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10 June 2021

Building Customer Relationships Through Value-Centricity: An Interview With Elizabeth Lee

by Rida Ahmed Reading time: 11 mins
build customer relationships

A Value-Centric Approach To Success

In a subscription-based economy, the success of your customers determines the success of your business. Customers expect to realize value from your product on day 1, so you need to build customer relationships and ensure a smooth and seamless handoff between Sales and Customer Success (CS).  In fact, 76% of customers now expect consistent interactions across departments, yet 54% say it generally feels like pre- and post-sales teams don’t share information (Salesforce, 2020). Often, Sales make unachievable promises to prospects that Customer Success can’t keep and both your customers and business suffer as a result.

So, how can you align your Sales and CS teams around value-based outcomes that your teams can quickly, effectively and measurably deliver to your customers?

To answer this question, I spoke with Elizabeth (Liz) Lee, Customer Success Strategy Consultant at Valuize. Liz has spent the last decade helping cutting-edge software companies retain their customers and achieve transformative business outcomes by delivering customer-centric growth strategies. During this interview, Liz explains the vital role that value-based outcomes play in a successful CS strategy and shares strategic actions that businesses can take to align their pre- and post-sales teams and build customer relationships.

Q: What was your first job? How did you get started in customer success?

My first job was at McDonald’s and I lasted three months! I’m not a transactional service person, I’m much better at building relationships. After university, I sold paper products (think of Jim from the Office!), and then accounting software. I actually stumbled into Customer Success; a friend from school reached out to me about a Customer Success job at Hootsuite. I beat out five-hundred other applicants and landed the job as a Customer Success Manager. That was my first foray into Customer Success and into growing an enterprise team, which was an incredibly informative experience.

Q: What excites you about working in the customer success domain? How do you think the domain will continue to evolve from here?

The thing that excites me the most about Customer Success is that this is the company’s economic lifeline; all revenue passes through this team. It’s the  job of Customer Success to be the conduit to the customer, build customer relationships and ensure that that relationship stays fruitful. I love knowing that my job directly contributes to leaders bringing their organizational goals to life. 

I think Customer Success is in its infancy. I believe that CS is going to become paramount in every organization and it’s going to reach the point where it’s taught in university as part of the required curriculum. Internally within companies, I think that software leaders will increase their investments and training to develop their organization’s soft skills, improve their sales skills and expand on how CS works with other teams within the organization. 

Customer Success technology is another segment that will grow exponentially. The willingness of software leaders to continue to invest in their CS tools and teams indicates that CS is no longer viewed as a cost center, but a revenue generator. As a result,  budgets will become larger and CS leaders will be able to invest more in  enterprise CS technology, like Gainsight, in the future. The CS tech market is not an overly saturated market right now, so I foresee a lot of new entrants into the CSM space.

Q: In your experience, what have you seen as some key challenges that software organizations are facing when it comes to designing a customer success strategy?

One of the biggest challenges companies are facing today is uniting all of their data sources.  In many software companies, there are so many disparate systems with incomplete or conflicting information that companies don’t have a true grasp of what their retention rate or churn rate actually is. Leadership may know that they have a retention or onboarding problem but, because their source systems aren’t working together, they can’t prove that with empirical data. This is why it’s  imperative to focus on a core metric, such as Net Revenue Retention (NRR), and lock in on one goal across your systems to drive change within your CS organization. However, identifying a metric is just the beginning. The next challenge is getting buy-in from stakeholders and ensuring that everyone is aligned around the achievement and improvement of this metric. At Valuize, we often find that our clients face a lot of red tape that makes it difficult to drive this change; as an objective third party, we’re able to come in and help eliminate those barriers by presenting the team with industry best practices married with tailored customer management processes. Valuize has the luxury of compiling our breadth of experience across many enterprise engagements to create the best possible approach for our clients with the one-two punch: strategy and technology. 

Another major challenge companies face is unifying their CS organization around the prescription and delivery of customer value, or what we call Value-Based Outcomes (VBOs). Companies as a whole have tried to become customer-centric without actually consulting their customers; they make assumptions about what is valuable to them. While leaders are conducting surveys to try and bridge the gap, they haven’t done the initial work necessary to identify the value-based outcomes that customers care about achieving, which ultimately influences what the organization is moving towards.  

Q: What do you think is the key to driving long-term relationships with customers? How do you think CS leaders can facilitate this?

One of the keys to long term relationships with customers is to give them short term wins. A lot of companies make the mistake of getting their quick wins before the customer experiences their quick wins. You need to incorporate value-based outcomes from the start so that customer value realization is the number one priority. By prioritizing the delivery of customer value first and foremost, you will secure your bottom line in the long-run by extending the customer’s lifetime value. Most end users determine within the first 90 days, consciously or unconsciously, if they’re going to stay with you. Therefore, I always recommend that organizations establish  a clear line of communication between Sales and Customer Success from the beginning and a seamless handoff, with relevant and complete information. 

I’d say another key to ensuring a lasting relationship between the customer and Customer Success is making sure your CSMs aren’t responsible for discussing money with customers. Talking about money is the quickest way to tarnish a relationship and those conversations can easily turn sour, negating all the work you’ve done to build customer relationships. Instead, entrust that conversation to Customer Accounts Receivable, Sales, or Finance.

Q: In your experience, what is the key to driving customer adoption?

The key to driving customer adoption is onboarding, onboarding, onboarding! Your onboarding playbook should be ingrained in everybody’s mind and everyone, not just Customer Success, should be aware of exactly what’s happening at the onboarding stage and what their role is in ensuring the customer successfully adopts your product. This is why uniting your teams around customer value from the start is so important. You also need to establish constant communication with your customers, including quarterly business reviews, and make sure your teams document all those conversations and meetings so you can track and measure your efforts accordingly. Measurement is such a crucial piece of the puzzle because it allows you to objectively evaluate your efforts, unearth improvement opportunities, and realign with your goals as necessary.

Q: You’ve helped many organizations align their teams around Customer Success. What have you seen as the most common obstacles companies face when they try to bring their CS and Sales teams together? How can organizations successfully align their teams around the customer?

When companies fail to align those teams, it comes down to one thing: key performance metrics and how they’re measured. If Sales is only incentivized to bring in new business and not for customer retention or expansion, then they don’t care about renewal or churn and that burden falls on Customer Success. As a consequence, both teams are automatically misaligned. To bring them together and align them around your organization’s strategic  goals, you need to measure their performance in the same way, with at least one common metric to measure them against. We recommend using NRR as a starting off point.

Q: What would you say are the top 3 most important components of a strong customer success strategy?

First, you need to start by identifying your customers’ desired value-based outcomes and ensure that those have been validated by data, both quantitative or quantitative. Then, you need to align your cross-functional teams around common business objectives, such as retention, and the delivery of customer value.  Lastly, you need to ensure that your strategy is operational, realistic, and feasible so that your team can adopt and implement it successfully.

Q: Customer data is such a critical piece of a CS organization. What role do you see data playing in an organization’s customer success strategy?

I think there’s a little analysis paralysis; there’s a lot of incoming information and it’s overwhelming. Everybody wants to capture everything to make sure that they’re not missing anything; however, in doing that, they’re missing the full story. One of the predictions I have about the future of the CS industry is that Data Scientist or Analyst will become an increasingly important role because they will be able to help people understand and articulate that story. 

I also see qualitative metrics becoming increasingly more important. Customer sentiment is subjective, but it is a significant indicator of the likelihood of a customer renewing. Software companies are becoming increasingly more accepting of the role qualitative metrics play in a quantitative environment.

Q: How do you help your clients identify and prioritize the most relevant customer success metrics to measure?

I always recommend focusing on your organization’s major goal and then identifying 2 or 3 top metrics that correspond to your goals. Net Revenue Retention and Customer Lifetime Value are two high-level CS metrics that are a great jumping off point, which you can then dive deeper into and build on as your organization scales. Your selection of metrics will depend on your organization’s goals and objectives, so these should always serve as your north star when you’re deciding what to measure and what to align your teams around.

Bonus Q: What’s your favourite way to spend a Sunday?

Every Sunday I have family dinner and the family dog is there, my ninety-year-old grandmother is there and my new baby nephew is there. The meals are amazing; there’s a roast, stew and barbecue. In the summer, there will inevitably be a badminton tournament that turns into us relentlessly mocking my brother. My Sunday’s are actually a lot of fun and because my grandmother is ninety, dinner usually starts at 3pm!

Creating A Value-Driven Customer Success Organization

To champion an organization-wide approach to customer value creation and build customer relationships, here are Liz’s top 3 recommendations:

  1. Align your pre- and post- sales teams around value-based outcomes and hold them collectively accountable for delivering customer value. This will ensure that your customer-facing teams are all incentivized to help your customers succeed.
  2. Solidify and build customer relationships by giving customers short term wins. The onboarding stage is one of the most crucial stages of a customer’s lifecycle, so ensure that all of your various stakeholders are collectively involved in the process.
  3. Start by focusing on 2 key metrics to measure your performance, using your organization’s strategic goals as your north star. Once you’ve identified these top cross-functional metrics, you can broaden your selection and evaluate your organization in more detail. 

If you’re ready to kick your Customer Success organization into high-gear, read our article for powerful insights and actions on aligning your Sales and Customer Success teams to drive recurring revenue growth.

Rida Ahmed

Rida is Valuize's Content Specialist. With a multi-channel marketing approach, Rida works to share Valuize's story as well as that of its team, clients and partners.