Issue 61 – Focusing on the Right Customer
Customer Success is by no means a reactive position, there is no waiting for customer complaints. Instead, being successful at Customer Success requires you to always be one step ahead. By proactively helping your customers be successful with your product, the result is retention and growth. Problems arise when Customer Success professionals stretch themselves too thin and can no longer keep up. The solution is prioritization. In this issue of the SaaS Tattler we look at prioritization strategies to help you focus on the right customer.
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How do you find the right balance spreading out your resources when not all customers are created equal? Prioritize by segment and tier. A major aspect of Customer Success software is the ability to deliver high touch at scale. In this article, Nick Mehta, CEO of Gainsight, covers some of the key considerations for customer tiering.
The big challenge is if you go from one to 10 to 100, how do you manage that all? One of the core things is tiering. You could start by saying, ‘How much do they spend with me?’ You could start by saying, ‘They spend $100,000 a year, $10,000 a year, $1,000 a year,’ and you could have tiers.
Once you’ve established your criteria, Mehta suggests the next step is to define and formalize levels of service you’re going to provide each customer tier. On a basic level, companies will typically take a three tiered approach.
- Top accounts: This level is typically high-touch. You’re actively spending one-on-one time with customers and maybe even making on-site visits (if the ACV justifies it). If your company is selling to enterprise customers, they may fall into this category, where you want to make sure every touch is great.
- Middle of your customer base: These customers are big enough that they absolutely matter, but not every one of them can be treated individually. The ability to segment within this tier and prioritize is key.
- Smallest customers: These customers matter, too! Depending on your model, they might actually constitute the majority of your customer base. You need to make them feel like you are reaching out and there for them every day, but the key is to find ways to do that through automation, taking the principles your marketing team uses with your leads and applying them to your customers.
Technology has changed the way your customers buy. They can buy anything they want and have it delivered anywhere. Your competitors will look for any way to undermine your strategy. The only way to keep afloat is to retain your existing customers and the only way to retain your existing customers is to become customer-obsessed. In this article, Kyle McNabb, VP of Research Strategy at Forrester Research, explains how some customer-obsessed enterprises use the customer lifecycle to support a continuous relationship with their customers.
A Business Technology Agenda Will Sustain New Competitive Advantage
Center on technologies that support the customer life cycle. The customer life cycle, and the systematic approach to transforming the customer experience, will push you to prioritize new and different technologies. You’ll prioritize life-cycle solutions and engagement platform technologies to deliver seamless and compelling customer experiences.[…]
What It Means For CIOs
Vendors will merge based on where they live in the customer journey. Mergers in the tech world are commonplace. But in the age of the customer , vendors won’t combine based on what department they sell into (marketing versus IT). Instead, they’ll attempt to dominate elements of the customer life cycle. We’ll see packaged app suites for discovery, for service, and for closing the sale.
You know that success looks like for you but do you know what success looks like to your customer? It’s not easy to answer that question and most often your customer would struggle to answer that question. Lincoln Murphy explains that to understand what your customer needs to be successful, you need to understand their desired outcome. Prioritizing by outcomes allows you to focus on the right customers because they have defined their stage in the journey to make them successful.
This is where “Desired Outcome” really starts to shine as a way of thinking about Customer Success.
It’s our job to understand what the customer is trying to accomplish, but moreover, it’s our job to understand how they want to accomplish it.
And of course the airline analogy I used can play out in other transportation methods, too, but also in pretty much every product and service category.
But in technology, we’re seeing this all the time:
Enterprise software is being disrupted by cloud offerings even if on-premises products do the same thing AND there is infrastructure in place to support them simply because the cloud experience is preferred.
Products with old-feeling (Legacy) UIs are being displaced by products from smaller vendors who understand the need in certain market segments for a great, modern UI, to the point where UX trumps feature parity.
Mobile-first startups are disrupting even “modern” cloud providers as consumer desires are evolving faster than “legacy” cloud providers can – or are willing to – keep up with.
Uber disrupted the awful experience of taxis or – like in Dallas – disrupted the inefficient valet procedures at popular restaurants.
So while helping your customer achieve their Required Outcome, helping them achieve their Desired Outcome is even better.
And some people are willing to pay more for that Desired Outcome.
So… does “desired outcome” resonate better? I think so.
I have so many accounts, how do I prioritize them? For the most part, Customer Success teams are fairly small compared to the amount of customers they are managing. It’s impossible for even the best Customer Success professionals to give their full attention to all their customers. Which is why it’s time to make prioritizing a priority. Derek Skaletsky, CEO of Knowtify offers a simple framework to prioritizing your customers by opportunity.
Potential size is pretty straight-forward. This is basically the answer to the question -“How big could this account be?” Don’t worry about how big it is NOW, just worry about how big it could potentially get if you were to “squeeze all its juice”.
Express the Potential Size of the Opportunity with letter grades (A, B, C). I also recommend putting a little more definition around these levels by applying some dollar amounts that fit for your business (an A-account should have a potential > $50k; B-accounts between $10-$50k; C-accounts below that – something along those lines).
Likelihood for Growth is a little harder. What you are looking for here is an assessment of how hard it will be to grow a particular account. Do you have a great internal champion that is going to sell this in across departments for you – making your job easy…or are there some major barriers (budgetary, political, legal, etc) which are going to really limit your ability to expand the account? Again, not an exact science, but you should be able to get a good sense for this from the initial sales process and early interactions with the customer.
Express the Likelihood for Growth with numbers (1, 2, 3).
Then when you put the two measures together, you get a grade for an account. An A1 account is one with a lot of potential room for growth AND a strong willingness to grow.
How often do you feel like you’re working for your inbox and not the other way around? Paul Philp knows your pain and offers some tips to help prioritize and focus on the right customer – Don’t Let Your Inbox Focus Your Attention!
Alex McClafferty explains why Customer Success is more than just a new Silicon Valley buzzword and could be the difference between failure and hyper-growth in Customer Success: The Best Kept Secret of Hyper-Growth Startups.
For people not working in a customer facing business it can be hard to distinguish between many customer focused titles. Jodi Beuder breaks down why It’s important to know The Difference Between Customer Service and Customer Success.
Companies to Know
Influitive – Powerful B2B advocate marketing software.
Nudge – Spend less time connecting, more time building relationships that matter.
Post Beyond – Enable your employees to consume and share your brand’s content.
Uplette – Dynamic, highly personalized creative optimization for mobile content.
Every week I issue this roundup of relevant articles from the customer success industry so we can learn from each other and share best practices. If you like what you read here, please consider forwarding to others. New reader? Subscribe.
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SaaS Tattler - Focusing on the Right Customer w/ articles by @nrmehta @lincolnmurphy and more!
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