The third and final part of my blog comes from snowy Kajaani, in Finnish Lapland, wrapping up the series of three posts on customer success strategy for 2016. In this final post in the series on building your customer success strategy for 2016, it’s time to face customer success leaders’ demon – Monetise. As a reminder, I suggest that a customer strategy can generally be split into three primary activities:
- Acquire: find new customers
- Retain: keep your existing customers
- Monetise: expand revenue from existing customers
Acquire and Retain were covered in my previous post from the last two weeks. This week’s focus on Monetise should allay fears about our role in bringing in revenue.
To make life simpler, I split Monetise into two elements:
- Advocacy: building a fan base of existing customers
- Growth: propelling expansion revenue of existing customers
Advocacy: This is why sales and the executive team love customer success. We know how to fan the flames of happy customers to turn them into raving fans, don’t we? And like anything that looks slick and easy from the outside, there’s a plethora of plans, a huge amount of hours invested and a cornucopia of conversations to build the fan base. I’ve done numerous posts on my suggested approach (take a look at my blog – customerfans.wordpress.com), but in essence, it’s like a funnel. Customer start by reporting that they are happy – thank you email, high score on a satisfaction survey, etc. What you do next, how you capture the latest feedback and having someone own this programme defines whether you get random fans or a structured programme.
From a strategic perspective, this must be built in conjunction with marketing. Whilst they, like sales are more likely to consume the output, marketing brings skills we may lack around creativity, event organising and promotion. But customer success focus on planning skills, engaging conversations and perseverance make a perfect match. This strand is definitely an area to get creative – beyond your own industry, where do you see the most vocal fans? How do you overcome the hurdles of B2B policy barriers to public recommendation? How do you reward your engaged fans without it feeling like bribes and sweetners?
Pumping out the positive vibe by partnering with marketing on social media is really important – people always want to align themselves with the successful, happy people. Creating events that are worthy of social media can also raise the profile of fans – think about a customer award event, for example. Championing a customer advocacy programme generates interest, more receptive customers and of course, more advocates!
Growth: We shouldn’t fear being held accountable for a revenue number. Instead we should invest thought and energy in understanding where we can contribute. With a well-delivered customer experience, a reliable product or service and a clear customer success strategy, seeing where we can work with customers to help them discover additional value through more products and services is inevitable. So let’s be courageous and commit to a revenue number!
Agreeing how the responsibility for expansion revenue within the existing customer base transitions from sales to success is probably the thorniest issue to address. The loss of commission for sales reps needs to be well thought through and fully signed off by all before any change is introduced. Paying both success and sales for expansion revenue is not an option – it erodes margin and shows indecisive management, so invest time in working with sales on a plan to make the change as smooth as possible.
Professional services is another great revenue stream for customer success. As the trusted advisor of the customer, customer success folks are often highly valued, and thus in B2B relationships, customers are often happy to pay for their specialist knowledge. Make sure you’ve defined how it works, documented what is and isn’t included (to avoid scope creep) and agreed professional services as a formal product.
In terms of outcomes and measures, be cautious, but be bold. Customer success can and does generate huge amounts of revenue for a business. Whilst this may primarily come from retention activity, stepping into expansion revenue from existing customers as well as creating vocal fans who help close new business is very powerful. Set realistic targets, perhaps phasing in soft growth targets across the year, and make sure that the team is rewarded with bonuses for their delivery. Likewise, the measures for advocacy should be pragmatic but bold, holding the success team to account for driving customers into the entry level of your advocacy programme, and supporting their move up the value chain.
Hopefully you’re feeling emboldened in your customer success strategy, and that as 2015 draws to a close, you’ve built a rocking strategy for 2016. So from the gorgeous snowy paradise of Finnish Lapland, wishing everyone Hyvää joulua ja onnellista uutta vuotta (that’s Merry Christmas and a Happy New Year to those who don’t speak Finnish!)