What’s REALLY Important When it Comes to Customer Success!

I didn’t start in customer success by accident or otherwise. I was fortunate, if we want to call it that, to have picked up a book called B4B, written by Thomas Lah, J.B. Wood, and Todd Hewlin, leaders within the Technology Services Industry Association (TSIA) organization. I was appointed to represent my company at their annual Technology Services World (TSW) conference where they gave away this book and a couple others of which I grabbed a copy.

 I read the B4B book not knowing what to expect and not only found it very interesting but got really excited about the teachings and how it was transforming the way we do business. More importantly this book started me on a journey that transformed my life and career. That’s when I really doubled-down on what I didn’t know at the time was called “Customer Success” by another group of similar fanatics.

I believe the term and responsibilities of customer success were created by the SaaS community to keep a recurring revenue model recurring. So, it appears the customer success approach is more geared towards the vendors thirst for more revenue and protection of its existing revenue where the XaaS model is geared more towards working really hard to make our customers successful and in return we’ll be successful too.

As I learned about the “customer success” perspective of what was called “outcomes” for Technology as a Service (XaaS) business model by TSIA, I again got very excited because here’s another perspective or way to look at this new transformational change in business that adds more depth and understanding. And with increased understanding, more possibilities and better results can occur when implementing these principles and methodologies.

My first thought was labeling the term “customer success” to represent this end-to-end perspective of helping customers achieve their business outcomes is a great description. However, as great as it is, the teachings around it are somewhat lacking based on incorporating TSIA’s perspective into it. There are several, what I would say deficiencies within the teachings of customer success that I’ve found. Here are few examples that help deliver customer success in ways that are just being discovered and align to what TSIA has been communicating for over 10 years now.

I attended SaaStr Annual 2019 conference a few weeks ago where Austen Allred spoke about his experience in launching Lambda school. Lambda school teaches technical skills to students online, specifically programming skills. Their company was floundering until they changed their business model to reach what TSIA calls “The Outcome Offer: Level 4 Supplier”, written about in their book B4B back in 2013. This is where we only make money if our client makes money and our income is based on their income, so we get a percentage of what they make.

This takes the risk away from the buyer and squarely puts it on the supplier. Lambda school partially removes the barrier to entry a client (or in this case a student) might have by eliminating the cost to start and complete the product offering (in this case the training) until the student becomes gainfully employed making $50,000 a year or more. This is precisely what TSIA has taught for years and yet we don’t hear customer success advocating for it, with the exception of this SaaStr session and it was presented as not only a superior business model but a revelation, something never before known about. The story Austen spoke of when he shared how he got to this business model was one that he figured out on his own based on deep thought, soul searching, and trailblazing, not through acquired knowledge that could have occurred by embracing TSIA’s teachings.

I’m not sure why customer success hasn’t leveraged the teaching and knowledge that TSIA provides as I regularly speak to 50 customer success and CEOs monthly who often haven’t even heard of TSIA or have not fully embraced it. I believe there is great value in knowing both aspects, customer success and a business formula based on outcomes as taught by TSIA. Imagine the power of implementing the best of both approaches.

Keep in mind the dramatic difference Austen shared about his attempt to make Lambda school successful is like night and day. Lambda school was doomed in the beginning based on the model and methods they were using. Now with this new model implemented, they have more students than major universities, enroll more students in one day than they did in a year, and are extremely successful. They built their business upon the success of others, their client’s outcomes. The requirement for them to become successful was to MAKE their customers successful, not focus on KPIs or CSM tools, although they have their place and are valuable. Let’s just not make them the ONLY tools and strategies we use.

So, the focus can’t be health score, NPS, adoption, or customer satisfaction or any other KPI. The focus needs to be on going beyond the customer’s expectations in creating business value or outcomes they desire and was the reason for them purchasing our offering to begin with. Once the original goals are met, then we can work to improve them and/or focus on others. When we focus on creating business value or outcomes for our clients and are successful at doing so, this is how we impact those KPIs previously mentioned in a meaningful way.

I believe that is the problem we are up against when as CSMs or customer success leaders, we follow the playbooks put in place and monitor all the indicators that customer success tools are supposed to give us insight into how we are doing, but we don’t step back and ask the real or right questions and act on those independently of playbooks or engagement plans. Am I right now doing what’s in the best interest for my customer?

Although KPIs and customer success tools that are available to us can be useful, they shouldn’t be our main focus. Our main focus should be providing the outcomes our customers want in a pleasant and pleasing way. This may or may not require more adoption. On the other hand, increasing lovability of our company and offering will help. We have to meet the customer where they are.

I remember hearing a story about a customer being pushed by the supplier to buy a premium support offering that they weren’t ready to buy because their business wasn’t at that level and therefor didn’t require features the premium offer provided. If the client would have bought the higher tier offering that might indicate increased adoption to the supplier, but it wasn’t the right thing to do from the customer’s perspective. Here in lies a great example of where increased adoption isn’t good.

We need to think before we act on everything we do, regardless what position we hold within our company, if the action we are about to take will help our customer in some way reach their goals or benefit them, then do it. If not, don’t. We need to be sending the right message to our organization. It’s not about increasing our business success, it’s about increasing our customer’s business success. Because when we take this approach our success is guaranteed and doing so creates customer loyalty too.

Another non-optimal approach of customer success lies in how new features and product capabilities are developed and pushed to the customer. Most of the time, they are welcomed and timely to the customer’s needs. But I’ve seen that once created, CSMs are taxed with making sure their customers are using the new feature, another use of the word “adoption”, and that’s probably not the best way to go. This adoption can be a good idea if the customer is at the right place in their customer journey and really benefits or gains value from using that new feature.

A better way to approach a new feature release, is to synergize with the customer based on productive discussions that determine outcomes they need to be more successful. As their vendor, we develop a capability to enable them to achieve that outcome. Doing so allows us to source our future features correctly and make adoption automatic because the value it provides them.

This is the right way to create new product offerings and value, but it seems like we work it from the opposite direction as customer success leaders. In other words, here is the new feature, use it to get value. Instead of what outcomes do our customers need, and then create the capabilities (or features) to accomplish them. The latter is the approach TSIA takes.

I love customer success and business outcomes; shouldn’t we encompass the best of both worlds?

Always grow, learn, question, and think about customer success. Let’s ask ourselves, what’s really important when it comes to customer success?

Connect with me here on LinkedIn or let’s engage in anything Customer Success related.

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