SaaS Customer Success Movement Pushes Customers to Redefine "Success"
In a previous post, my colleague Ravi Thakur eloquently articulated the evolution of the Customer Success movement in enterprise software, and outlined the differences between customer service and Customer Success.
As he explained, Customer Success represents a shift in the mindset of how software vendors interact with customers. SaaS companies are aligning on this more proactive, partnership-oriented approach to software implementation, and the term Customer Success is popping up in marketing materials and org charts across the industry.
Using the System Does Not Equal Success
Now somebody just needs to tell the customers. Customers can benefit greatly from leveraging this more proactive approach on the part of vendors, but what I find working in the Customer Success organization at Coupa Software is that many customers still do not understand the true meaning of “Customer Success”. The very term leaves them scratching their heads and thinking, “The system is installed and I’m using it. Therefore, I am successful.”
Since that seems to be the reigniting definition of Customer Success, SaaS companies are pushing customers to redefine success. Sometimes I think we should call it "Customer Health" or "Customer Advocacy" because that's a better description of what Customer Success organizations do: to redefine success. We proactively check in with customers to look at certain indicators of health and to make sure they're getting all of the value they an out of their software subscription.
This takes some getting used to for customers who are used to buying a product, installing it and going off on their own to use it, with the vendor largely leaving them alone until it’s time to sell them an upgrade.
With SaaS we're not selling a product and walking away. We're selling an impact to the bottom line and we're trying to work in lock step with the customer along the way to help them maximize it.
SaaS vendors want to earn subscription renewals, and the Customer Success team functions as a customer advocate within the vendor company to make sure they have what they need to get continuing value from the software.
A Two-Way Street
To be clear, SaaS companies are not custom development shops, but at the same time if a customer wants certain functionality, we look at that seriously to determine how we can fulfill that request not just for that customer but others as well. Our customers are smart, and often the capabilities that they're asking for are the right ones that we need to build into the product. They help us define our product roadmap. They push us.
At the same time, we push the customer to think beyond just getting the system up and running as the ultimate definition of success. We try to get them to take a step back and look at what business problems they’re trying to solve, and why.
When you get to the why, you start to approach the quantifiable business result associated with the software purchase. In our space, common answers to the why question are to save time, to remove bottlenecks in the process, to eliminate paper or cut cycle times. Those are all about saving time or money or both, and those things can be quantified. Now we can establish some metrics to define success.
The finance and procurement industries have done a great job establishing benchmarks for automated processes, and Coupa compiles its own benchmark based on data gathered from transactions running through our platform. So, once we understand the why, we can look at industry benchmarks for similar companies and work towards some success metrics that make sense for a particular customer.
Finding a Starting Point
For example, if benchmarks indicate it’s possible to save $20 per order through automation, and you process one thousand orders a week, you should be able to save $20,000 per week on processing costs. At the very least, that's a starting point and something to aim for.
For many customers, this is first time they've really thought like that. They want to automate processes because they know it saves money; they just don’t know how to figure out how much.
It's really not that hard. You need to walk through some different scenarios and come up with some plausible numbers. Your CFO may critique those a bit from a finance standpoint, and your CIO may critique it a bit from an infrastructure standpoint. But you can still show how it’s possible to make a positive impact to the bottom line.
We think we've done a good job if we can get customers from “I want to automate my process because it feels like it'll save me money” to “let's automate the process because we can reduce our processing costs by 50% or $20 an order.” When they start to actually approach those numbers, all of a sudden they see the light.
Once they see that light, then measuring success becomes a no brainer and we can start getting into conversations around increasing adoption of the system, because they can see that the more they increase adoption, the more of a positive impact they can drive. Then they truly understand what Customer Success really means.
It doesn’t mean logging into a system. That’s a very generic, high-level definition. It ultimately means having an impact on the company's bottom line, however that’s defined at your particular company. Once they start to experience that, we can begin thinking and working more strategically together to see what more we can achieve.