Customer Success Managers - A decade ago it was a title that meant nothing to nobody - Fast forward to the present day, and any self-respecting software vendor has a dedicated customer success team. But what is their charter, and how much do they really care about your success? It is no coincidence that Customer Success Management's rise coincides with the adoption of Software As A Service. The implementation of a business application, such as ERP, CRM, EIM, HCM, etc. The long-term capital expenditure projects are diminishing, and the write-off period would only include the implementation costs - the software itself is an operational expense, a subscription that can be cancelled at any given moment (pending terms and conditions of the vendor). Therefore, a successful implementation provided a better chance of ongoing revenues on the software subscription - and the flipside - a failed implementation would put these revenue streams severely at risk. Since most implementations are done by System Integrators or Technology Partners, there is a lot riding on the success or failure in execution by third parties. The Customer Success teams are a way to bring some form of control back to the vendor, helping to forge the quickest path to success.... in theory at least, as the Customer Success teams have no contractual engagement on the implementation project, other than advisor.
Success scope
The scope of success is what really makes a difference to what a Customer Success Manager can mean in your organisation. The spectrum is roughly filled with five categories of customer success initiatives - starting from none - where the nature of your engagement with the vendor is limited to the end-user license agreement. The second category is recovery - the project is already so far in the red, that it is at risk of a complete write off - vendors tend to be step in if there is a case for salving the situation. The third level of Customer Success engagement is where a Customer Success Manager is part of the implementation in an advisory and where needed coordinating capacity. This is the mainstream customer success interpretation today. A Customer Success Manager is assigned to provide advice and coordination with the System Integrator and the R&D/Account teams at the vendor where needed. The scope is the success of the implementation. More enlightened Customer Success interpretations will look beyond the confines of the program, and help customers uncover more ways to add value to their operations by different or more use of the offered software subscriptions. For the vendor this is good, because it entrenches the subscription in day to day operations, and for the customer this is good because it represents more return on the investment. But to elevate Customer Success Management to a truly trusted advisor position, we need to go to the next level - the fifth level.
Customer Value Management
Value Engineering is nothing new with software vendors. Traditionally it would focus on Return on Investment, Internal Rate of Return, and Payback Period for the capital investment. In the world of Software As A Service, the value needs to be apparent every billing cycle, not at the start of the transaction. Therefore, Business Value Executives/Architects/Strategists are emerging at vendors. As a customer, you can get significant value out of this initiative - as the Business Value Executive will not only work with your finance team to uncover potential for ROI but stays with the implementation to drive the value realisation as part of the program planning and execution. Success is evolving to beyond the terms of the contract, into realizing maximum value from the investment.
What to expect next?
Customer Success is becoming more centralised in all aspects of engagement. Where currently customer centricity (or customer obsessed) are phrases coined by organisations in transition from process centric to customer value centric, the incentives of these organisations will change to favour customer success as opposed to process fulfilment. Customer centric organisations are more fluid, where process centric organisations are static in their operations. New technology plays a significant role in becoming customer centric - the ability to use unstructured data and build new transaction structures as needed is not something the traditional ERP/CRM systems would provide, at least not in a way that the company remained profitable. A transformation towards customer centricity demands a wide program of integrated information tools to be implemented and connected, as well as a complete overhaul of incentives to drive the desired behaviour - such programs take years. But in such transformation, customers already can see the benefits coming their way - the vendor is more attuned to their industry and their customers. The Digital Advisors will collaborate deeply with the Value Executives to come with not only the view of what's possible, but a plan on how to extract tangible benefits from the potential disruption. The relationship customers can have with their vendors can transform from transactional and End User License Agreement based, to a true value advisor that impacts the entire value chain - but it will take time for the vendors to get through the required business transformation and cultural shift. Until then, Customer Success Management and Business Value Teams are of great benefit, and customers should take full advantage of these services.
Originally posted: 24 October 2017