Why KPIs And Value Engineering Play A Growing Role In Customer Success

Seamless digital communication has fundamentally changed the entire customer relationship cycle, from sales and marketing to customer service and updates. From frequent sales meetings and missed service calls, businesses today can use digital technology to build customer relationships that last a lifetime. This has given rise to a new role in customer relationship management (CRM) called customer success. In a series of articles, we've explored the ongoing evolution of customer success. Here are the funds for today's business.

As the software industry feels the impact of continuous digital communication with its customers, the software industry is moving away from customer-installed software to software as a service (SaaS) vendors. SaaS providers have found that by staying digitally connected to their customers' actual product usage, they can gather valuable metrics about that usage. This helps inform product development early on popular features and features that need improvement. The provider later discovered that the usage meters contained alerts that alerted subscribers when their subscriptions were not up for renewal, allowing them to take action to order a renewal. Thus, the Customer Success function was born.

A lot has changed since the beginning. On the one hand, every business is now harnessing the power of digital technology to improve the customer experience, and as a result the early practices of SaaS providers are now relevant in all industries. This shift to Everything as a Service (XaaS) will change their approach to customer engagement, including adopting customer success techniques.

Second, customer success itself increases. In the past, customer success focused on analyzing metrics related to usage and adoption, as this proved to be an important indicator of customer engagement and churn. But for a product, these metrics, while still important, are only part of the picture.

Customer-centric metrics

As vendors become more sophisticated in the area of ​​their customer success, they focus on more customer-centric metrics based on the business goals the customer wants to achieve by using the vendor's product or service. In an interview earlier this year, Neeracha Taychakhoonavudh, EVP Global Customer Success at Salesforce, one of the first SaaS providers to introduce a Customer Success function, confirmed this trend toward measuring customer outcomes. He says:

For Salesforce, customer success is all about serving and retaining our customers. But the criteria you mentioned, acceptance and use, are very internal. So does this really mean customer success for every customer? What value are they getting from their investment? What business results have you seen?

Another leader in customer success engineering, subscription management provider Zuora, has guidelines for 28 KPIs that align with the goals customers can achieve when using their product; b. Promoting usability or versatility. Amy Connery, vice president of the Zuora Institute of Customer Success Strategy Engineers, explains the customer success philosophy:

Then we work with the client and try to understand which of these 28 initiatives they really want to achieve. ...then we link specific KPIs to them and it all flows into a customer success plan. All these KPIs are tracked live in Zuora.

This is how we manage these clients over time. And it allows us to create personalized views of how customers expect value with Zuora and how we help them achieve it.

The goal remains to generate revenue, but is not based solely on the customer's success in using the product and the salesperson's success in selling the product. Konair said:

My North Star is that there are successful subscription businesses that win, thrive and grow over time in the subscription economy. OK, it could be the number of subscribers to this proxy in our system, is this increasing? Have the number of income reports sent to our system increased? This is definitely something we focus on trying and understanding if our clients are getting the results we are working to help them achieve.

Otherwise, we have a number of steps that we take directly with clients to ensure that we have all the necessary resources to ensure that they see this success, both within the system and as a team like myself.

Value engineering

Like many other vendors, Salesforce now uses a pre-sales value engineering process to identify the outcomes that matter to customers, then builds metrics based on those outcomes to measure the value achieved. This baseline is updated from time to time as the client's business changes. The term value engineering has a long tradition in business software. It is often used to justify investment in a new software project, but in most cases it is discarded after the deal is closed. From a customer success perspective, value engineering is an iterative process throughout the product lifecycle, even more so with the XaaS model. As Nick Mehta, CEO of customer success platform Gainsight, explained in a recent interview on Customer Success Advancement:

The crazy thing is that you create a value engineering model that tells you the ROI of what you will get from buying the product. And that's the last time you talk about price.

In theory, this should be a model that you review every six months and say: "Okay, you said we'd charge this much." That's how we do it. By the way, the reason we can't do X, Y and Z is because we want you to do something, because often the customer needs to do something too.

So it's about connecting value engineering with customer implementation and success and making it a common thread.

As the XaS model expands beyond SaaS into other industries, tracking customer success is no longer limited to metrics captured by the product itself. It must also consider all digital ways to interact with customers, especially in industries where the product experience is as important as the unique features of the product or service.

Martech package is very complex. now you can see what people are doing. They have an online self-service support site, you can see what they do there. You can have an online community. So overall there is a lot of digital participation.

What I see people say. "I want to use all this digital engagement to understand what's going on with the customer, what value they're getting, what value we can provide." So start using the product. And, from what we've seen, it extends to almost all digital interactions.

Amount of KPI

According to Zuora, Gainsight has defined more than two dozen different business processes performed by its own customers using the platform. b. Customer risk management, incoming transfers, etc. He then links these to KPIs in the sales process and works with clients to set specific KPI targets such as: b. Increase total liabilities from 82% to 84%. Finally, he creates a customer success plan that defines the tasks and steps to achieve this goal. The company plans to manufacture this process, clients can in turn create the same KPIs and customer success plans for their customers.

Measuring KPI goals is becoming more common. Spend management provider Coupa has long worked with clients to choose three goals they want to achieve by promoting their products. b. Increase the value of managed costs beyond a certain amount or reduce the duration of the process. Buy questions for a few days. The provider analyzes the overall behavior of the customer community and creates metrics to select and adjust these targets based on industry averages.

At Selonis, a business process implementation provider, companies prefer to talk about customer value rather than customer success. Work closely with clients to accurately measure the cost of each project and ensure value is delivered. In an interview at a recent event in London, Nick Mitchell, UK Vice President and Head of Country, and I in Ceylon, told me:

The actual result depends on the given value. Usually dollar value, but could be KPI [customer] and customer acquisition or risk and compliance. Many financial services companies use risk and compliance. If we can reduce their risk, and we can demonstrate that risk reduction, there is value in that.

Usually we define values ​​and plan to realize those values. Then we asked their finance department, whoever it is, to sign that their prices are real. (This is) a very formal and structured process to ensure that a particular proposal is made in good faith and approved by the appropriate standards of this organization. This method is part of the customer's value package.

Helping customers realize desired value is the primary goal of the customer success function, not increasing adoption and usage. Gainsight's Mehta typically says companies should address these goals and adjust their product development and marketing accordingly. He explained.

Your selling price should be related to your selling price. So people go back and reinvent their marketing approach based on added value.

Step Four Now that you have all the information about what value customers are looking for and what they are getting, the most important user of this data is the product. Because they can begin to see the difference between the value they want and the value they deliver. This is a gap that can be filled depending on what type of product it is.

Got it

When I first started thinking about a results-based approach to customer success, it was a very young field. Techniques and tools are now starting to develop, but I think it's still in the early stages of maturity. It seems clear that customer success is measured by the true value of the customer, and that value should be measured as much as possible. This is easier in some areas than others. financial indicators such as costs and revenues are easy to measure, while productivity indicators such as time and resources are often not used.

Once clear KPI goals are established, the vendor's Customer Success team must determine what steps can be taken to help customers achieve those goals. This will be a mix of advice, guidance and training, as well as ensuring that the technology does the job it is designed to do. If vendors are smart enough to collect comprehensive data about how customers use their products or services, they can provide useful benchmarks to support these policies.

Ultimately, the entire organization must align with these customer success metrics to ensure that the product best supports the customer's goals and communicates effectively to the market. None of this would be possible without a digitally connected set of products or services, as well as a broader customer experience.

Steps to set key performance indicators (KPIs) for data analysts