Value realization, or in other words the ability for your customer to gain and acknowledge measurable benefits and value from a product, has become a hot topic in the CS world over the last few years. There’s been an increasing focus in being able to define ‘success’ as it relates to the customer’s individual business goals.
But how can value truly be quantified? Are there repeatable models or frameworks for measuring value that actually work? Are all SaaS businesses focusing on value realization or is it not always a priority?
In part two of our 3-part Customer Success Metrics interview series, we dug deeper into what it means to really measure value and how to do it, with insights from some of today’s top Customer Success leaders.
Joceyln Brown, SVP Customers and Revenue at Allocadia:
Value realization is one of the measures that we include in our health score and ultimately how we support renewals and expansion. It starts with knowing what value means to the customer. For us it is achieved when the customer acknowledges that they have received that value and then starts again with the next value they want to achieve. Since this is an outside metric, one of the ways of tracking it is to ask the customer. We have embedded that opportunity in our business reviews but it can be confirmed at any time and is tracked as a milestone. We will infer value if a customer does a multi-year renewal or expands more than 25%, but my preference is to hear it from them. For me the important thing to note is that value realization is defined by the customer and it is not static.
Dione Hedgpeth, Chief Customer Officer at Sumo Logic:
We have a Business Value Office that reports into Sales Operations and they have created two events that can be leveraged. The first one is BVA, or Business Value Assessment, which is leveraged in presales to help prospects understand the ROI they can get from the solution. The second is BVR, or Business Value Review, which is leveraged in post sales to help our champion measure the ROI they’re receiving from our solution. In addition to these assets, we just rolled out a process where we will be leveraging the BVA during the sales process to create the Customer Success Plan. The Customer Success Plan is the artifact we use to execute the post sales motion and is a shared document between Sumo and our customer. We believe that through this process, we can deliver a seamless transition between pre and post sales and ensure that we deliver the value that was promised.
Holly Tiessen, SVP of Customer Value at Axonify:
Our buyers are Line of Business (LoB) or Learning & Development/Human Resources. The Business Value or Value Realization is really most impactful to the LoB leaders that the employees who use our software report up into. We took a long standing framework from an L&D Expert (Kirkpatrick) and using this helps clients articulate what "business value" they want to realize. From there, we can help them design a training program that changes behaviours by growing knowledge, all just by encouraging employees to regularly do their training, which we recommend at 3-5 times a week.
Jesse Goldman, VP of Customer Success at Sprout Social:
Value realization is crucial for our long term success as a business and our mission to make
each and every one of our customers successful. This is an area we remain keenly focused on, together with our partners across the company: ensuring our customers understand how our platform and team can help them achieve their goals. We work closely with our amazing Data Science team on a multi-faceted health score to help us understand the drivers of value at a detailed level so we are able to act on them. We also collect direct feedback from customers about the value they’re receiving from Sprout, and we do this through observing in-app experience, surveys about their purchase decisions, CSAT surveys, customer meetings, and NPS. For us, advocacy is also a very important part of value realization and we work closely with customers who are willing to tell their story publicly and share their results.
Kevin Scheper, VP of Customer Success at Drift:
Customer value is by far the most important thing any company can measure. Nearly 20 years have passed since Salesforce declared that software is dead, yet the SaaS world still transacts in licenses, support contracts, and other fees that aren't directly aligned with customer outcomes. As a company, we are working to shift away from that, but in the meantime, we can and do orient our efforts, from sale to implementation to ongoing success, around customers realizing value. For us, realizing value means the combination of the existence of positive business results and a customer recognizing those results. What we've found is that it is crucial to start off a new customer relationship with aligned goals – what is the customer expecting to get out of their investment and how will they measure success? That becomes the foundation of everything we do together in the partnership.
We want to hear from you. How are you measuring value at your organization? Do you have a framework that’s scalable? What challenges are you experiencing? Join the discussion on LinkedIn now!
Check out the other interviews in this 3-part series: