An excerpt from:
Why aren’t we measuring if customers are successful?
Our customers don’t come to us because they want a “product.” They want a solution to their problem. But many companies don’t try to measure whether or not the customer problem has been solved, and the ones that do typically focus on how frequently the product is used (an internal metric that has nothing to do with the customer’s success).
Success teams go through several phases of getting more sophisticated in how they track and measure the value received by customers. Here’s a summary of those phases and how Success teams can move from one level to the next (you can read the full post for more):
Level 1: Pitch features and use cases
The Success team solely focuses their time with customers on explaining features and use cases. The company is essentially saying, “here’s the product! Go use it.” The customer is “on their own” to figure out how to adopt the product in a way that fits their needs.
Level 2: Incorporate usage metrics
Here, the Success team still focuses on pitching features and use cases (level 1) but they’re also leveraging product usage metrics to evaluate whether customers are getting value out of the product. They’re saying, “Here’s the product, go use it,” and then tracking usage data to see whether customers are receiving value.
Most companies land here, at level 2. They can move up to level 3 by connecting usage data to an outcome that matters to customers.
Level 3: Connect usage to the customer's goals
Instead of focusing on features and use cases, Success teams at Level 3 anticipate 3-4 high-level objectives that customers will have when buying their product and then create playbooks for helping customers achieve those goals with their product.
Teams at level 3 are still using product usage as the main indicator of whether the customer received value. They can move to the next level by 1. acknowledging that their product alone won’t help customers reach their goals, and then map out what role their product plays in the ecosystem, and by 2. using more sophisticated metrics to understand whether customers are getting value out of the product.
Level 4: Understand the ecosystem of products required to achieve customer goals
There are no products that own the entire ecosystem of people, tools, and services required to hit a company’s objective. If your customer wants to increase revenue by 3%, your product is only one part of that story. The key to moving to level 4 is understanding where the product fits in that ecosystem and then being able to coach customers to leverage all the moving parts required to hit the customer’s goal.
Success teams in Level 4 have also moved beyond relying on product usage as the main indicator that the customer is receiving value, and are now tracking earlier indicators of customer health.
Here’s what’s missing in Level 4. Level 4 assumes the question of whether the customer “received value” is binary: either the customer received value, or they didn’t. But in reality that’s rarely the case. Customers can realize some value from a product, but not get everything they were expecting. Companies at Level 5 are able to detect and record when customers have received partial value.
Level 5: Total focus on customer goals and value received
Level 5 is where the Customer Success team not only understands the customer’s goal, the ecosystem of products required to meet that goal, and is tracking early indicators of customer health, but they’re also able to record and detect whether the customer received partial value.
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The top articles this week:
This week's newsletter features posts on:
- A Feature Request Process for B2B Product and Success Teams
- You Aren't Doing Enough Customer Marketing
- Why Isn't the Entire Company Measured on Retention?
- What Does Sponsorship Look Like?
PROCESS
Creating a Feature Request Process for B2B Product and Customer Success Teams
Nuffsaid’s Co-founder and VP of Product, Nick Paranomos, explains why Success should play a much larger role in how feature requests are prioritized and breaks down the core elements of a feedback process.
RETENTION
You Aren't Doing Enough Customer Marketing
If Customer Success doesn’t own Customer Marketing in your company, consider making a case with the group that does own that responsibility to set goals around advocacy or retention. As Jason Lempkin says in this post, “If you don’t come up with clear quantitative goals for Customer Marketing, it will never get enough attention.”
GOALS
Why Isn't the Entire Company Measured on Retention?
Chris Walker, CEO at Refine Labs, points out (in a 37-second audio clip) that in order to retain customers, everyone in the organization should be held accountable for a retention metric. Here’s the quick audio clip, or listen to the full episode here.
ALLYSHIP
What Does Sponsorship Look Like?
Here’s a timeless piece from Lara Hogan, Leadership coach at Wherewithall, on how we can be better sponsors and mentors of minoritized people.
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