Author Archives: Anthony Nygren

Customer Success Evangelism: Insights from Zuora’s Subscribed Conference

In attendance recently at Zuora’s US Subscribed conference in San Francisco as an observer and enabler of–rather than a participant in–the subscription economy, I really focused on the strategy content: CEO growth advice, SaaS pricing and packaging approaches, customer experience/success best practices.  What I found through these sessions was a recurring theme of a focus on value–value realized by the customer and value captured by the vendor.

While that may seem like something that could be a theme at almost any conference because it is the foundation of business, at Subscribed it stood out in two ways:

  • Variety.  It is the nature of the subscription business model generally and the SaaS version in particular that there is no unitary “product.” Offerings are a construction of features, services, and access and accrue value (revenue and profit) to the vendor through myriad of pricing structures and levels.  Aligning your offering/s with customer value and capturing the appropriate value from the customer in revenue is an iterative process.
  • Conviction.  Many executives talk about focusing on the customer; at Subscribed, the people I heard and talked to really seemed to understand the implications of this and had built their operations and business with this mindset.  This was the rare environment in which most people understood the concept of customer success in SaaS and why it was vital to the success of that business model.

The foundation of all of this, of course, is an understanding of what customer value means to the customer.  Going further, the key to balancing the customer value equation (the value derived from the application equals the value you capture in revenue) is understanding what value means to different segments of customers.  So while the SaaS industry needs to walk before it can’t run and so needs events like this and the people in attendance at Subscribed to be the evangelists for the new subscription economy and to spread the word of the importance of customer success, it’s important to mention that the ideal state should be one in which customer intelligence and customer behavior analytics play a central role in driving SaaS company success.

 

 

How To: Customer Segment Intelligence Gathering

In a previous post, we discussed the uses for and value of customer segment intelligence in SaaS companies. This post focuses on the approaches to gathering customer segment intelligence and provides a framework for developing an intelligence-gathering approach that meets intel objectives most efficiently.

In EMI’s experience, companies often under-invest in customer and market intelligence because they either perceive that doing research is too expensive and time-consuming or they have done research in the past that didn’t deliver value. With a focused research approach in which methodology is aligned with objectives, however, neither of these should be the case.

Start with an Objective

As the previous sentence suggests, successful research always starts with a clear, strategic objective. Often that objective will emerge out of anecdotal identification of potential gaps in knowledge, for example:

  • Penetration in a particular industry isn’t as robust as you would have expected based on the fit between the industry’s needs and your software’s benefits
  • Sales closes significant new contracts with several customers from an industry not explicitly targeted through marketing
  • A group of customers are not succeeding in implementing the software as quickly as other customers
  • Several larger customers cancel or reduce their subscriptions

In each of the examples above, observations of behavior leads to questions—What is driving less-than-expected industry performance? How did these customers find out about us and can we target more like them? What are the impediments to implementation? Why are larger customers cancelling? These questions can then be turned into research objectives: understand how to increase penetration in an under-penetrated or emerging segment; identify customer experience improvements that can improve time to implementation and retention.

Sometimes the need for research arises when a business begins to pursue a new, untested venture. Common examples would be the development of a new product/service, the enhancement of an existing product/service, or the pursuit of an entirely new market.

While the genesis of the research may be different, the approach must be the same. Discipline around objective definition is vital to avoid trying to answer every question about the de novo opportunity. For example, if the research needs are in the area of product development or enhancement, potential objectives are:

  • Collect “blue sky” input to build a list of potential new features for customer segments with high growth potential
  • Test the value to existing customers segments of new features that have already been defined

Each of these two objectives drives a different research approach. Whatever your objective, defining it and maintaining it as your lodestar throughout the research development process is the key to efficiently capture the insight you need and avoid gathering information you don’t need.

Identify Your Methodology

“Research” does not always mean a survey. In fact, it is likely that customer data analysis, secondary market research, in-depth interviews, and/or focus groups could be better methods for achieving your research objectives.

The key to determining which method will best meet your needs is articulating the kind of insights you need and the most logical source of those insights. For example:

  • Do you need to identify differences between customer segments or find what all customers have in common?
  • Are you trying to gather initial, guiding information to develop a list of potential new features or are you trying to understand the relative value of features that have already been conceived?
  • Do you want to understand what existing customers value or the size of the potential new market for your product?

The answers to questions like these will guide whether you pursue qualitative focus groups, interview or survey existing customer, analyze customer usage data, gather secondary research into industry trends, or conduct broad market surveys.

Know When to Stop

There is a famous quote from French author Etienne de Saint-Exupery: “Perfection is attained not when there is nothing left to add, but when there is nothing left to take away.” Perfection may neither be obtainable nor even a desirable goal in research, but the need to limit and control the compulsion to add—questions, completed surveys, interviews, data—is both strong and vital to research quality and utility. The goal should always be to do the least amount necessary to ensure well-grounded decisions and outputs. If you can’t articulate how a question will contribute to better decisions or outputs or how collecting more data is likely to change decisions or outputs, it’s time to stop.

Customer intelligence is a vital tool for identifying and scoping new market opportunities, grounding product development decisions in an understanding of customer value, and honing in on causes of under- or over-performance. Amassing this intelligence isn’t easy, but when approached in a disciplined, grounded way, it almost always produces a measurably positive ROI driven by new revenue and/or productivity gains.

LIMRA Marketing & Research Conference Wrap-Up

EMI recently attended the LIMRA Marketing & Research Conference at Disney World. Our take-away from the conference: No business today can achieve sustainable growth and gain market share without being customer-centric. Easy to say, but less easy to implement.

As an exhibitor, we had dozens of conversations on companies reassessing and refining their client-centered strategies. The challenge of operating with a consumer marketing lens, versus the traditional product-centric lens, which so many companies have done, was well expressed in a recent McKinsey report* on U.S. retirement readiness:

[Providers] “have a unique, largely untapped opportunity…But to capture it, firms must stop driving product innovation based on actuarial models and instead lead with a strong consumer marketing lens…financial institutions must take a much stronger consumer view as they create new product prototypes.”

These challenges relate to how companies engage with their channel partners to enable customer-centric throughput. For example, one mutual fund leader at the Conference addressed investment language and how “financial security” resonates far more than “financial freedom.” An insurance leader explained the need to help agents establish an online social presence and keep diverse customers engaged through social media.

The LIMRA event helped us to crystalize several fundamental questions:

  • “Am I using customer-centricity to achieve competitive advantage with my channels and end-customers?”
  • “Is my organization unified in this approach, even if product, sales and research are in silos?”
  • “Am I extending my consumer-centric expertise and assets (e.g., research, collateral to advisor and agent channels) that arms advisors and agents with educational and motivational client tools?”
  • “Am I adapting core messaging to engage different generations, particularly as they age and their needs evolve, across relevant traditional and digital communications?”
  • “Am I preparing for what my distribution channels will need in the next two years based on what my research, marketing analysis and industry trends are reporting now?”

These questions speak to the need for strategies and tactics to help financial service institutions to grow share with their captive and third party distribution channels. EMI examined many of these questions at our recent webinar Four Strategies to Win the Hearts and Minds of Your Advisor Channel – and Grow Share which shows you the need for customer-centric throughput and the importance of building better advisor relationships that can be adapted to sales channels and ultimately end customers. This is a topical concern of research and marketing experts at investment and insurance firms alike as we clearly recognized at the LIMRA event.

 

* McKinsey & Company, “Why Are We Not There Yet? An Update on U.S. Retirement Readiness,” May 2013.