About Phones and Mobility

We celebrate Memorial Day in the States every year at the end of May.  One of the things I like to do on the holiday is catch a baseball game with the local minor league team.  And I tend to watch people in addition to watching the game.

This year I made it to a game.  And while I was there enjoying the game with a hot dog and a soda, I noticed something very interesting.  I saw more people carrying mobile flip phones and other "unsmart" phones than smart phones (Note:  I do not live anywhere near Silicon Valley).  Smart phones seemed to be predominant in the over 40 crowd while "unsmart" phones appeared to be the choice over the under 40 people.  I was a bit stunned.

Now, keep in mind some qualifiers.  First, there were probably about 6,000 people at the game...I probably laid eyeballs on a 10th of those people at the most (I spent more time checking out people as the home team lost badly).  Second, my ability to judge age is not the best.

Still, my observations got me thinking.  Thinking enough that I actually talked to a few people about it.  All of the people carrying the "unsmart" phones made their choice because the cost of the monthly service was so much less.  And so long as their phone can text, check email, and function as a phone (in that order of priority), they were willing to live with the limitations and save the money.  Those people carrying smart phones?  In most cases, their employer subsidized part or all of the hardware and service costs.

Now here is the interesting thing to me.  We stress mobility in the enterprise for two reasons:  to increase the productivity of our workforce and to connect with our customers.  But if the smart phone tide for consumers is beginning to ebb due to increasing costs, doesn't that eventually disrupt the idea of using mobility to connect with our customers?  Is cost beginning to drive a new trend?

So that's how I spent my holiday...at the ballpark observing and pestering people about their mobile phone choices.  I'd be interested in hearing your thoughts and opinions.  Comments welcome.

Let Mikey Try It

Life Cereal came up with the perfect early adopter commercial back in the 70's:  Let Mikey try it.

It seems as though the providers that have mastered SaaS have a few things in common; one is leveraging an early adopter program.

The idea is that the provider shares new applications or new major releases with a small set of specific customers before making the new software generally available.  They do that because it allows them to learn from those customer experiences: catching software bugs and...just as important...perfecting the service component in the offering.  It's the latter component where an effective center of excellence comes into play.

By addressing service and service process issues based on learning acquired in the early adopter period, an effective center of excellence will have standardized processes and procedures for customers onboarding and starting with the new software by the time the product is generally available.  Which makes getting from onboarding start to valuable first use happen better, faster and cheaper.  And, in a SaaS world, that's the key to customer success.

It's a good model:  let Mikey try it.

A CoE for Customer Success?

So if the model we've put together in the past few posts is the key to the SaaS lifecycle, how does a Center of Excellence tie into all this?  Good question.  Let's take a look at it.

The CoE I work in, which seems typical for the industry, essentially divides the work into three categories:  Programs, Customers and Solutions.  The detail plays out in the following table:

BTW, don't thank me for this work breakdown.  It's the brainchild of Oracle's John Cafolla.  My particular role, which falls mostly into the "Solutions" category, is currently focused on building tools and technologies that improve the transition of our SaaS customers from "Start" to "First Valuable Use" - yup, another application of the "better, faster, cheaper" mantra.

Keep in mind that it's an evolving approach...note that "Escalation Support" (which we're previously defined as a negative-value activity in SaaS) is still such a substantial part of our workload as to hold a spot in the table.

It's also important to keep in mind that our particular CoE also deals with a huge base of customers coming to SaaS from legacy applications.  Due to the sheer volume, moving those customers forward is just as significant as helping customers who are new to us.

Finally, it's also worth noticing that the Solutions work focuses on the "Onboarding" stage of the SaaS Lifecycle...for the moment.  As our own journey as a SaaS provider moves forward, we'll eventually shift into an emphasis on tools and technologies to improve customer experiences in the "Nurturing" stage.  But that's a topic for another day.

So you asked how a Center of Excellence fits into the customer success - oriented SaaS lifecycle model?  Well, here ya go.

Comments encouraged.

Drivers

About the driving wheel
Want to know how it feels
To be taking time out, turn it all about
We're taking hold the driving' wheel
            - From Poco's "Drivin' Wheel"

If you can't measure it, you can't manage it
             - Peter Drucker

In my last post, I promised we would talk about influence drivers here.  So let's do that.

In any endeavor we undertake, we naturally want to achieve success...one or more positive outcomes.  But measuring the positive outcomes themselves give you after the fact information; puts us into reactive mode.  And, in customer success, we want to be proactive rather than reactive.  With that in mind, the idea is to measure drivers that influence positive outcomes...drivers that indicate how we're doing during the journey to our outcomes.

A really convenient point here:  most of our resulting outcomes are really determined during SaaS onboarding and nurturing...and most of the influence drivers we find relate to onboarding and nurturing.  Cool how that logic ties together, isn't it?

In a nutshell here, the idea is to measure influence drivers in a timely fashion (note that I'm avoiding the discussion of real-time, near real-time, and the related technical dogma - I'll only say that sooner is better).

So if it were me measuring customer success, I'd focus on something akin to the following:

Onboarding Drivers

• Time to Provision:  Measure in days the time from when the customer subscribes to when they have access to all the SaaS environments promised.  The smaller the number, the more positive the influence.
• Time to Value:  I'd measure this in days from the completion of the provisioning to the time of first value use or "go live" date.  The quicker the better.
• Initial Adoption:  What is the rate of use by the initial individual users at the time of first value?  I'd measure this by transaction numbers or usage (daily, monthly, and/or frequency).  We're simply setting a baseline here to measure growth or contraction during nurturing.
• Customer Satisfaction:  This comes down to a basic yes or no question:  would the initial set of users recommend your service at the time of go live.

Nurturing Drivers

• Adoption
• User Adoption: growth in usage - more transactions, more users
• Feature Adoption:  do we see new types of transactions?  We're looking for growth in use case solutions or in the use of additional features included in the applications.
• Capacity Utilization:  how many seats a customer is using relative to those they are paying for in the subscription?  the higher the ratio or percentage here, the better.
• Business Results:  measurable gains that relate to the outcomes desired by the SaaS customer.
• Escalations:  the number of open inbound requests, the number of closed requests, and the time to resolution for closed requests.  The smaller the numbers here, the more positive the influence.
• Customer Feedback:  The same deal here as with Customer Satisfaction, just a different point in the lifecycle.  This comes down to a basic yes or no question:  would the initial set of users recommend your service at the time of go live.

Not only would collect these for onboarding and nurturing metrics, but I would share the metrics for each customer with that customer.  Because influence drivers matter just as much for customers as they do for providers.

In addition to the metrics above, I would also measure these outcomes:

• Renewals:  both in terms of dollars and number of customers who extend their subscriptions
• Growth: both in terms of dollars and number of customers who subscribe to additional SaaS products
• Churn: both in terms of dollars and number of customers who cancel their subscriptions

Let me sum it up.  The mission of customer success is to add value for both customers and providers.  To add that value in the world of SaaS, you must be proactive rather than reactive.  And the best way to start being proactive is to measure influence drivers.

Last point for the day:  I'm stealing a huge portion of these ideas from Guy Nirpaz's book "Farm Don't Hunt: The Definitive Guide to Customer Success".  A very worthy read if you're into SaaS and customer success.

Comments welcome...

Customer Success - What It's Not

Sometimes it's easier to wrap your brain around an idea by first defining what it's not; kind of like picking the right answer on a multiple choice test by eliminating the bad choice first.  Sound like fun? Let's give it a go.  For your edification, some examples of what customer success is not:

• Pipeline Management:  The idea here is to follow the classic sales funnel (aka the image below) by driving the customers up for renewals in the next quarter through that process.  The problem?  Most customers decide whether or not to renew long before the SaaS provider starts this process.  So this approach?  Not customer success.

• Project Management:  A great model to follow while a new customer is on boarding or while an existing customer onboard new applications or functionality.  But the Project Manager approach fails to address the subsequent crucial nurturing cycle that takes place after Onboarding.  That's not customer success.
• Customer Support:  The support approach, in practice, deals mostly with resolving escalations: "the customer is unhappy", "the customer has threatened to cancel", you know...all the unhappy situations where providers jump through flaming hoops to make a disgruntled customer happy again.  Activity is triggered by the escalation, and that activity is usually expensive.  In customer success, the idea is to be proactive and make an impact before the customer goes down the path of disgruntlement.  So Customer Support does not equal Customer Success by any means.

Note here that our discussion of what customer success is not has been focused on outcomes: renewals, onboardng, escalation resolution.  None fit.  So what's my suggestion?  Focus on the drivers during the onboarding and nurturing stages that provide your desired outcomes by influence.  That's right, manage a portfolio of drivers in order to add value through a customer success approach.  What drivers?  

Well, kids, it's Friday as I write this.  And T-Bone Walker taught us all that "the eagle flies on Friday" (Google up a tune called "Stormy Monday" for more details on that).  My eagle is set to fly. The next post will be about drivers...probably on Monday.  Y'all have a good weekend.

Defining Customer Success

Since I've started this new blog, people have noticed that I've picked up a real focus on customer success.  Some have even implied that it's the only subject I'll be writing about.  Seems those folks don't know me very well...I'll be writing about a wide variety of topics relating to enterprise software.  It's just that I've been deeply involved lately in SaaS Customer Success matters and I've learned a ton.  That's what bloggers do: we learn about something that is new and exciting and useful, then we share that learning with others by writing about it.  That's what I'm doing here.

On to the second thread of feedback I've been hearing:  define this SaaS Customer Success thing.  We've all heard about it, we know it's important, but we struggle to clearly define it.  OK, let's tackle it right now.

I actually go with two different definitions.  Because your definition of customer success in the SaaS world depends on your perspective:  are you a SaaS customer or a SaaS provider?

In providing a definition from the customer perspective, I'm spinning off a definition provided by SaaS Customer Success guru Lincoln Murphy:  customer success is the achievement of your desired outcome(s) through interactions with your SaaS provider.

• Achievement of your desired outcome(s) - did you get what you expected to get? Are things better than when you started your SaaS journey?
• Interactions with your SaaS provider covers all the interaction touch points:  market and sales, onboarding, nurturing...did it all work together to make things better as quickly and inexpensively as possible?  

So, you may ask, what is Floyd thinking with this latter portion of the definition?  I'm thinking that when we talk about Software-as-a-Service, we place a huge emphasis on the service - if it was just about the software, we'd call it Software-as-a-Software...and that doesn't make any sense at all, now does it?

From a provider perspective, the definition is a bit more quantitative than the qualitative definition customers use.  It's all about maximizing customer lifetime value:  CLV=APA/Customer Churn Rate

• CLV = Customer Lifetime Value
• ARPA = Average Revenue Per Account (Monthly)
• Customer Churn Rate = The Monthly Percentage of Customers Cancelling or Failing to Renew

Think about this formula for a minute and you'll realize the huge influence of the "interactions" portion of the customer definition on CLV.  So both customers while emphasize the importance of service interactions, SaaS providers are incentivized to optimize those interactions.

So now that I'm up to my eyeballs in the work of a Center of Excellence for Customer Success, what's my personal bottom line?  It's in creating more value more quickly for both the customer and the provider.  That's a tough nut to crack.  We'll talk about it in a subsequent post.

Needless to say, your feedback is always welcome.  Get intimate with the comments.

SaaS - The High Road and The Low Road

O ye'll tak' the high road, and I'll tak' the low road,
And I'll be in Scotland afore ye
              - From "The Bonnie Banks of Loch Lomond"

So we just talked about the lifecycle in SaaS.  While we can see that it's more than a little different from what we've seen in the past, it's also a bit tough to match those lifecycle states to the types of activities SaaS service providers (both software vendors and partners) and customers.  One group  must 'take the high road while the other must 'tak the low road...two paths to the desired end results. With that challenge in mind, I offer up the following for your consideration:

Customer Activities play out like this:

• New:  A newly signed customer.  The important goal here is to gain user acceptance by winning hearts and minds.  The best tactic here is to get to "first valuable use" (aka "a big win") as quickly, easily and inexpensively as possible.
• Growing:  Customers want to be here most of the time.  If customers achieve their desired results, this is when it happens.  We're also looking for growth in value through an increase in engagement:  more users, more transactions, more use of features, subscription to additional products.
• Renewal:  A very short activity in which the customer (hopefully) opts to renew subscriptions and jump right back into the growth phases.
• Cancelled:  If the New or Growing phases have not been good experiences, customers will terminate subscriptions and move to another solution.  One of the benefits of SaaS for customers - doing this is easy in comparison to the historical effort of switching platforms, because there is no tech stack to transition.

In parallel to each phase of Customer Activities, Service Provider activities play out like this:

• Integrate Services:  This includes everything the Service Provider does to get a customer from "New" to that first valuable use.  Creating and provisioning instances, implementation, initial training, and whatever else is done to get the new customer's subscribed services up, running, and adding initial value.
• Tending:  Much like parenting a newborn child, the work does not end when the baby is delivered.  You tend to that child:  feeding, changing, socializing, managing health and development... It's much the same with SaaS customer.  You're continually working to develop value: new use cases, new capabilities, post-implementation training, and so on.  The quality and volume of the Tending effort here is directly related to whether customer accounts head to Realization or Churn.
• Harvesting:  This is when the Service Provider reaps the results of their efforts in Integrate Services and Tending.  If it went well, we'll see customers renew their subscriptions.  We'll also see opportunities to upsell (expansion to existing service subscriptions) and cross-sell (new services for existing customers).  But if Integrate Services and Tending did not meet expectations, we move into...
• Saving: Work done to address issues that may lead to customer cancellation.  This is always bad news, but the real bad news is this:  across the SaaS industry, we have yet to be able to consistently save projects that have gone off the rails during the Integrate Services or Tending phases.  To a very great degree, there is no saving the soup once it's turned bitter.

So the big takeaway here?  SaaS customers and service providers take different paths and engage in different activities to wind up together in the same happy Realization zone...it works better when each  knows how the other gets there.  And it's also important to realize (and this is a hint for the next post) that creating customer success is an exercise in portfolio management - it's not a traditional pipeline management effort.

Comments?  You know where we keep 'em.