The Digital Two-Step

What is success, anyway?


Technology in the digital era is more complicated and connected than ever. The Cloud. Mobility. Virtualization. Big Data. Analytics. IoT. The need for enhanced skills in technology is obvious, and there are many paths that tech professionals may take to brush up or expand their digital expertise.

In line with the digital transformation of business, there are several technology thrusts that are converging, altering the landscape of the technology sale, indelibly shifting the landscape and relationship between vendor and customer.

First is the transition from the customer’s IT organization driving the scoping and acquisition of IT solutions to different lines of business (LOBs), such as marketing, operations or finance. IDC is projecting that fully 60% of IT purchases will come from other LOBs than IT, greatly reducing the influence of the IT department and the CIO in the purchasing process.

Coincident with this shift is the increasing adoption of enterprise cloud-based solutions. Off-premise, hosted by trusted partners – companies like Salesforce or Zenefits – as well as the major players like Oracle and SAP are offering solutions that instead of being on premises, hardware and license-heavy deployments, are hosted in their data centres, with secure access to data, and offering customers the ability to purchase just what is needed (such as seats, concurrent users, data size or transactions).

As you can imagine, when the cost to deploy or evaluate is low (often just a nominal payment for a pilot program) your goal as a vendor changes drastically. Signing up customers is easy, a simple pilot program can be a low-cost, low-risk prospect for the customer, giving you a chance to show your strengths and your incredible product. But the downside is that this low barrier to entry also brings a low switching cost, thus you are at risk of the next best thing displacing you, and losing the account.

This highlights the need for a customer success role in the vendor (often called the customer success manager, or CSM. It also can be called 'enablement' or 'adoption'). This is a resource that enters the equation after the close of the deal to step in and own the effective deployment, mapping the product to the customers’ desired outcomes (or the reason they bought the product initially). The CSM validates the product can deliver on the promised capabilities and value that was committed in the sales contract. 

The second priority of the CSM is to drive awareness across the customer’s staff. Are the potential users knowledgeable about the product? Do they have access? Do they have enough access? Are there additional capabilities or features that they might use to improve their outcomes? Do they need training? All these are activities that can increase the value to the customer, making the product 'sticky' and ultimately smoothing the process when it is time for renewal, or time to buy more options or even expand capacity.

The CSM Role

The customer success role is a vendor position, a person or team who picks up at the end of the sales cycle, with the closed order. They will first determine the actual business outcome that the customer expected to purchase. Was it generating more leads? Was it to automate the lead nurturing process? Was it to increase their collaboration and integrate sharing and email communications to streamline? Was it deep data analytics to help drive operational efficiencies? Regardless of what was sold, the customer success role is to ensure that the customer realizes the value that they expected.

There are other key functions of the CSM role, including:

- Tracking KPIs - monitoring performance, utilization, and adoption, ensuring that the product is delivering value to the customer. They will report to the customer’s leadership team and provide concrete evidence of the efficacy of the solution.

- Managing Adoption - keeping an eye on the actual use, looking for softness in the adoption of the product or service. If usage flags, it might be an indicator that the product isn’t meeting the needs, or that a competitor is trying to gain a toehold. An effective CSM will look for ways to increase usage and to drive additional seat or capacity sales.

- Reduce Churn - the death of service based products is losing customers. The acquisition costs can be relatively high, so preventing customers from leaving after a subscription ends is of paramount importance. Roadmap alignment, task analysis, and writing the product/service into the plan of record, embedding the capability are key ways that a CSM can greatly improve the likelihood of renewal, and expanding of scope. Happy customers, easy to use products, delivering tangible benefits will drive higher lifetime customer values.

Looking ahead

The disruption of the business environment via digital transformation is huge. As more core functions (but not necessarily the key functions) are filled by the rise of enterprise-grade services, it is imperative for the vendors of these services to manage the satisfaction and success of their customers.

The role of customer success manager is a crucial component, providing ongoing engagement, and monitoring of the utilization, the value provided, and early warning of troubles allowing product and engineering teams to keep ahead of the game.

Wake up small

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