Customer success is hot…it is spreading faster than cute puppy videos on YouTube.
But just what is it? What’s in it for your organization? What’s in it for you?
Customer success is an organizational strategy and philosophy based upon a simple, straightforward concept: “For us to win, the customer must win.” However, an important understanding is that customer success is personal. Just as kids in a candy store might prefer different treats, each customer may value certain outcomes more highly than others at a given point in time, and hence, customer success varies from person to person.
A Quick Look Back in Time
Distinguished readers (those with the gray hairs of experience) will recall a bookcase full of volumes going back decades touting the importance of the customer. Business authors bandied about bushel baskets full of phrases such as “the customer is #1,” “customer delight,” “uncommon service,” “knock-your-socks-off service,” and on and on.
The intent was clear: Embrace the customer and all ailments will be healed…the blind will see and the lame will walk.
This wave of customer inspiration led to mission, vision, and value statements being drawn up (mainly by the marketing folks), and hung in lobbies and posted in company dining rooms all over the planet proclaiming, pledging, and promising the organization’s commitment to the customer.
Customer-Centric Organizations Outperform
Sophisticated readers (add wrinkles to the gray hairs) will also recall that study after study has demonstrated the positive financial impact of acting on this customer philosophy, whether called a customer-centric organization, a culture embracing customer intimacy, or something similar. Hard numbers provided positive proof that true customer focus made absolute business sense. No doubt about it, any organization serious about outstanding performance had to grab and hold tight the ring of customer focus.
So logically, after 30-plus years, this customer philosophy should be the norm, the standard operating procedure, the driving concept embedded in the business’s strategy, and enacted in the business plan of the majority of both profit and nonprofit entities.
But is customer-centricity a prime driver of today’s organizations? How about your company? Let’s take a test and find out.
Customer-First Litmus Test for a Traditional Organization
Think about your organization for a minute (I bet you have at least one customer-hugging slogan hanging in your lobby ;). Here is the situation: It is the last day of the last quarter of your fiscal year, and it is crunch time. Your place is a-flutter with activity like an F-5 tornado in a Kansas trailer park…sales guys with sweat on their brows and phones in both ears doing the Selling Two-Step.
Cold reality sets in around the executive boardroom as the truth is told that the only way for your organization to make the revenue numbers (and thus qualify the executives to get their bonuses) is to ship product that is not quite ready for prime time (e.g., known bugs in the software or hardware missing a vital part that, for all practical purposes, makes your offering inoperable). The CFO solemnly states that the rules of business finance allow that shipping this product will count immediately as recognized revenue whether the product is functional or not. It is up to the executive team to decide. So, does your company ship the sub-quality product knowing it will be worse than doing nothing for the customer?
Well, your organization may be different, but most organizations in that situation will ship the product…the numbers are made, the bonuses paid, and the customer commitment betrayed. Leave it to the services guys to apologize, agonize, and minimize the damage of lost credibility and trust.
Even those who swear by customer satisfaction, kneel at the altar of customer loyalty, and embrace the verbiage and the virtues of customer success abandon all principles the last day of the last month in the last quarter of the year.
Sadly, most of this was just customer “happy talk”—something to espouse and arouse, not enact and impact.
Dim Practice: No matter what they say, very few organizations live and breathe customer-centricity, and a make-you-sad, way-too-high percentage are customer clueless.
Organizations that operationalize customer intimacy are quite rare despite what their mission statements proclaim. The figure below demonstrates the findings of recent research—only 3% of 140 organizations studied were truly “customer-centric,” while fully one-third was found to be “customer-oblivious.” Yikes!
The ramifications of this important fact will be addressed in more detail later.
So, Alex, with that said, what makes you think that this “customer success thing” will actually change suppliers’ attitudes toward customers?
First Some Definitions
“Customer success” is a term bantered about in boardrooms and break rooms in many different ways. It has been perceived as a business model, a company-wide priority, an organization, a profession, or a technology. My research confirmed this disparity—the definitions given regarding customer success and customer success management were as varied as Mexican chilies at Santa Fe’s Saturday’s farmers market.
So I prefer a concrete, actionable definition…
Customer Success: A customer state of mind, in which a specific customer (let’s call her a key player) feels that she has achieved her desires (business outcomes and personal wins) while undergoing brilliant customer experiences.
Here are definitions of the three requirements of customer success.
- Business Outcomes. The results that a key player hopes will happen to her organization from purchasing and using a supplier’s offerings (e.g., increased revenue, lowered downtime, enhanced productivity, etc.).
- Personal Wins. The results that a key player hopes will happen directly to her from purchasing and/or using a supplier’s offerings (e.g., job security, personal recognition, less job hassle).
- Customer Experience. The customer’s perception of a supplier’s performance, including activities that do not directly touch the customer but that affect the customer’s overall view of the supplier.
Even with all the challenges, building customer success is worth the effort. Whether a traditional product company selling on-premise offerings, or an off-premise organization selling outsourced solutions or cloud-based subscriptions, suppliers that deliver customer success reap both higher profits and deeper loyalty than organizations that don’t. Hence, having a clear understanding of what customer success is and how to deliver it has immense potential value to most all organizations.
For many organizations, customer success must be embraced as a full-body immersion, or they will endure a slow, painful death by drowning in the shallow end of the pool. The game has been changed, the ante has gone up, and the stakes are really high.
1. Some organizations have no choice today. If you are a subscription-based supplier with customers who have limited investment in you, low switching costs if they change to a different supplier, and perceived little risk in doing so, you will not survive without dutifully following the customer success model. Abandonment will rain down like hail in an Iowa cornfield in July. If you fall into this category and have no workable customer success model in place, better call CustomerSuccessCrisisLine911. Dial now and hope operators are waiting for your call.
2. Most organizations will have no choice tomorrow. Unless your offering is the diamond in the coal pile and your customers cannot flourish without it, changing customer attitudes and sophistication, and constantly improving technologies, mean that only those suppliers who help customers get business outcomes, achieve personal wins, and provide a great customer experience while doing it will win. Most of you reading this fall into this category. Avoid delay and begin today. You are burning daylight. Damn the torpedoes, full speed ahead.
- Alexander, James A., EdD. January 26, 2015. “Brilliant CX: The 7 Things Your Customers Want, Expect, and Deserve.” LinkedIn Blog.
- Goodman, John. 2014. Customer Experience 3.0: High-Profit Strategies in the Age of Techno Service. New York: AMACOM.
- “An Executive Primer to Customer Success Management.” April 2014. Thought Leadership Paper. Forrester.
- Alexander, James A., EdD. 2016. Customer Success: Managing the Customer Experience for Loyalty and Profit. Alexander Consulting and Service Strategies Corporation.