Strong. Determined. Brave. And covered in brick dust and plasterboard. These are all common traits of customer success managers who are driving sustainable growth for software companies in the subscription economy. These leaders are armed with customer success strategies that empower them to blast through the walls in their businesses.
Companies unintentionally constructed these sky-high, solid walls in the era of ‘acquire the customer at all costs’, ‘sell, implement, walk away’ and ‘feature-function bake-offs’. Nowadays, these walls block us from efficiently and effectively delivering recurring measurable value to our customers.
Even in today’s ‘born in the cloud’ companies, these walls still exist. These organizations are hiring staff who have lived within the walls for their entire careers. These employees often unknowingly integrate the walls into their new employer’s architecture.
Empower your Customer Success Managers
Empowering your customer success managers to smash through these walls in your own organization will increase revenue retention, expansion and optimize your customer acquisition. Throughout my career, I’ve often had brick dust in my hair and pieces of plasterboard hanging from my shirt. Here are the two of the hardest but most important walls I’ve broken through in companies:
1. Saying “NO” to Sales
Goose: “No. No, Mav, this is not a good idea.”
Maverick: “Sorry, Goose, but it’s time to buzz the tower.”
In the mid-2000s, a tech company I worked with in London branded their Sales Reps as ‘fighter pilots’. These fighter pilots had full control of the company machine. They used it to find, engage and take down new accounts. The rest of the organization was there to support the pilots with whatever they asked for on demand.
As poor Goose experienced in Top Gun, very few people successfully told the fighter pilots “no”. That’s how the wall between sales and the rest of our organization was built.
This dynamic worked fine for the company at the time. The business model du jour was upfront recognition of perpetual software license revenue and upfront billing for multi-year service contracts. The Sales Reps didn’t need to operate like customer success leaders or care whether the customer landed safely to thrive, or exploded on impact. The lifetime value of that customer was almost entirely secured in that one upfront transaction.
This was until my team and I launched a new business unit based on a gain-share revenue model. In this model, the company got paid when the customer achieved value. We got paid again when the customer achieved more value. And on and on it went. In this case, value was defined as the customer achieving recurring savings on their software assets. We took a percentage of those savings as our recurring fee.
For this new business unit to grow and be profitable, acquiring the right customer with the right expectations was imperative and no longer simply optional, as it was in the legacy business model.
I had to start saying “no” to Sales. I had to run through the wall.
- “No, we can’t offer the service to that customer.”
- “No, we can’t agree to X without knowing Y.”
- “No, we can’t contract to A without the customer agreeing to fulfil B.”
- “No, we don’t want the business…”
- “…and this is why.”
Initially, many Sales Reps complained and resented my actions that they perceived as risking reduced deal sizes, extended sales cycles and over-complicated sales processes.
My team and I needed to cultivate customer success leadership—as well as demonstrate patience and a willingness to take the punches—as we educated others on the evidence of this new model’s success. We built trust with this approach, and success for the Sales Reps, the business and our customers followed.
My team and I partnered with Sales Reps to successfully land multiple new customers with gain-share contracts worth 9 figures in revenue in some cases. These agreements saved customers an enormous amount of money, made the company a great deal of money, and, in turn, made several Sales Reps A LOT of money.
The ability to explain why I was saying “no” to the legacy business model and to provide new ways to achieve both the salesperson’s goal and my goal was key to establishing this trust.
The reason behind the “no”was always centered on the need to ensure that the path to delivering recurring value for the prospect would be achievable with that prospect. This path was how our business model survived and sustainably grew into the largest business unit in the company.
As a recurring revenue business reliant on creating value for your customers to increase the value of your bottom line, you must knock down the wall between your Sales and Customer Success teams.
2.The customer is not always right
‘The customer is always right’ has long been a core value for businesses. Harry Selfridge coined the term in 1909 for his now famous London department store. In today’s information age, and with the emergence of the ‘self-educated buyer’, would Harry claim the customer is even more right today than in 1909? Probably so, especially when it comes to the B2B customer. But what, exactly, is today’s customer always right about?
Customers are right that companies’ business processes could probably be more efficient, risks could be lowered and opportunities could be realized through technology. These desires are why customers are talking to your Sales Rep about your solution right now.
But is the customer right about what exactly they need from:
- your product?
- your Customer Success team?
- their own users to achieve their desired goals?
Your customer success leaders should be accountable for ensuring that your customers’ path to value realization is achievable and fully mapped out. This accountability should flow throughout your customer’s entire journey, including the sales process. Your organization must have direct and transparent conversations with customers in order to manage this flow, which will often require your Customer Success teams to run through another wall.
Telling the customer they’re wrong about what they say they need.
Take the following scenario—one I dealt with constantly both pre- and post-sale during my time at software companies in the 2010s. You may have encountered it, too.
Our prospects and customers were looking for a way to automate the reports they were spending hours creating manually. Our products contained the reporting functionality that, when adopted by the customer, would deliver this time-saving value.
So…when prospects and customers claimed they would be unable to realize this value IF our product’s automated reports could not be formatted in exactly the same way as their current manual report…were they correct?
99% of the time, no. The customers were wrong.
What these prospects and customers had identified was a cost of change. And in the 99%, my team and I could prove that this cost of change did not outweigh or prevent the outcome they desired.
Your customer success leadership must ensure the balance between cost of change and available value is assessed for all qualified prospects and customers.
In many cases,I knew that the change feared by our customers did not outweigh or prevent the outcome they desired, so I ran through the wall. I challenged the customer’s own assessment of the situation and prescribed my own diagnosis and prescription. In a sales cycle, this conversation was often prefaced with telling the Sales Rep “no” first…
Remember, there is always a 1%. There are always exceptions. Your team’s assessment is key to finding them.
In the previous scenario, the 1% were delivering reports to niche external regulators that required an exact match to their reporting standards. The cost of not meeting these standards was high. The cost of changing formatting did outweigh the value of automated reports with different formatting.
To break through the wall of ‘the customer is always right’, your company needs customer success leaders who can strike a balance between being the voice of the customer and the voice of reason to the customer.
Need some guidance?
If you’re in need of guidance to discover which walls in your company are blocking the path to recurring value for your customers and business, Valuize can help.