Search Results

Greg Daines, Founder and CEO of Client Velocity, talks about the 3 toxic excuses of customer success. Customer Success teams are frequently crippled by excuses for their failure to deliver exceptional customer outcomes: they blame the product, they blame sales, and they blame their lack of resources. I will show why these are the wrong issues, what to focus on instead, and I’ll share real-life examples of how companies have taken ownership and are winning.

Greg Daines takes the stage at the CS100 Summit 2017 to discuss surprising ideas, deadly fallacies of customer success as part of the customer success leadership presentations at the event.

Greg Daines, Founder & CEO, Client Velocity, takes the stage at the CS100 Summit 2018 to discuss one question that will transform your customer success strategy. Learn more about the CS100 Summit here: http://cs100.clientsuccess.com/

As long as your customer success efforts are reactive, they will never be effective. The only way to change this dynamic is to stop trying to prevent churn and start learning to predict it! The Conventional Reactive Mode Everywhere I go I see customer success teams operating in a constant state of crisis. Their entire approach and everything they do is reactive. They react when customers complain, or run into trouble, or stop using the solution, or ask for help, and even when they are happy and successful. The conventional approach to customer success is profoundly reactive. In my experience everyone knows this and wants to change but they don’t know how. First of all, it’s nearly impossible to stop reacting when there are so many things to react to. What are we going to do, stop answering our customers calls? I don’t think so. And even if you could stop reacting long enough to do something proactive, what would it be? You’ve already done everything you know: the solution has been installed and configured and the customer has been trained. What else is there? Anyone with sense has figured out long ago that merely reaching out to customers is a waste of their time, and ours. So merely establishing a customer “touch cadence” will never qualify as operating proactively. Customer retention efforts are the ultimate reactionary force. They kick into action when signs appear that a customer is in distress. Often “rescuing” the customer requires a great deal of effort and demands resources and personnel from multiple parts of the company. In many cases, there is little time so a scramble takes place. A certain level of “heroism” is often involved. Sadly most of these customers will never be saved. Even when heroic efforts result in a successful renewal, my research findings show that the majority of rescued customers will not renew again. But that’s down the road, and in the mean time any temporary wins perpetuate the illusion that reactive efforts are effective. The truth is that, aside from the celebrations and shout-outs at company meetings, there is precious little to show for your heroism in the long run. Obviously, there’s a fundamental problem with operating in this reactive mode. By the time a customer is visibly at risk, it’s usually too late to save them. The only way to escape this trap is to understand a simple truth: You can’t prevent churn if you can’t predict it. In other words, you need to stop focusing on preventing churn and start learning to predict churn! Only when you are able to predict customer risk consistently will you be able to do something meaningful about it. Success Takes Time One crucial reason predicting churn is so important is that it takes time to address the real causes of customer failure. The typical customer rescue doesn’t allow for anything but slavish compliance with the customer’s list of demands. Often you sense that these demands don’t address the true underlying cause of their troubles. The customer says, “Jump!” and you say, “How high?” when you should be saying, “That won’t solve the real problem.” This scenario is nearly universal, and things will never change until you flip the script. The only way to transform customer success is to know customers are failing even before they do. Only when you are able to see trouble coming far in advance can you intervene with a proactive approach. That way urgency and the customer’s demands don’t get in the way of pursuing the right solutions. But it goes far deeper than just ensuring there’s enough time to address risk. Learning to predict churn leads to a much more fundamental transformation in the entire organization. You can’t predict what you don’t understand Once you seriously commit to learning how to predict customer churn in advance, you run headlong into a serious challenge: in order to predict churn, you must first understand why customers fail. If the customers’ demands won’t address their real problems, then what will? What is the real underlying cause of their troubles? Answering this question is more difficult than it appears. You can often go a level deeper than the customer. But can you get all the way to the bottom of it? Do you truly know why your customers are consistently failing? The conventional approach is to look at the failing customers and their problems. But this way of thinking is a trap. As long as you are looking for what is wrong it will be easy to find plenty of things. But are those things really at the root of your customer’s troubles? This approach is fruitless because there are endless things that can go wrong, but none of them reveal the fundamental cause. The most important outcome of learning to predict churn is to finally gain a clear understanding of what is driving it. What Causes Churn? In my last article, I argued that the way we think about churn is all wrong. The key to uncovering the foundation of churn is to change the question that we ask: The essential question isn’t why do customers fail, but why do they succeed? I don’t think we can understand why customers churn until we know why they succeed. We won’t find the true cause of customer failure in all the difficulties they encounter or the complaints they lodge. Customers don’t leave because they have a reason to leave. They leave when they no longer have a compelling reason to stay. Think about your most successful customers. Haven’t they also experienced many of the same problems? Successful customers actually tend to run into more issues because they use the solution more actively and deeply. So why aren’t these customers failing? This point is demonstrated in another fascinating finding. My research shows that customers who complain are actually more likely to renew than those who don’t. The insight is powerful but counterintuitive: Problems don’t cause customer failure, and resolving problems won’t make customers successful. Now understand, I am not suggesting that resolving real customer problems is unnecessary. You must continue addressing issues and removing friction from the customer experience. But these activities won’t significantly reduce the rate of customer failure. You will never fundamentally gain power over customer churn until you understand what is really driving it. A New Hope The way out of the trap is to reverse your perspective on how you look at customer churn. The fundamental reason customers churn is that they did not achieve or perceive measurable success. So in order to understand failure, we really need to deeply understand what drives success. That’s why the most productive route we can take is to seek to understand our most successful customers. What are they doing that ensures they are getting undeniable value from our solution and that it is key to their success? I’ve been asking this question for years with dozens of leading companies and literally tens-of-thousands of customers. This is what I have consistently found: The primary difference between successful and unsuccessful customers is that successful customers change how they work to take advantage of the solution’s benefits. Understanding this truth is the gateway to a completely different, and much more powerful way of thinking and acting. It shines a light on the ineffectiveness of the conventional reactionary approach. Most importantly, it shows us the path to a much more proactive mode of operating. How To Predict Churn The key to radically improving retention is to identify the essential customer behaviors or processes employed by your most successful customers. This is more than a matter of simply asking them why they succeeded. You need to study them more deeply. What’s standing in the way is the reactive approach that focuses most of your attention on failing customers. Turn your attention instead to the most successful customers. Look beyond the limited view of what they are doing with your solution. Dig deeper as you observe their process. Why do they do it that way? Who is responsible? What other processes or systems are they using to get it done? How do they use the solution’s outputs in their broader organization? Why do they think they were successful? In addition, there is likely a significant amount of expertise already in your organization. This valuable knowledge is often underutilized. Talk to the most experienced people in your company to find out what they know. Ask this question: “Why are some of our customers so much more successful?” This is different from asking why they are successful with your solution. This is taking it one level further. Why are they better at their business, or at least in the major function that the solution supports? What are the most successful customers consistently doing that sets them apart? The answers are relevant precisely because your solution won’t succeed unless the customer does. You must understand precisely what the most successful customers are doing in their business and ensure that we are helping all of our customers to operate that way. Typically there are just a few essential customer behaviors. There may be many things they do right, but I have found that there are usually just one or two key behaviors that are responsible driving most of their superior results. Having identified the key behaviors, you can then engage with all of your customers to help them make those changes. Start early by committing customers to change their process right during the sale. Then refocus your onboarding process system configuration and training to teaching and supporting customer behavior change. Finally, implement a simple tracking system for monitoring whether customers make the essential process improvements. When they don’t, you’ll know even before they do that they are inevitably going to fail to achieve good results down the road. Now you can proactively intervene to improve their process and get them back on track. I’ve implemented this approach repeatedly for the last several years, and the outcomes have been phenomenal. Not only does it transform retention results, it also provides the methodology for aligning all activities around your company’s central purpose: driving exceptional results for customers. Here are just a few ways it radically changes how we care for customers… Finally Become Proactive The primary reason teams behave reactively is that they monitor customer risk retroactively. If you think about it, the things we typically track to identify customer risk aren’t predictive at all. Think about the major components of a typical “Health Score”. Are these leading or lagging indicators of churn? In other words, are you measuring something that happens before or after a customer has failed? Usage (utilization, adoption) is a good example. We know for sure there’s a problem when a customer stops using the solution. But is it predictive? I don’t think so. By the time usage drops meaningfully the customer is already in the later stages of distress. The warning flag goes up too late. Although this may happen before a customer cancels, it does not happen until after a customer has failed. Responding to this signal can never be truly proactive. Other things we measure are similar. The underlying principle is simple: Most warning signals of customer risk don’t appear until after the customer is already failing. This is the fundamental problem with conventional customer risk metrics. And it’s why predicting churn requires flipping the script. What we need are truly leading indicators that customers are at risk of failing. This kind of early-warning detection can only be created by identifying and tracking the customer behaviors that are essential to success. Focus Your Efforts Another benefit of learning to predict churn is that it maximizes your leverage. We all have extremely limited resources to care for our customers. As long as we are operating in a reactive mode, much of our efforts are wasted. Failing customers set the agenda, but what if they don’t know what matters most to achieve success? You must take control to steer the ship back on course. But how do you do that? The good news is that you have the perspective that the customer desperately needs. After all, you’ve seen many customers succeed and fail, and so you are in the best position to understand what really drives success and offer customers what matters most. Whether a customer is successful is primarily dependent on the degree to which they change how they work. In order to succeed, customers must change their behavior in ways that are essential to achieving good results. That’s why you need to go beyond merely training and pushing adoption. In fact, the delusion that customer adoption leads to success is one of the deadly fallacies. Instead, turn your attention to your customer’s behavior. Teaching the essential things customers need to do differently and tracking when they do is the key to operating proactively. But you can’t teach the key behaviors if you don’t know what they are. That’s why I always conduct a Success Analysis, and I’ve even posted the process I follow for you to use (download it here). The essential insights will never come from surveying failed/churned accounts. When a company fully converts to this way of operating, they discover to their delight that most customer churn is preventable. It’s only when you are in the end stages of customer failure that you feel powerless over the situation. But when you see the entire process of how customers succeed you can engineer a process that transforms retention. Love What You Do Perhaps the most surprising outcome of this transformation is that Customer Success can start to be a lot of fun! I mentioned the continual state of crisis that I see in companies everywhere. The constant drumbeat of churn and the focus on problems, complaints, and failure takes its toll and the outcome is often chronically low morale. Customer Success can be a bummer. By contrast, shifting to a focus on driving success through customer behavior change really puts the spring back in your team’s step. Operating proactively to help customers achieve their goals is inherently motivating and satisfying. And it’s exhilarating for a team to dramatically reduce churn while simultaneously increasing customer results. When done properly, customer success is the best and most rewarding role in business. Try this approach for yourself and let me know how it goes. I’m anxious to learn about your experiences so I encourage you to reach out to me with questions and ideas.

The greatest threat to companies is the failure to align around driving customer results. The solution begins with one essential question. I’m going to tell you why I think it’s so hard to figure this out, and along the way, I’ll share some new data that sheds fresh light on the challenge. Most importantly, I’m going to give you the simple process that I use with my clients to cut straight to the heart of what makes their customers successful. It all starts with asking the right questions. Questions Matter I’ve found that often the key to success is to get a clear view of the opportunity by asking the right questions. We rarely articulate and examine our questions as we work. But they are there nonetheless, implicitly framing everything we do. And getting them right is essential. It’s impossible to get the right answer if you are asking the wrong questions. Have you had the experience of working away at something diligently with little to show for it? I think that often what is underneath these frustrations are faulty questions. I believe that is exactly what has happened in the case of growth and customer success. The Questions Preventing You from Adopting a Customer-Centric Strategy In the subscription economy, there are two basic questions underlying how we think about growth: Why do customers buy? Why do customers leave? We rarely articulate these questions, but they are there just the same, framing virtually everything we do in business. We expect that solving for these two questions will naturally lead to the accumulation of customers and drive growth. It makes perfect sense: bring more customers in and reduce the number that leave, and you get growth. But it’s a trap. These are actually the wrong questions, and focusing on answering them ultimately leads to rising customer churn, falling sales, and stagnating growth. Let’s look at each of these questions to see precisely why they get us in trouble. Wrong Question 1: Why Do Customers Buy? This first question — Why do customers buy? — is the foundation for everything that we do in sales and marketing. It’s the definition of their job, and we aggressively reward them when they do it successfully. The problem is that there’s a huge flaw in this question: Not every reason to buy is equally valid. Think about your own company: there are probably a variety of reasons why customers join. Invariably some of those reasons turn out to be really compelling and those customers tend to get good results and stay for a long time, while other reasons don’t play out as well. But wait, isn’t any reason to buy valid as long as its valid to the customer? Who are we to judge their reasons to buy? Absolutely, and this is actually the heart of the matter. A recent experience illustrates why: The Case of the Disappearing Customers A SaaS company came to me recently with a puzzling situation. They had a large number of customers leaving within the first year even though these specific customers were reporting very high satisfaction with the service. The company had heard me talk about how customer happiness is not the solution to customer success, and so they thought I might be able to help them with their dilemma. I dived in and quickly discovered that one of the reasons some customers were signing-up was to meet a temporary need. These are actually successful customers that simply no longer need the service after the first several months. Looking more deeply, I found that many of these customers also have a longer-term need for the solution. But the sales executives had learned that it’s easier and faster to win customers for the temporary need. Fewer conversations and no long-term commitment translated into a more efficient sales process. The real problem is that this particular reason to buy is not also a good reason to renew. This is a really big issue since most companies don’t make money unless customers stay for a long time. And even if these short-term customers are profitable, the value of the entire enterprise is severely diminished by high customer churn rates. That’s why just selling as many new customers as possible can never be the right strategy in the subscription economy. It’s not enough to get customers to join, they have to join for the right reasons. The Wrong Reasons To Buy Meeting a temporary need is just one example of many bad reasons to buy. Other examples include: Buying for the wrong benefits (bad fit selling) Buying with the wrong expectations (overselling, underselling) Buying features rather than benefits (demo selling) Buying to “try it out” (free trials, opt-outs) Buying for a single feature (selling against competitors) Buying on a whim or emotion (relationship selling, convention selling) Buying to use up available budget (last-minute selling) Buying the lowest-cost option or for a discount (discounting) These reasons and many more demonstrate a simple truth: not all reasons to buy are equally valid if they are not also reasons to stay. Think about this from your own experience: Have you noticed that some reasons to buy are more durable or successful than others, particularly over the long run? Are you aware of particular sales behaviors, pitches, or promises that lead to higher churn? In my experience working with many different companies, this has been a consistent theme. In fact, I’ve come to the conclusion that this is the most significant factor driving long-term customer churn in many companies. What Does the Data Say? I’m the kind of person who likes to validate intuitions using hard data. My reason is simple: over many years I’ve found that our intuitions frequently turn out to be wrong. That’s why I’ve been gathering data on customer success outcomes from dozens of SaaS companies over the past few years. It’s a unique set of data that is probably the largest in the world, and continues to expand. The question I wanted to ask the data was simple: is there evidence that some reasons to buy are consistently better than others for customer outcomes? The short answer is yes. There are actually many indicators, but I will share just two examples here. 1. How you sell matters First, it is well known in the world of sales that a very small number of reps are consistently the highest performers by a wide margin. I wanted to know if this holds true when you measure sales reps by how well their accounts retain. In other words, do accounts sold by particular reps consistently renew at higher levels? My hypothesis is that this would be a clear indicator that the way in which an account is sold matters for success. To understand these differences better, I’ve spent time studying many of these reps closely. Suffice it to say that they do in fact sell differently and in ways that are consequential to long-term customer success. But that’s a subject for another article. 2. All reasons to buy are not created equal A second proof point from the data came out of a large study in which all customers were grouped by the primary reason they purchased. The results are astonishing and definitive. Some reasons to buy are clearly much better than others in the long run. It’s a powerful reminder that in the subscription business model, the act of “closing” a new customer – while essential – is not success. All we’ve done at that point is introduce that customer into the “mall”. Everything we ultimately earn from that customer will come from keeping them in the “mall” and selling them more. Your churn rates and losses are going to continue rising until you acknowledge and adapt to this truth: Not all reasons customers buy are equally valid reasons to stay. How we sell, and who we sell to, have a bigger impact on customer outcomes than anything else we do. Wrong Question 2: Why Do Customers Leave? Now let’s turn our attention to the second wrong question: Why do customers leave? Like the previous question, this also seems completely reasonable and useful. It’s the underlying logic of virtually everything we do in customer success. But once again, it’s a trap. Let me explain… I’m sure many of you have probably had a similar experience to one that I’ve had many times. In an effort to reduce churn, we go out and survey our canceled customers and ask them why they left. We gather up all those results, organize them into categories, and put them into a pie chart. Then we pick the one or two biggest reasons and go to work solving those issues. With great effort, we crush those issues down and look forward to improved retention. But what actually happens to churn? Usually not much! Certainly not in proportion to the slices of our pie. But why? I’ve personally made this mistake over and over again, and it has taken me a very long time to start to understand why this simply doesn’t work. I call it “studying failure” and it’s the reason that I don’t do exit analyses anymore. I’m convinced asking customers why they are leaving is a dead end. One hint that there’s something wrong with the logic of this approach is that it raises a question: Why aren’t the other customers leaving? Certainly, many of the customers who are renewing have also experienced the same issues as those that have canceled. In fact, it’s typical for our most successful customers to be using the solution even more deeply and therefore they tend to run into more problems rather than fewer. So why don’t they leave? Obviously, there’s something else going on here. Think about your own experience: Have you had a customer leave but on the way out, say very nice things about you or the company and how happy they were with the experience? Conversely, do you have a customer who is unhappy and complaining, but keeps renewing? What gives? Clearly, problems with the solution and bad experiences aren’t the only factors driving churn. What Does the Data Say? Naturally, I wanted to know whether this was reflected in the customer retention data. Actually, there are many indicators of this in the data, and here I will share two that demonstrate the point. 1. Customers that complain are actually more likely to renew The first data point may initially seem counterintuitive. The data consistently show that customers who complain are actually more likely on average to renew than those who don’t. When you divide customers into groups, the group that submits tickets consistently retains at a higher rate than the group that doesn’t. But how could this be true? We believe that making customers happy and providing a good customer experience is the key to long-term success. We would reasonably expect that more problems would lead directly to more churn. But this is dead wrong. As I’ve argued for years, satisfaction is not the primary driver of long-term retention, and customer issues are not, on their own, indicators of account risk. The intuition is simple: Think about what a customer is signaling when they complain. When they run into issues and go through the trouble to complain or open a ticket it is a clear signal that the solution matters to them and that they are engaged with it in a meaningful way. 2. No signal is the worst signal The second validation of this comes from a large study in which we divided customers into groups based on whether they had ever requested a change in their contract – either expansion (upsell) or reduction (downsell). The hypothesis was that these requests signal whether the solution is important to the customer. The results confirm the hypothesis and even offer a bit of a surprise. The group we naturally think of as healthy are those who don’t bother us. But this shows that they are the most at risk for churn. The next result makes a lot of sense: customers that request an expansion are very likely to retain. It’s an intuitive result: requesting more of the solution is a clear signal that it matters to them. So what about those that are asking for a reduction? This seems to be a negative signal that the account is at risk. Wrong! Actually, this group has a two-year retention rate that is the highest of all! But how do we make sense out of this? Again, think about what they are signaling when they ask for a reduction. They are certainly not communicating that the solution is irrelevant to them. In many cases, they’ve established a valid long-term use case, and now they are optimizing it to fit. Please understand, I’m not suggesting that we don’t need to improve our solutions and solve the real issues our customers experience. Of course, we should do everything we can to remove friction from the customer experience, and shame on us if we don’t. But it clearly won’t be enough to get us the results we are striving for. So here’s my rule for this … Customers don’t leave because they have a reason to leave. Customers leave when they no longer have a compelling reason to stay. Now that we know why these two questions are problematic, we can turn our attention to the search for better questions that will reliably guide us to the right set of answers. The Right Question: Why Do Customers Stay? I believe that there is actually just one ultimate question at the heart of success in the subscription economy. It’s not about why customers join, or why customers leave. The most powerful question is business is, “Why do customers stay?” This is a much better starting point. It avoids the pitfalls inherent in the wrong questions and provides absolute clarity for what it means to have a customer-centric business strategy. One particular experience changed my thinking on this. For many years I managed a very large customer that was notoriously demanding, and virtually impossible to satisfy. They were always unhappy with us, and constantly complaining about our solution and demanding changes. Dealing with them was actually rather unpleasant! (I’m sure many of you can relate to this experience!) This went on for a few years, and at one point my frustration got the better of me. Right in the middle of a meeting, I asked them, “If you are so unhappy, then why don’t you just cancel?” The customer was somewhat confused by my question and responded, “Why would we cancel when you make us so much money?” I immediately felt embarrassed. After all, why did I ever think it was about anything else? That was a profound lesson for me. There are always plenty of reasons to cancel. None of our products are perfect. Every product has friction and issues, and customers can always find reasons to be unhappy. But as I’ve been saying for years: happiness is not the panacea of customer success! Figuring Out Customers’ Reasons to Stay When we sincerely begin to seek the answer to this question — Why do customers stay? — it will lead to powerful new understanding that can finally align us with our customers, and guide all the company’s efforts to drive sustainable growth. So, what’s the answer? Why do customers stay? The answer will obviously be different depending on your product and market. But whatever you do, and regardless of what your customers are looking for, on this point the data are compelling: the customers who stay are those that succeed. Customers that produce measurable and durable results stay more than four times longer. So here’s my rule: The only valid reasons to buy are those which are also reasons to stay. The reasons to stay are always those that produce measurable and durable results. Studying Success The key to building an extremely high-growth customer engine is to identify the reasons your customers stay and use that clarity to get every part of your organization to focus its efforts on driving this dynamic: Marketing must focus its messaging and campaigns to attract and cultivate the leads with the right reasons to stay. Sales will craft customer deals aimed at the right benefits: those with the ability to drive measurable results over the long term. Customer Success can use its limited time and resources to help customers change how they work in key ways to achieve measurable results, and keep expanding them. Product will be able to envision the improvements that will drive the essential customer results, and the clarity to properly prioritize the roadmap. So, the task is clear. You must discover with more clarity than ever before precisely why your customers stay. Be prepared for some in the organization to think that they already know why your customers stay and that such an effort is unnecessary. But it’s just as certain that there is disagreement within the company about what matters most. Remember that this is something that can only be properly understood from the customer’s perspective. And, make no mistake, the negative information that tends to accumulate from customer interactions cannot be trusted as a clear signal regarding the essence of why your most successful customers stay. I have developed a simple process that I use with my clients to clarify precisely why their successful customers stay. It’s a process you can follow, and I’ll provide a brief overview here. For those who are interested in doing this in your own company, I have posted my detailed, step-by-step guide including templates and forms for you to use. You can access it here. The purpose of the Success Analysis is to answer the key question: Why do customers stay? This process will help you identify your most successful customers, conduct effective interviews, and create your Customer Bullseye. Step 1. Identify your most successful customers. The first step is to select the right customers to interview. The goal is to interview at least 5 customers, so you probably should identify at least 10 in order to account for the possibility that some customers may not be available. When you have your list, reach out to the customers to try to get at least five interviews scheduled. Identifying your happiest customers may seem like a simple matter. However, it is important to understand there is a difference between a successful customer and one that is “happy” or says nice things about you. Successful customers are those that have achieved significant results of the kind your solution promises, and are able to speak to how those results were achieved. Step 2. Interview Them To Learn Why They Stay The next step is to interview each customer to get to the heart of why they stay. You will be looking to answer three key questions: Why did the customer buy the solution in the first place? How successful has it been? What has the customer done to make it successful? It will likely take multiple questions to get complete answers. These interviews can normally be completed in 45 minutes, and it’s best to include the CSM or Account Manager to schedule the interview and introduce the interviewer to the client. Step 3. Distill The Learnings Into Your Customer Bullseye With your interviews complete, you are ready to distill the results into your Customer Bullseye. There are four key elements of a Bullseye Customer: What is their primary business objective? How do they measure success? What are their key attributes that enable these customers to succeed? What key processes are essential to their success? The Bullseye Customer document is a one-page summary where you succinctly answer each of these questions. Brevity and clarity are essential. Unless you can identify the one most important answer to each question above, your work is incomplete and the outcome will simply lead to further dissipation and misalignment. Therefore, a significant amount of judgment must be invested. The most important things will always be those that form an intersection between producing measurable results (as opposed to unmeasurable) which are mission-critical to the customer’s business, and that are common across the majority of successful customers. What’s Next? The Customer Bullseye will become the anchor point for guiding all customer activities. Start by examining your direct customer interactions in light of what you’ve learned. Identify opportunities to focus more precisely on the factors that drive their success. Where are you spending time and effort that is not precisely aligned with the Bullseye benefits, and key customer processes? Look for opportunities to replace low-leverage activities with those that drive directly to the Bullseye. Pay close attention to your onboarding process in particular. Are all activities targeted at driving the benefits identified by your customers that stay? Are you using valuable customer time merely to configure and train? Use the Bullseye to identify the activities that have the highest leverage for driving their success. Look for ways to simplify configuration through standardization, and move training to videos or webinars. This will free up precious resources to focus on helping the customer change how they work to drive their outcomes. Make sure every touchpoint is aligned to the bullseye benefits. The ultimate goal is to align the entire organization to the Customer Bullseye. You should share it with other departments and help them identify ways to incorporate key elements into their activities. The best way to start is by working across functions to answer a few key questions: Marketing: How does the Customer Bullseye impact the marketing strategy, what the key message should be, and the kinds of customers to target? Sales: What are the best reasons to buy, and how can we guide customers to give them the best chance for long-term success? What should we eliminate from our practices that jeopardize long-term customer outcomes? Onboarding: How does the Customer Bullseye change the focus of the onboarding process? What are the most important things we can do to ensure customers achieve success? Renewal: What key milestones are necessary for customers to have a compelling reason to stay? Working back from the optimal renewal outcome, what are the specific things that must happen and when? Product: How does the Customer Bullseye clarify the product roadmap? What innovations or improvements will directly drive better, and more measurable, customer results? The Customer Bullseye is the starting point on the journey to true customer-centricity. With it, you are able to establish a common set of objectives across departments, and align everyone to focus on driving the most important customer benefits.

Handoffs are at the root of too many customer problems – especially in the enterprise. Read on to find out why, and my method for making them seamless. Everybody says you’ve gotta nail the handoffs or you’ll lose customers. I couldn’t agree more. Except, I’ve never been able to do it. I’ve tried every suggestion out there. But nothing I’ve ever done to engineer the “perfect” handoff has really solved the problem. Transitioning custody of a customer between teams continues to be a major source of customer success problems — especially in the enterprise. In fact, I completely stopped doing handoffs altogether in my SaaS/B2B customer success process. It started when I discovered the specific reason why handoffs cause so much trouble. That insight was a key turning point. Once I understood the root of the problem, I could see that there will never be a perfect handoff – at least not with enterprise customers. Conversely, it also explains why many companies don’t have any trouble with handoffs, and why other companies start out fine but develop handoff problems as they grow. Based on this key insight, I’ve created a very simple technique to determine the handoff risk and the best approach which I share below. But first, it’s important to understand why handoffs cause so much trouble? The Trouble with Handoffs The reason it’s so difficult to solve the problem of handoffs in the enterprise is because it isn’t really about you — it’s mostly about the customer. Let me explain… The reason we handoff the customer between teams is because of specialization. It makes perfect sense: salespeople are devoted to selling, implementors are dedicated to onboarding, and support teams exist to address issues and questions from end-users. Likewise, the customer also hands off custody of us inside their organization. In larger companies, the decision maker usually hands off to a project manager to work through the implementation, and after that, the project manager exits and the solution goes live for the users. Here’s the problem: What is merely a handoff for us is actually a hand-down for the customer. Here’s how I drew it in my notebook… Looking at it this way, it’s instantly clear what’s wrong: in every handoff, the focus of our engagement with the customer falls, and therefore so do we. The problem is, getting back “up” in the customer and reestablishing engagement with the executive sponsor is notoriously difficult. What’s Wrong With Hand-Downs? This matters a lot in SaaS/B2B because we need the sponsor to be engaged to have any chance of success. The solution just isn’t going to succeed without support from the top. And even if we somehow miraculously get the solution to take hold with users without this support (unlikely), we are eventually going to need that person’s enthusiastic support to secure the renewal. That’s why losing engagement with this key person really is a disaster. This is usually the only person in the customer who thoroughly understands how your solution will drive their success, and that makes this person essential to your entire customer success strategy. Who else is in a position to appreciate the value you’ve created and how it specifically drives their success? Certainly not their project manager who’s focus is being on-time and on-budget. And certainly not the end-users who mostly just want things to be easy and trouble-free. On your side, the person who established “custody” of this specific relationship and the mind-meld that occurred in the purchase decision is usually the salesperson. Unfortunately, the first handoff is also the moment when they also disengage from active involvement. The Danger Zone In my experience it is often not long before the customer sponsor starts forgetting some of the details about precisely what was agreed and even exactly what success looks like. In the vacuum created by the hand-down, their grasp on the specifics of the success plan begins to fade, and they enter the “danger zone” where they become vulnerable to having their vision of success hijacked. The first time they hear any complaint about the solution, it can completely take over how they think, shifting their mentality from a business project focused on success to a technology project focused on problems and issues. This is the most common way customers lose track of the original success concept. Obviously this is bad. Now, I know very well that both the customer sponsor and the salesperson will adamantly deny that they are going to disengage. They’ll say that they are keeping tabs on the implementation and will be fully engaged when it is time to go live. But, to be fair, they both have a lot of other things to do, and far too often they won’t fully reengage, especially in larger enterprise projects, or where the implementation takes weeks or months. That is, until the inevitable moment down the road when the whole thing goes off the rails. Customer Success This is where the idea of the customer success manager (CSM) comes in to the story. The hope is that the CSM fills the vacuum at the top of my chart. But, the trouble is, the CSM usually never has a chance to reestablish engagement with the executive sponsor once it has fallen. Most of the time, the CSM is stuck dealing with someone lower down – either a “system admin” or IT person – which will never be able to appreciate the original success plan and vision. Their focus is nearly always on minimizing difficulties and user complaints – hardly a recipe for real success. In my experience this problem remains even when the CSM gets introduced right away by the salesperson at a “kickoff” meeting. This is because the problem isn’t really with your handoff, it’s with the customer’s. Once the decision maker hands-down the engagement, the CSM will be building a relationship with someone else, nearly always focused on issues other than the original success vision, and will have a lot of trouble getting the sponsor reengaged. The magnitude of this problem can be seen in the immense effort CSMs continually expend trying to “get back up” in the customer. If they don’t succeed in reestablishing full engagement with the key leader there is little chance for a long term relationship. This is one of the most important sources of avoidable churn in SaaS/B2B. The Solution: Durable Custody of the Customer That’s why a key element of my solution has been to eliminate handoffs altogether. In my experience the risk associated with hand-downs is simply too great and the effort needed to recover too costly. The way I do it is to bring the CSM directly into the sales process. If the CSM is involved in the sale, and ensures the customer sponsor remains engaged, then there really isn’t a handoff. After all, the CSM was there for the mind-meld, and they were an integral part of the success plan. In fact, I like to get the CSM deeply involved by tasking them with building the success plan and working through it with the executive sponsor to get their full buy-in prior to the sale. During the implementation, the CSM conducts a regular cadence of oversight meetings (I prefer weekly), led by the CSM requiring the executive sponsor’s participation (and preferably the salesperson as well). This is an expectation that must be clearly set and agreed prior to the sale. In this approach, there is no hand-down of responsibility and oversight in the customer. The CSM leads with the clear purpose of retaining sponsor engagement throughout that phase and beyond. This is what I call establishing “durable custody” of the customer. There are other benefits to this approach including ensuring that the salesperson remains involved enough to be an asset at critical moments down the road. It’s also the best way I’ve found to implement a real success planning process and have the continuity to ensure that the plans are implemented and achieved. Why Aren’t Handoffs a Problem For All Companies? Once I understood the problem with handoffs, I could immediately see why many companies don’t have any trouble with them. Look again at my diagram of the customer above. It’s obvious not all companies look like this. Many companies simply don’t have that many levels in their organization (what I call “organizational distance”). In fact, particularly in smaller companies, these roles are often played by the same person. In other words, the decision maker is the same person who sees the project through implementation, and this is the same person who is the ultimate end-user for the solution as well. In these customers, there is no hand-down and therefore, minimal handoff risk. In other cases, the implementation is not complex or significant enough to allow for a loss of engagement. If the solution can be provisioned in a day or two, then the risk of lost engagement is effectively zero. However, in both of these cases there must still be a very tight coupling of sales and customer success to ensure continuity with the success plan. Building good success plans in collaboration with the customer sponsor, and making them the focus of all interactions is one of the keys to maintaining sponsor engagement. This also explains why some companies experience no trouble from handoffs early on, but develop problems later. A lot of SaaS/B2B companies gain initial traction with smaller customers where there is little or no organizational distance between the decision maker and end-user. However, as these companies mature and their solution begins to take hold with larger enterprise customers, their handoffs can develop hand-down problems. I’ve seen this happen a lot in SaaS/B2B, and it’s often a source of confusion and frustration when terrific early customer success results run into trouble as they move upmarket. This is one of the reasons the enterprise requires a different approach to customer success. How To Choose The Right Approach Based on this, I use a very simple technique to determine the degree of handoff risk, and the right customer success process. I will always use the “durable custody” approach described above if: The customer will handoff ownership of your account within their organization for any reason. The implementation will take more than a few days. Your company is starting to move into the enterprise. In my experience working with SaaS/B2B companies, eliminating handoffs via the “durable custody” approach has helped eliminate a lot of problems and drive exceptionally high customer retention, expansion, and advocacy. It is one of the key things you can do to enable customer bonding. But this approach does not come without a cost. For one thing, it places much more responsibility on the CSMs to establish and maintain engagement at a high level in large enterprise accounts, and to build and deliver on specific account success plans. It therefore requires a relatively high degree of skill and competence. Finding and training the best CSMs is one of the most important things for any company to get right. Also, the relative number of accounts per CSM has to allow enough time for the high degree of engagement. Although the cost is higher, the returns can be phenomenal, measured in reduced onboarding failures, much longer retention through customer bonding, and most importantly, in continual expansion of account value through real customer success.

“It ain’t what you don’t know that gets you into trouble.  It’s what you know for sure that just ain’t so.” Mark Twain The conventional theory about SaaS customer success goes something like this: Your solution creates value for the customer. The value you create drives their success. Their Success leads them to renew their subscription. This is the chain of causality in the conventional thinking about SaaS customer success. Here’s how I drew it in my notebook: I know this looks like perfectly sound logic, but it’s not. In fact, it’s a disaster for customer success, because every part of this theory is actually dead wrong. There are some gaping holes here, and until you fill them in you will continue to struggle to achieve the results your company needs. Let me explain… Deadly Fallacy #1: SOLUTION => VALUE Truth: Your solution on it’s own will not create significant value unless the customer also changes how they work. It’s a simple as that. I’ve found this truth can be difficult for many people to grok, particularly in technology companies. Yet, pretty much everyone has experienced it. I’m talking about those customers who implement your technology but get no results, lose interest, and end up cancelling. These are the times you’ve been tempted to say, “They didn’t do it right!” And, actually you’d be onto something, because this hints at the true problem. Customers who achieve phenomenal results have invariably adapted their processes to take advantage of the way the solution works. This is why it can seem so random which customers succeed and which don’t. If you leave it entirely to the customer to understand and make the essential process changes you’ll naturally get highly variable results. The solution is simple: take ownership of your customers’ business process change. If you are not crystal clear on how customers need to change their business process, they won’t be either. As I’ve said elsewhere, the enterprise is hard because organizational change is hard. So, an essential role of the customer success manager is to be the agent of the customer’s business process change. And we won’t be effective if we don’t know how the customer does their work, and more importantly, why they do it that way. Digging-in and doing some deep learning around their processes is not optional. Reality: SOLUTION + PROCESS CHANGE => VALUE Deadly Fallacy #2: VALUE => SUCCESS Truth: The value your solution creates must align with the customer’s definition of success. The next fallacy is that the value your solution creates will automatically make your customer successful. Don’t get me wrong, it’s more likely to be true than not. After all, they signed-up because they saw a clear link to their success. But taking the link is for granted can lead to problems. It’s another major cause of the variability in customer outcomes. The most common reason why this link gets broken is simply the failure to truly understand the customer’s ultimate vision for their success. We come to every engagement with so many prior expectations as to how the value drives success,  that we often fail to examine and understand the customer’s unique way of thinking about it. My experience is that there is much more variability in the way customers frame their success then we think, both in what they hope to achieve, and also the vocabulary they use. The solution is to engage in a process of deep learning about how every customer uniquely defines success. Only then can the customer success manager work to assure the value created aligns to drive the customer’s vision of success. There are many different things that may need to be done, but the most common missing ingredient is measuring and materializing the link between the solution value and the impact on their success. Reality: VALUE + ALIGNMENT => SUCCESS Deadly Fallacy #3: SUCCESS => RENEWAL Truth: If you want to ensure the renewal, you must continually increase the customer’s success. Almost nothing in customer success is more confusing or frustrating than having one of your successful customers unexpectedly cancel their contract. Getting blind-sided like this has happened to every SaaS company. Sometimes there’s an obvious reason, such as an abrupt change in the customer’s leadership, or they got acquired. But more often it’s not clear what went wrong. The third fallacy is the idea that driving their success will be enough. This is something I go into detail elsewhere. But suffice it to say, over time, delivering the same value has a diminishing impact relative to the customer’s evolving needs, perceptions, and alternatives. That’s why value must be a dynamic thing. For every renewal there must be a story about how you are making an increasing impact on the customer’s success. I call this dynamic nature of success, “client velocity”. And it’s the reason for another counter-intuitive truth of customer success in the enterprise… Truth: Expanding the account is actually a cause of renewal, rather than it’s outcome. You’ve probably heard it before: “First let’s secure the renewal, then we’ll work on expanding the account.” This way of thinking is the essence of this fallacy. Experience has taught me that in order to continue to renew year after year, customers need to have a vision of how your solution’s impact on their success is expanding. If the account isn’t expanding, it’s dying. That’s why you have to first secure the expansion, and the renewal will be a foregone conclusion. Reality: SUCCESS + EXPANSION => RENEWAL The REAL Causal Chain of Customer Success So, here’s how I see the real chain of causality in customer success… Think of it this way… All the factors in red above (process change, alignment, and expansion) are the main activities where customer success managers should focus their efforts. To achieve phenomenal results: Drive key process changes in the customer. Ensure value is aligned with their success, and the impact is measured and materialized. Continually find ways to expand your leverage against the customer’s success. This is the formula. But wait, what about adoption? How is it possible that I haven’t mentioned driving adoption? Isn’t that a big part of customer success? Well, that’s what most people think, but it’s actually the heart of one more deadly fallacy. Bonus Fallacy: ADOPTION => SUCCESS Truth: Broad adoption inside the customer is the outcome of success rather than the cause. It’s a nearly universal belief that getting the customer’s employees to use (“adopt”) the solution is a primary driver of customer success. This is why encouraging adoption is so often a top priority, and why there’s so much focus on training the end-users. This belief is understandable because we clearly see that our most successful customers always have high adoption. The two obviously go together. But the important question is: which causes which? There’s no doubt that customers have to adopt the solution at some level to even know if it’s working. Clearly, zero adoption is death. But, what we want to know is: What causes adoption to spread broadly in some customers from that first little bit to a lot? The answer: success drives adoption. When all the elements of the causal chain lock into perfect alignment, a magic thing happens: your solution goes viral inside the customer organization. This is because there is a reinforcing loop where success drives adoption which produces more value which drives more success, and so on. It looks like this… Reality: SUCCESS => ADOPTION That’s the formula for customer success. If any of the elements are missing or out of alignment, driving adoption can feel like pushing a piece of string. You’re never going to get anywhere. When all the elements are there and aligned, success, adoption, expansion, and renewal seem to take on an energy of their own. But in the majority of cases, you need to work deliberately to ensure the pieces are all in place and aligned. That’s why customer success is so important in SaaS.

These are the 5 concrete things anyone can do right now to start crushing it as a customer success superhero. In my last article, 5 Counter-Intuitive Ideas of Phenomenal Customer Success, I described the unconventional shifts in mindset that are key to generating exceptional customer success results in SaaS/B2B. Each one challenges a dominant mode of thinking in the customer success world, and together they constitute a departure from conventional customer strategy. I call this approach, Client Velocity. If you have not already read the article, I strongly recommend that you pause now and read it before proceeding. I promise what follows will make a lot more sense. Principles are magic in the way they clarify what matters. And when we can see what matters most, we also see what matters less. These principles are a tool for focusing scarce resources where the leverage is highest. The next step is to translate principles into action. What follows are the behaviors that put each of the 5 Principles into practice. They are specific and concrete. They can be performed by any person or team, in any organization, and do not require a new customer success playbook, or a snazzy new system. And, best of all, they are very simple things you can start doing right now. But don’t be deceived, these are the most powerful actions you can take to significantly up your game and create enduring bonding with your customers. I have demonstrated that, if done consistently, they drive incredible results. So let’s get started… The 5 Practices of Customer Success First Principle: Success [not happiness] A strategy focused on customer happiness is not the key to long term renewal. Focus instead on understanding and driving the customer’s own definition of success. Practice 1: Plan for Success Create a custom success plan for every client. It’s impossible for me to believe that any success manager can be intent on driving their customers’ outcomes without a plan. Creating a custom-tailored success plan for every client is the first essential practice of Customer Success, yet it’s astonishing how many people don’t do it. What is a Success Plan? This discipline ensures all the essential elements for client bonding are in place. First, you cannot take ownership of the customer’s success if you don’t know what it is. Naturally, it has to be measurable, and there must also be a clear target the customer would view as unequivocally successful. No plan would be complete without a timeline, milestones, and a clear definition of all the roles and responsibilities. That’s basically all there is (except for one additional key 6th element that I discuss below). The formula for a great Success Plan: Clearly define the client’s Purpose (what is success?) Determine the Metrics and how to Measure Agree on the Target Create the Timeline and Milestones Define the Roles and Responsibilities Beware of the tendency to over-engineer the Success Plan. It’s great to have a beautiful document, but that’s not what a success plan is. Obviously it must be written down, but stay focused on the reality of the success plan as something you do, rather than fetishizing the written object itself. What is NOT a success plan? an account status update an overview of the account a write-up of the last interaction a “next action” plan a QBR (though it should always contain the Success Plan!) Which customers need a Success Plan? All clients need a success plan. But in practice, only customers with a success manager are going to get one. Creating a success plan is, by definition, an individual process in which each plan is specifically tailored to the client and their own vision for success. This is not something a robot can do, it’s why you (the CSM) are so valuable in SaaS/B2B. You’re welcome! When do clients need a Success Plan? Now. It’s almost never too early to start. The best process introduces success planning before the client even purchases the solution. It’s also never too late to start. I’ve built success plans for clients after they’ve cancelled, and won them back! Some common objections to creating a Success Plan for every account: “All my customers have the same motivation. The ‘plan’ is always the same.” This belief is a delusion created by starting from the wrong place: your product/service. You must open your mind to the variety that exists in your client group, and the only way to do that is to switch your perspective to focus on the customer. “My customer won’t engage with me to make a success plan.”
 This speaks to a more profound problem in the relationship. The good news is now you know so it can be addressed. Beware the urge to presume the relationship is otherwise strong and therefore it’s a bad idea to “rock the boat” by demanding more engagement. Do it now. This account is red. “The customer doesn’t know what their purpose/success is.”
 This mostly likely means you are engaging at the wrong level in your account, which is endemic in customer success. What has happened is your account has “fallen” in the customer organization to the level at which it will eventually fail. The solution is to up-level your engagement inside the customer. Do it now. This account is red. “There’s no way to measure success.” See “Practice 3: Measure + Materialize” below. “I don’t think this customer will follow the plan or fulfill their responsibilities.”
 This is evidence that your entire on-boarding and customer success process is not designed to drive specific, measurable, success outcomes that are meaningful to your customer (see previous objection). This could also be due to the problems described in the second and third objections above. “I don’t have time to do a custom success plan for every customer.”
 First, you need to take a hard look at how you spend your time. Anything else you are doing is lower leverage. Success planning takes priority. Second, you are probably over-engineering the process. Keep it simple. Here’s the key to client success planning: do it. Just push all objections and worries aside and start today. Go through your accounts, one at a time, and engage with your clients. The process is magic. Your customers have probably never had this experience with a provider. It’s refreshing. And, here’s the secret: you will discover your bonding takes hold almost immediately, even long before you complete the plan and hit your goal. Of course, the target is important. But you will find just engaging in this practice transforms your customer relationships. Finally, don’t just do it with the “good” customers that you are comfortable with. Your troubled accounts need it even more, and have the potential to respond even better. Try it with one of your difficult accounts today. Hey, it can’t hurt, and you may just be astonished at the turn-around that happens! Second Principle: Behavior [not technology] Technology does not transform organizations. Business process change transforms organizations, and technology makes it possible and scalable. Success is dependent on helping your customers change how they work. Practice 2: Add Expertise Add expertise to every interaction to help your clients change how they work. The second key practice is based on the understanding that technology will not transform your customers’ business unless they also change how they work (see principle 2 here). Organizational change is hard, so owning their success inevitably means getting involved in their process change. However, it is not as complicated as it may first appear. You don’t need to be McKinsey and create a big corporate change initiative to have a real impact. All you need is to recognize that the key to the change that matters most is found in the unique expertise locked within your company. This practice is simply about continually sharing key insights, tips, and suggestions gathered from within your company and across your clients to help your clients change and improve how they work. Some common concerns with adding expertise to your regular interactions: “I don’t know what expertise we have to offer the customer.”
 Here are some simple ideas for gathering expertise: Think of your most wildly successful customer, and ask the following question, “What did the customer change in their work process that was important to their success?” Inevitably you will think of several things. Write them down and share some in your next client meeting, adding that these are things your most successful customers do. Then, follow up on how it’s going next time you talk. You should also reach out directly to your successful customers, and ask them the same question.Request an interview, and ask them about how they do everything, and especially, why they do it that way. If possible, go onsite and observe. As an added bonus, they’ll appreciate the recognition for their good work, and end up becoming more bonded as a result. Identify the domain expert/guru in your company. I’m guessing you know instantly who that person is. Do they write or speak at conferences? Consume everything they’ve said/written, then go to them directly and ask if they’ll teach you and your team about what makes some companies so much more successful at this function than others. Write it all down. You are well on your way to becoming an expert advisor to your customers. “My customer is not open to my advice on their process.” If the account appears healthy, then I suggest offering some expert advice when appropriate in conversation. If this is not possible, then write it up and send it by email. Be friendly and conversational: “Hey, I wanted to share with you something that another customer of mine has had success with…” If neither of these work, then either the account definitely isn’t healthy or you are working with the wrong person (see the second and third objections under Practice 1 above). “The customer won’t change their ways.”
 This is a common issue, and is familiar to anyone who’s worked in the enterprise. As I’ve said, organizational change is hard. Have some empathy for your customer, their processes are usually the result of forces far outside their immediate control. Keep in mind that their rigid processes are part of what has helped them scale to this point. Be patient but persistent. Remember that small changes often have the biggest impact, and that the process of engaging with them is often as important as the result. “We’ve tried everything and the customer just isn’t getting results.”
 This situation is neither particularly rare, nor necessarily a reason to panic. It’s a signal that there is more to learn about the customer: how they operate, why they do it that way, their unique resources and constraints. Somewhere in there is the key to unlocking their results. Keep digging, and when you find it you’ll demonstrate just how valuable you are to them. It is unacceptable ever to write the client off as a “bad” account. They are your client, and you are responsible for their success. This is what you do. And remember that the harder you dig-in, the more they’ll come to see you as a trusted advisor. That means you are creating bonding long before you ever solve their problems. Third Principle: Bonding [not relationships] Relationships will not be enough to drive retention and expansion. The purpose of all activities in the company is to achieve bonding with the customer. Bonding occurs when you become integral to the customer’s success. Practice 3: Measure and Materialize (M+M) Continually measure and materialize the client’s key success metrics. Nothing demonstrates your commitment to the customer’s success more profoundly than measuring it. That’s why this is the keystone habit of customer success. As I have said previously, It’s impossible to be truly intent on something, and applying your efforts to effectively drive it, if you are not measuring it. Measure The practice of measuring is simple. Once you know what success means to your customer, it is only natural that everyone involved will want to know how they are doing. They may already be measuring it, in which case you’ll want to get access to monitor it on your own and come to every meeting prepared with the latest updates. If they are not measuring it, get creative and figure it out. Make sure  the metric accurately tracks success for the client. Materialize Materializing is about tying the success metrics to your solution, so that your impact is clear. Often that is as easy as showing their metrics before and after your solution. But, remember that client velocity is all about making continual improvements. So most likely you’ll want to display the data as a time series (weekly, monthly, quarterly, etc.). Some common objections to M+M-ing: “There’s no way to measure success.”
 This is the most common objection I hear from low-performing customer success teams, and the clearest indicator the entire company is not centered on the customer. The short response is: This is almost certainly not true. And if it is, your entire business model is in danger. Grave danger. (Is there another kind?) Even if you know how your client defines success, you may still have a challenge measuring it. My advice: own that problem. The need to measure is never going away, and solving it can be one of the most powerful bonding activities you ever do. Think about how integral you have become with their success when the client relies on you to measure it. “I’m not sure we really have any measurable impact on their success.”
 Beware of jumping to the conclusion that the solution is a failure, or the customer is a bad fit. It’s possible this anxiety simply comes from never having measured it before. It’s scary, but there’s no alternative, so get started. As I said above, you’ll get some credit in the short run just for trying. “We are measuring but there’s no visible benefit.”
 Check your metric to ensure it really tracks your solution’s impact. Remember that the results are dependent on the client changing how they work, so ensure you are following Practice 2. Beware of the tendency to blame the customer (which is the cardinal sin of customer success). Up your game in Practice 4 below. And remember, if SaaS and customer success were easy, everybody would be crushing it. “My customer doesn’t care about measurement.”
 You are dealing with the wrong person in the organization. Go back and reread the third objection under Practice 1 above (“The customer doesn’t know what their purpose/success is”). “The metrics were progressing great initially, but recently they’ve stalled.”
 There isn’t space here to deal with this one. Just know that it’s important, and figuring out what is going on and what to do about is the responsibility of the success manager. Suffice it to say that stopping measurement is NOT the solution. Take ownership of the problem and hone your skills in Practice 4 below. Make M+M a regular part of your kick-off’s, account reviews, QBRs/EBRs, renewal calls, and other touch points. Create a slide, spreadsheet, table, chart, or dashboard which contains the client’s success metrics. Review it regularly and talk about it with the client. Have they gone up? Why? Have they gone down or stagnated? Why? You are their partner in figuring it out and driving it up and to the right. M+M is the essence of success management, and the most important practice in creating durable bonding with your clients. Fourth Principle: Learning [not teaching] Learning is the essential attribute of great customer success organizations, and the best predictor of whether an organization will succeed in achieving bonding. Focus first on understanding. Practice 4: Ask Questions Ask a lot of questions, and write down the answers. If you want to be phenomenal at driving your clients’ success, you need to become a champion learner. All of the practices described above require you to acquire deep knowledge of your clients. It is not an overstatement to say learning is the quintessential attribute of stellar customer success managers. CSMs should view themselves as the front-line in the company’s imperative to continually learn and understand the world of their customer. This learning should be so effective that every other part of the company from marketing and sales to product and billing wants to engage with the CSMs to benefit. But, you have only so much time, so learning effectively also means learning quickly. My mother always said, working hard and working fast are the same thing. This applies to learning. As you hone your craft, you need to develop habits and techniques that enable you to surface and leverage knowledge quickly. That starts with great questions. Ask Questions Highly effective learners ask lots of questions. Quantity leads to insight. Avoid the tendency to focus all your questions around the solution. Ask about how they do their work, and who is involved. And don’t ever miss an opportunity to ask what I think is the most valuable question in customer success: “Why do you do it that way?” What you learn from this question will often lead to the key to unlocking their success. Write Down the Answers Deep learning won’t happen if you don’t have a process for capturing answers. There are lots of systems and solutions for doing this, but don’t get hung up on the technology. The magic is in asking good questions and writing down the answers to support your work with clients, to benefit others in your company. There are no limits to the types of questions that should be asked. However, I often provide my clients with the following “cheat sheet” to get them started and prompt some of the most valuable questions. 5 Key Questions of Customer Success: WHY: What is success? What are your top strategic priorities? HOW: How do you do it now? Why do you do it that way? WHAT: What resources do you have to work with? What are your limitations? WHO: Who is responsible for this success? Who will be essential to have involved? WHEN: What is your timeline? When do you hope to achieve your objectives? The above questions represent most of the general areas. But you obviously should be digging-in wherever the hunt for driving their success leads. The good news is anyone can start this practice immediately. Here’s an idea: Instead of measuring yourself on the number of times you interact with a client, track the number of questions you ask, and diligently write down what you learn. You’ll see the benefits sooner than you think. Fifth Principle: Velocity [not value] Creating value is not enough to establish long-term bonding. The focus must be on continually finding ways to add more value, to more people, along more dimensions, always expanding your leverage as a partner in your customer’s success. Practice 5: What’s After This? Include a “next phase” in every success plan. Now that you have become integral to their success, the renewal should be a foregone conclusion. I always know there’s a problem when a renewal call culminates with something like: “So, would you like to renew?” If you have to ask, then the renewal is at risk. This final practice ensures that the renewal flows naturally. And, as a bonus, it is also the most effective method for driving account expansion. This practice is simple: just add one more element to your Success Plan. In addition to the 5 elements above, there should always be a 6th which defines what comes next when the current phase is done. In other words, always give your client something to look forward to: a “next phase” with even better results. In some cases what’s next is a high-priority objective or task that did not make it in the current plan scope. It is always about achieving higher performance, and often involves rolling out to more divisions, driving broader or deeper adoption, applying your solution to additional processes, adding services, or adding more functionality. In every case, what’s next must anticipate driving more results for the client. If you find yourself stumped as to where to go next, here is my What’s Next “cheat-sheet”… 5 Ideas for What’s Next: More improvement More success targets More expertise/services More people/teams/divisions More technology/functionality/modules Finding a compelling “next phase” should not be difficult if you are asking lots of questions (see Practice 4). Review your notes and you should have no problem identifying opportunities. In fact, most often there are too many to select only one, but this is a great problem to have. Openly engage your customer in prioritizing their wish list. You’ll probably end up not only with a compelling next phase, but several after that as well. This practice should not be complicated. You do not need to write-up a detailed plan, that’s for later. Right now you are focused on your current success plan and targets. As you get closer to achieving your current targets, you can start to discuss it more and fill in the details, and the client will increasingly envision where you are going together. At that point, the renewal will be natural, and the conversation will most likely shift to expansion. To summarize, here are all 5 Practices: Plan for Success Add Expertise Measure + Materialize Ask Questions What’s next?

These surprising and unconventional changes in mindset are the key to breaking out of the SaaS/B2B customer retention doldrums. Next month will mark 20 years since I began my career in enterprise software. And to honor the occasion, I am sharing the most important lessons I’ve gleaned during those two adventurous and fascinating decades working to transform the world’s most innovative companies. These five principles represent a set of fundamental and somewhat counter-intuitive shifts in mindset that unlock the power to create the kind of deep bonding with customers that leads to extremely high customer retention, account expansion, and advocacy. The Five Principles of Customer Success 1. Success not happiness A strategy focused on customer happiness is not the key to long term renewal. Focus instead on understanding and driving the customer’s own definition of success. Research shows that high levels of customer happiness or satisfaction do not consistently translate into high rates of renewal. A strategy of exceeding expectations on customer service may feel good, but on its own it is not enough to drive the degree of retention necessary to make your SaaS company highly successful over the long run. In addition to all your best efforts to craft a great customer experience, you must latch onto something that your customer organization can experience that is both highly valued and transcends the tenures and vicissitudes of its people. The good news is that while organizations can’t exactly have emotional experiences in the way that people do, there is something that they continually experience quite exquisitely that is much more durable than happiness. Customers can experience success. In fact, all companies and organizations are fundamentally wired to experience success. Success (and conversely failure) is the intrinsic experience of the organization. Obviously all organizations define success differently, and there are often multiple definitions, not to mention that these ideas tend to change over time. But the fundamental truth remains: Success is the quintessential experience of the enterprise. And focusing on your customer’s success has two other attributes that make this by far the most worthy object for your efforts… First, it’s more durable. People in organizations come and go. Providing direct and visible leverage against the organization’s own vision of success spans the individual tenures of its people. Second, it is much more under your control. Yes, that’s right. You have the opportunity to establish a more direct and demonstrable influence over your customers’ ability to achieve its goals than you will ever be able to maintain over the emotional experiences of its people. This idea of focusing on your customer’s success may seem obvious. But before you think that you’ve got it nailed, consider this: how do you measure it? You see, it’s impossible to be truly intent on something, and applying your efforts to effectively drive it, if you are not measuring it. But what we mostly measure in customer success actually aren’t metrics of the customer’s success at all, they are measures of our own success. Think about the major CS metrics: renewal, retention, churn, adoption, satisfaction, NPS, etc. Not one of these is a direct measurement of the customer’s success. In fact, what they really represent are kind of the opposite: the results your own company is getting from your customers. But wait, you say, aren’t they at least indirect measures of customer success? After all, if a customer is successful won’t they renew, adopt, and be satisfied? There’s definitely some truth in that. The problem is that, even to the extent that’s true, these measures don’t tell you anything about the ‘why’. Looking at these metrics alone one can’t really tell why some customers succeed and others don’t. And for that reason you can’t use these metrics to do anything specific to impact the outcome. In any case, they are all backward looking. In other words, whatever happened to produce these outcomes is now in the past, and often far in the past. So by the time we see the number it’s too late to do anything about it. It’s like looking at the stars: by the time the signal gets to you what you are really seeing is what they used to look like. A true focus on your customer’s success involves figuring out what success really means to them, measuring it, and driving it. This approach is foundational not only to how you relate to customers, but in fact to everything else you do. That’s why your customer’s success — as they define it — must be the ultimate focus of your efforts. The true purpose of the Customer Success organization is to ‘own’ the customer’s success. 2. Behavior not technology Technology does not transform organizations. Business process change transforms organizations, and technology makes it possible and scalable. Success is dependent on helping your customers change how they work. This is a mantra I repeat constantly, and nearly everyone who works with me can recite it verbatim. Why? Because the enterprise is hard. All the incredible potential packed into your awesome technology bundle will remain locked up and unrealized until your customer changes the way they work. The mere act of provisioning their accounts, or getting people to login and use it, will not be not enough to make real change happen. A lot of experience has taught me what I think everyone else already knew: it’s hard for organizations to change engrained habits and processes. Normally, they can’t do it without help. Therefore, as long as we are founded on the first principle, the job of customer success is clear: we must take responsibility for helping our customers make the necessary changes in behavior to achieve superior results. Otherwise, they will fail to realize the value from our solution that they envisioned when they signed up. And when that happens you can kiss the renewal goodbye. This principle involves a fundamental change in orientation from the conventional mindset. We can no longer think about customer success merely in terms of implementing technology, training users, and driving adoption. Customer success must expand its mandate to include helping the customer change they way they work. Sitting back and saying it’s all on them to change is easy, but the results will not be compelling. This principle is the recognition that organizational change is hard, that there will not be enduring and transformative results without it, and therefore: an effective customer success strategy must include engaging with your customer to drive their business process change. 3. Bonding not relationships The purpose of all activities in the company is to achieve bonding with the customer. Bonding occurs when you become integral to the customer’s success. One of the most pervasive ideas in the customer success universe is that securing the renewal is dependent on establishing a strong relationship with the customer. It actually makes a certain amount of sense given the conventional approach to measuring customer success. What else is a Customer Success Manager (CSM) to do? Without a clear and measurable link between their specific efforts and the actual results the customer realizes, and without a mandate to engage directly with the customer in driving process change, it is natural to fall back on building relationships. When things go wrong (and they always do) the hope is that the relationship will carry you through. But it won’t. Certainly not year after year to the 4th and 5th and 6th renewal. Relationships are simply not enough — not in the enterprise. Then what will be enough? Principles 1 and 2 provide the necessary background to comprehend a fundamentally different kind of relationship between provider and customer. It is different enough that I believe it requires the use of a different word. “Bonding” represents a deeper kind of relationship in which the provider so completely comprehends and internalizes its customers’ true success that it becomes an integral part of it. Achieving bonding requires a complete shift not only in how you view your relationship to the customer, but even in what it is you think you do for them. Let me explain… It turns out that your customers don’t want your software. Not really. They want what it can do for them. And in the case of organizations, they want it to make them more successful. They must always have a very specific vision of how they will use your service to make them more successful. Bonding is what happens when you are able to establish that link between your product and their success. “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” — Theodore Levitt Think about it: do you think they really want to sign up for a new service, and put time into learning it and configuring it and loading it with data, or hooking it up to their other systems? Do you think they want to spend time administering it? No, of course not. They don’t want your drill. They want a hole. Put another way, people hire your product to do a job for them. Bonding is understanding that job and making sure it gets done. This is the most profound change in mindset of all of the five principles. Here are just a few examples of how this shifts your orientation… Bonding is not about offering the best product or the lowest cost. Both of these ideas focus on the wrong thing: the competitor. Bonding focuses on the customer. The conventional mindset emphasizes the economics of the market and of your own business. Bonding emphasizes the customer’s economics. Bonding shifts the attention away from your product and focuses it on the job your customer is hiring your product to do. In fact, even the term “customer” is based on a transactional mindset. That’s why I prefer the term “client” in the context of the enterprise. A customer is simply someone who has transacted business with your company. By contrast, the word “client” speaks to a deeper bond. The original term denoted a person under the protection or patronage of another. That comes a lot closer to the idea of taking ownership of your customer’s success. Think of your clients as being under your protection. Their survival (success) is now, at least partially, your responsibility. There’s much more to say about this. For now, understand that bonding is what happens when you truly own your customer’s success, measure it, and learn to drive it. It is the natural outcome of thinking in terms of the customer’s “jobs to be done” and their economics rather than in terms of your own objectives, products, and economics. The ultimate result of bonding is a Total Customer Solution (TCS) that combines technology AND expertise to drive the needed organizational changes that lead to meaningful results. Bonding is the transformation from a transactional customer relationship to one that is characterized by high rates of long term renewal, significant account expansion, and advocacy. 4. Learning not teaching Learning is the essential attribute of great customer success organizations. Focus first on understanding. Only then will you have the power to create bonding. All of the principles above require learning. Not just a little bit of learning, but a lot. In fact, I believe learning is the attribute that best predicts whether an organization will succeed in achieving bonding. One of the tell-tale signs that a customer success program is not creating bonding is when its customer activities primarily revolve around training the customer. There’s an underlying mental model that says that the product/service itself produces the promised benefits as long as it is being used “correctly”, so it follows that the job of customer success must be to make sure that everyone is using it, and using it and correctly. In other words: achieve adoption and the benefits will flow. This is why so many companies emphasize training in their customer success programs. And, this way of thinking seems to be validated by experience: whenever a customer is really successful we observe them actively utilizing the service with a high degree of skill. So naturally we conclude that the customer is successful because they are actively and effectively using the service. But isn’t the opposite also possible? Could it be that some customers are great at using the service because they are successful? My experience is that customers and their users will engage with your service and learn to use it effectively only when they come to envision how it is essential to their success. This reversal in thinking naturally drives a very different approach to customer success. In particular, the focus shifts from teaching to learning. In fact, every principle above is totally dependent on a learning approach. Principle 1, Success, is fundamentally about understanding the customer’s definition of success. Baked into the way most companies approach customer success is the assumption that they know what the customer needs and that the link to their customer’s success is already hard-wired into their product’s features. Learning is the only way out of this trap. You cannot help each customer succeed if you don’t really know what success means to them. Principle 2, Behavior, is the recognition that helping customers change their behavior is essential to their success. Every organization is different and nowhere is this more evident then in the unique way that they do things (their processes). Learning is essential to catalyzing change. You cannot help the customer change if you don’t understand how they do things, and more importantly, why they do it that way. Principle 3, Bonding, is entirely about shifting your focus to the world of the customer: their objectives, their resources and constraints, and their economics. It changes the relationship from customer to client, and leads to a solution mentality that combines your product and expertise. None of this happens without a deep investment in learning. The problem is that most companies are simply not wired for learning to the degree that this mentality requires. That’s why it is essential to engineer learning into the very fiber of your organization and culture. Ask yourself this question: Does your organization view customer success as a vital learning conduit to its customers? If your organization is wired for learning, then every team from marketing and sales to product and billing will be constantly asking for access to the CSMs to interview them and gain perspective about the customers. But this is rare in my experience. And if nobody in the organization is eager to know what the CSMs have learned, then why should they invest their time and effort in deep learning about their customers? How would that knowledge be of any use? If the broader organization isn’t hungry for understanding the customers, then the CSMs won’t be either. The resulting posture is what we see all too often: a customer success program oriented to telling the customer things rather than learning from the customer. Whereas bonding is the most important outcome of great customer success, learning is its most important input. It is not overstating to say that learning is the essence of great customer success. The number of questions that CSMs ask is a much better metric of their effectiveness than the number of touch-points, suggestions, and trainings they provide. And this kind of learning simply doesn’t happen in a vacuum. A sincere and eager interest in the perspectives, goals, and challenges of the customer is something expressed throughout the entire organization. This kind of “learning organization” is what provides a vibrant environment for understanding and sharing. 5. Velocity not value Creating value is not enough to establish long-term bonding. The focus must be on continually finding ways to add more value, to more people, along more dimensions, always expanding your leverage against the customer’s success. Velocity is the final element. When we drive the customer’s success we create value. When we measure and materialize that impact to the customer we demonstrate that we are becoming integral to their success and bonding begins. But value must be a dynamic thing. For example, in the beginning velocity is about getting to first value quickly. That’s what I mean by dynamic. It isn’t just about value but about a story of how value increases over a relevant time frame. Many understand that successful customer onboarding is heavily dependent on rapidly achieving a first demonstration of value (time to first value). But it doesn’t end there. For every renewal there must be a story about the increasing impact on the customer’s success. As long as this process continues and the scope of value expands, bonding will be durable, and renewal will be a foregone conclusion. That’s what velocity means: the continual expansion of the integration with the customer to drive ever greater levels of customer success. This principle is based on a simple truth that I actually learned quite early on. What I found is that value in and of itself is a powerful motivator during the sale and even during the first year. However, the impact of the benefits tends to wear off over time if they remain static. The first time your point of contact POC bragged about the amazing results to the boss it was really impressive, and maybe even the second time. But organizations never come to the end of their challenges and needs, and eventually that same value you created is old news. From their perspective, an important need has been met, but just as quickly, they move on to the next one (or ten). The absolute magnitude of the impact may remain, but over time it appears progressively smaller in comparison to the company’s evolving challenges. What’s more, in the mean time another five companies have come along to do it cooler, faster, cheaper, or better. In many cases perhaps all they offer is a different kind of benefit. But, at least that’s something new for your POC to brag about to the boss. And if you don’t have a compelling story about the expansion of your impact and relevance to their latest set of needs, the account is at risk. But velocity is about more than just driving customer results “up and to the right”. It is what it means to be truly integral with your customer’s success. Your customer is on a journey and the relationship that they value most over the long run looks a lot more like a partner than a vendor. If bonding is about becoming integral to your customer’s vision for their own success, then velocity is the expression of the dynamic nature of that relationship. Each renewal is an opportunity to tell a new story: more benefits, to more people, along more dimensions, and on it goes. Client velocity is the characteristic pattern of SaaS companies driving phenomenal rates of renewal, expansion, and advocacy in the enterprise.