Coupa is a company of talkers, passionate about sharing tips, tricks and advice for improving finance and procurement and saving companies of all sizes time and money. But we’re not the only people with opinions and ideas. We’d love to hear from you so join the conversation!
- January 23, 2017
- Ravi Thakur
- IT & Technology
SaaS is not just changing the way software is delivered. It’s changing the way software vendors and customers work together. What’s changed the game is data. Vendors, with visibility into performance data across their whole platform, now have opportunity to understand the best practices of successful customers and create performance benchmarks for different customer types and industry segments. They can use these data insights to help all of their customers get the maximum value out of their software implementations.
And, they have the motivation to do so. Because of the time-based subscription model, vendors have an ongoing incentive to make sure customers get continued value. With on-premise software, account management often consisted of reactive customer support and efforts to sell add-ons and upgrades. Now the function has been transformed to Customer Success, a more holistic effort where the vendor and customer jointly share the responsibility for achieving value throughout the product lifecycle.
This is still relatively new for both customers and vendors, but as SaaS companies mature and collect even more data, customers’ expectations around the value they can get from enterprise software are starting to change, and vendors must respond.
In the early days of building the Customer Success organization at Coupa, if a customer said, "Hey, I'm having trouble," I wanted everyone who could to jump in and help them out, because there’s no higher priority than customers.
Now, there's still no higher priority than customers, but as we and other SaaS vendors scale and build out dedicated teams with a roster of position players, we need to create an integrated customer management framework to ensure that measurable value remains front and center across the handoffs that take place in the early phases of the customer’s deployment. This will vary from vendor to vendor depending on their offering, but here’s roughly what that should look like.
It starts when a customer is in a selection phase, and the goal is value discovery—figuring out the specific business value they're trying to achieve with the software. This is already part of the process in most enterprise software sales. What’s new is the degree to which SaaS vendors have data to help customers hone in on very specific goals.
Some customers already have one or two goals in mind, but more often they just know they need a system to do things better, but don’t have a clear definition of what “better” looks like.
In this phase, the solutions consulting and business value engineering teams use benchmarks and platform data to help the customer define between three and five specific outcomes that will be the focus of the first year or so of the deployment. For a Coupa deployment, examples might be, save 15% on indirect spending in the next 12 months; cut accounts payable costs by 23% in the next 18 months, and realize savings of $5 million by leveraging early pay discounts.
There’s a wealth of information that comes out of this process, but there might be a lag of several months from when we reached an agreement on our value targets to when we finally move into implementation. During that time, everyone goes away and works on different projects. So, the deliverable for this phase is to have the information and agreement packaged up nice and neatly to hand over to the services team.
Once we move into implementation, the professional services organization starts putting together a configured solution designed to realize the value targets outlined in the discovery phase.
The key deliverables for this phase are a handoff document that's shared between solutions consulting and professional services teams, and a transition call between the selling team, the solutions consultants and the professional services teams to get everyone one the same page. There’s also customer implementation kickoff meeting, with the solution consultant presentation to make sure that value thread makes it intact into this phase.
Again, most enterprise software vendors attempt to do this in some fashion. We also encourage every customer to attend a success metric workshop where we use data and benchmarks to help the customer take the high-level goals from the value discovery phase and break them down into incremental operational metrics.
This workshop might be done in month one of an implementation, and the Customer Success Manager may not get the customer for several more months. It’s important at that handoff to be able to say, "I was with you six months ago in this meeting, and I know what your success metrics are,” and for the outcome of the workshop to be packaged up and available for everyone’s reference.
Once the system goes live and is in production, the focus turns to value optimization. Now it's up to the vendor and the customer to work together to optimize the system and processes to achieve the success metrics agreed upon during value discovery and value realization, and set new ones as you hit the initial ones. There’s potentially no end to this phase.
Value optimization is the new frontier with SaaS. With on premise software, vendors simply did not have the visibility into the data to be able to see if the original goals were met, much less help the customer fine tune their performance on an ongoing basis. With SaaS, we do.
As SaaS organizations mature, Customer Success will become more and more data driven. Account managers will be empowered with simple dashboards where they can match actual performance data against what’s been laid out in the success roadmap, and a playbook so they know what actions to take based on whatever data insights they see. They’ll be more like partners or coaches than sales people pushing upgrades.
SaaS companies need to be thinking about the data and tools they need to support that effort, and they need to be building an internal customer management framework like the one I’ve described for pulling it all together and creating that partnership with the customer.
Each SaaS organization has different dynamics and variables, so this framework isn’t one size fits all. The target market, the sales process, the size of the sale and the customer lifecycle will all determine what your company’s framework will look like.
Does this take a little bit more time than just closing deals and implementing them? Sure, in the beginning. But once you get the framework in place, it keeps everyone on the same page, focused on the same goals, working in tandem to prioritize and optimize for defined value, not just “something better.”
Ravi Thakur is Senior Vice President, Services, Customers Success and Adoption at Coupa. Prior to joining Coupa, Ravi spent over ten years at Oracle building and leading a variety of teams in the applications product line. He was instrumental in leading a number of cross functional teams to streamline the product management and development processes after the Peoplesoft, Siebel, and JDE acquisitions.