saas customer success framework: signuplab's growhow
TRANSCRIPT
SignupLab’s GrowhowCustomer Success Framework
for B2B SaaS companies
http://signuplab.com/growhow/
History of Customer Success
• Early B2B software industry enjoyed a vendor trap phenomenon: Customers made large upfront investments and it was difficult to change the vendor. During those days vendors were more interested about new customer acquisition than existing customers.
• SaaS changed the game; no upfront investments; easier to change the vendor.Customer retention become more serious challenge for vendors.
• Around 2005 companies such as Salesforce launched their first official Customer Success programs to reduce churn.
1990 2000 2010
SaaSearly adopters
“After cloud”:Subscription economy
Customer successbest practices
“Before cloud”: vendor trap
Customer Success in Brief
• Why should we care?Customer Success focuses on recurring revenue: 90% of B2B SaaS revenue is generated by renewals and upgrades after initial sales.
• How can we do it?Customer Success is based on simple goal: Make your customers succeed in their business with your products or services.
• What can we do to reach this goal?Customer Success can be enabled with a set of best practices,working cross-functionally to grow (upsell) and fight churn.
Initial Revenue Recurring Revenue
Subscription company that focuses on Customer Success
can grow even without making a single new customer.
• Customer Success is related to customer’s journey inside and outside your application. The most important goals are renewals and upsells.
• Customer journey inside application isfairly easy to define, but what is commonly forgotten are concepts and servicesthat are connected to this journeyoutside your product.
Scope of Customer Success
OnboardDeploy
Adopt
Grow
Renew
Upsell
Learn
Services
Manual work
Competitors
Support
Functions of Customer Success• Technical enablement provides a solution to customer’s need,
typically during on-boarding or new feature adoption.• On-going support makes proactively sure
that the solution matches customer’srequirements during whole lifecycle.
• Knowledge enablement educates thecustomer to make sure that full potential of the services can be used.
• Business relations identifiesnew opportunities anddevelopment areas
CEOMarketing
Engineering IT
Product
Services
Customer Success
Sales
Finance
No matter do you hire a dedicated Customer Success Manager or assign the CS activities among your current people, Customer Success is always
cross-functional process and cross-organizational mindset.
Growhow approach
Strategy
OperationsMetrics
Value Concepts
KeyFeatures
CustomerObjectives
A cross-functional approach to improve Customer Success for B2B SaaS.
StrategyHow to add Customer Success
into product strategy
Challenge 1/3: Change
Customer’s requirements evolve constantly. Strategy cannot be written in stone – it must
evolve among customer’s needs.
Challenge 2/3: Isolation
There shouldn’t be any isolated Customer Success plans, only one product strategy that
follows the discipline of Customer Success.
Challenge 3/3: Scope
Customer Success affects almost everywhere.It’s important to choose the right hotspots
where current focus must be targeted.
Solution: Value Concept
• Value Concept is a mandatory milestone or hotspot in your customer’s journey where significant value is created.
• It can be inside or outside your product, consisting of features, services, manual work or external services.
• List of Value Concepts is a constantly evolving addition to your product strategy.
ValueConcept
How to define Value Concepts?
Objective hierarchy is a simple way to define value concepts.
Customer’s Objective
Value Proposition
Value Proposition
Value Proposition
ValueConcept
ValueConcept
ValueConcept
Value Concept example
Execute projects on time
Make task tracking easier
Make resourcing more effective
MilestonesCalendar
To-doList
Resource Timeline
Possible hotspots for a simple Project Management App.
ValueConcepts
ValuePropositions
Customer’sObjective
Value Proposition Canvas
GainCreators
Painrelievers
Products& Services
Pains
Gains
Customerjobs
ValuePropositions
CustomerSegments Business Model Canvas provides
tools for strategic planning. It can be extended With Value Proposition Canvas. After value propositions are explained, it’s fairly easy to define Value Concepts.
Read more from http://www.businessmodelgeneration.com/canvas/vpc
Keep the list of Value Concepts always available and make sure everyone in your organization
understands what they are and why they are in the core of your products and services.
ProductionHow to add Customer Success
into SaaS production
B2B SaaS production – core elements
ProductDevelopment
CustomerService
Marketing& Sales
BusinessDevelopment
Product Development
Software developers are in cross-fire:Sales people ask features for demos, customer support asks features for specific customers,
product managers ask features for new concepts. Too often the one who is loudest defines what is
selected to the next development sprint.
Agile, and goal-driven• Scrum, Agile, DevOps etc. are designed to
improve software development, but they do not guarantee Customer Success as a goal
• To fix this, we can connect Value Concepts through the production process. This gives better focus to sprint planning.
• Otherwise it’s easy toend up into ”One More Feature” syndrome: Wildly growing backlog
Value Concepts in issue tracking• By keeping Value Concepts visible in GitHub, Jira, Trello and
other issue tracking tools it’s easier to keep the focus on strategic aims. This connects your product strategy into development sprints.
• Aim is to achieve better focus: If a feature cannot be connected to Value Concept, it’s not crucial and can be kept on second priority. With this approach developers understand better what is important and what is not.
• Simply use labels or categories to show that a feature relates to Value Concept:
VC: Milestones Calendar VC: To-do List VC: Resource Timeline
Outcome: Key Feature
ValueConcept
ProductRoadmap
KeyFeature
DevelopmentBacklog
Key Feature is a product feature or service that implements the Value Concept. It’s planned on product roadmap and delivered to implementation via development backlog.
Whenever there’s an issue or bug reported, project manager or developer can confirm
does it relate to Key Features and Value Concepts. If it does, then it should be
solved on higher priority.
Customer Support
Support vs. Success
Customer Success Customer Support
Financial
Revenue driven Cost Center
Action Proactive Reactive
Metrics Success-oriented Efficiency-oriented
Model Analytics focused People-intensive
Goal Predictive Responsive
Customer Success and Customer Support are two different things, but they do relate closely to each other. A good customer support team can improve
Customer Success by taking steps beyond a simple support:
Table is from the book “Customer Success”:http://www.gainsight.com/book/
The aim of customer support is to serve customer’s better. But to transform this into Customer Success you need tighter focus:
Customer support team must be aware how to prioritize work relating to Key Features and
Value Concepts that are set in product strategy.
Sales & Marketing
Get 360° overview
• SaaS app can provide amazing amount of data that can be pushed directly into a sales CRM– Company or user details– User’s sessions and usage log– Locations, time zones - per each user– Customer support tickets and conversations– Used features, interests– Notification tracking: Sent, read, bounced, clicked.– Use your imagination …
Focus on right customers• B2B SaaS sales is based on highly collaborative
relationship with customers• Feature requests and roadmapping with customers
is part of everyday work• There is a pitfall - not all customer related
work is right for you:
A demanding customer can poison the whole product development with requests that are not related to your value concepts nor key features.
For Customer Success driven company it’s crucial to define customer profiles and stick
in them. This profiling begins from sales.
Importance of Value Concepts• Salespeople are constantly seeking for product/customer fit, therefore
focusing on:– Product’s features and value propositions– Customer’s needs and requirements
• Too often this means that salespeople send small requests to developers based on instant demand
• Much more solid way to affect on product development is strategical: Instead of simple feature requests, get the concepts aligned in product strategy and that way push the changes into development
• It’s sales team’s duty to focus, sharpen and define Value Concepts via product strategy, thus improvingCustomer Success permanently
Business development
It’s time to get nerdy
• CEO and the team of key business developers are in the main role when improving Customer Success
• The role of CEO has changed in B2B software companies: Instead of giving all attention on largest customers through negotiations and face to face meetings, in B2B SaaS it’s important to give bigger focus on analytical data and signals coming directly from product users.
• B2B SaaS is more and more about sales automation – Everyone must focus on a scalable “SaaS sales machine”, which often means that even the CEO must understand the smallest details of the product.
MetricsHow to measure and improve Customer
Success
Automation is the key• Customers improve their processes and
business all the time. This defines that also vendor must evolve and renew services regularly.
• Annual, quarterly or even monthly evaluations are too scarce. Proactive development is possible only if metrics and improvement management is automated.
• Following slides describe the most important Customer Success metrics for B2B SaaS
Conversions• The most obvious conversion
rate is from free to paid customer, typically used in free trials or freemium products.
• To take more out of conversion rates, it’s recommended to build a conversion funnel with Key Features. This allows youto follow how far your users really get, howmuch value they get before churning away.
• Conversion funnels can be configured and measured in CRM or other availablecustomer success tools, such as Intercom.io
Recurring revenue
• Renewals• Upgrades• Churned dollars
Customer Acquisition Cost (CAC), Churn and Life Time Value (LTV) forms the core of the SaaS business. With these meters you can measure how healthy your SaaS business is and is it able to scale. If CAC gets too high
compared to LTV, it’s time to seriously reduce churn.
Get your automated SaaS metrics dashboard rolling with SignupLab.com today.
User activity• Inside application– How many times user has
started session– How many times user has
used the key feature• Outside application– Emails sent, opened, clicked, replied etc.– Mobile notifications received, reacted– Call center contacts– Interactions with your consultants
Churn
• Churn meter = Number of customers leaving your product in defined time
• Churn is probably the most important figure for SaaS company. Signups can be improved with bigger marketing budget, conversions can be improved with better onboarding processes and value propositions, but fight against churn requires real value creation relating to your product and services
Direct Feedback
Customer surveys are not the only way to ask direct feedback. B2B SaaS companies have a possibility to integrate continuous
feedback channels within products and services, such as:
• Net Promoter Score (NPS)– Measures the willingness of customers to recommend
your product to others– Excellent tool to measure NPS: delighted.com
• Customer Effort Score (CES)– Measure customer satisfaction with one simple question:
• How much effort did you needed to get this information?
– Assigns ratings from 1 to 5, with 5 representing very high effort• Other tools that can be integrated inside your product …
Customer Success Software
• Totango• Gainsight• Evergage• Preact• Clientsuccess• Bluenose• Mindtouch
SignupLabTrack sign-ups, automate onboarding, drive conversionsand manage recurring revenue on one dashboard:
https://signuplab.com
Goal: Identify Customer’s Objectives
• The first and last component in Growhow framework is Customer Objective: A goal that customer needs to achieve.
• From meters and feedback we can learn which features are important and what needs to be changed.
• Use systematically the automated information from your meters to improve your Customer Objectives
CustomerObjectives
SignupLab’s Growhow
Strategy
OperationsMetrics
Value Concepts
KeyFeatures
CustomerObjectives
http://signuplab.com/growhow/