Category Archives: Customer Experience

The Implications of the “Perpetual Campaign” of Customer Success Management

In the political world, there’s lots of talk of the “perpetual campaign”—the unceasing cycle of fundraising, speech giving, and vote soliciting. The reality is that for SaaS companies, the state of being should likewise be understood as a perpetual campaign. This is because with SaaS, every moment using the application represents a customer touchpoint that influences customer decisions—about whether to expand utilization, about whether to upgrade to a more advanced version, about whether to invest in additional services.

For this reason, it is vital that a marketing mindset and marketing capabilities be an organic part of the CSM organization. Specifically, successful CSM needs to:

  • Understand Customer Behavior. It is vital to the success of a CSM organization to understand customer behavior and attitudes. Market research into customer satisfaction, customer decision-making, propensity to recommend, and segmentation can all contribute significantly to building a CSM team that delivers measurable value to the organization.
  • Influence Customer Behavior. Core to the CSM function is influencing customer behavior towards activities that result in successful utilization of the application. To execute this successfully requires customer data analytics skills and the ability to draw conclusions, make predictions, and act to compel the desired activity—all of which should already be part of the marketing function.
  • Test and Learn. Because understanding and then influencing customer behavior is an iterative process, a systematic testing and learning approach to CSM activity is important to optimize efficiency and effectiveness. Whether pre-contract, during onboarding, over the course of ramp-up and utilization, or triggered by specific milestones or activities, the opportunities for communications to boost CLV (Customer Lifetime Value delivered through conversion, retention, up/cross-sell)—and therefore, the opportunities for testing and improving communications—are limited only by resource availability.

To distinguish itself from traditional customer service, the CSM team needs to take a proactive approach to customer communications, rather than being reactive to customer problems. As the organizational function most responsible for proactive customer communications, marketing (whether in the form of shared resources or in the form of dedicated CSM staff with marketing training) needs to be a part of the CSM effort.

Where online sale of lip gloss and B2B software customer retention converge

Sometimes marketing inspiration and confirmation of instincts comes from places you wouldn’t normally look. This recent blog post on getelastic.com is case in point: http://www.getelastic.com/the-easiest-way-to-increase-conversion-by-20/. On the face of it, this post would seem to be quite far afield from the world of customer retention in B2B software, or any of the other B2B industries in which EMI works for that matter. And indeed there isn’t much that links lip gloss and software; but there is a link in the approach to solving marketing challenges.

The getelastic blog post starts off with a research-based data point: ecommerce customers are 20% more likely to purchase a product that has at least one customer review. Then, based on that data point, it presents several reasonable ways to obtain that key *first* review. The ways to do this are only important if you’re interested in driving web purchases. What’s important outside that context – and especially in a B2B context like CSM strategy for SaaS – is the way in which marketing research and analytics have identified an operational measure which becomes the strategic focus. Increasing web sales is obviously the business goal, but it’s so broad and influenced by so many factors that it’s unwieldy as an operational focus. By isolating one key factor that has a significant impact on the objective, exploration and testing of tactical options becomes significantly easier. In mathematical terms, you solve for “reviews” because you know that it will drive conversions.

Take this approach out of the world of online sales of lip gloss and into the world of B2B software customer retention and it is still just as effective. Retention is impacted by a multitude of factors –satisfaction, perceived value, switching costs, depth and breadth of utilization – each of which can be affected by a set of strategies and tactics. To optimize retention, you must first sift through all the potential factors to identify those that actually have the greatest impact. Once you have effectively ranked the factors based on their likely impact, then you can develop retention marketing strategies – new communications approaches, new messaging, testing – that specifically and precisely aim to drive improvement in that factor.

What an Overnight Camp Can Teach Us about Managing the Customer Experience

Note: Since this involves a personal anecdote, I deviate from normal EMI blog practice and include my name at the bottom of this post. What follows is a cautionary tale about how an organization can destroy customer satisfaction and ultimately threaten revenue by not adhering to these simple rules:

  • View your CRM approach and communications through the lens of the customer.
  • Understand that satisfaction = reality – expectations: if you set expectations properly through communications, then satisfaction will benefit.

This summer, for the first time, my 11-year-old daughter decided that she really wanted to go with a friend to overnight camp. The camp we selected was one that the friend—and my wife—had attended in the past and enjoyed a great deal. For anyone familiar with overnight camps these days, it will not come as surprise to learn that the cost for a month of camp was not insignificant. My wife and I wanted our daughter to be able to have the experience, though, so decided to sign her up.

About a month before camp was to start, we received a communication that detailed all of the clothes that our daughter would need during her stay. All of a sudden, we were now on the hook for several hundred dollars more, but we appreciated the level of organization that enabled us to ensure that our daughter had what she needed.

But things took a turn for the worse, as detailed below:

  1. We were informed that in addition to the clothes on the list, we would also HAVE TO purchase several shirts and pants from the camp. No option to opt-out, no mention of that when we signed her up.
  2. Then, immediately after dropping her off, we were told that in order to communicate with her we had to sign up for an emailing service for which, yes, there was a fee.
  3. Now, with the end of camp approaching, we have received another communication: on the day we pick up our daughter we must—before we actually get to see her—settle up her “Canteen tab”, which comprises items (e.g., batteries, candy, soft drinks) she “purchased” from the little on-site store as well as the costs associated with day trips (e.g., to a nearby amusement park) planned by the camp.

All these additional costs took us by surprise. Maybe they were buried somewhere in the material provided about the camp, but they certainly weren’t prominently displayed. Moreover, we had no control over the expenditures. I’m confident that opting-out of the amusement park trip was not an option, nor would I have wanted to deprive my daughter of the experience, but since the camp knew it was going to charge me for these things, why didn’t it clearly tell me upfront…or better yet, why not build the charges into the cost of the camp?

And that brings me to what this whole experience should teach us about the importance of thinking strategically about the relationship between poor customer experience and lifetime value. My daughter might come back from camp having had so much fun that alternatives will not be an option next summer, and the camp will retain us as customers. However, the camp’s poorly considered pricing and communication decisions mean that even if my daughter loves it, I don’t. The next time another parent asks me how it was, my answer will be “Well, my daughter thought it was great, but it aggravated me like crazy….”

That’s called negative word-of-mouth and it should be a cause of concern for any business—but especially ones like this camp that relies on referrals for most of its marketing. Now, not only am I on the fence about sending my daughter, but I’m sure the parents I talk to will have second thoughts about sending their children. Avoiding this problem wouldn’t have involved any loss of profit for the camp; all it needed to do was follow the rules laid out at the top of this post.

Anthony Nygren