Monetizing Customer Success is a discussion topic that I see coming up more frequently these days.
Companies struggle to balance the fine line between adoption and consulting services.
The former is typically offered as a part of the software subscription service to ensure that customers successfully adopt the technology and achieve the business outcomes they sought when they bought.
The latter occurs when customers also need help operationalizing their business in new ways in order to take full advantage of the software and hence, are charged for additionally.
The challenge for Customer Success is "where to draw the line?".
By definition, Customer Success needs to ensure that customers are successful with the product but to what extent is the function responsible for improving deficiencies in customer operations (that need to be addressed to fully realize product value)?
This is where services offerings come in handy.
They allow companies to delineate between adoption and professional services; that is, the assistance provided to customers to utilize the product and realize value, versus consulting rendered to improve business performance.
Monetizing Customer Success services provides the additional benefit of greater role clarity for Customer Success Managers (CSMs), which ultimately leads to greater efficiency (i.e. think scale) for the organization.
When CSMs clearly understand the difference between operationalizing the technology and fixing the customer’s business processes, it allows them to proactively identify the nature of the impediment to adoption and keep the customer accountable accordingly.
It also allows the business to charge for services that go above and beyond those reasonably expected to drive product adoption (which ultimately keeps CSM effort and customer ratios in check too).
How then does Customer Success determine the appropriate services offering for its product(s)?
As my followers will come to expect, my response is that the answer lies in aligning to the customer journey.
If a company has its customer journey, it can outline its playbook.
That is, the set of plays required to support customers successfully through the journey of product adoption, retention and expansion.
With the playbook and its corresponding set of plays known, the main services components are identifiable.
The identified services components then become the elements of the services offering.
The services offering framework is complete.
To tier the offering, all that is left to do is to delineate between adoption services included with the subscription price (base level), and higher levels of service to address customer needs for additional assistance.
Monetizing Customer Success is an effective way to delineate subscription versus consulting services.
It also leads to greater operational efficiency, and thus scale, for an organization.
A service offering provides clarity to CSMs around product adoption effort allowing them to proactively identify when customers need product guidance versus business consulting, and to keep customers accountable accordingly.
To create a service offering, Customer Success should identify the service components required to deliver the plays that support the successful customer journey (i.e. successful adoption, retention and expansion of the technology) to form the framework of the services offering.
Service tiers (the varying levels of service per component) and their corresponding pricing can then be determined accordingly.
Stay tuned for next week when I answer questions that I received regarding creating premium services packages.