Lead story - Debating customer success - why KPIs need to change
One thing I never tire of: creating an enterprise debate where it didn't previously exist. Phil started the debate - at least in my mind - with his landmark post, Why KPIs and value engineering play a growing role in customer success.
Phil sees "customer success" as a worthwhile discipline for enterprise vendors. Yet he also makes clear that the metrics need to shift, from vendor-centric KPIs to customer-centric KPIs:
Helping customers realize the value they're looking for thus becomes the core goal of the customer success function, rather than simply maximizing adoption and usage. Gainsight's Mehta says that the entire company should also be looking at those goals and refining its product development and go-to-market accordingly.
Phil acknowledges two crucial points:
- An outcome-based approach is still in the early stages ("customer success" really began with classic SaaS adoption metrics like churn).
- The KPIs to properly measure outcomes are not necessarily easy to nail down.
Yet, Phil does see progress. He shares several examples of granular KPIs that offer a more precise view of how a customer is faring. For example:
Like Zuora, Gainsight has defined over two dozen different business processes that its own customers implement using the platform, such as client risk management, onboarding hand-offs, and so on. It then relates these to KPIs during the sales process, working with the customer to define specific KPI targets, such as increasing gross retention from 82 to 84%. Finally, it creates a customer success plan, mapping out the tasks and steps to achieve those targets. The company plans to productize this process so that its customers in turn can create similar KPIs and customer success plans for their own customers.
By contrast, in his review of Zoho's analyst event, No More Customer Successing: Can Zoho Be the Antidote to the Great Customer Success Cover-up? Josh Greenbaum issues a scathing view of so-called customer success programs.
No doubt reeling from one self-congratulatory slide deck too many, he writes:
I’ve come to realize that the predominant form of customer successing, to coin a grammatically challenging term we probably don’t need, is basically not much more than a cover-up, like greenwashing, that is intended to make everyone feel good without ever doing anything that makes anyone feel any real pain.
After conceding that "greenfield" SaaS implementations can hit their targets with a narrow scope, Greenbaum adds:
For existing customers looking to transform, migrate, re-platform, and otherwise update an existing system, customer success programs aren’t really changing success rates. Success happens, of course, but no vendor has come forth with real data showing how it has improved customer success by creating a customer success program. None. I doubt they could prove it if they tried: I’ve never seen decent definitions of success or other metrics on how vendors track success in a truly objective way.
Ouch! I see plenty of fodder for debate here, from the viability of customer success KPIs to the scope of what's achievable. I also *think* I see common ground here, including the need for continuous project monitoring and course corrections. I'd say that's enough to compel these two onto a video to settle the matter, wouldn't you? I'll let you know how I fare.
Diginomica picks - my top stories on diginomica this week
- Lessons to be learned for Learning & Development to tackle the skills crisis in the age of the Great Resignation - Stuart on the perpetual skills gap problem, with a Vaccine Economy twist: "Organizations that want to ‘grow their own’ skilled workforce AND hold onto it need to take a long, hard look at their approach to L&D. Bersin’s report is very detailed in its assessment and recommendations."
- Nasdaq’s board diversity rule is here - but new research shows underperforming firms more likely to oust board members from diverse backgrounds - Derek reviews Nasdaq's board diversity requirement: "Diversity improvements are meaningless if they only happen when times are good - get under-represented groups into positions of power to sustain the changes."
- No McRobots in the restaurant - McDonald's CEO Chris Kempczinski has a more practical digital transformation menu in mind - Interesting update from Stuart on the limits of robotic labor at McDonald's.
- Federal Trade Commission opens public debate on tougher US data protection rules as Congress makes progress with national legislation - Is the US (finally) on the verge of tougher data privacy rules? Perhaps. Stuart breaks it down.
Vendor analysis, diginomica style. Here's my three top choices from our vendor coverage:
- Twilio’s Q2 revenue growth overshadowed by weaker guidance - but 2023 profitability target remains - Before my goof-off week, I reviewed enterprise earnings reports in search of viable trends. I don't think we can take broader implications from a single vendor, but Derek's Twilio writeup is still instructive: "The demand is still there, but it seems that focusing on efficiency and preparing for [some rough] months is the status quo for the medium term."
- The IFS acquisition of Ultimo - why it's an EAM deal of note - Brian gets an inside view of an intriguing EAM play: "EAM shares some of the same data sources and technologies as what a great ESG (environmental, social & governance) solution might need. For example, the same sensors that report energy usage and other machine data can also provide guidance as to the condition of a firm’s capital equipment. I believe this area will get very ‘hot’ in short order."
- ServiceMax CFO Simon Edwards on delivering value for customers during uncertain times - Derek's on the case again, with a ServiceMax update after IPO plans were scuttled in late 2021: "Edwards says that ServiceMax is less concerned with its ownership model than it is about focusing on product and delivering on its strategy for field service."
A few more vendor picks, without the quotables:
- Inside the push for continuous planning - finance transformation lessons from Planful customers - Jon
- If ABM's at an inflection point, where to next? The way ahead according to Terminus CMO Natalie Cunningham - Barb
- CEO Duncan Angove on making Blue Yonder the ‘category killer’ for supply chain - Derek
- Cry havoc as the macro-economy leads to decision paralysis, but Rimini Street will be ready to pick up the pieces, says CEO Seth Ravin - Stuart
Jon's grab bag - Gary filed a couple of nifty tech-for-good use cases: Dune Group’s COVID-19 crisis website creates foundation for long-term success and How Deliveroo delivered one million meals to frontline NHS teams during COVID-19. Neil dismantles our insufficient attempts to confront AI bias in We won't eliminate AI bias - unless we get at the real root of the problem. Meanwhile, Chris parses a not-exactly-glowing report on the UK's data plans: UK data strategy - a surveillance state, claims security survey.
Best of the enterprise web
My top seven
- It’s Time to Normalize Cyberattack Data - Steven J. Vaughan-Nichols raises an overdue issue: "There’s little rhyme or reason to coordinating attack data. A coalition of cybersecurity and technology groups wants to fix that with an open source effort." Meanwhile, the breaches (and vulnerabilities) persist: Sounding the Alarm on Emergency Alert System Flaws.
- It's time for technology teams to find their voice in customer experience - Joe McKendrick issues a wake up call for tech teams: "Unfortunately, a customer experience mindset 'is quite the opposite of how classic IT organizations work.'"
- 6 Paradoxes Facing Vendors Selling Enterprise Technology - Hank Barnes nails this one. The "customer power paradox" is one standout.
- Effort, Performance, Purpose: The Three Evolutions of Services - Phil Fersht has a message for services firms, particularly those that rely on low cost labor: change or perish.
- 8 Strategic Imperatives for SAP Transformation Success - Len Riley of UpperEdge has updated guidance for SAP customers, now navigating the RISE with SAP and hyperscaler era.
In a totally synthetic metaverse, what does “authentic” even mean? - Constellation's Steve Wilson issues the enterprise quote of the week: "I don’t believe there’s any fundamental call for decentralisation technology, shared ledger, blockchain, or NFTs. Indeed, none of that is even helpful here."
Is Google’s AI sentient? Stanford AI experts say that’s ‘pure clickbait’ - Yeah, that settles that.
While I was goofing out for a week, I missed a chance to hand out a special hypocrisy award:
Malcolm Gladwell Says Working From Home Is Bad, Unless It's Him Doing It https://t.co/McBoOHnIA5
I was on vaca when this came out. I welcome views from all sides of the remote work debate but not Gladwell's. It's impossible to extract the hypocrisy and find a useful view here
— Jon Reed (@jonerp) August 13, 2022
Not sure why I got myself into a dither about this - "Uber Rewards" is an oxymoron at any rate.
Uber is shutting down its free rewards program this fall https://t.co/UXDePqx1FP
"It’s been a great ride, but we’ve decided to end Rewards"
"sorry to pull the rug out again, but we're still scrambling to find a profitable business model."
— Jon Reed (@jonerp) August 14, 2022
Finally, I guess Amazon wanted in on the whiffs action - no problem.
Amazon is turning Ring surveillance footage into a reality show https://t.co/gN7aE7LD5l
"the company that routinely shares customers’ video feeds [with local police], wants to share that same footage with you in a new, “fun” reality streaming series. "
-> dystopian perfection
— Jon Reed (@jonerp) August 14, 2022
See you next time... If you find an #ensw piece that qualifies for hits and misses - in a good or bad way - let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed.