Dominique Levin, Jacco van der Kooij: The SaaS Sales Method for Customer Success & Account Managers

CUSTOMER SUCCESS: GROWING THE BUSINESS TOGETHER

The best companies are able to keep their customer churn below 5 percent per year.

Static customers are no longer good enough. The top companies grow customers along a logically orchestrated customer journey, leading to positive Net Revenue Retention (NRR).

Companies with a customer success operating model often have Net Revenue Retention (NRR) – defined as expansion revenue minus revenue churn in a given time frame for your existing customer base – that is greater than 130 percent.

Key processes during the growth phase of a customer journey are:

• Preboarding
• Handoff: In this meeting, sales will introduce the customer success team to the client.
• Orchestration and technical kickoff: Whereas most companies organize a technical kickoff, many forget a business orchestration meeting in which you (re-) affirm a client’s one-year goals.
• Delivering value
• Monitor and respond
• Review results
• Renew and expand

SPICED framework we developed in The SaaS Sales Method Fundamentals: How to Have Customer Conversations.

• Situation – Any facts or circumstances relevant to your deployment at this particular customer.
• Pain The issue – (s) that brought the customer your way in the first place.
• Impact – The ways in which you can improve the customer’s business.
• Critical Event – Any particular deadline to achieve impact.
• Decision Criteria – Any considerations that made the customer choose your solution over others.

Ultimately, you are trying to achieve outcomes for your customer’s business, not line up inputs with product features!

The customer typically makes their initial purchase to solve for a specific event or desired impact.

Uncovering or reminding the customer of their Critical Event and the link to an important business priority can create urgency and priority during the onboarding process and is therefore an important concept for every customer success manager to master.

Hand Off

Onboarding is the first look into the ongoing relationship the client will have with your organization.

A great relationship with the AE is a big factor in making a buying decision, but customers often find it even more important to know the person they will be working with AFTER the sale.

CSMs can ask questions that AEs cannot. Customers know that an AE has a goal of hitting quota, but that it is a CSM’s job to make sure that the customer is successful.

The pre-close customer success introduction

• STEP 1 AE sets up the introduction of customer success using an ACE opening

• STEP 2 AE introduces customer success at the end of the call
• STEP 3 Customer success enriches the diagnosis and establishes their role as expert

First confirm their “Business Impact” – what they need to achieve and how they need to achieve it.

SPICED is an excellent framework to facilitate handoffs between the different teams involved over the course of a customer’s life.

Figure out how to categorize (segment) this customer. Create an appropriate onboarding experience (and ultimately an overall customer experience). Get the customer to realize value as quickly as possible. Manage expectations with the customer in the appropriate context. Document the customer win story.

A good customer win story: Is quite short. Names the protagonist by name and title (a person, not a logo). Focuses on the problem, not the solution. Lists decision criteria, not features. Doesn’t mention the vendor by name.

Here is a checklist to help establish the customer’s fit, or success potential:

• Technical fit – Do they have the required technology in place to be successful?
• Functional fit – Do we have the functionality they require to be successful?
• Experience fit – Do they have the experience internally to be successful in the relationship with us?
• Support fit – Can we support them, by whatever means, in a way that’s appropriate for them?
• Internal buy – in fit – Did we get the right stakeholders from the customer involved?

Categorize the customer according to the following:

• Good fit Customer
• Stretch Customer
• Bad fit Customer

Customer Handoff Your customer just committed to a 12-month contract but has not yet taken delivery of the service. This is a very important moment when the customer might be thinking “What the heck did I just do!?!” This is also known as buyer’s remorse, and you need to counter it.

Onboarding

Onboarding Most SaaS businesses think of customer onboarding as primarily a technical exercise. This is a huge mistake.

• STEP 1 Business orchestration
• STEP 2 Technical kickoff

Business Orchestration. Orchestrating the customer relationship is by far the most important activity that can happen during customer onboarding.

Customers are typically on an emotional high just after they commit and are very excited about their new purchase.

They are on a “Honeymoon Peak.” This is also the first time that you are on the same side of the table as the customer and they are much more likely to share information about their goals, challenges, and internal organization structure.

Unfortunately, in the first months after purchase, customers may also slide into a “Reality Trough,” as change is always difficult and there is a learning curve to any new product.

• Agenda – It is not unusual for new stakeholders to emerge during your impact orchestration meeting. You want to go around the room and verify that your proposed agenda serves all stakeholders.
• Verify and deepen goals – Even if you are certain that you have done a good job capturing a customer’s situation and goals during the pre – sales process, you still want to verify and deepen this during impact orchestration.
• Share customer journey – A typical customer success manager might have done 100 installations. Share your knowledge with your customer in the form of implementing do’s and don’ts. A good way to document best practices is in the form of “12-month customer Impact Journey.”
• Joint Impact Plan – It is your job to give the customer checklists, deadlines, and concrete homework assignments that will help them achieve their goals. We refer to this set of documented activities and goals as the “Joint Impact Plan.”
• Defining next steps – Assuming your customer answers affirmatively when you confirm that the goals of the call have been met, you can then move on to scheduling the next steps.

During the business orchestration meeting, define separate goals for the onboarding and ongoing phases. The onboarding phase officially ends with the customer achieving First Value.

FIRST VALUE GOAL

What does success look like at the end of onboarding?

• Twelve Months Goal What does success look like at the end of twelve months?
• Ask what the customer is trying to achieve and how they would like to achieve it.
• Break down customer goals into manageable “success milestones.”
• Set timing expectations with the client.

Sharing the Customer Impact Journey. It helps to document a customer success journey or impact journey for each of your customer segments, but no more than two or three.

The Joint Impact Plan defines what you (and your product) will do, and what the customer is responsible for. You should share these Joint Impact Plans explicitly with the customer, and bridge known success gaps. Share successful customer best practices and customer pitfalls. Create and share a customer-facing document that lays out the 12-month impact journey.

Finally, as the last step of onboarding, you get to the technical implementation that is the topic of most traditional kickoff meetings.

The customer success Manager (CSM) is responsible for ensuring that the customer achieves their business impact. It’s important to note that customer success is NOT the same thing as customer support, though customer support is an important part of customer success.

While generally reserved for higher-value or strategic accounts, 3×3 Contact Redundancy is when three people from your team reach out and connect with three (different, if possible) people from the customer’s team. That way, if anyone leaves on either side, you’re protecting the relationship and ensuring continuity.

Make the champion look good; buying your product took a lot of faith and they invested a significant amount of political capital. Help them get ROI and more!

Monitor champion movement: It’s a big risk when your internal champion moves to another company; you’ll need to intervene quickly to ensure the vacuum left by them isn’t filled by someone who is a champion for a competing product.

Achieving First Value

First Value is either the point when the customer actually achieves value for the first time, or for the first time beyond your sales and marketing, sees the real value potential in their relationship with you.

Different customer segments will most likely have a different First Value experience requirements.

Inexperienced customers need to see value from the relationship earlier, even if it is simply a status update on what’s happening behind the scenes. Experienced customers may understand what’s happening behind the scenes and don’t need updates.

Time to First Value (TTFV) is the key metric here. For each customer segment, define the First Value.

Usage and Recurring Value

Your company should have some baseline usage metrics that indicate if a client is off to a good start and also using the product enough throughout their lifecycle if they are receiving enough value.

In high post-sales businesses, almost all of the revenue comes after the initial sale.

It might make good sense to use a different organizational structure for high post-sales businesses. Instead of an SDR to generate leads and an Account Manager to secure the initial contract, in high post-sales businesses, the initial order might be easy to get as it is small.

Customer Contact Cadence

Every call with your customer needs a clear purpose beyond the Probation Officer Approach: “Just checking in … .” Nobody is interested in more meetings. We all hate meetings.

Most customers are keen to learn what is working with other companies.

Every meeting you have with your customer – whether scheduled or unscheduled – needs to have a purpose and provide value.

Configure alerts that will trigger a customer interaction; either positive (expansion opportunity alerts) or negative (potential churn risk).

Create a detailed playbook that outlines which actions a customer success or account manager should take should an alert go off.

Examples of triggers:

• Executive or stakeholder changes
• Feature and license usage
• Customer engagement (training, community, meetings, etc.)
• Advocacy

Customer Health Score

A health score looks at both CSM Actions and Customer Actions. We recommend that you more heavily weigh your health score towards those factors you can directly influence, the CSM actions. For example, 60 percent CSM actions and 40 percent customer actions.

Once you’ve defined your health score formula, you can create thresholds that would trigger a call from a customer success manager.

Handling Frustration – The Golden Sequence

Trust is built after consistently providing value and meeting expectations. Customers care more about how you handle situations when things go wrong – and showing them you are trustworthy by caring about their account over time will earn you the right to ask for more business as they scale.

Here is the golden sequence of how to handle objections for frustrated customers:

• Communicate: Establish a solid way of communicating, e.g. talking and listening.
• Disarm: Express empathy/disarm the situation without taking on blame.
• Research: Get smart ahead of time – do not diagnose without knowledge.
• Diagnose: Determine a solution based on understanding.
• Proof: Before you prescribe, accumulate proof of your case.
• Prescribe: Recommend based on research/diagnosis /proof.
• Communicate: Summarize, ask if you got it right, and ask for their feedback.

How to Have Customer Conversations

Here is a framework we use in Fundamentals:

• Tone of voice
• Ask questions and prepare your questions in advance of the meeting
• Listen, Repeat, Summarize and Mirror Keep Notes. Capture tone words, priorities and themes. Don’t transcribe every word
• Elaborate by digging deeper with the intent of understanding their business better Repeat it back to them to make sure you got it right

Expansion

The process of selling more to an existing customer starts as early as your first discovery call with a customer. During the initial sales process, it is good to simultaneously “think big” and “act small” with that customer.

“Act small” means deliver great results to individuals and small groups and grow from there.

Define what is the initial, middle-of-the road, and eventual big impact value for your solution and who is the logical decision maker for each.

Blueprint of an Impact Review

ACE You should be familiar with the ACE opening from the business orchestration meeting. After confirming a 2- or 3-bullet-point agenda of what you want to cover, make sure to ask a simple question like:

• “What would you like to accomplish on our call today?
• “Is there anything else you’d like to get out of the call?”

Every impact review meeting should start by restating the objectives set at the orchestration meeting, which have been passed through during the customer journey.

Starting each meeting by summarizing what you already know using SPICED.You should also verify any explicit First Value and Twelve-month impact goals previously discussed.

Upsell is defined as adding additional spend per month or adopting a new platform through the same buying center as the initial deal.

Cross-Sell, on the other hand, is defined as a different budget owner – often a completely separate department without much overlap with your existing team.

Every time you leave a call, confirm what was discussed in writing. Every call should have a clearly defined next step. Best practice is to send the email within 30 mins of the call, so it is still fresh.

Account Management

While there are very successful customer success teams that close deals, it is more common to have sales step back in to work on the expansion of the account, especially when it involves new stakeholders. This expansion role can be fulfilled by the hunter sales team or by a separate farmer-account management team handling the actual process of renewing or expanding a contract.

Think of your CSMs as the SDRs of your Account Management Team. This can be an MBO target instead of a commission plan.

Organizational Selling

The Account Manager is generally not a CSM or an Account Executive.

SUMMARY OF ORGANIZATIONAL SELLING:

• STEP 1 Establish needs per user/group/department
• STEP 2 Confirm who is involved
• STEP 3 Establish the decision process
• STEP 4 Decide on hierarchy selling vs. consensus selling
• STEP 5 Prescribe your solution for expansion

The traditional decision process was based on purchasing authority against seniority. However, increasingly, the executive is only responsible for ensuring the right process is followed, with the actual decision being made by a committee much lower in the organization. The decision process is consensus based, rather than hierarchical.

In the hierarchy model which prevailed in the past, the most important roles were the “decision makers” at the VP or CxO level.

It is the job of the Account Manager to align resources so that executives line up.

CSM should map out the customer’s organizational structure. Account Manager should interact at the highest possible level. Account Manager should involve executives as needed to expand exposure within the customer.

In a consensus model, the most valuable point is driving success for the end users based on the success metrics you defined in the kickoff call.

Account Manager, you must be able to drive success from the bottom and simultaneously translate that success across the relevant departments it impacts.

In a consensus model, the key is the “orchestration” or “construction” of the communication.

There are two key skills when presenting to customers:

• Share stories: Instead of telling your customers what they should do next directly, share stories of how other customers are finding additional success under similar circumstances.
• Ask questions: The client is eager to see how the additional services will take your partnership to new heights.

Since most revenue comes AFTER the customer commits, Customer Success is equally, if not more, important in implementing The SaaS Sales Method than SDRs and AEs! Customer success is where SaaS businesses live and die.