The Advent of Customer Success
After reading several articles about the advent of customer success recently, I find it time to share more about our actual experience and vision. At the time, none of us had any indication of how this would evolve. We were just on a mission to change the world of service and support in the tech industry – starting with our own organization as the example and sandbox. The initial concepts behind customer success actually began when I was at Harbinger, an Electronic Data Interchange network, but the prequel is a story for another article.
At Harbinger, I was a Vantive customer. As a part of the sales process, Vantive gifted a copy of “Total Customer Service”, written by board member Bill Davidow. I was an immediate advocate for the concepts he championed. When John Luongo approached me about joining Vantive, I felt I had reached the pinnacle – heading services for a company that was delivering solutions for services.
My vision was to create something “special” around the quality of service we provided our customers. Had I been asked to define “special: at that point, I would have merely said: we’ll know it when we get there. But I knew that we would have to think outside of the box. We needed to do something different.
First, fix the problems.
The first step was to improve the basics of our support. As with each organization I’ve led, developing a process was a step-by-step operation. To be clear, we didn’t create the Customer Success Manager to mask problems - we fixed the problems and then added a new level of service later. There was no best practices document –everything we did, we created from a blank slate. I was surprised to find in my first week, there were literally 450 open cases in the database. (I recall John stating that we narrowly dodged a bullet. My response was that he had been hit with an Uzi. I felt confident because I had his full support, which made my job so much fun.)
My first step was to assign out the open cases to engineering and consulting. There was no way I could ever catch up if I approached it with first-in-first-out on these old cases. It took about two weeks to clear the backlog. Now, the support organization could focus on the new cases coming in.
I always felt that a tiered support organization was inefficient. Why not have an expert take the initial call? I was given a budget for 12 people at $60K per year. I began my search to hire engineers into my support positions. I was immediately met with doubt from the executive team—no one felt engineers would ever work in support. Turned out, the problem was not the job: it was the salary. I hired 6 people at $100k per year. The qualifications were simple – you could have never worked in support, and you had to despise having to call a support organization.
The results were incredible. This team was amazing. We achieved the goal of ending every day with fewer than 10 open cases in the database. Because they were engineers, they created unprecedented tools. Keep in mind, it was 1995 – pre-internet. Like most support organizations, they became bored with providing the same answer over and over and having the customers make errors after writing down incorrect instructions. Rather than complaining, they solved the problem. We shifted very quickly to email responses rather than phone calls. This team went on to create a database of solutions and then worked with our engineering team to build a portal to allow the customers to submit and see their cases. It took little time to add a resolution database. This portal technology actually became a product we offered our customers as well.
Again, knowing how much they hated resolving the same question or case, they added a step to closing a case. A corrective action had to be defined, entered, and assigned. Actions could be assigned to training, products, documentation, marketing or sales. We considered any request coming into the support area to be a measure of the entire company. The goal was not only to resolve the request, but to prevent it from ever occurring again.
I recall one of our reps scheduling time with me to discuss her concern that we only had 6 tech support engineers. She was having to sell against the fact that our competitors had 25-30. We quickly educated our sales force of an incredible differentiation: having an excess of support engineers signals product problems and a poorly run organization.
The team was so energized – each step was doing something new and innovative. They even added the ability to translate all our resolutions and communications into the language of a customer’s choice. It literally took about 2 hours after I proposed the idea to them.
Eventually we stepped up to complete an audit to be deemed a “world class support organization”. We soared through the process, passing with relative ease until we hit one final glitch. Our first call resolution rate was considered too low. While that seems like the right goal at first blush, we decided to challenge the audit itself: we argued that in a world class support organization, if something could be solved in one call, then the call should have never occurred. Our goal was reducing the number of calls by ensuring the quality of our product which included but was not limited to the code, the documentation, the training, our marketing, and our sales process.
True customer service does not mean taking pride in how well you deliver the support, but rather eliminating the need for it. Once we were confident that we had designed our systems – both technology and behavior – to accomplish this, we were ready to take the next step.
Be a visionary – Proudly lead the way
Our next approach was not to just provide support on how to use our software, it became about teaching others how to become world class.
We coined the concept of customer advocacy, sharing that customer satisfaction and customer loyalty were not enough. I can still literally envision the slide: “Customer Advocacy”—when someone is willing to build your case or plead your cause to support your efforts. If you can achieve the level of advocacy, your customer base becomes your primary lead source and the fuel for your corporate growth. We knew literally every contact made with a customer, a prospect, a partner, an analyst, a journalist would impact the market’s perception of us.
We stated that we had 100% referenceability. – a term typically used to measure how many customers would share their opinions of their experience with your company. Most misunderstood and immediately voiced their disbelief. Once I had their attention, I simply declared that everyone did. 100% of your customers are sharing their opinions of you and your company, but you can never know if they are 100% positive. One phone call on a bad afternoon before your customer catches a flight can result in that story completely influencing your company’s reputation. Now with social media, it could take milliseconds for this to occur. We knew every single touch point mattered.
The next level: Customer Success Management.
It wasn’t until after all of this had been implemented that I conceived of the Customer Success Manager (CSM) role. It came out of a discussion around whether customers should pay for account management after the sale. I was adamant that it was our responsibility and if we performed the role correctly, then revenues would increase to cover the cost. I was also adamant that this role was a services role, not a sales role. I knew from my own experience: the customer will more often place trust in the guidance of someone who is not getting a commission for their advice.
Introduce the Customer Success Team, managed and led by the Customer Success Manager. The vision was that each customer would be assigned a team consisting of a member from every organization in the company: Sales, Sales Engineer, Tech Support, Product Management, Finance, Engineering, Training, Executive Sponsor. The Sales organization introduced the Customer Success Manager to the prospect early in the sales process, sharing that this person was THE reason they would be successful in implementation of our systems.
We started out with just one CSM and slowly added individuals as we designed out what the process would be. The key in this approach was understanding that the foundation of success is to set clear expectations. I recall the first time this became evident to me. I’m sure each of you can relate. I was still working in Atlanta and had to drop my car off at the dealer for service. I’d been told that they would have a shuttle service, so I didn’t ask anyone to pick me up. Long story short, it took 2 hours for me to get to my office, and I ended up having to have the shuttle drop me off at the train station and then walking from the train station to our offices. In that frustration, it occurred to me that if they just had not offered the shuttle, then I would have arranged a lift beforehand and would have been a satisfied customer.
Soooo, we were on a mission to ensure expectations were set correctly. Our first step was to schedule a kickoff meeting with a team from the customer side, which included the executive who signed the contract, the people who were responsible for implementation, and the people who would use the product. We reviewed exactly what had been purchased, our support policies and procedures, what was covered and what was not, and how we could help them with consulting services if it was not covered.
Excited about how this was being received, we decided to add more. We were going to have the customer share with us how they would measure success and what they expected of us in order to achieve that success. I had many doubters, mostly those concerned that the customer would ask for things we couldn’t deliver. That worry was actually the easiest to dismiss. The kickoff was a time to reset their expectations if their requests fell outside of our support policies. While this sounds like it could be contentious, it really wasn’t. We could have a good discussion of their need and determine how it could be addressed through a consulting contract. Typically, it was just that what they were seeking was not covered by the support contract. In some cases, we did find that what they were seeking would be beneficial to all and we updated the support policies. Exceptions to your defined support protocol are often the first places to fail.
The difficult part was unexpected. We found that customers were quite uncomfortable in this process. I had not anticipated this, but what we had really done was added accountability for the customer in the process. They had to be able to clearly articulate their goals and most accounts had not even considered how they would measure their success.
Eventually we even added a module to our CRM system where we logged expectations, so that everyone in Vantive could see customer goals and our commitments to each individual customer. Rather than having customer satisfaction surveys in which the customer is asked how we met their expectation for generic activities (for which we didn’t know their expectation), our research team added a survey question to each expectation record in order to create individual surveys for each customer.
When we completed a review of the expectations after 6 months, we would ask the customer if they felt successful. The point here wasn’t to prove to them that we did what we said, but rather to determine if what we had all agreed upon had created the desired results. If it didn’t, then we needed to rethink and perhaps reset the expectations. The surveys were not for statistically significant reporting. They were designed as a powerful tool for operational feedback.
The most difficult behavioral change for us to accomplish was to teach my team to take control of the implementation. Stereotypically, services individuals are comfortable with serving – not controlling. I found myself challenged with this on occasion as well. But to truly achieve success we must know what is required and we must own – yes own – the process of guiding the customer to it.
Some conversations were epiphanies and cemented my own understanding. One in particular stands out. We were selling to Cisco. It was quite a large contract. The decision maker requested a meeting with me before making their final decision. He was adamant that this was a make or break and that I better not flub this meeting.
The executive was quite direct: “We have had a failed implementation with Siebel and a failed implementation with Clarify, what is going to be different with you?” I paused. My heart began to pound and my palms produced an inordinate amount of sweat.
Then I told him that the sales rep had been correct, that this was going to be a make-or-break conversation. I began slowly. I explained: Siebel has a great product and has had over 1000 successful implementations, and the same was true of Clarify. From where I was sitting, it appeared that Cisco was the common denominator in the failure.
I continued: The difference with Vantive was that when we signed a contract with him, then our teams would become one virtual corporation and that he would agree to let us lead. I shared that we knew how to be successful and that we would hold him and his team accountable. I committed to personally be involved as the Executive Sponsor.
There was a silence that seemed to last much longer than it did, but his response was quite positive. We began discussion of what our process entailed. And in the end, we succeeded.
Our Overall Results
In our first year, our metric for the success of the program was the percentage increase in revenue from the accounts to which we assigned a CSM versus the ones where we did not. That first year, there was a 300% greater increase in revenue from our CSM guided accounts. As we grew the program, we widened our focus to the number of recommendations and leads that we got from customers. We set up our CRM system to track this and never offered any compensation to our customers for these referrals.
The most incredible part of this experience was that our cost of service was far lower than the industry average. If designed and managed appropriately, services can not only increase revenue but can also cut costs.
Financial results aside, perhaps the greatest value of this experience was the realization that the “something special” I had spoken of had been achieved. I remember the specific moment that I felt it. Members of my training staff had just completed a two day off site. The passion and drive was palpable in the room as they circled up, sharing what they had gotten out of the off-site. Even though I had just joined them to attend the dinner, they jokingly asked me what I had gotten out of the two days.
In that moment, it hit me. I absolutely knew what the “something special” was: an energy that is created when a group of people love themselves, love each other, and love what they are doing. Each person on the team knew that it was their attitude and behavior that created the “something special” for the customer. While so often employees are told that a commitment to service starts at the top, each member of my staff knew it started with them.
There was a joy and blessing in sharing this experience with my team. The creativity, the initiative, the comradery left an indelible mark on each of us. It was not just the commitment to each Vantive customer that started here, but an entire movement – an industry and approach that now employes over 4 million individuals globally. The beauty of it was that we were not focused on anything other than providing the highest level of service and through that specific focus we did make the change we desired.