We explore the benefits of proving the financial aspects of customer success for both the customer and supplier.
Recently I have been exploring customer success, how it is assessed, its effectiveness when used as a marketing tool for vendors, and how it can contribute to maximising customer lifetime value. What has struck me most is the lack of businesses proving the financial aspects of customer success. My suspicion is that vendors have nothing to measure against or are unsure of how to do it effectively.
So, let’s take a look at how to measure the financial impact of customer success. To effectively do this, you need something to measure against. This is where the business case that was completed during the initial sales process is key. I’m not going to cover how and why you should be articulating and quantifying the benefits of your solution with your customers however if you’re interested in reading more about this topic, take a look at the links at the end of this article. The most important factor for this discussion is that the initial business case includes the quantified metrics specific to the impact your solution was forecast to have on the customer’s business – this is the baseline to measure your customer success case against. The process for creating both the initial business case and the review business case should be identical to ensure clarity and integrity.
In my view, giving your customers the option of quarterly or bi-annual financial success (or failure) reviews of the implemented solution can prove to be a huge win for both parties. These reviews do not need to be onerous or complex, so long as it is made clear at the start of the implementation that it will be reviewed, and the metrics that will be used. Again, this is where the initial business case plays a vital role, it contains the metrics you will be measuring and it should be as simple as replicating the case and updating the numbers, then comparing the two cases. Of course, any modern day, moderately complex technology solution can take months to deploy and adopt within an organisation, this should be considered during the initial review, it is also a factor that the initial business case should have accounted for.
There are a couple of scenarios that you will face during this review process:
Scenario One - You have had your first review and it shows that the solution you implemented has excelled in all areas!
Great, this proves that the decision to implement the solution was a good one and the vendor as well as the customer have performed well. It also confirms that the initial business case was done well, and the estimations that were made were accurate, well-timed, and made the basis for a sound investment decision.
Scenario Two - You have had your first review and it shows that the solution you implemented has fallen short in several areas!
This is not necessarily a bad thing; it means that under performance has been identified and the magnitude has been measured. The reasons why the metric or set of metrics has fallen short can then be examined, it could be a training issue or perhaps an implementation issue. Whatever the reason, it has been identified and can be remedied!
These customer success reports will give the vendor great insights and can ultimately be used as a guide to help mitigate potential problems for the customer or before similar future implementations take place - all in all a very valuable service for vendors and customers alike. It also ensures that the vendor is seen as a trusted implementation partner, delivering a solution with continual refinement, and adding significant value to the customer's business.
References
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