Customer Success in the World of Long-Term Contracts and Embedded Technical Solutions

For those serving the Financial Services Industry, Fintechs (startups which disrupt incumbents in the finance industry by expanding financial inclusion and using technology to cut down on operational costs) will disintermediate legacy systems within one renewal cycle unless the customers are confident their providers are meeting not only today’s needs but tomorrow’s as well. The only way to survive is to know your customers better than they know themselves and constantly challenge them on how to stay in their leadership niche. Whether that is done through quarterly executive business reviews or regular webinars, the action plan must come from analyzed data that triggers specific actions to achieve predictable outcomes.

Businesses all over the world are hopping on the Customer Success bandwagon. But, I am finding most traditional companies are using the term “Customer Success” without actually practicing the innovative disciplines which make Customer Success a “science” as opposed to the “art” of Account Management.

Originally, Customer Success was developed as a remedy to reduce churn in the world of subscription services in which an enterprise has thousands of customers operating without term agreements affording the customer the ability to move at will from one provider to the next. Nick Mehta and the folks at Gainsight wrote the beacon of light treatise on the discipline of Customer Success: Customer Success: How Innovative Companies are Reducing Churn and Growing Recurring Revenue. In this work, he asserted the principles learned in the subscription business were foundational prescriptions for managing relationships in the world of legally and technically sticky enterprises.

Over the past several years I have built from scratch, enhanced and seen the positive impacts of a Customer Success initiative at a Fortune 500 company which is a global leader in enterprise software solutions serving the Payments Industry. The patch I was accountable for was the 600 plus banking, processors and merchant customers who purchased software licenses, maintenance and professional services on long term contracts.

I set out to establish Customer Success in our license portfolio division focusing on the top 30ish customers in terms of 60-month backlog. We developed a High Value, White Glove team of highly tenured individuals to foster C-Level, strategic relationships following the roadmap outlined in standard large account management processes. In one short year we had made tremendous progress improving measurable customer experience ratings, gaining value added renewals and significantly increasing our backlog.  With this unprecedented success, we realized we needed to expand our Customer Success attention to the 95% of our customers who were managed the old fashion way – sell ‘em what you got.

What I have come to appreciate is, the large account management process is more of an art than a science because it depends greatly on talents of the Account Executive and team which studies their assigned customer. Yes, there is a playbook of sorts but the game changing work is done through managing a myriad of decision makers and influencers both with the customer and internally. Once getting past the large accounts, driving as much as 70% of the revenue, the investment to manage the numerous “less valuable” accounts does not yield the return necessary if employing the individual approach.

I have spoken to a great number of Customer Success leaders in businesses with contractual relationships just like the industry I come from. Most are proud to have established a High Value relationship team and are getting great results from focusing on the top tier. But, when asked about the rest of their customer base, they simply know they need to address the area but are not sure how, don’t have budget or are frankly kicking the can down the road.  Think about it, never has there been a more poignant time to tend that part of the customer base that is most vulnerable to competitive takeout. Overcoming this inertia is an objective not to be kicked down the road.

Customer Success is all about collecting, analyzing and acting on data to create predictable results in customer relationships. For Low Touch and Tech Touch customers there is no other affordable way to be successful in customer management than to know your customer through data and be prescriptive on how to react to it. Thus, the science of Customer Success.

The science of Customer Success should inform all three customer levels. The business drivers and needs of top tier customers do not appreciably differ from those of the Low Touch and Tech Touch customers. Therefore, understanding the business imperatives and their relationship to the services provided, defining them into collectable data elements, benchmarking results and defining actions (playbooks) positions the Customer Success Team to develop predictable outcomes for customers. Capitalizing on measured, effective contributions gained by customers in the tiers not getting white glove attention will depend less or very little on developed personal relationships.
The relationship methodologies will be different between high touch, low touch and tech touch; but, foundational understanding is achievable with individual customers through the window of well-defined data. Playbooks for the tech touch segments can be derived from what works with the top tier if a discipline of collecting data and memorializing the analysis along with resulting actions is religiously journaled by those highly skilled Customer Success Executives and made available to the entire Customer Success Team.

Cloud, Open Systems, SaaS, IoT, Fintechs… disruption in the world of technology providers is inevitable. No matter if a business is a disruptor or a legacy provider, survival, in part, requires we know our customers, we understand their business, we establish our role in their success and we challenge them on how to meet the demands of their ever-pressing competitive world. The science of Customer Success is an essential discipline demanded of us all as we must strive for informed relationships with every single customer we serve.

The discipline of Customer Success is changing the landscape of Account Management from small firms to global enterprises. If your enterprise is reliant on the “art of managing customers”, you are missing the opportunity to solidify your customer base for many years to come. Are you ready to build your future through a discipline that yields on going success via analyzed data that triggers specific actions to achieve predictable outcomes?