Digital Darwinism: Business Adaptation Strategies for Enterprise Customer Success
I had the opportunity to present on the topic of “customer success best practices in the enterprise” at Gainsight Pulse 2016. Wow, Nick Mehta and team really know how to put on a conference. In my keynote, I addressed over 3000 enterprise customer success enthusiasts. As the CEO of a company that has been delivering enterprise customer success and revenue growth to our clients for over 15 years, my presentation focused on sharing five adaptive strategies to embrace disruptive change in this time of digital Darwinism.
Yes, this is a time of digital Darwinism—an era where you must evolve to deliver customer success or die. It is impacting every industry and vertical market. Organizations that are not prepared to adapt to changes in how people communicate, connect and invest resources will face extinction. As Darwin stated, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”
We are living in a DC (During Cloud) World
It’s a time where change is happening at an unprecedented pace. The “Customer Experience” economy has emerged—where your clients expect to receive immediate VALUE and the burden of delivering quantifiable business OUTCOMES is on the vendor, not the customer. CEOs and other business leaders must be set to embrace the tectonic shifts in the market that necessitate significant changes around the customer experience and delivering customer success. It is no longer enough to simply manage change well—adaptability must become part of your organizational DNA.
The five most common business adaptation strategies that we’ve seen across our global customers that have been critical to their success are:
- Measuring outcomes
Adaptation Strategy #1: Data
The first strategy is all about how you leverage your customer data. In today’s digital age, we have more data than we could ever utilize. Adaptation means deciding which data will provide actionable insights into whether or not your clients are on track to achieve their expected business outcomes. Understanding how your clients are using your products and services is critical to survival. SaaS companies have an advantage here, but information services, hardware and other asset-based companies need to adapt quickly. Customer behavior analytics are no longer just a nice to have—you must be able to proactively drive the customer journey and facilitate the behavior that will lead to business outcomes.
Adaptation Strategy #2: Organization
Thriving in the customer experience economy requires a shift from departmental objectives to clearly defined customer objectives. Silos of teams working with their own set of goals, technology and customer outreach best practices results in complexity, cost and poor customer experience. Delivering enterprise customer success requires synchronized teamwork across all departments, where the customer receives the right information, to drive the right action, at the right time. A customer-obsessed organization needs to have leadership that is focused on the holistic customer journey and ensures that every last employee understands the value proposition of your products and services.
Adaptation Strategy #3: Processes
With customer profitability occurring only if you can deliver value and expected business outcomes, which set you up to expand customer lifetime value and extend the subscription, you need to adapt your business processes. Customer onboarding, adoption, retention and renewal playbooks are now necessary for survival. In order to thrive, focus needs to be equally applied to customer acquisition AND customer retention. Successful adaptation requires continuous improvement and implementation of best practices that lower the cost of sale and the cost to serve, while maximizing customer lifetime value.
Adaptation Strategy #4: Technology
While technology is crucial to leverage data and implement best practice processes at scale, it is not the holy grail of customer success. In our experience it takes a convergence of technologies to successfully deliver outcomes and revenue growth. Adaptation requires finding the right products, integrating them together for a 360-degree view of your customer and training your internal teams and partners to utilize them following best practice processes. No easy feat! Our Revenue-as-a-Service platform was built from best-in-class technologies that have been integrated to help our customer success and renewal experts deliver revenue growth and retention.
Adaptation Strategy #5: Measuring outcomes
Last, but certainly not least, is the concept of measuring outcomes. Yes, measuring outcomes of your customers allows you to prove ROI and secure the renewal for years to come. However, you also need the ability to measure your internal outcomes to demonstrate value to your executive teams. Our recent co-study with Forbes helped us develop a maturity model that allows us to benchmark and measure the success of our clients. The study showed that by moving up in maturity you could achieve a 7.9 percentage point improvement in revenue. This means that if you have a 100 million dollar business, you are more likely to retain about 7.9 million more dollars of that 100 million dollars after 1 year.
I wrapped up my presentation by showing case studies on the impact of accelerating the evolution of enterprise customer success for three of the business adaptation strategies.
Data: Fortune 500 hardware company achieved a 28% increase of customer extension revenue by successfully implementing a data adaptation strategy.
Organization: Fortune 500 software company achieved a 57% customer expansion revenue increase by successfully evolving their business model to maximize customer lifetime value.
Process: Global information services company increased active users by 33% by taking a holistic approach to customer success and improving customer onboarding.
Every morning in Africa, a gazelle wakes up. It knows that it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up knowing that it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle…when the sun comes up, you’d better be running.
Authored by Christopher M. Carrington, CEO of ServiceSource.
Christopher M. Carrington is the CEO of ServiceSource, leading the company to power the world’s revenue relationships through its customer and revenue lifecycle solutions. Chris’s career spans more than 30 years leading and growing global corporations that deliver technology-enabled business services. Outside of ServiceSource, you can look for Chris on the golf course or traveling somewhere fun with his family.