May 30, 2016

Desired Outcome is the Key to Customer Success

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Tags: Podcast

Lincoln Murphy of Winning By Design and Sixteen Ventures was a recent guest on our podcast, B2B Nation: Smarketing Edition.`

In the episode, we discussed:

  • How the way companies look at customer success has changed
  • Properly framing customer success with desired outcomes
  • How companies can and should make their customers more powerful
  • The relationship between ABM and customer success

Below are some of the highlights from our conversation.*

“Customer success” has been around for over 15 years.

“Five years ago, it started to really become a thing of its own. The notion of customer success started at Salesforce. That had a lot to do with people actually leaving Salesforce and going out to start companies, join companies, or to become investors. It also coincided with a maturing of the SaaS world. Investors looked at churn and said ‘This is a problem. What can we do about it?’ The vendor’s job, then, was not just to acquire customers, but find ways to keep them from leaving.

“Once you stop churn or get it down to a very low level, where do you go from there? Are you done? No. Customer success is something that’s super powerful if you think about it as a lever for growth.”

Desired outcome is the key.

“Customer success is when a customer achieves their desired outcome through their interactions with your company. Desired outcome is very simple. It’s what the customer needs to achieve in the way they need to achieve it. There’s the desired outcome, and then there’s their appropriate experience. When you bring those two things together, you get the desired outcome.

Customer success is when a customer achieves their desired outcome through their interactions with your company.

“If we can help them achieve their desired outcome, they will be successful and stay with us. They will buy more and they will advocate for us. We need to do that through all of our interactions with them, not just their use of our product. Starting when they first interact with sales and marketing to the time they buy, we need to be selling to them in a relevant way. In a lot of cases, customers will stay for five or even ten years.” 

Customer success started with SaaS.

Here’s why:

1. “SaaS is generally a subscription model, so it’s very easy to know when a customer leaves. They tell you they’re done. ‘I’m not going to pay you anymore.’ It’s very easy to notice that. In a transactional business, you don’t really know when a customer stops being a customer. If I go to Starbucks and decide this is the last time I’m going to buy a cup of coffee from them, I don’t get my cup of coffee and then tell the barista, ‘Write this down. This is the last time I’m going to buy anything from you.’ 

2. “In the SaaS world, most successful SaaS companies have funding from venture capital firms from very early on. What that means is that there are external people, a board of directors, looking at their numbers. So we have a subscription business model where we know it’s easy to identify when customers leave. Then we have an external set of eyeballs looking at our numbers, putting pressure on us to reduce churn. Those two things are why I think customer success really took hold in SaaS.” 

Customer success affects startups all the way to enterprises.

“I’ve had some interactions with HP, Cisco, and Citrix. This is stuff that big companies are applying and finding a lot of success with. But very young companies are also seeing amazing results when they apply ‘desired outcome’ thinking.

“In some ways, customer success as churn mitigation is just another way of doing account management; it’s about the financial side of an account — kind of just renaming account management to customer success. A lot of those things are already happening, so the movement seems to be getting traction.” 

Customer success isn’t just about happiness or delight.

“Understanding customer success as an operating philosophy is one thing. But customer success management should be a part of the organization. Customer Success needs to have the same structure and the same processes as sales, as marketing, as product, as every other part of the company. It’s not just about delighting the customer and making people happy. It’s about actually making customers successful. To do that, we have to know what success is. Sometimes there are customers who never seem happy — the ones who are always opening support tickets, pushing back on us, asking for new features.

“I would love for everybody that I work with to be emotionally happy. But I can’t solve for your happiness. The only thing I can truly solve for is making sure you achieve your desired outcome. If that makes you emotionally happy along the way, that’s a bonus. There are times I might even push a customer into discomfort, because I know they need to do that in order to achieve their desired outcome.

“That’s something we need to understand. In a real-world example, do you always like your personal trainer? No. They push you outside of your comfort zone and make you work harder. They get results. “

The FlipMyFunnel Festival will be great.

“I’m really looking forward to hearing from everybody. It’s going to be an amazing event. I’ll be giving a talk called ‘How to take the power back.’ We talk a lot about all this great stuff, but the reality is, especially in the SaaS world, there’s a lot of power in the customers’ hands. How can we take that power back? There will be a little bit of twist there.

How do we take the power back? How do we use customer success to do that?

“It’s going to be a lot of fun overall. I hope to get everybody hyped up about customer success and how it fits in with ABM.

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B2B Nation: Smarketing is a podcast for B2B sales and marketers, featuring expert opinions and advice on the most important topic customer service in the industry. Check out our other episodes on iTunes, or follow on Twitter: @B2BNation_Smar.

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*Some excerpts have been paraphrased to enhance readability.