You think your customer is getting solid value from their subscription to your application. Can you prove it? Can you hang a real number on it? The value gap between your thinking and what the customer is actually realizing can swallow your retention and expansion hopes.
Talking is not Doing
There is a lot of talk in the global Customer Success community these days about value. What’s the actual value that the customer is receiving? If we’re going to move to outcome based pricing, what’s the real worth of those outcomes? On a quieter level, but no less vitally important, what’s the real value of the Customer Success group and its activities?
I’ve been told by many that it’s very hard to connect application usage to actual Customer Realized Value. I agree, especially when you have no domain expertise in your customers’ business — a critical lack that has hampered most if not all Customer Success groups worldwide for the last decade or more. Is ai going to fill that gap? Will an ai notice that your customer is not using a key group of features to accomplish real work, and then tell the customer that they are leaving significant money lying on the table? And if that ai does send the message, will the customer be willing to accept and act upon it? How far do you trust ai?
Ed Powers [ Service Excellence Partners ] often talks of the real, non-economic, factors that heavily influence if not actually drive renewal and retention. Proving tangible value may not be enough by itself to assure the continuance of the relationship, but on the other side, if you can’t provide that measurable economic proof, sooner or later, somebody on the customer side is going to decide that you and your product are no longer necessary.
Moving Forward
So how are we going to address that Value Gap? It’s going to take some hard work, the willingness to ask uncomfortable questions and to face the answers, and then to build the data and logic. Start with a small group of customers, and learn everything there is to know about them and their business. How many users are there at the customer sites? What are their relative skill levels with the product? Has your product changed the way their work gets done? What innovative uses have the power users discovered? Map the feature usages against the subscription cost, and then talk to the customers about the data to see if they agree on the valuation.
