The Question That Shall Not Be Asked…
Your best sales and customer success people are all thinking about it. I bet you are too. What if a prospect or customer asks it?
In your senior leadership team meetings, it’s the Voldemort of questions: the question that shall not be asked.
What is the measurable value that the product creates for a customer?
The faces of the leaders in your team tell the story. They feel they should know the answer but it’s not quite there. More questions arise:
How do we calculate that measurable value for a customer?
How do we deliver that measurable value to a customer?
How do we sell that measurable value to a customer?
Marketing looks at Sales. Sales looks at Customer Success. Customer Success looks at Product. Product looks at Marketing. They all feel like the answers should be on the tips of their tongues. After all, everyone knows what the expected customer lifetime value (CLTV) is.
Oh, but wait. Customer LTV has nothing to do with value FOR the customer. Customer LTV is the expected $ value OF the customer for your company. Same goes for ACV and ARR. All about the $ value OF the customer to your company.
Of course, you should be measuring those and other revenue-based metrics for your B2B SaaS business. But what drives the success or failure of those revenue metrics?
The sale, delivery and measurement of value FOR a customer.
So where are your metrics that measure the value delivered FOR a customer? What is the Annual Recurring Value (ARV) realized by each of your customers. What is the Average Customer Value (ACV) realized by your customers by segment and by product. If you were to advise a prospect on what the Product Lifetime Value (PLTV) will be for them should they purchase your product, what would it be?
The Current State Of The B2B SaaS Customer Lifecycle
In the vast majority of B2B SaaS companies today, the design and operationalization of their customer lifecycle strategy does not enable the questions above to be answered. Instead, their customer lifecycle strategy is based on legacy inward-looking sales and post-sales strategies, technologies and organizational structures.
Today’s sales strategies are, in the best cases, still rooted in selling value that will simply get the prospect to buy. This is distinct from selling value that can then reliably be delivered to the customer in order to create a measurable outcome that is meaningful for the customer. Customer success strategies are stuck at V1.0 with newly branded roles trying to be proactive in driving customer usage in the hope that the usage might lead to that customer renewing and even expanding.
The technologies used by both teams, especially Sales, are designed primarily for internal-use only and do not enable effective collaboration with the customer at each stage of the customer lifecycle. Nor do the technologies in play enable a seamless integration of each stage of the customer lifecycle, creating risk and points of failure for both the customer and the vendor.
The organizational structures that define the roles, accountabilities, handoffs and relationships between sales and post-sales are based on the same organizational designs that software vendors had 20+ years ago when selling box software with perpetual licensing. Siloed and with only one unifying thread – maximize value OF the customer.
The time and opportunity to transform your customer lifecycle from this legacy state has arrived. To create a “steel thread” strategy, digital operation and organization that connects sales, post-sales AND the customer to maximize value FOR the customer and, as a result, for your SaaS business.
Why is Now The Customer Lifecycle Transformation Era?
It was always going to take something cataclysmic to trigger the Customer Lifecycle Transformation era. The 20+ year old legacies I summarized above are too entrenched in B2B SaaS leaders and their companies otherwise.
I knew this nearly four years ago when I started writing extensively on why and how the customer lifecycle of B2B SaaS companies must transform to succeed amongst the commoditization of software functionality in the modern subscription economy. I knew that not even the rapid pace of cloud adoption was going to be enough.
And then COVID-19 exploded in all our laps.
Thanks to COVID-19, the dinners, conferences, onsite executive briefings, offsite Napa Valley “executive briefings”…they’ve all been stripped away and, when they return, they will never have the same impact on acquiring, retaining and expanding customers that they used to.
Sitting in their home office, the exec sponsors in your prospects and customers no longer care which vendor will put their face on the biggest billboard at the next user conference. Looking at your latest sales or renewal quote, the exec sponsor is now firmly fixed on one thing: the measurable value they can realize or have realized by having her team use your product.
The exec sponsor and the influencers that surround her want to know:
What exactly is the measurable value the product will create for me?
How do I know when I’m achieving that measurable value?
What do I, my team and the vendor need to do to deliver that measurable value?
The customer lifecycle of the future will answer these questions for every prospect and customer. Just as importantly, the customer lifecycle of the future will enable these questions to be answered for prospects and customers through a collaborative digital experience.
The customer lifecycle of the future will require the legacies of the customer lifecycle in your business today to be dismantled. However, to do this, we need to be able to actively design the future without disrupting the present.
Which brings me, after this very long wind up, to Co.Lab, the innovation offering for B2B SaaS revenue leaders that Valuize and MetaCX jointly announced today.
Introducing Co.Lab, A Future State Innovation Lab
Co.Lab is designed for the B2B SaaS revenue leader who recognizes the need to build the customer lifecycle of the future for their business. Who recognizes the opportunity for an end to end transformation in how they acquire and renew revenue. But who, quite rightly, doesn’t want to disrupt the day to day running of their 8 or 9 figure $m ARR B2B SaaS business.
Co.Lab provides the safe innovation laboratory to design, build and test the customer lifecycle of the future. The Co.Lab concept was inspired by the digital experience and innovation labs found in virtually every large enterprise where the goal is to design and incubate the future in a way that doesn’t distract the company from the business they are running today. Think of Co.Lab as a simplified and scaled down version of the very same thing.
Co.Lab helps B2B SaaS companies define a strategy and a roadmap for change, prototyping their entire customer lifecycle as a safe starting point for a transformation in how they sell, deliver, renew and expand customer relationships based on proof of value.
So in your next leadership meeting, be Harry Potter. Speak the question that shall not be asked: “What exactly is the measurable value that our product creates for a customer?”
Don’t stop there. Should you be greeted with an awkward silence and a scene of panic-stricken execs looking back at you through their webcams, it’s time to transform.
Ready to spearhead a customer lifecycle transformation?
Discover how Co.lab will empower your organization to actively design a future-state customer lifecycle without disrupting the present.