Understanding The Power Of Outcomes In Customer Success
Customer success professionals all know that delivering business outcomes for customers is critical. I’d wager at least 90% of the CSMs who read that sentence would agree.
If we dig below the surface what does it actually mean to say that outcomes are critical and if it’s true how do you make it central to how you deliver customer success?
To me there’s a danger that ‘outcomes’ becomes one of those words, like my favourite ‘adoption’, that sounds great, has everyone nodding, but as you drill in often lacks real detail. And that would be a huge missed opportunity because building a clear focus on outcomes backed by a clear understanding of what that actually means in your company is an essential and almost certainly transformational step along your journey to customer success mastery.
Outcomes matter to companies because they confirm whether or not they are moving along a path to success. At the highest level companies measure themselves by how well they deliver their products and services to their customers. The specific measures they use are measure of value and they include the satisfaction of their customers with their products and services, how well this satisfaction translates to sales and subsequently how that shows up as profits (at least traditionally) and shareholder value. They also care about costs, about quality and employee satisfaction.
To deliver the value linked to these highest level outcomes a company employs process to organise multiple resources. People, technology, raw materials, physical assets and so on. Most of these components are purchased from other companies: let’s call them B2B vendors. The complexity of the picture is such that no single B2B vendor can claim more than an influence on the key high level value and outcomes we’ve already discussed. It’s difficult (not impossible) for most vendors to point to units of revenue, or units of profit or cost saving that arise solely from their solution or contribution. The truth is we’re all, usually, only part of the picture.
The greater impact on a company’s financial results is typically the macro-economic climate they are operating in: changes to the state of the economy, legislation, the entry/exit of competitors and so on are likely to have a far greater impact on these high level outcomes than any single technology supplier.
If that’s true then how are B2B vendors best able to demonstrate their contribution? The answer is by focussing most of their efforts on demonstrating the value provided from the outcomes they are best able to deliver. Where these can be tied directly, or indirectly, to high level business outcomes they should be but not at the expense of being absolutely clear about how a vendor’s contribution is supplied.
This is best illustrated with an example of a fictitious company – let’s call them ACME Banking Ltd.
ACME Banking Ltd Example
ACME Banking Ltd provide retail banking services via a combination of high street branches and online banking. In addition to their staff, property and physical assets they are supplied by numerous B2B technology vendors. Each of these suppliers plays a vital role in enabling ACME to offer their products and services to the public.
Included amongst these technology vendors are the following:
- Application security (app sec) software : it’s vital that ACME maintain a reputation for security, confidentiality and privacy
- Marketing software : in a competitive market ACME face a constant battle to retain and win customers
- CRM software : it is essential that ACME build and maintain a complete view of each customer’s products and interactions to enable up-sell and cross-sell
- Service desk software : ACME need an effective process to manage customer enquiries, requests and complaints to ensure customer satisfaction
- Learning management software (LMS) : ACME staff are required to stay in compliance with financial legislation and regulations, develop customer facing skills and learn about new products
- Content management software : ACME maintain their core website, FAQs, mobile content and require a way to do this as effectively as possible
It’s a complex picture. It’s likely in fact that ACME have 10’s if not 100’s of technology solutions in effect at any given time.
Take all this complexity, all working in reasonably harmonious fashion, add in people, the ever shifting nature of the macro-economic climate, constant changes to process (be it tweaks or wholesale changes) and it quickly becomes extremely hard for a vendor to point to a change in one or more high level outcomes and say “we did that.” Put another way the correlations we use in these cases “after our software was installed profits went up” are rarely, if ever, the whole story when it comes to causation.
Let’s say for example in the situation above our learning management software is installed and in year 1 profits go up. The provider might well try to make the case that this is a direct result of their impact because ‘customer facing skills are better’ or ‘more people are buying additional products because the staff are better trained on them.’ However, the next year profits go back down, to below the level when the supplier was first engaged.
There’s a lot going on here. For example let’s examine year one. If all that changed was the introduction of the learning management system then a case could be made that it had an impact on profit for one or more of the reasons given above. But perhaps the economy improved that year, people had more money to spend and chose to buy additional financial products across the board and ACME simply caught the wave. Perhaps the launch of the learning management software coincided with a brand new marketing campaign that truly resonated with customers, perhaps a new service desk was launched at the same time and it was actually vastly improved customer service that led to the improved results. The fact is changes never happen in isolation and we simply don’t have the information, or usually the inclination, to do the work that would be needed to prove full attribution.
Year two rolls around and the numbers go south. Why? Did the learning management system, if it was responsible for such great results in year 1 suddenly become a negative influence? Did the economy move towards recession, did a new marketing director introduce a new campaign that began to put people off ACME, did the bump in satisfaction from the new service desk unravel because ACME failed to keep evolving it’s customer experience in this area and fell behind the competition? Again, we typically don’t have enough information to know what exactly caused the changes.
Solving For The ACME Situation
What then does a B2B vendor do to prove they’ve made a genuine impact? That clear business outcomes have accrued to the company as a result of their buying that vendor’s solution?
The answer is still to focus on business outcomes. But this time those that can be much more directly attributed to the vendor’s solution. Let’s take a vendor from the ACME Banking Ltd example.
Application Security Software
What are the specific outcomes that accrue from an investment in application security? As the vendor what would we measure to demonstrate to clients that their investment was paying off? The next table looks at this question in more detail.
So what should the app sec vendor’s CSM be talking about with their customer? The answer is of course all of the above. There is a hierarchy here and it’s crucial that the CSM and the customer understand the sequence that needs to take place to get to the outcomes that actually matter:
- Getting developers aware of the new app sec platform and logging in
- Ensuring they know how to and are running scans
- Managers using analytics to establish a baseline
- Making sure management are driving a process that results in defects being fixed which happens off platform
- Managers using the same analytics to then establish that a business outcome has been achieved
The outcome that matters here is the reduction in defects, all of the others are simply means to an end. They are essential foundations but not important outcomes in themselves. If the vendor can tie this reduction in defects to a revenue outcome, for example a reduction in costs versus the previous method of securing code which used peer review by another programmer, even better but as this is not always possible it’s critical that the value producing outcomes that can be demonstrated and cannot be argued are a core part of the vendor to customer conversation.
We could do the same analysis for each B2B vendor in our list above. Some vendors can get at real ROI but usually the ability to do that is, as we’ve seen, compromised by the fact that changes so rarely happen in isolation.
Crucially though ACME Banking Ltd has to have a process in place to ensure they are working towards secure code. The reputational risk, not to mention the risk of breaching their regulatory framework and being fined mean this is unavoidable. To be seen to deliver real value the app sec provider has to show that this move towards more secure code is taking place as a result of the investment in their products and solutions. Great results here = great value. Maybe not in ROI terms but definitely as a key part of the overall landscape of people, process and technology that makes up ACME Banking Ltd.
There’s another critical point to this article. Something that speaks directly to the role of the CSM. We’ve all sat with stakeholders and asked the ‘what are your key business outcomes?’ question and been met with blank faces. In fact being a CSM means leading that outcomes discussion. Not only is this easily done if it’s in the context of the outcomes you deliver, as we’ve just seen with the app sec example, but your customer will love you for showing them the fastest way to results they want to achieve. In all probability you’ll have more expertise than they do when it comes to this particular topic because CSMs are the experts in what their product delivers and how it does it. So it’s crucial that we initiate and drive the conversations that allow us to shape the outcomes we’re uniquely positioned to deliver into an individual vision and success plan for each customer.
Do that, and do it well, and your path to the delivery of sustainable value from delivered business outcomes will become much more straightforward, much easier to demonstrate and far harder to ignore.