Desired Outcome – Not a Great Single Barometer for Customer Success Anymore?
Let us see what exactly is desired outcome for a SaaS business as it has given way to more tech-driven, and more accurate metrics to gauge customer success.
Jul 2, 2020
Desired outcome is a very common phrase – in fact, every act of ours, even just a walk, has desired outcome for us. But its meaning turned on its head when it came to be associated with SaaS businesses and customer requirements. Initially, everyone went giddy with the phrase – and thought of it as a one-chant-cures-all mantra for customer success. It was the favourite SaaS buzzword about two years ago, touted by Customer Success (CS) evangelists to describe what customer success means to a SaaS company.
“Customer Success is when your customers achieve their Desired Outcome through their interactions with your company,” Lincoln Murphy had famously explained. But then over the last one year, and more so as we go further into 2020, one can see that SaaS metrics are changing, and with it, the way business is conducted, too. Now, it is all about knowing the customer, anticipating his needs and demands, analysing his user patterns to read his mind, and blowing him away with a fab Customer Experience (CX) right from touchpoint, till his entire journey with your product or service.
And therefore, desired outcome, though still important, has given way to more tech-driven, and more accurate metrics to gauge customer success. But before we go into that, let us see what exactly is desired outcome for a SaaS business, now?
What is desired outcome?
It is the measure of what you think the customer wants from your product or service enabling companies to focus on that with all the tools have at hand. So, for the company, desired outcome is customer acquisition, and for the customer, it is about finding success with your product or service. Therefore, a clear picture of desired outcome will shape the company’s overall CS program, from pricing, marketing, sales, onboarding… and the customer’s journey with you. But the big question is whether desired outcome alone is enough to gauge CS today, when SaaS services are on the verge of total automation?
Desired outcome alone is not enough
Not anymore. To make desired outcome a path-breaking concept for your company, you need to buffer it with more metrics that measure CX in more tangible ways. Metrics that look at two primary things in a multi-pronged manner:
How is your customer engaging with your product/service?
How are you engaging with your product?
The second point must converge with the first for you to be aligned to your customer’s success in a meaningful manner so that your renewal rates are high, and your Success Vector is always pointing upwards. But how do you gauge how the customer is engaging with your product? Is he happy? Are there any bottlenecks? Is he experiencing success with your service? While defining your desired outcome can point you towards these things, they cannot help you think like the customer to define his desired outcome for you. For this, you need other detailed analytics over and above the required outcome measure that help you with KPI metrics to add value to your brand as well as product. What are those barometers of CS?
The new indicators of Customer Success
These are technology driven solutions that use customer data and analytics to pinpoint what, how and where your customer is engaging with you. This helps you come up with quick, real-time adjustments to your product, pricing, marketing strategy, so that you can build long-term customer relationships – which is essential for growth and revenue generation of SaaS businesses. The five primary indicators of customer happiness could be:
A key factor in customer success is to ensure your customers are sticking to your product. It is the reason why CSMs spend a considerable amount of time ensuring they are providing value to each customer by handholding them right through the product with the necessary training and resources. This is done by
Using tools to strategically segment and understand each customer’s needs and goals
Tailoring what you offer them to help them achieve their desired outcomes.
Customer segmentation will further help you provide valued engagement touchpoints by helping you figure out whether customers are consistently achieving success.
Clearly, if the customer is the king, then customer relationship is at the top of gauging customer success. And for a proactive customer engagement, you will need to set up automated systems that track and analyse customer interactions, user data, usage patterns and trends, health scores, and other relevant data. All this information will help personalise customer relationship, which is imperative to delivering customer success. A good customer relationship strategy can help SaaS businesses lower churn, rake in renewal moolah and grow by helping customer achieve their desired outcomes. And this automatically brings us to renewal…
Renewals and SaaS
In subscription-based SaaS models, contract renewal is a must so that customers can continue using your service. While that is an expected outcome, a customer is not bound to renew with you unless he feels you are offering continuing value to him to succeed. While CSMs must be aware of their desired outcomes, they should have by now built a solid relationship with the customer to be in sync with their desired outcomes or success stories. SaaS metrics with the right set of KPIs that trigger alerts and predict renewals on the basis of license utilization, product usage and customer engagement are key factors here. These figures can be used to funnel down valued engagement and take your customer to the next level. You can then blow him away with tailor-made outreach plan that includes key factors such as whether he will go for an upgradation, does he need guidance or training, what kind of support does he seek for to achieve his success, what is the perfect time to upsell, etc.
Down with churn
More renewals plus new sign-ups equal low churn rate. Renewals lower customer acquisition costs and increase lifetime value of a customer. Often, poor pricing, customer touchpoint management and failure to meet desired outcomes leads to churn. However, these days, technology help in reducing churn and increasing customer retention. Some of those steps are:
Specialised churn versus retention dashboard
Personalised customer engagement measures
Prepping the prospective customers to convert by automating sales pipeline and customer acquisition funnel
Perfect the onboarding experience – Customer’s lifecycle depends on his success and adoption to your product (further read)
Make everything easy for the customers – leave reminders and leave them to act – even if it is to cancel.
So, there you go. Customer Success is measured by all the above factors, and then some. It is no longer a single-barometer measure. At the end of the day, it is all about converting a visitor to a customer, and ensuring he stays with you for life, paying for upgradations, et al. But while this is the overarching desired outcome of your business, measuring customer success in this digital world has become a complex and tech-driven process with quantifiable metrics.
Anshi has over 12 years of experience in demand generation, digital marketing, and managing global teams. In her prior role as head of marketing operations for a high growth US healthcare tech organization she transformed marketing from cost to revenue center.