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Customer Success Part two (Good fit vs Bad Fit (Advocacy potential…
Customer Success Part two
Purpose of customer succes
to ensure customers achieve their Desired Outcome through their interactions with our company.
First, remember that when your customers achieve their Desired Outcome through their interactions with your company, that is customer success.
Required Outcome (RO) is the thing your customer needs to achieve, the thing they are trying to accomplish; helping them achieve that is why you exist in their world.
Customer Success should be your driving purpose.
Good fit vs Bad Fit
Success Potential
If you haven’t done this, as soon as you’re done reading this post, create a list of characteristics that indicate when a customer is a bad fit or the things that would indicate they don’t have Success Potential.
What are the charactheristics of bad fit?
What are the charactheristics of good fit?
Ascension Potential
This is Intra-Company Virality or Land-and-Expand
Expansion must be logically orchestrated around the Customer’s Success
Advocacy potential
Improves Customer Acquisition Cost (CAC) Efficiency
Spend $1 CAC to bring in 2 customers (1 refers another) and your CAC drops to $0.50
Technical fit = required technology
Functional fit = features, functionalities
Resource fit = money, time, energy
Competence fit = internal expertise
Experience fit = appropriate experience
Cultural fit = beliefs morals attitudes
But within that cohort of good fit customers exists a Spectrum of Readiness (SoR), from those customers that are not at all ready to those that are able to hit the ground running.
Start with Technical and Functional Fit (the two that are generally the most obvious) and share that with sales and marketing; don’t go after – or sign – customers that don’t meet these criteria.
Advocacy, referrals and upsell
When you achieve lower CAC, it cuts down the acquisition cost payback period, allowing you to invest immediately into acquiring more customers — i.e. grow faster.
Manufacturers win with superior products and cheaper production costs. SaaS companies win through efficient sales and marketing.
Success Gap
There is often a gap between the functional completion of your product and the customer’s Desired Outcome. I call this the Success Gap.
This Success Gap also has another meaning… it’s the gap between what you think represents the customers’ successful use of your product and what they think equates to success.
success” may be outside the scope of your product, which means thinking about your customers and not just your product… and then thinking about how you can help them achieve that desired outcome. The closer you can get to that, the better.
Accept this reality and mind the success gap by doing things to help your customers achieve their Desired Outcome. Training, Articles, Videos, Presentations, Courses, Tools, Consulting, Professional Services, etc.
Success gap: You can do that by bringing in experts, providing content, giving discounts on third-party courses, or building those bridges into the product.
Customer accountability: But at some point you also need to let the customers know that they are accountable for some portion of the results.
Customer accountability gap: ”the other 165 hours”
Customer success is not about doing everything and anything to help your customer be successful; sometimes it’s about ensuring your customers know where they fit in and holding them accountable.
Desired Outcome
If your customer doesn’t achieve their desired outcome, even if that outcome is beyond the scope of what your product does (but your product is being used to get them there), then if they don’t achieve it, they’re going to blame your product; they’re going to blame you.
Accept this reality and mind the success gap by doing things to help your customers achieve their Desired Outcome. Training, Articles, Videos, Presentations, Courses, Tools, Consulting, Professional Services, etc.
Desired outcome > job to be done
But let me be very clear; Required Outcome is NOT the functional use of your product. It is NOT the Job to Be Done. The Required Outcome is an outcome that matters – often deeply and even emotionally – to the customer.
There are always multiple ways to reach required outcome
every customer segment (for every product you have!) will have a different experience that is appropriate for them. —> appropriate experience
Appropriate Experience is your differentiator; it’s why you exist. It’s why customers choose you over the next best alternative.
It’s time to logically segment customers based on Appropriate Experience (AX).
Success Milestones are the steps required for a customer to achieve their ever-evolving Desired Outcome.
So once you know what their Desired Outcome is (point B) – and you know where they are today (point A)- you can more easily come up with the steps to get them from Point A to Point B.
Success Milestones
Think of Success Milestones as “customer-centric” or milestones reached by the customer that may or may not take place within your product, but have a direct impact on their relationship with you.
Use success milestones to optimize CRO of free trials
Use success milestones to optimize expansion opportunities timing
Use success milestones to optimize advocacy opportunities (e.g. After strong NPS)
Some Success Milestones (not all of them; don’t force it) have a logical expansion opportunity associated with them.
Ideal Customer Profile
Your Ideal Customer Profile – ICP – dictates (or should dictate) everything from the features and functionality of your product you build or what makes up your service offering, to the words you use and the emotion you invoke or tap into in your marketing.
You get to choose who you want to do business with. So creating an Ideal Customer Profile isn’t limiting… it’s empowering!
So get clear on your Ideal Customer… then move on to persona development, empathy mapping, etc.
In fact, your Ideal Customer is really specific to: The situation you’re solving for, to Your goal, to Your capabilities
Stretch Customers?
Sure, in order to grow and expand you sometimes need to take on “stretch” customers that require you to extend your capabilities… but you have to be realistic about the amount of stretch you can handle.
If you can find a customer that is Ready, Willing, and Able, that’s a great start.
Ready?
They have a problem they need to have solved or an opportunity to take advantage of
They know they have the problem to solve or the opportunity to take advantage of
The problem or opportunity is acute … there’s a sense of urgency you can take advantage of
Willing?
They’re ready to solve that problem by taking action
Even better if they’re exploring options to solve that problem
There’s a strong Catalyst driving change: M&A, Investments, Bankruptcy, hiring/firing, RFP, etc.
Able: Money, authority & Buying Cycle / Procurement Process
Acquisition Efficiency
This means that it’s cost-effective to get in front of them
Include Onboarding & Support costs when considering cost-effectiveness of the acquisition
Customer POV
Would they know they’re your ideal customer if they looked at your site?
Would they feel comfortable in your app?
Would they feel like your service was designed for them?
Pricing is a function of marketing and determines, among other things, your market position.