Are you tired of the same old customer success approach? It's time to shift your thinking to outcomes-based strategies.
I'm Shane Ketterman, Enterprise Customer Success Manager at SimpleTexting, and in this article, we'll explore the power of outcomes-based thinking and how it can revolutionize the way you approach customer success.
What is outcome-based thinking?
Those familiar with outcomes-based selling, which is a kind of selling technique, will have a strong idea of what outcomes-based thinking is.
When a salesperson uses outcomes-based selling, they’re selling value, instead of selling a product or a feature. If we flip to the other side of the sales funnel to customer success, outcomes-based thinking is similar to that. In some ways, it is sales – selling an outcome, a business goal. But it's more about focusing on your customer’s business goals, with less of a focus on the product and any of its features.
Assimilating outcomes in a product-led culture
Now, you might think that this ethos is completely at odds with a product-first company. For companies that are product-led, outcomes-based thinking can still be an important concept.
After all, the customer probably isn’t product first, they're focused on what's in it for them. Granted that might sound a bit sales-y. But in truth, when it comes to outcomes, you're specifically referring to the very beginning of the post-sales journey during onboarding and adoption.
Even if you’re at a product-led company, you need to make sure you can actually locate those nuggets of value. Now, this is a critical inflection point because this is what's going to drive the customer forward. The bottom line is: this is what they're there for. They're not really there for the product, or the features – they only want the product because of the value they can gain from it.
The progression toward outcome-based success
There's a consensus that, as customer success evolves, the Customer Success Manager (CSM) does too, going from first, second, to third-generation.
Currently, we’re witnessing the third-generation CSM, who’s more preoccupied with this outcomes-based world. But what's interesting is this type of thought process can sometimes be a tough concept for a lot of CSMs because we’re really talking about out-of-the-box thinking.
For example, I could be a CSM for a lead generation product. In this scenario, you’d naturally think that the hypothetical product is supposed to help the customer generate leads. (This is true.) However, in the customer’s mind, they might be looking for far more than what the product says on the tin.
As you discuss this further with the customer, you might find out why they want to generate leads. You could discover that they want to generate leads because they have a really difficult industry they're trying to break into.
Now, as it turns out, you as their CSM, might have knowledge of that industry and could leverage this intel to help them. By thinking outside of the box, you can supply them with advice and tips – almost like a business consultant.
There’s a definite shift in thinking with outcomes, as you’re not solely supporting a product as a CSM. That game is over. To truly sell the idea of value to your customer, you need to broaden your mind and act more like a business consultant.
Getting internal buy-in for outcome-based thinking
Just as the philosophy of striving for successful customers – the essence of customer success – should be a company-wide strategy, outcomes-based thinking should also be adopted as such. One way of the best approaches to this is through education.
First and foremost, it's important to educate your team about what's expected from them, rather than just throwing this concept at them and expecting them to understand. Due to our close proximity to our company’s product, we develop a specialized knowledge of our respective industries that goes beyond the parameters of a “Customer Success Manager."
In a way, we're also consultants and we need to start thinking that way. By helping people understand what consulting means and how to be consultative, we can share that knowledge and add value to our customers.
There are many resources available for educating the team, such as courses or bringing in someone for a day session.
I’m a huge proponent of investing in education because it’s so important.
When it comes to convincing senior internal staff like VPs or the CEO, it's important to frame the discussion in terms of hard data. They're primarily interested in metrics, like churn reduction and monthly recurring revenue.
If we can sell the value of our services and show customers how to expand, we can decrease our risk of churn and increase our customer retention. This is a huge selling point and a way to make a direct connection.
How customer success drives business outcomes
It's hard to know how customer success can drive business outcomes since it depends on the specific role and product, but I can give you an idea.
Let's take the onboarding process as an example. Traditionally, onboarding was a sales responsibility, but nowadays, many companies introduce Customer Success Managers into the process earlier to build familiarity with the customer.
Regardless of when the CSM is introduced, onboarding is a critical moment for the customer and for the CSM to put on an investigative hat to understand the underlying reasons driving the customer's use case. Let me give you an example.
A while ago, a customer approached us at SimpleTexting saying they heard about business texting and thought it’d be a great way to hire people. I asked them a lot of questions to get to the root of:
- What they wanted to achieve.
- What was driving their need?
After peeling away the layers, we discovered that they were struggling to hire people in the trade industry, and it had been six months since they hired anyone. I suggested they ask their current staff how they would like to receive texts and what they’d be interested in learning about a company through texting.
The customer did their research and found out that people wanted to know the pay range and what was going on in the company. We incorporated this feedback into the texts and also scheduled a 15-minute pre-call to keep them in the loop. As a result, the customer was excited and engaged, and they were able to hire people after a long time.
Now, I'm not a recruiter by any stretch. Some people may argue that because I'm not in the recruiting industry, how would I know what to recommend to people? However, I believe that having the right mindset is important. AI can learn and adapt, but sometimes it's not just about that. It's about understanding people. After all, this is a people thing, right?
For instance, if I were selling a medical SaaS product, I certainly wouldn't be able to tell a physician how to do something. But what I can do is empathize and relate to them, bringing it back to business.
I want to elaborate on the data.
How does a case study help a customer success team?
Well, here's what you can do.
First, you can email the customer and get a response within a few minutes. This is an important measurement because, most of the time, CS teams struggle with getting customers to respond.
So, it takes hard work to build relationships and give them a reason to respond. From a data point of view, the response time with the customer is crucial. We don't measure it enough, but it's really important.
The other data point is to talk to the customer and ask if they’d be interested in doing a case study or success story. If the customer agrees, it's a huge win for the company. It can help reduce churn and improve customer satisfaction. These are soft things that are tough to sell, but they matter a lot.
In short, the success of a CSM depends on their ability to understand their customers' underlying needs and motivations and tailor their approach accordingly. Success metrics can vary from company to company, but ultimately, if the CSM helps the customer achieve their goals and drive revenue for the company, then they’re doing their job right.
Overcoming the barriers of implementing an outcomes-based approach in customer success teams
One of the biggest challenges in customer success is balancing the amount of time spent with the customer.
With various segments such as high touch, low touch, and tech touch, it can be difficult to find the right balance. Time management is key when it comes to delivering effective customer success, as a Customer Success Manager cannot be a full-blown consultant and still have other customers to attend to.
It’s important to set boundaries and expectations early on to avoid a toxic relationship where the customer relies too heavily on the customer success manager. Delivering value is important, but it’s equally important to communicate that this isn’t an open door to constant demands.
Setting expectations and communicating clearly can help strike a balance between effective customer success and efficient time management.
Continue your outcomes education…
…at the Customer Success Festival in Las Vegas 🎪
I'm excited about my upcoming session at the Customer Success Festival in Las Vegas on May 24-25 at the Mirage Hotel, where I’ll be talking about how you can expand and scale your customer relationships at scale by tying in the concept of outcomes-based thinking.
Many teams struggle with how to scale relationships when dealing with numerous customers from different regions. Through case studies, I'll be exploring how to create long-lasting relationships while also delving deeper into outcomes-based thinking.
Why should customer success professionals attend events like this?
I used to work in the event industry, and I loved it. I think events like this are so important on so many levels. First of all, the education aspect is invaluable. Even if you think you know the topic, you can always pick up little nuggets of information from others. And it's not just about listening to someone speak; you get to see and experience things firsthand.
Plus, events are great for networking. You can meet so many people and you never know who you'll run into. In the old days, you'd exchange business cards, but now it's exchanging LinkedIn profiles. The human connection that events provide is so important, and I wish we could have more of them.
Most people walk away from events feeling like they've gained something, whether it's a new friend or a valuable contact.