How Do We Sell?
I am of the opinion that the way SaaS software is sold today is totally wrong, especially if companies follow the traditional approach of selling software. It shouldn’t just be about selling, acquiring new logos, and moving on, but instead more focused on retaining the customer. Let me explain.
I remember my days as a management consultant at Ernst and Young during which we were measured on successful implementations and solution launch. We didn’t stay on to see if the customer was adopting the solution or getting value from it. Market research shows that the probability of selling to an existing customer is 60 – 70%, whereas the probability of selling to a new prospect is 5-20%.
In the coming years, cloud computing will be the biggest technological disruption to how businesses are run. More small and medium businesses are adopting cloud apps with an average of three SaaS solutions per company.
With statistics like this, it is imperative that SaaS companies focus on customer experience and retention for revenue growth and cost savings. You might say, hmm, cost savings.. how? Well, it costs 6–7 times more to acquire a new customer than retain an existing one. So simply concentrate on retaining customers, and voila – costs reduced.
A Paradigm Shift
This drives a paradigm shift into how we sell and retain customers, and the advent of Customer Success. In the recent past, I have met several Customer Success leaders and practitioners at conferences and summits, all of whom are frantically trying to figure out how to build a successful Customer Success organization. Since It is a fairly new industry, there is no defined approach, per se. Besides, the strategy for a developing a Customer Success organization with complex product offerings versus a simple products, and paid versus free products may differ. In essence, a cookie-cutter approach may not work.
I am one such practitioner, who was responsible for building and shaping a Customer Success organization with complex product offerings.
Here are the top 5 key lessons that I can share based on my experience:
1. Customer Centric Mindset Across the Company:
Customer Success cannot be the responsibility of one small organization. Instead, every employee in the company has to share a customer-centric mindset, and know what their role is in the customer experience framework. The end goal is to keep customers happy with continuing use of the solution. I implemented a companywide HappyCustomers™ certification to drive a cultural shift. Every employee in the company is certified, and understands that a happy customer is one who adopts our solution and receives ongoing value. For example, a developer with a non-customer facing role understands that his job is to ensure high quality in order to make customers happy.
2. Success Framework to Drive Adoption and Business-minded Outcomes:
Our customer buys our SaaS solution with the expectation that they are going to realize value from the solution. To put it another way, they anticipate that they will achieve their desired outcome. I developed a success framework and a HappyCustomers™ Adoption Program that lays out how to engage with the customer throughout their lifecycle and help them achieve success and a great experience.The process must start well of well ahead of customers “going live”, ideally soon after the sales process is complete. It involves aspects of change management as well. The key is to engage in Readiness Assessment that focuses on the following 5 areas – Business Alignment, Communication, Training, Hyper-Care Support, and Adoption.
3. Develop a Toolkit for Adoption and Value Measurement:
Develop a toolkit that Customer Success professionals can leverage to guide your customers through achieving high user adoption and measurable value. Collaborate with your customer to lay out an Adoption plan and establish Adoption and KPI goals for each quarter. Key Performance Indicators (KPIs) are a great way to measure ongoing value. It is important that you work with your customer to define and build the KPIs, because the desired outcomes for different customers may vary. Prepare a library of KPI and Adoption dashboards that can be tailored to a customer’s desired outcome.
Develop an Adoption Survey which should be administered 30-45 days after go-live. Surveys are a great way to understand the end users perception, and can provide you with actionable themes to counter adoption challenges. Offer Usability Audit and Solution Review as an option if adoption challenges are due to usability issues. With complex solution and customizations, usability becomes a key factor in adoption. Another very important tool kit that can help you be proactive is tracking customer’s usage pattern. In fact, this is a key attribute in predicting churn risks. I developed an Early Warning System, that alerted CSMs when usage dropped, or there was a challenge with stickiness, as measured through feature usage.
4. Voice of the Customer:
Listen to your customer! I cannot stress enough how important it is; customer loyalty increases when you listen! Through ongoing interactions, quarterly Customer Success surveys, annual loyalty questionnaires, and feedback from Customer Advisory Boards, you’ll get deep insights into how to effectively prioritize the common key themes you record.
5. Invest in developing your Customer Success Professionals:
The most effective Customer Success professionals become the trusted advisors of their customers. They represent the voice of the customer within your company, and advocate for their issues. They may not be the best friend of all departments because they bring up issues, escalate and fight for customers needs. CSMs need to transition from being reactive fire-fighters and coordinators in charge of bringing teams together to address issues, to a proactive and technologist role where they add value in their interaction with customers.
Today, the ideal CMSs are technologists who have a blend of technology, business process, and program management experience. This is in addition to having the ability to build and nurture relationships, communicate efficiently, and work effectively with cross-functional teams. Make it mandatory for CSMs to be certified in your product offering, and keep the certification current. If you don’t have the right talent, focus on hiring CSMs with the right background and build a high performing team. Pair junior CSMs with experienced CSMs as mentors.
A 5-Step Plan
Given my first hand experience in Customer Success, I am qualified to say that this is a much better way to sell. Customer Retention requires a framework for renewed success, and a minimum down-payment for structure and best-practices, but yields positive turnover every year. If you follow this five step framework for establishing Customer Success in your organization, I can guarantee that the executive board will be blown away by your progress and revenue influx.