An executive described an interaction with someone from a different department to me, and asked for my advice on what to do to solve an apparent impasse. I suggested that they go back and have the meeting again, this time beginning with agreement on the definition of terms. “I’ve heard your description of that meeting, and I’ve also heard the other person’s account of what went down. It’s clear to me that there were two entirely separate meetings going on, for there is nothing in common except a mutual feeling that the current scenario is unworkable.” Imagine that conversation as happening between the vice presidents of Sales and Customer Success on the subject of retention and Customer Realized Value. Then assess the likely effects, and costs, of that failure to communicate. Is this happening in your company?
But Wait! It Gets Worse
Now add the Customer into the mix, with *their perceptions of the value outcomes that they want to see realized at their end before renewing their subscription. Three people using the same words, with varying levels of intensity, while all three have different definitions and metrics for those supposedly common terms. Next, Product joins in the conversation with their different focus, together with Onboarding and Support. Now we have six voices talking past each other. Dare we add Marketing to further muddy the waters as they ask the customer to do a success story?
In the course of interviewing people and companies on the subject of realized value and retention for the past year or more, I’ve heard countless horror stories about this scenario. In counting the costs, there is the lost subscription revenue that can be known. But there is also the money left lying on the table in the form of unrealized expansion sales. Though largely invisible, it’s still loss.
Cleaning Up The Communication
Start by building a library of the outcomes the customers want to achieve. Don’t try to boil the ocean, just identify 2-3 measurable value outcomes that will immediately resonate with the customers. Reduce revenue leakage. Faster invoicing cycle. Close a ticket. Ship a marketing campaign. Reconcile invoices. Which roles in the customer org are involved in these jobs? How important are they to them? What dollar value would they place on the successful accomplishment? Confirm the results with the customers.
Next, tie those outcomes to specific features of your application that are required to be used in order to deliver them. Now you’ve got some measurable, trackable common points that can be understood by all involved. With that beginning library of customer realized value outcomes in hand, it’s now time to get the senior execs of Sales, Marketing, Product, and Success together to build a common set of definitions and ways of talking about them both within and without the company.
Recommended Reading
Customer Realized Value – A New Metric for Customer Success Teams
Do You Know What Your Customers Are Doing With Your Application’s Feature Set?
The Value Gap
Customer Success Platforms and Customer Realized Value
