SignupLab’s GrowhowCustomer Success Framework

for B2B SaaS companies

http://signuplab.com/growhow/

History of Customer Success

• Early B2B software industry enjoyed a vendor trap phenomenon: Customers made large upfront investments and it was difficult to change the vendor. During those days vendors were more interested about new customer acquisition than existing customers.

• SaaS changed the game; no upfront investments; easier to change the vendor.Customer retention become more serious challenge for vendors.

• Around 2005 companies such as Salesforce launched their first official Customer Success programs to reduce churn.

1990 2000 2010

SaaSearly adopters

“After cloud”:Subscription economy

Customer successbest practices

“Before cloud”: vendor trap

Customer Success in Brief

• Why should we care?Customer Success focuses on recurring revenue: 90% of B2B SaaS revenue is generated by renewals and upgrades after initial sales.

• How can we do it?Customer Success is based on simple goal: Make your customers succeed in their business with your products or services.

• What can we do to reach this goal?Customer Success can be enabled with a set of best practices,working cross-functionally to grow (upsell) and fight churn.

Initial Revenue Recurring Revenue

Subscription company that focuses on Customer Success

can grow even without making a single new customer.

• Customer Success is related to customer’s journey inside and outside your application. The most important goals are renewals and upsells.

• Customer journey inside application isfairly easy to define, but what is commonly forgotten are concepts and servicesthat are connected to this journeyoutside your product.

Scope of Customer Success

OnboardDeploy

Adopt

Grow

Renew

Upsell

Learn

Services

Manual work

Competitors

Support

Functions of Customer Success• Technical enablement provides a solution to customer’s need,

typically during on-boarding or new feature adoption.• On-going support makes proactively sure

that the solution matches customer’srequirements during whole lifecycle.

• Knowledge enablement educates thecustomer to make sure that full potential of the services can be used.

• Business relations identifiesnew opportunities anddevelopment areas

CEOMarketing

Engineering IT

Product

Services

Customer Success

Sales

Finance

No matter do you hire a dedicated Customer Success Manager or assign the CS activities among your current people, Customer Success is always

cross-functional process and cross-organizational mindset.

Growhow approach

Strategy

OperationsMetrics

Value Concepts

KeyFeatures

CustomerObjectives

A cross-functional approach to improve Customer Success for B2B SaaS.

StrategyHow to add Customer Success

into product strategy

Challenge 1/3: Change

Customer’s requirements evolve constantly. Strategy cannot be written in stone – it must

evolve among customer’s needs.

Challenge 2/3: Isolation

There shouldn’t be any isolated Customer Success plans, only one product strategy that

follows the discipline of Customer Success.

Challenge 3/3: Scope

Customer Success affects almost everywhere.It’s important to choose the right hotspots

where current focus must be targeted.

Solution: Value Concept

• Value Concept is a mandatory milestone or hotspot in your customer’s journey where significant value is created.

• It can be inside or outside your product, consisting of features, services, manual work or external services.

• List of Value Concepts is a constantly evolving addition to your product strategy.

ValueConcept

How to define Value Concepts?

Objective hierarchy is a simple way to define value concepts.

Customer’s Objective

Value Proposition

Value Proposition

Value Proposition

ValueConcept

ValueConcept

ValueConcept

Value Concept example

Execute projects on time

Make task tracking easier

Make resourcing more effective

MilestonesCalendar

To-doList

Resource Timeline

Possible hotspots for a simple Project Management App.

ValueConcepts

ValuePropositions

Customer’sObjective

Value Proposition Canvas

GainCreators

Painrelievers

Products& Services

Pains

Gains

Customerjobs

ValuePropositions

CustomerSegments Business Model Canvas provides

tools for strategic planning. It can be extended With Value Proposition Canvas. After value propositions are explained, it’s fairly easy to define Value Concepts.

Read more from http://www.businessmodelgeneration.com/canvas/vpc

Keep the list of Value Concepts always available and make sure everyone in your organization

understands what they are and why they are in the core of your products and services.

ProductionHow to add Customer Success

into SaaS production

B2B SaaS production – core elements

ProductDevelopment

CustomerService

Marketing& Sales

BusinessDevelopment

Product Development

Software developers are in cross-fire:Sales people ask features for demos, customer support asks features for specific customers,

product managers ask features for new concepts. Too often the one who is loudest defines what is

selected to the next development sprint.

Agile, and goal-driven• Scrum, Agile, DevOps etc. are designed to

improve software development, but they do not guarantee Customer Success as a goal

• To fix this, we can connect Value Concepts through the production process. This gives better focus to sprint planning.

• Otherwise it’s easy toend up into ”One More Feature” syndrome: Wildly growing backlog

Value Concepts in issue tracking• By keeping Value Concepts visible in GitHub, Jira, Trello and

other issue tracking tools it’s easier to keep the focus on strategic aims. This connects your product strategy into development sprints.

• Aim is to achieve better focus: If a feature cannot be connected to Value Concept, it’s not crucial and can be kept on second priority. With this approach developers understand better what is important and what is not.

• Simply use labels or categories to show that a feature relates to Value Concept:

VC: Milestones Calendar VC: To-do List VC: Resource Timeline

Outcome: Key Feature

ValueConcept

ProductRoadmap

KeyFeature

DevelopmentBacklog

Key Feature is a product feature or service that implements the Value Concept. It’s planned on product roadmap and delivered to implementation via development backlog.

Whenever there’s an issue or bug reported, project manager or developer can confirm

does it relate to Key Features and Value Concepts. If it does, then it should be

solved on higher priority.

Customer Support

Support vs. Success

Customer Success Customer Support

Financial

Revenue driven Cost Center

Action Proactive Reactive

Metrics Success-oriented Efficiency-oriented

Model Analytics focused People-intensive

Goal Predictive Responsive

Customer Success and Customer Support are two different things, but they do relate closely to each other. A good customer support team can improve

Customer Success by taking steps beyond a simple support:

Table is from the book “Customer Success”:http://www.gainsight.com/book/

The aim of customer support is to serve customer’s better. But to transform this into Customer Success you need tighter focus:

Customer support team must be aware how to prioritize work relating to Key Features and

Value Concepts that are set in product strategy.

Sales & Marketing

Get 360° overview

• SaaS app can provide amazing amount of data that can be pushed directly into a sales CRM– Company or user details– User’s sessions and usage log– Locations, time zones - per each user– Customer support tickets and conversations– Used features, interests– Notification tracking: Sent, read, bounced, clicked.– Use your imagination …

Focus on right customers• B2B SaaS sales is based on highly collaborative

relationship with customers• Feature requests and roadmapping with customers

is part of everyday work• There is a pitfall - not all customer related

work is right for you:

A demanding customer can poison the whole product development with requests that are not related to your value concepts nor key features.

For Customer Success driven company it’s crucial to define customer profiles and stick

in them. This profiling begins from sales.

Importance of Value Concepts• Salespeople are constantly seeking for product/customer fit, therefore

focusing on:– Product’s features and value propositions– Customer’s needs and requirements

• Too often this means that salespeople send small requests to developers based on instant demand

• Much more solid way to affect on product development is strategical: Instead of simple feature requests, get the concepts aligned in product strategy and that way push the changes into development

• It’s sales team’s duty to focus, sharpen and define Value Concepts via product strategy, thus improvingCustomer Success permanently

Business development

It’s time to get nerdy

• CEO and the team of key business developers are in the main role when improving Customer Success

• The role of CEO has changed in B2B software companies: Instead of giving all attention on largest customers through negotiations and face to face meetings, in B2B SaaS it’s important to give bigger focus on analytical data and signals coming directly from product users.

• B2B SaaS is more and more about sales automation – Everyone must focus on a scalable “SaaS sales machine”, which often means that even the CEO must understand the smallest details of the product.

MetricsHow to measure and improve Customer

Success

Automation is the key• Customers improve their processes and

business all the time. This defines that also vendor must evolve and renew services regularly.

• Annual, quarterly or even monthly evaluations are too scarce. Proactive development is possible only if metrics and improvement management is automated.

• Following slides describe the most important Customer Success metrics for B2B SaaS

Conversions• The most obvious conversion

rate is from free to paid customer, typically used in free trials or freemium products.

• To take more out of conversion rates, it’s recommended to build a conversion funnel with Key Features. This allows youto follow how far your users really get, howmuch value they get before churning away.

• Conversion funnels can be configured and measured in CRM or other availablecustomer success tools, such as Intercom.io

Recurring revenue

• Renewals• Upgrades• Churned dollars

Customer Acquisition Cost (CAC), Churn and Life Time Value (LTV) forms the core of the SaaS business. With these meters you can measure how healthy your SaaS business is and is it able to scale. If CAC gets too high

compared to LTV, it’s time to seriously reduce churn.

Get your automated SaaS metrics dashboard rolling with SignupLab.com today.

User activity• Inside application– How many times user has

started session– How many times user has

used the key feature• Outside application– Emails sent, opened, clicked, replied etc.– Mobile notifications received, reacted– Call center contacts– Interactions with your consultants

Churn

• Churn meter = Number of customers leaving your product in defined time

• Churn is probably the most important figure for SaaS company. Signups can be improved with bigger marketing budget, conversions can be improved with better onboarding processes and value propositions, but fight against churn requires real value creation relating to your product and services

Direct Feedback

Customer surveys are not the only way to ask direct feedback. B2B SaaS companies have a possibility to integrate continuous

feedback channels within products and services, such as:

• Net Promoter Score (NPS)– Measures the willingness of customers to recommend

your product to others– Excellent tool to measure NPS: delighted.com

• Customer Effort Score (CES)– Measure customer satisfaction with one simple question:

• How much effort did you needed to get this information?

– Assigns ratings from 1 to 5, with 5 representing very high effort• Other tools that can be integrated inside your product …

Customer Success Software

• Totango• Gainsight• Evergage• Preact• Clientsuccess• Bluenose• Mindtouch

SignupLabTrack sign-ups, automate onboarding, drive conversionsand manage recurring revenue on one dashboard:

https://signuplab.com

Goal: Identify Customer’s Objectives

• The first and last component in Growhow framework is Customer Objective: A goal that customer needs to achieve.

• From meters and feedback we can learn which features are important and what needs to be changed.

• Use systematically the automated information from your meters to improve your Customer Objectives

CustomerObjectives

SignupLab’s Growhow

Strategy

OperationsMetrics

Value Concepts

KeyFeatures

CustomerObjectives

http://signuplab.com/growhow/