Engati CX spoke with DesiredPath CEO and Founder, Kia Puhm, to discuss why a customer-centric business model is essential for driving customer retention and avoiding churn.
Here is a transcript of the questions posed during the podcast along with Kia's responses.
Which is the most neglected thing in the industry of Customer Success? Is it implementation or planning? Where do companies generally go wrong?
Random Acts of Customer Success. Trying to make customers successful by just copying “best practices” of CS without understanding whether these practices actually help or hinder your customer.
Companies need to understand their customer’s holistically – what they’re trying to achieve and why they want to leverage your products/services in order to achieve their desired objectives – and then understand the patterns of their most successful customers so they can strategically create an intelligent framework by which they can deliver repeated, sustainable and scalable customer success.
Once a vendor understands its customers holistically, and knows what it takes to make them successful, it can then align itself to efficiently support customers through the entire customer journey. It can then also measure the progress of customers towards their desired objectives through the customer funnel to continuously improve how that journey is travelled making the experience better for customers and the effort to get them there more efficient for vendors.
This allows smarter, faster, revenue growth to happen.
How can customer success drive customer retention? What can we do to avoid churn? And how do we implement the solution in an organization that hasn’t taken customer success on priority yet?
Successful and happy customers are loyal customers. They stay as long as they are realizing value from the products and services, and often buy more and become great advocates for your brand.
To avoid churn we need to therefore ensure that customers are successful and that the experience to achieve their objectives is delightful. It sounds easy but it can get quite complex quite quickly if not implemented correctly.
Too often I see vendors implementing those Random Acts of Customer Success that I mentioned earlier. Things are done “at” customers not “for” them. What I mean by this that vendors spend more time trying to educate the customer on their organization and product and how a customer should act in order to use the product vs trying to understand how they can try and make the product or service fit seamlessly into the customer’s organization so that they feel the product/service is easy to use and that it’s supporting the objectives that the customer is trying to achieve. i.e. does the customer really want a 120 day renewal discussion with you or are you trying to ensure everything is just “fine” before the renewal? Is the customer getting any value out of the EBR or is your organization having CSMs/AMs conduct them because it believes this will drive success and good CX?
To implement a solid practice of Customer Success, companies should intelligently align their organization around the customer to effectively support them in achieving success. The best way to get started on this is to map out the desired path of your customers. Customer journey mapping is an effective way to understand what the ideal path to success looks like. Once that is known, then aligning operations accordingly can be done.
If listeners to this podcast are interested in learning more about this they can contact me and/or visit the DesiredPath website which outlines how a company can start mapping out its intelligent framework in order to drive great customer retention and revenue growth.
Why is the VOC program necessary? How easy/difficult it is to implement in companies that have a base in customer success? And how new organizations start their journey to build one from scratch?
The Voice of the Customer is key in ensuring a company continues to listen to the needs of its customers and delivers on those desired objectives. Closed loop feedback is the life blood of an intelligent framework that allows companies to continuously improve and deliver on ever-increasing customer expectations. It helps companies stay in-tune to its customers and be organizational agile. That is, to be able to continually adapt to customer expectations and changing market conditions.
Like any implementation it can be as easy or as difficult as a company makes it. If a business does not have a clear strategy for how it will listen to, and act upon, customer feedback then it’ll be difficult to implement a VOC program.
If on the other hand a company knows how it will use customer feedback and it establishes the right processes to act upon feedback and adapt operations accordingly, then it will have a good chance of implementing a very effective VOC program that will serve customers as well as the business well.
In terms of building one from scratch I would say start off simple and then build on it as the organization is able to act on the feedback. Again, understand the customer’s desired path on the journey to success is helpful in knowing how customers should be progressing with the use of your products and services. Feedback along that journey should either validate that your organization is successfully supporting customers in that journey or it should offer important information that will help the company learn from the feedback and implement necessary changes that will improve the CX and make product adoption easier.
Are there any digital tools that enhance customer success? How effective are chatbots and live chat in terms of building customer relationships?
There are many digital tools that will enhance customer success. I’m a big proponent of employing tools to help automate and augment the customer journey experience to both improve the CX and help the vendor scale effectively.
Chatbots and live chats are great ways to build customer relationships and help CSMs scale their relationships with customers.
The thing to remember however in implementing any tool is that it’s important to understand how you will be using the tool and what objective you’d like to see. Just as CS should be instructing your own customers in adopting the technology so too should organizations be following their own advice when taking on new tools to help improve CS.
Garbage in, garbage out, a tool is effective if an organization understands how it will leverage the technology to improve the CX. If it doesn’t have a strategy for driving effective CS then a tool won’t be fully leveraged. Sure, it’ll help to drive a bit more efficiency but without tying back to how the tool will be used to assist in servicing customers, a vendor misses the mark in leveraging the tools to its full potential.
Start with a customer-centric strategy first, then implement tools to accelerate the execution of that strategy.
Why should businesses consider moving to a SaaS model?
I can't answer this question generically for all. I think there are many good reasons for moving to a SaaS model – the benefits of recurring revenue and revenue growth from existing customers is a big one. At a certain point in a company’s growth and depending on the total addressable market size, the pace of acquisition slows and becomes more expensive to gain. Keeping customers and repeatedly selling to them is a healthy business model.
But again, a business should understand its strategy, market and objectives before considering a move. There may be very good reasons to not move to a SaaS model and still be able to drive recurring revenue out of the customer base.
Any other thoughts you’d like to share with our audience?
Be thoughtful about why your customers use your products and services and understand what their desired path is so that you can align your business accordingly to drive smarter, faster revenue growth.
If listeners are interested in learning more about how to create an intelligent framework to drive customer retention and growth, please contact me or see the website, www.thedesiredpath.com for more information.