Reimagine Customer Success

Designing Organizations Around Customer Value

Sasi Yajamanyam

• Publisher: New Degree Press
• Year: 2021
• ISBN:
  9781637305300
• Edition: 1
• Topic: Business
• Subtopic: Customer Relations
• Index: Business

Each major economic shift from the Industrial age to the Digital age has given rise to new sets of management practices. Yet, we have not changed how companies are organized and teams are managed to reflect the needs of the Digital age. Reimagine Customer Success explores how to design organizations that manage customer relationships, with a focus on organization-wide alignment around the customer and what success means to them. In this book, you'll learn about a new model for customer success, with some key insights focused on:

• Building a common understanding of customers.
• Transforming organizational models in an effort to deliver exceptional customer experience.
• Changing how customer-facing functions are managed - who is hired, how work is done, and which system investments are made.

If you believe customers are the growth engine for your company, want to bring a customer-centric mindset to life, or are looking for a framework to bridge the organizational silos, Reimagine Customer Success is a long overdue addition to your professional library. Customer success is not just a function, it is the promise we make to customers.

Part 2

What is in the new model for customer success?

Chapter 4

Define Customer

Who is your customer? The answer to this question is not as straightforward as one would think.

Imagine asking this question in a typical strategic planning meeting of a SaaS company. You will get a range of answers. Sales teams will talk in terms of buyers and influencers, Marketing teams will talk about buyer personas, Product teams will talk about user personas and roles, and Customer Success teams will talk about executive sponsors and users. Then there will be talk of customer segments, ideal customer profiles, and more. While these are not necessarily wrong answers, the problem is each function within the company has a slightly different answer.

For any company, “knowing your customer” is table stakes and something most companies think they have a firm handle on. After all, how can one sell products and services without knowing the customer? Let us look at a couple of scenarios that I came across in my research.

Jen Chiang is the director of Customer Success at Yup, a math tutoring app, and the author of The Start Up’s Guide to Customer Success. In our interview, she said, “Our Sales team is constantly iterating on who they are selling to. They may try community colleges instead of high schools, which is our main customer segment.”

That is what you would expect the Sales team to do—push the envelope and find new buyers. Other teams in the company, like Marketing and Customer Success, will need to change what they do and how they do it for each new type of customer. For example, what does it mean to implement the tutoring app at community colleges? The teachers and students at high schools and community colleges are quite different. The students at a community college could be a mix of young adults and working professionals, and there are more adjunct teachers. Does that change anything?

Another common scenario plays out something like this: if you ask a product manager at any company, “Do you know who your customers are?” they will most likely give you a list of customer personas and use cases; this is their view of who their customers are and why the customers use their product. If you then walk over to the Customer Success team and ask, “What are your common reasons for churn?” the answer is usually, “We are selling to the wrong customers.”

Why is there such a disconnect?

Different teams across the company have their own idea of who the customer is, and they arrive at this idea from their unique perspective. To make it worse, each unique definition of the customer, why they buy the product, and how they use the product changes regularly, and different teams don’t stay in sync with these changes.

In this chapter, I offer a few different ways to look at the customer definition. A suggested way to use this framework is to have different teams—Sales, Marketing, Product, and Customer Success (including Success, Services, and Support)—come up with a common definition of different types of customers. They can then use that understanding to develop common approaches to address the needs of these customers.

What are the challenges with how we typically define a customer?

The most common approach many companies take is to segment customers by revenue and industry. It is common to see sales teams dedicated to selling to mid-market companies (those with less than a billion dollars in revenue, even though this definition changes across companies) or enterprise customers (companies with more than a billion dollars in revenue). There are also some teams focused on certain markets, such as healthcare, government, education, etc.

It is a sound approach to understanding trends in these segments and applying different techniques to engage these customers. However, this segmentation is used primarily in the sales process. Other functions do not always find this segmentation useful.

Another approach that is common is to develop an “ideal customer profile.” This describes the customers who are most likely to buy and use the company’s products. The problem with this approach is that it is only effective for an individual product, and even then, not in all cases. What happens when a company sells many kinds of products, and customers use the product to solve different problems than the company intended? Last but not least of the problems is that the ideal customer profile is not static, and it changes as the company grows.

All these approaches miss the fundamental, human element of the customer. They help us design our internal teams and processes but miss the mark on truly understanding the customer, their needs, and motivations.

Buyer vs. deployer vs. user

A sale is usually a promise to deliver value in return for investment, and there are different people involved in making and keeping that promise. A typical enterprise software sales process goes something along these lines: The salesperson builds a strong relationship with an executive, learns their business challenges, proposes the solution they (the salesperson) are selling, and convinces the executive to write the check. The executive is the buyer.

The buyer then brings in their team to implement the solution. Let’s call this team, or individual, the deployer. Once implementation is complete, the solution is deployed to others in the organization, who are the users of the solution. The gist of this scenario is that it is important to have a clear understanding of all these moving pieces.

Rav Dhaliwal is a former CS leader and currently an investor and venture partner at Crane, a London-based venture capital firm. Rav and his team work with hundreds of start-ups and understand what separates those that are successful from those that are unsuccessful. He summarized his observations in a blog post titled “There Is No Such Thing as Post Sale,” stating, “These companies have realized (and accounted for) the fact that there is often a very big difference between the buyer (who definitely has specific outcomes in mind) and the people tasked with deploying and eventually using the software (the “deployer”).

This is particularly true when a vendor offers many products, and the customer has bought more than one. Imagine the company I work for, ServiceNow. We have several products to manage workflows across several parts of an IT department, each with its own unique users. Our products are used by help desk operators, project managers, and IT administrators—among others. We also offer products used by Human Resources teams, Customer Service teams, and many others.

The problem of buyer vs. deployer is pronounced for my company, ServiceNow, as will be the case for any company with many different products bought and used by different people. In ServiceNow, there are various combinations of buyers, users, and deployers, and not all of them are part of the same conversations, nor do they all have the same motivations in relation to adopting our products. In his aforementioned blog post, Rav goes on to say, “Understanding the ‘distance’ between the purchaser and the deployer/end user and preparing to close it during the sales process is something each of these companies do particularly well.”

Rav and his team’s experience highlights the need for understanding the different postures that buyers and deployers take toward adopting the product. In a similar vein, product users should be treated as different-in-kind customers. The first step to understanding the “distance” between these customers is to build a common understanding among different functions, like Sales, Marketing, Product, and Customer Success. This way the entire company can take steps to understand and address the needs of these customers.

Prospect vs. customer

The most common growth model in SaaS companies today is to sell one of your products to a customer and then sell other products to expand the company’s footprint. This model is commonly known in the industry as “land and expand.”

Sales and Marketing teams at most companies use the phrase “buyer’s journey” to define a series of interactions that potential buyers, called “prospects,” have with the company. These journeys document the key questions that a customer might ask at each stage of the journey and the company’s answer. Amanda Sellers presents a good example of a buyer’s journey in a blog post titled “What Is the Buyer’s Journey?” on HubSpot’s (a popular marketing automation software) website. There are three stages in the journey:

• Awareness

• Consideration

• Decision

Many of these journeys are built with a new prospect, not an existing customer, in mind. In most cases, the company does not know a lot about the prospect. But in the “land and expand” model, the company knows a lot of contextual information about the customer. What does the buyer’s journey look like for a prospect who happens to be a customer? How can we engage these prospects differently?

Marketing teams create content to entice a prospect to be interested in the products of the company. They try to convince them of the value proposition using this content. Similarly, Customer Success teams build content to help customers implement and use the product. In most cases, these two types of content are completely different. This difference reflects the silos within the company. In my experience, Customer Success content can be very useful for marketing purposes as the customers feel more confident in the company’s ability to support them after the sale.

My team at ServiceNow recently published a new document type called Success Map. Within the document, we outlined the activities a customer should perform to successfully adopt a product, including activities after the implementation, like defining the right roles. The last step in this map was a recommendation for the next set of products to implement. Not surprisingly, our Sales teams find this document to be extremely valuable for two reasons. One, they can build credibility with the customer by helping them successfully (and quickly) implement the first product that the customer bought. Two, they can set up the next sale as a natural extension of the first sale and implementation.

It is in the best interest of both the customer and vendor to use the information they know about each other to expand the relationship; this makes the process less of a transaction and more like a relationship you are navigating.

Customer’s customer

In some cases, the end user of the product is the customer of the company that is buying the product; I will call this group the end user throughout this chapter. The value of the product to the company that buys your product is directly dependent on the value to the end user.

Nora Khalili, who runs a consulting practice advising start-ups on their CS strategy, makes defining customer value a central piece of her advice. When I interviewed her, she talked about a previous role at Dext, a receipt scanning software for small accounting practices. Nora says, “The hardest part was to get accountants’ customers [small business owners] to scan the receipt. That was the biggest struggle.” Small business owners have to change how they do their work, scan receipts as they come in instead of saving them and sending the stack to the accountant.

In this case, even though the accountants were paying for the software, the real customer was the small business owner—the end user of the s...