There has been a lot of conversation over the past few years about customer centricity, and many companies have associated themselves with the concept in various ways. As a result, there are many different definitions of customer centricity. While most do not directly connect with measurable outcomes or profitability, there is one definition that does — and that ought to be known by all customer success executives.
The Wharton School of Business program defines “customer centricity” very precisely. To be authentically customer centric requires that a company conceive of and manage themselves “not as a group of products, services, territories or functions, but as a portfolio of customers.” The program teaches that companies who are customer centric “know how much money they make or lose with each of their customers or customer segments, and they understand why.” Perhaps most importantly, “they understand in precise analytic terms exactly how their different customer relationships contribute to, or subtract from, the total value of the firm. Because they manage their customer portfolio on this basis, they know what to manage and where to invest in order to create sustainable profitable growth…”
The emerging profession of customer success management came to be primarily out of the necessity for customer retention in the subscription business model. A core aspect of the CSM role is ensuring that customers succeed in measurable terms from their investment in the vendor’s applications. But the customer, though unquestionably vital, must not be the only object of the CSM team’s concern. Their own company, the app vendor, must succeed as well, and the team has the best access to the data necessary for that goal too.
The Need to Know
Every authentically customer-centric company needs a detailed map for each of its customer portfolios so that its CSM team can track individual customer progress against that map. The production of those maps is a prime goal of the CSM team, for they are the ones who should have the data necessary for the exercise. With it in hand, slowed progress or plateaus should generate alerts, and quick corrective action, for revenues and retention are at risk. The precise knowledge of just how much money is at risk is the proof of the CSM’s value proposition as a team. Yes, the customer success manager must know which specific modules and features of the application are in use by which customers, but the knowing can’t stop there. Being able to show the value of that usage to both the customer and to their own senior management team is what will bring both retention and continued employment. And there’s still more knowledge to be gained — the knowing of the customers’ business so that other opportunities for profitable offers of technology and services can be identified and produced.
Where to Begin?
The results of the ongoing Customer Success Research Initiative (www.customersuccessresearch.com) show that many subscription-model companies have not added customer base segmentation or mapping to their strategic plan yet. This does not mean, however, that the Customer Success team must await the go-ahead to begin the study of customer portfolios, for there are some vital aspects of the overall customer base that are not directly tied to monthly or annual recurring revenue data.
In the strategic view of a company’s customer base — its Customerium — beyond the logos or accounts, there are individuals working for customer companies who play various key roles. There are the Decisioners, who have the authority to make decisions and to sign subscription contracts. Influencers do what the label suggests, they influence the choices made by the Decisioners, which can be positive or negative to what the software vendor might desire. Either Influencers or Decisioners can also be Advocates for a company and/or its products, encouraging others to become involved with the vendor by way of Word of Mouth (WOM), the most powerful form of advertising a company can have.
Looking even further, to perhaps the most logical place to begin, we find the Mavens, or power-users, the ones who get the most value of all out of an application. Of all of the personas, the Maven ought to be the closest to the Customer Success team, for the more mavens a customer company has, the greater the potential for long-term loyalty.
How does a maven grow into the role? This is vital knowledge, for it will not only serve as a map to help you create more mavens across the board, it can also help you to identify new ones who naturally appear in your customer accounts. If a maven leaves a company, we instantly have an at-risk and an at-opportunity scenario. The CSM team needs to work with the former company to replace the resource, and to explore the possibility of acquiring a new customer from the maven’s new employer.
To learn more about the Customer Success Management team’s role in helping their company more toward authentic customer centricity, join in the ongoing conversations of the worldwide customer success community at:
- The Data of Customer Success Management
- Detecting At-Risk Customer Relationships
- The People of SaaS Customer Retention
- The Centricity of Customer Success
- Welcome to Customer Success Magazine
- Customer Success and Product Design/Dev: Partnering to Reduce Churn
- The Customer Success Technology Suite
- About The Hotline Magazine Archives
- The Value of Power Users
- The Customer Success Technology Suite
- Managing the Power-User Portfolio
- A Tale of Two Customer Success Books
- The End of a Customer Success Team
- The Customer Success Tipping Point
- Is SaaS Customer Retention Coming of Age?
- The Outsourcing of Customer Success
- The First Year of a Customer Success Group