Strong. Determined. Brave…and covered in brick dust and plasterboard.
All the above are common traits of a top Customer Success leader in today’s B2B subscription economy. As Customer Success leaders, we need to be able to run through walls in our companies.
These high, and hard walls are made up of legacy cultures, processes, data, and roles. They were constructed in the era of ‘acquire the customer at all costs’, ‘sell-implement-walkaway’ and ‘feature-function bake offs’.
Even in the new, fresh and shiny startups of today, these walls can still exist. These startups are hiring employees and leaders who have lived within the walls for their entire career. These leaders have, often unknowingly integrated the walls into their new company’s architecture.
Your company will reap the benefits of a subscription revenue model by hiring and training Customer Success leaders to run through these walls. Having broken through, these leaders can establish new cultures, processes, data and roles. These are the new foundations of Customer Success will be aligned with creating recurring value for your customers. Recurring value for your customers translates into recurring value for your bottom line.
For most of my career, I’ve had brick dust in my hair and pieces of plasterboard hanging from my chest. Below, are the two hardest but most important walls I’ve broken through in companies. I’ve found demolishing these particular walls to be the most valuable to companies AND their customers. Are these walls still standing in your company?
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’. Once given a mission from the ‘General’, these ‘fighter pilots’ had full control of the company machine. They used it to find, engage and bring down targets into the company’s top line. The rest of the company were there to support the pilots when asked and with whatever they asked for.
As poor Goose experienced in Top Gun, very few people successfully told the fighter pilots ‘No’. Only a handful even tried.
This dynamic worked fine for the company’s business model at the time. Upfront recognition of perpetual software revenue and upfront billing for multi-year service contracts was the business model du jour. The Sales Rep didn’t need to care whether the customer landed safely and became a success, or exploded on impact.
Then my team and I came along and launched a business based on a gain-share revenue model. We 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 prescribed as the customer achieving recurring savings on its software assets. We took a % of those recurring savings as our recurring fee.
This business model turned the company’s risk profile on its head when compared to the company’s traditional model. Achieving value realization for the customer was imperative and no longer simply an option. I had to start saying ‘No’ to Sales. I had to run through the wall.
- ‘No, we can’t offer this solution 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, I was complained at and resented by many Sales Reps for what they regarded as my blocking sales, reducing deal size, extending sales cycles and over-complicating sales processes. Education, patience, evidence of success and a willingness to take the punches were required from me. With this approach, trust was built and healthy partnerships formed.
Key to creating this trust was an ability to explain why we had to say ‘No’ and identify new paths to the shared goal. The ‘why’ was always centered on the need to ensure that the path to value realization for the customer was achievable and properly mapped. Why? Because that was how we as a business realized value on our bottom line.
I partnered with the Sales org at this company to successfully execute multiple gain-share agreements. These agreements saved customers a lot of money, made the company a lot of money, and, in turn, made several Sales Reps A LOT of money.
I have run through this wall at several companies with the same positive outcomes. Big and small, SaaS and on-prem, subscription and perpetual licensing companies. I expect to go through it several more times. Many companies I learn about still have this wall between Sales and Customer Success teams.
As a subscription revenue business reliant on creating value for customers to create value on your bottom line, your Customer Success leader needs to be able to run through this wall.
The Customer is Not Always Right
Customer Success should be accountable for ensuring that the path to value realization for customers is achievable and fully planned. This accountability flows throughout your customer’s journey, including the sales process. Direct and transparent conversations with the customer are key to managing this. This will often require the Customer Success leader to run through another wall:
Telling the customer they’re wrong about what they say they need.
‘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 for the B2B customer. But what, exactly, is today’s customer always right about?
They’re right that their business processes could probably be made more efficient, risks lowered and opportunities exploited through technology. They’re right that a SaaS product would provide lower TCO and lower upfront cost. These correct assertions are why this customer is talking to your Sales Rep about your SaaS product right now.
But is the customer right about what exactly they need from your product and/or your Customer Success team to achieve their goals? Their desired Value-based Outcomes?
More recently – for a tech company in Vancouver – I was focused on helping audit, risk and compliance customers to realize value from this company’s analytics and workflow/collaboration products. These customers’ ability to report on their audit findings and recommendations was critical to their role. Before adopting our products, a customer would spend hours upon hours manually creating these reports in Word. They wanted this time back.
So, when some of these customers asserted they would realize significantly less value IF our product’s automated reports could not be formatted with precisely the same margins and the line spacing as their current manual report…was the customer correct?
99% of the time: No.
Ultimately, the answer was confirmed by 1) asking the customer WHY they believed this and 2) consulting the Adoption Methodology we had built that aligned with the customer’s desired Value-based Outcome. In this case, time savings.
In 99% of customers seeking to automate their reporting, the margins and line spacing of the report had no impact on their ability to adopt our product and therefore realize the value of automation.
(The 1% were delivering reports to niche external regulators that required exact matching of their reporting standards. Remember: there is always a 1%. There are always exceptions. Always ask the ‘Why’ to find them. )
In the remaining 99%, and many other cases like it, myself or a member of my Customer Success team had to tell the customer they were wrong.
Specifically, we would tell the customer A) Why and B) How they would realize the value they desired without our pre-built report meeting their layout specifications. In a sales cycle, this conversation was, of course, prefaced with telling the Sales Rep ‘No’ first…
Breaking through the wall of ‘The Customer is Always Right’ requires a Customer Success leader to strike a balance on being the ‘Voice of the Customer’ and being the ‘Voice of Reason to the Customer’.
Go check out what walls in your company are blocking the path to recurring value for your customers and business.