pick up where others leave off? Or maybe those other departments are just under-staffed themselves, so the CS team picks it up? Any of those might be good reasons for the CS team to directly drive the CX.  On the other hand, are those reactive CX tasks truly more important than proactive CS work?

“Not so fast!” I hear you say. “We only have people in the Tech Support organization for handling issues that relate to product usage. There isn’t anyone else in my company that can do ad hoc training, help with configuration, assist with paperwork, etc. So those things are our job in CS, and they help the customer be successful.” While that last statement might be true, the key is to find out for sure.

In other words, do you confidently know which activities are most likely to move the needle, i.e. what things drive a customer’s ability to be highly likely to recommend your company to their colleagues? Best to ask the customer what elements of CX and CS are working well and which aren’t working well. Then use proven analytical techniques for deriving importance and determining how to best execute on customer expectations. Companies that operate effectively will assess which investments will drive the biggest bang-for-the-buck. And the only way to do that is through formalized customer feedback that helps your company prioritize.  I won’t go into the details of that here since the process is explained in full at https://waypointgroup.org/5th-way-b2b-companies-can-accelerate-growth/

Now that we know which things are most important (that is, which changes are needed within your company to drive retention and also improve the likelihood that your customers will recommend), we can better optimize resources around the company.  Perhaps that new hire planned for CS really should be allocated to Support Operations, whereby gaps in Support capabilities could be addressed (instead of putting the onus on the CSM to do that work).  Or maybe Training should get more resources to get new customer employees up to speed on a regular basis. Or maybe Product Marketing (where use cases and best practices can be best combined) should get it. Properly analyzed feedback that is linked to financials will yield the result.

To be clear, the CSM must ensure the rest of the company knows what they need to do to drive excellent CX. The reality is that if Customer Success Managers (CSMs) are working those CX tasks themselves then it means that in reality they are supporting the various internal departments to deliver an excellent Customer Experience. Driving a great experience for all the various contacts within the account is certainly an important effort.  But meanwhile, who’s engaging the Buying Committee members to make sure they both acquire and perceive ROI (business outcomes)? It’s not that driving better customer experiences (CX) is a bad thing; it’s that there could be a higher calling for CSMs, if customers have an appetite for it. And especially in high-touch B2B functions, the job of the Customer Success organization is to ensure the customer is achieving and seeing the value that your products and services are creating (i.e. you should assume these customers have an appetite for it, but again you best make sure you know the answer). No one else in the company is doing that. So just know that every minute focused on CX is a minute coming at the expense of CS.

To do this effectively, you need to make sure that everyone else in the company is doing what needs to be done.  You, as a CSM cannot tell those other departments

Trustworthy & Representative Voice-of-Customer Insights Power Optimal Resource Decisions to Drive CS

what they should be doing. But you *can* provide the voice-of-the-customer that clearly identifies the issues and opportunities for getting it right. With that mindset you’re no longer telling those departments what to prioritize; your customers are. Equipping your colleagues with trustworthy and representative customer feedback, liked to financials, ought to be enough to get them to improve. If not then you need good governance and oversight to ensure everyone has retention and expansion top-of-mind.

To sum up, the CS function needs to make sure that the customer is recognizing the ROI that your products and services are delivering. So, your job is

  1. CS: Ensure you are providing the assistance that the customer needs to successfully acquire the ROI. Then measure the ROI and communicate it. If you aren’t making it obvious then who will?
  2. CX: Be a resource manager – bring the right tools and information to the right people to make sure everything is working well.  Even if you could do everything the question is, are you the right resource to do it or is there someone better suited to complete the task? Bring trustworthy and representative feedback to those inside your company that are making decisions about where to allocate company resources, and ensure they are accountable to implement the optimal CX. Now you can collaborate with your customer so they can best execute with a great CX to achieve the results, with you as their Sherpa along the way.

Your job is to ensure the customer obtains the necessary outcomes. Improving the CX is everyone’s job. Don’t be a “catch all:” allocate time to acquire the insights that will help the rest of the company enable a smooth CX. The voice-of-the-customer will also help you understand what’s working and not working, across the business. One more hint: Voice-of-customer <> NPS! But more on that in the future, or contact me directly for tips on questionnaire design.

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I recently wrote about the importance of leading indicators to improve customer retention and expansion rates in B2B environments.  Waiting for financial results is too late; it behooves every company to embed a simple and repeatable set of steps that strengthen customer relationships over time. To achieve this, many companies start with “mapping the customer journey” in order to understand the complete set of processes that customers go through to be able to fully use (“adopt”) the product.  While that works well for consumer B2C companies (where, by and large, you’re only as good as your latest transaction), relying on journey mapping is dangerous and far from ideal for B2B companies. Instead, B2B companies must learn to develop and strengthen relationships.  Here’s why and how.

Success = Outcomes

Let’s start with a definition of Customer Success: “Success” is simply, “The accomplishment of an aim or purpose.”  Focusing on the word “accomplishment” is the key (the CS industry has more commonly used the word, “outcome” or “result”).  In other words, Customer Success is NOT a matter of making sure that end-users adopt the product. Although product adoption could be an accomplishment and might very well be required to drive the right outcome, stopping there doesn’t necessarily mean you’re enabling a business outcome for your customer and strengthening the relationship. Even with high utilization, it’s entirely likely that your customer is not realizing the outcome they require.  Why?  Your products and services might be fully in use, BUT:

  • What is the customer journey once onboarding is complete: Does your company have processes and programs that keep key contacts engaged with you so your company continues to be top-of-their-mind? If yes, are they sufficient to meet customers’ expectations?  Or are you just hitting them with automated emails?
  • Your key stakeholders (i.e. the Buying Committee) might be far removed from the day-to-day usage of the product, never logging on to see the beautiful dashboard that displays the Key Performance Indicators (KPIs) being produced by the end-users.
  • Even with the visibility on your KPIs, the business value – the return the customer realizes on their investment – might not be crystal clear (your executive sponsor needs clear results in order to get promoted!).
  • Perhaps your customer relied on poor practices that merely automated old workflows, rather than embedding new processes that take advantage of new capabilities that your products have enabled.
  • The key contacts might be changing due to a re-org or departure of an executive sponsor, leaving your future uncertain (followers of David Skok’s For Entrepreneurs blog know that loss of an executive sponsor is a key reason for churn).

“Check-in” <> Success

To address these problems, you might be inclined to “check in to see how things are going.”  It’s a nice idea to be able to lob an email over the wall and feel comfortable that everything is going well.  But,

  1. With whom are you “checking in” – are you reaching out to the contacts that matter most? Are you reaching out to contacts that assess and manage to business outcomes?
  2. Are they being responsive to your inquiry? That is, did the “check in” actually add value, or are you merely marking off a to-do list item?
  3. Do they understand where and how to make changes or improvements to their business processes in order to acquire the necessary outcomes?
  4. Are your company’s products and services meeting their expectations?
  5. Critically, how much can you do individually to meet expected outcomes?  Do you need other people within your company to help?

It’s not enough to “check in” – you need to have a clear process to understand what’s working and not working – and you best not rely on the customer to drive it on their own. Having a process that allows the customer to share their perceptions of success and value is the first step. But pay attention to item 5:  You are only one person, yet it takes a whole company to drive value (otherwise why does the company need all those other employees??).  Every person in the company needs to be wired towards adding value for the customer, and it’s the job of Customer Success org to ensure that happens (if not you, who?). The key is to equip employees around your company with clear descriptions of what is working well and what needs improvement, straight from the customer. Sharing customer perceptions directly, without passing through anyone’s personal (perceived or real) filter, is the fastest path to get everyone on the same page.  When it’s direct, trustworthy, and without concern for bias, customer feedback is tough for your colleagues to ignore, helping ensure you’re aligned internally.

Acquire Trustworthy Insights

So, the second piece is to make sure that you are acquiring and distributing trustworthy feedback from your customers. Trustworthy means representative. If you are sharing one comment from a customer survey then what’s expressed is true for that one person, but you cannot conclude that the entire population feels this way.  Although there’s great opportunity to follow-up and strengthen the relationship with that one contact, only by acquiring a sufficient amount of feedback from the right people can you extrapolate to the whole. Implementing a Voice-of-Customer (VoC) program that collects the right feedback from the right people at the right time is the third key.

We also know that response rate is a powerful leading KPI that can predict churn and drive expansion. Research has shown that silence (non-response) from your B2B customer contacts indicates there’s insufficient “what’s in for me” to respond. In other words, there is a value equation for the customer that has both a numerator and a denominator:

  1. Numerator: You are asking for feedback, but what is the level of investment (time, energy, and exposure) you are requesting?
  2. Denominator: Have you shown your customer participating is worth their time, energy, and exposure? Are you going to do something with the feedback?

When you put these together you get your value equation for your customer to provide feedback.  Your customers won’t respond if their perceived value for participating isn’t sufficiently large. In other words, response rate means something.  Are you confident that you’ve clearly articulated that it’s a short process and that you are committed to listening and (at least) addressing any issues – i.e. you’ve expressed the numerator of the value-equation?  Are you confident that you’ve even sent the request for feedback to the right people (note: a thorough description of the “Active Recruiting” process to drive high customer response rates can be found here)? If you have done this then silent customers are telling you that it’s not worth it to them. Don’t throw out these data points. Instead,

  1. understand that silent accounts are far more likely to churn, and place resources on those accounts that you might be able to save. Make sure that you leverage a feedback tool that highlights these as risk and opportunity.
  2. accurately indicate how much revenue was represented by the feedback process and include the revenue-at-risk from these silent accounts. Companies make decisions all the time based on zero data. Bringing evidence to the table should certainly help move the company in the necessary direction.

Consider these 2 images from a real-world client: TopBox was used to acquire feedback from the Buying Committees (decision makers and key influencers of renewal decisions) at each of their accounts to gauge overall sentiment.

  • Image 1 shows the average ACV of accounts that are happy (green), moderately happy (yellow), unhappy (red), and silent.  We clearly see in this case that happy accounts tend to spend far more than others.
  • Image 2 shows the total amount of ACV from each of those account sentiments.  We clearly see a huge blind spot from the silent accounts.  We also know that silent accounts are far more likely to churn than accounts that participate in your request for feedback. Assigning resources to strengthen relationships with those accounts should be a priority.

Real B2B Example from a TopBox client showing Average and Total ACV by account sentiment. In this example, happy accounts clearly spend more (on average) than others.  While that’s good, this company shouldn’t celebrate just yet: We see in image 2 that the lion’s share of revenue is in “silent” accounts, which we know are far more likely to churn than others.  Shifting some resources to strengthen relationships with those disengaged folks is likely to bring dramatic revenue improvements.

In summary, as a Customer Success organization your job is to ensure the customer is perceiving business outcomes.  Perception is your customers’ reality, so any time there is a gap in expectations vs reality, the “fix” can be

  • Communicate appropriate to close the perception gap, and/or
  • Execute differently to close the perception gap.

Only customers tell you if they perceive value. If they do then you’re in a good position to consider an expansion opportunity.  If they don’t then you had best shore that up.  It all starts with customer feedback:

  1. Understand if there is a gap in expectations vs. delivery/results
  2. Understand why there is a gap: is it real, or just perception?
  3. Create a plan to address the gap

Execute the plan.  Reap the rewards of increased retention and expansion.  Then rinse and repeat.  A more detailed explanation of this process and the associated KPIs is at https://waypointgroup.org/the-power-of-leading-indicators-in-customer-success-heres-what-to-measure/

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