Category Archives: Cross-Sell / Upsell

CS Boston – July: The CFO as Customer Success Ally

Customer Success is gaining significant traction, but it is still the “new kid on the block” in the leadership ranks of most SaaS companies. And just like the new kid, CS leaders need to find an ally who can guide and support them in obtaining both an appropriate share of spending and a voice in strategic decision-making. At the recent inaugural session of the Boston chapter of the Customer Success Association, I led a discussion with a panel of two CFOs who, through their comments, made a strong case for the CFO as a prospective ally.

If these two CFOs were at all representative of their peer group, we learned that there are several reasons for CS leaders to be optimistic about developing a fruitful relationship with that member of the executive suite. Specifically, CFOs:

  • Understand the financial necessity of capturing renewals and maximizing CLV
  • Aren’t caught up in who-should-be-responsible-for-what; they just want to see the financial impact
  • Are interested in a strategic view of improving the long-term health of the business and customer relationships
  • Believe in data

For CS leaders to forge strategic relationships with CFOs, they need to take leverage the CFOs’ mindset and respond to their motivations. The case for investing in Customer Success needs to be made based on evidence that spending—on CSM software, on an onboarding program, on additional headcount—will provide a return above baseline in the form of improved retention and/or increased lifetime customer value. This evidence, according to the CFOs, can take the form of plausible outside benchmarks or (and better) can be derived from testing.

Importantly, in calling on CS leaders to create tests to make the investment case, they are not looking for elaborate experiments that could be blessed by a statistician. They simply want real-world evidence of efficacy. For example, to make the case for the impact of CSM software on renewals, select a test group and more closely monitor customer utilization for a month. To make the case for investment in a customer marketing program, send several newsletters to a test group and analyze the correlation between engagement and the likelihood of renewal. Moreover, the tests themselves are an opportunity to forge an alliance with the CFO: by working with the CFO on the test design, CS leaders can not only assure buy-in if the test proves successful, but can also gain credibility and earn trust.

Four Things I Learned at Gainsight’s Pulse 2014

Gainsight held their second annual Pulse Customer Success Management conference May 13th and 14th in San Francisco.  With a reported attendee count of 900 (and as one of the 900, that number rings pretty true) and lots of breakout sessions, the event was full of people, content, and energy.  Here are my key take-aways, with the caveat that all those concurrent breakout sessions meant that I missed a lot of content:

1.  The Customer Success wave is definitely rising.  Between the turnout of attendees and the large number of high-quality speaker panels assembled, Pulse definitely made the case based on sheer quantity.  But beyond the numbers, the content of sessions and hallway discussions also evidenced the rising wave: this wasn’t a large collection of people collecting their swag; attendees were hungry for serious information and tips and advice on how to do things better, smarter, more efficiently.  The excitement around sharing ideas fueled the conference.

2.  There are real—and interesting—differences between the Customer Success challenges and goals across industry verticals.  While the core objectives and challenges in CSM—deliver and demonstrate value to customers; improve retention and CLV; define roles, responsibilities, and incentives for customer relationship management; develop and implement ways to measure and monitor customer health—are common to every team at every company, there are definite differences from one industry to another.  For example:

  • In the session on CSM in security, there was a discussion about the need for and challenges of demonstrating value and measuring customer health when an application largely works passively (i.e., email and other digital security threats are automatically scanned and stopped) and at least some value is delivered outside the product entirely (e.g., being a resource for authoritative information to combat ill-founded hysteria around a security threat).
  • In the session on CSM in HR, panelists highlighted the fact that they often have to think about not one customer persona but three:  in addition to the users (HR managers), they need to nurture relationships with the buyer (HR Director/VP), and even in some cases the candidates themselves.  If they lose sight of managing the relationships with any of those customers, it erodes value for the whole system.

3.  “Land and expand” is core to the SaaS model…but requires a commitment to and investment in  making up-selling and cross-selling effective and efficient.  A key part of the value proposition of SaaS—ease of deployment, controllable trial—naturally leads to the model of establishing “beachheads” within larger accounts and increasing CLV by expanding the contract footprint.  One problem with that: doing it with any kind of scale requires not only a rock-solid onboarding program to deliver a rapid time-to-value for that first customer, but an efficient and disciplined approach to leveraging the initial success to find and capture other opportunities.  Just as customer acquisition (aka, sales), has marketing support for lead generation, CSM needs support for building the pipeline for cross/up-sell.

4.  Strategy is a luxury in which many CSM teams don’t have time to indulge.  I think part of the reason for the high-level of conversations pursued in the halls and the significant numbers of attendees at break-out sessions is that many CSM team leaders and members simply don’t have time to grapple with strategic issues because they are too busy with tactics.  The good news is that conferences like this or virtual venues like the Customer Success Management Forum group on LinkedIn give practitioners the space away from the tactical to think strategically, learn about alternative approaches, and gain insights from their peers.  The bad news is that it doesn’t make it easier to keep strategy in mind when back at the office.

 

 

Customer Segment Intelligence Delivers Balance to Your Customer Success Initiatives

In customer success management, there will always be a tension between treating each customer as special and unique in order to ensure their success, and serving all customers without exploding the CSM team budget. One way to strike a balance between these two poles is the collection, maintenance, and efficient utilization of customer segment intelligence.

Customer segment intelligence is the knowledge base of elements relevant to the sale and utilization of your product/service by companies within a target segment. These elements would likely include:

  • Key “firmographic” attributes of companies in the segment (e.g., size, geography) that might influence purchase and adoption
  • Market trends
  • Decision-making structures and influence networks
  • Typical needs and objectives related to your product/service
  • Propensity for and approach to technology adoption
  • Common objections to purchase
  • Common obstacles to implementation/utilization

Equipped with this kind of intelligence, SaaS companies can develop segment-specific customer success programs and segment “playbooks” that will produce better results more efficiently.  They achieve this by being adapted to align with the particular characteristics and meet the particular needs of companies in that segment. A “one-size-fits-all” onboarding program is almost always better than no onboarding program is likely to miss the mark for some customers.  A custom implementation plan is highly effective but unscalable.  A customer segment intelligence-based onboarding program strikes a balance between these extremes by delivering a template that applies to a group of customers, but is effective because it is built on the foundation of knowledge of the typical operational constraints on the companies’ ability to get quickly to value and capture quick wins.

As is the case with the aforementioned onboarding, most customer success initiatives benefit from segment intelligence. For example, it is much more effective and efficient to have a series of segment email templates for cross-selling and/or up-selling rather than each CSM writing new emails from scratch for every upsell/cross-sell opportunity and rather than using a single, generic “canned” email that fails to be compelling because it doesn’t speak to the specific segment needs. Similarly, understanding when breadth or depth of utilization should register either as a concern (too low) or an opportunity (very high) requires knowledge of the relevant segment-specific benchmarks rather than benchmarks based on the entire customer base, much of which may behave very differently than the customers in one specific segment.

Moreover, this intelligence delivers further operational efficiency gains by enabling lesser-tenured CSMs to ramp up and effectively help customers faster. Playbooks, templates, and diagnostics provide a foundation of proven tools and process that gives newer CSMs with good relationship-building skills the opportunity to succeed quickly.

In an upcoming blog, we will discuss best practices for gathering and distributing customer segment intelligence.