Shifting Your Customer Success Organization From Activities to Outcomes
By Chad Horenfeldt
Over the last several weeks I’ve had the opportunity to speak to many software companies and the overwhelming challenge they are facing right now is customer churn. While we can blame the economy, the bigger issue is that many Customer Success teams are relying on strategies that are passé and dated.
The common theme I’m hearing in my conversations is that there is too much surprise churn. Customers CS thought were “green” are giving their cancellation notices. This is causing havoc on renewal forecasts and hurting team morale. The common thread? CS teams that are too reliant on helping the client leverage their products when they should be focusing on identifying and delivering business outcomes.
Think of a time when you were sick and you had to go to see the doctor. Your doctor may have prescribed you some medication but focusing just on the medication isn’t sufficient. Your overall well-being and health is what really matters. You need this same type of mentality when it comes to your clients. You should equate overall health to achieving their business outcomes.
Being “proactive” isn’t enough. Doing QBRs and meeting regularly with your clients isn’t enough. Sending your clients gifts isn’t enough. Knowing your customers' pets’ names isn’t enough. Why? Because when your decision maker’s ass is on the line and they need to defend the budget allocated for your product, they need to justify it in business terms such as revenue earned, costs saved, or some other key company metric. Data points not tied to how your customers perceive value are almost worthless. Which makes your product worthless to your customer’s CFO and impossible to defend from getting axed.
The good news is you can reverse this trend. You can get your CS team on the right track. In this post I will first define the elements of business outcomes and then take you through how to adopt a business outcome mindset.
WHAT DO I MEAN BY BUSINESS OUTCOMES?
Business outcomes are the high-level objectives your customers defined as being critical to their company’s success and achieving value from your product. Improving efficiency, increasing sales, or improving employee satisfaction are examples of business outcomes. These should be written from their perspective and in their language, not yours.
Capturing business outcomes is not enough - you need to have something you can take action on as well as measure against. This is why you also need to attach goals and measurable results to each business outcome. Goals are the high-level actions that will be taken to achieve the defined business outcomes. For example, leveraging a specific product feature in the next 30 days, taking certain training courses this week, or integrating particular systems into your product by a certain date are proper goals that support business outcomes. These goals need to be specific, measurable, have a clear timeframe, and a named owner. “Sending more email” or “taking more training” are not proper goals.
If you were climbing Mount Everest, you would be close to the summit but not quite there. What’s needed at this point is specifying a meaningful business metric that the stated goals will impact. And this is a metric that your decision maker needs to care about. I call this a measurable result.
A measurable result is the metric that will determine if you’ve achieved the customer’s business outcome and should be tied to the identified goals. For example, a measurable result may be to improve employee satisfaction by 15% by the end of the quarter as part of the business outcome to improve employee satisfaction. The goal to achieve this outcome will involve leveraging a specific product feature. A measurable result could also simply be “customer to be fully onboarded by a certain date.” The key to successful business outcomes is defining a specific measurable result. Be sure to align with the customer on how they define success - not how you define it.
Lastly, you need to capture the progress that has been made against their defined business outcomes. This will give you an indication as to how much value the client is receiving from your solution and is the equivalent of summiting Mount Everest.
HOW WE CREATED A BUSINESS OUTCOME MINDSET
Transitioning your CS team from focusing on activities to business outcomes requires being deliberate and getting your team on board.
Here are the summarized steps I took to create a business outcome culture while leading the CS team at Kustomer:
1. Educate the team on what business outcomes are and why they are important. You can’t just force your team to start adopting a business outcome mindset. Take the time to educate them on the need for this.
2. Build a business outcome playbook. Once you explain to your team the three parts of business outcomes (the business outcome, the associated goals and the measurable results), have them help you define which business outcomes apply to your customers. For example, for a given customer, improving efficiency and increasing revenue are needed business outcomes, but improving employee engagement doesn’t apply.
Next, have your team help create your business outcome playbook. Assign business outcomes to teams and have them come up with possible goals that could help their clients impact their business outcome. Include customer use cases they can refer to. You may want to break down business outcomes by the various industries of your customers as well as by various business processes if there are different types of personas that leverage your products.
3. Teach your team how to have strategic conversations. Defining the process isn’t enough. Your team needs to understand how to tease out of your customers what their business outcomes are as well as suggest possible goals and measurable results. This requires training, guidance, and practice.
4. Create a process on where to capture your client’s business outcomes. These are usually captured within account plans or success plans. It’s recommended to capture these in your CRM or customer success platform.
5. Create a process on when your team should capture & report on business outcomes. Typically you want to capture these as part of the kick-off or even in the pre-sales process. You should then have specific moments in the customer journey where you verify and adjust business outcomes. This could be part of QBRs or at renewal. You can also automate the capture of business outcomes through surveys or directly within your platform.
6. Share the results. Be sure to share the business outcome results with the right client stakeholders - especially the decision makers. In addition, you can share the results with your sales and marketing teams as they may be interested to hear the results.
7. Measure and iterate. Measure the impact your business outcome strategy is having on customer retention and growth. Gather feedback from your team and customers and adjust as needed.
Climbing the business outcome mountain is a challenging one. In fact, this post just referred to how to transition your CS team to think this way. Your larger focus should be to transform your organization so that everyone is focused on attaining your client’s business outcomes. But you need to start somewhere. I recommend starting with a few business outcomes and trying out this concept with some clients. When it’s working well, you will transform your CS team from focusing solely on product solutions to one that is truly impacting your client’s business challenges.
The Success League is a global customer success consulting firm based in San Francisco, with a presence in Boston, and the UK. We help build and develop top performing customer success programs. Visit TheSuccessLeague.io for a full list of our offerings, including Leadership and CSM Certification training.
Chad Horenfeldt - Chad is a customer success executive with 15+ years of experience building and developing high performing teams. Currently, he is the Head of Customer Success at Kustomer. Prior to Kustomer, Chad held CS leadership positions at Updater, Bluecore, Influitive, and Oracle (Eloqua). In addition to writing for The Success League, he also writes regularly on the topic of customer success on his blog The Enlightened Customer.
