Perceived value as a metric is not very common. A simple definition is:
Perceived Value = Total Customer Value – Total Customer Cost
If you have ever stood in long lines to snap up deals on Black Friday or overloaded your virtual shopping cart with the latest gadgets on Amazon Prime Day, you have experienced the power of perceived value. The moment the price of something you have been thinking about buying drops significantly, your perception of its value tends to go up—and suddenly you feel a greater urgency to buy it.
Successful organizations become good at consistently enhancing the perceived value of their product or service. While reduction of cost does help the equation, it is not a sustainable solution nor a prudent one for creating a profitable business.
SaaS (software as a service) businesses are driven by recurring revenues and it is important for them to track this metric along with the standard culprits – MRR/ARR, Churn, LTV, etc. The reason initiatives and functions around “Customer Success” and “Customer Experience” are gaining more and more traction is that these provide a direct and positive impact to the Perceived Value.
Let us look at two, often neglected ways in which the Total Customer Value and hence the overall Perceived Value can be increased. Let us assume the Cost to be constant for now.
How Effective Customer Onboarding Can Increase the Perceived Value of Your Platform
First impressions matter when purchasing a product. If you like how it works the first time, you are more likely to use it again. If not, it may take some prompting for you to pick it up a second or third time. In the SaaS world, onboarding is the first touchpoint that kicks off the customer journey and creates the perception users have of your platform and its value.
You can impress users upfront by creating the right onboarding experience for them. That means making it short, easy and efficient and personalizing it to their individual needs. To achieve this at scale, you must be able to segment user groups within the customer organization by role, the features they typically use and stakeholders. This allows you to customize your training to different users and the specific parts of the platform they use. It can also help you understand who is making the purchasing decisions for your product and personalize their interactions with your platform even more so they will grasp its value.
Once you have divided users into roles and groups, you can deliver personalized training content and communication that explains how to use different features or how to best use the platform for their particular role. The more you can engage with them across different channels, the more effective your customer onboarding will be. For example, if you send users a welcome email after they log onto your platform for the first time, they might miss it if they don’t check their account right away. But if they can see a welcome message on their screen once they have logged into the application, it enhances the onboarding experience through real-time interaction. Being able to automate different types of content and communication to send to a user across various channels can personalize onboarding even further.
You can monitor the effectiveness of your onboarding by tracking usage or seeking user feedback through the application. If the experience was good, usage should be holding steady or trending upward. Having the right tools and systems in place to connect customer data and usage trends to automated actions enables you to optimize your onboarding experience to individualize it for users.
Using Personalized Interventions to Drive Usage and Product Adoption
Simply stated, the more the usage the more the Perceived Value. Once you have successfully onboarded users, the next important step to increase their usage and perceived value of the platform is ensuring they are adopting the product well. Usage tends to dip over time, even for steady users, so you must monitor it continuously. Since people within an organization may use the platform differently, the best way to track usage is by role.
If usage appears to be dropping based on the platform’s expected frequency, you must be able to drill down enough to pinpoint where users are dropping off and why. It may be more than just a technical glitch. Users may not be aware of what they need to do to properly use a certain feature or how to get to the next step within an application.
Identifying what is causing them to drop off at a particular point helps you take the right interventions to prevent them from leaving your platform. For example, if a user drops off after clicking through several screens to complete a feature, you can give them a virtual push within the application that lets them know they are nearing the end or provide a short training video to help them navigate it better. Delivering more personalized interventions like this can go a long way in driving greater usage and product adoption, but you need automation and data liquidity to do them at scale.
It’s easy for customer success teams to get so wrapped in the business of managing customer portfolios, troubleshooting issues and upselling features that they lose sight of what’s most important for driving customer success: Have the customers had a good initial experience and are customers using the platform enough? After all, you wouldn’t buy something again if you didn’t use it the first time around. But you might be willing to buy a product again if you have used it extensively and had a positive experience in the meantime.
Customer success and customer experience teams need to do more than connect with customers regularly, provide support and run NPS and other feedback programs. They need to significantly impact Perceived Value. Organizational structure, culture and tools used by these teams all need to be relooked and decided upon accordingly.