In the 2022 Sales Pulse Survey, two-thirds of participants indicate significant increase in virtual resources dedicated to customer outreach after the sale. Almost 60% indicate significant investment in tools to do this effectively, with emphasis on tracking customer usage so interventions can be targeted to improve adoption and results. A fundamental change in the definition of service and its importance to the revenue function is driving this transformation.
Making sure promises made can actually be kept. Building and maintaining business-centric relationships. And earning the right to ask for more business if initial results are strong. All of this said the experience of the customer has to lead to satisfaction.
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Hello. Gary Tubridy, here Senior Vice President of the Alexander Group, with topline findings from our 2021 Virtual Executive Forum. In the 2022 Pulse survey, two thirds of participants indicate significant increase in virtual resources dedicated to customer outreach after the sale. As well, almost 60% indicate significant investment in tools to do this effectively, with emphasis on tracking customer usage so interventions can be targeted to improve adoption and results. What’s driving this transformation? Well, a fundamental change in the definition of service and its importance to the revenue function. This, too, can be defined as the transformation of a function originally built to respond to break/fix problems, to a function that is focused on anticipating and helping customers succeed. According to our Customer Success Panel, that means four things as vendors install solutions with long tails after the sale. This new success function must ensure that the customer is actually using the newly installed solution. Users at a company who do not adopt a solution signal that the investment may not generate an acceptable ROI, and that means no add on sales and possible cancellation of subscriptions and services. Second, it means that vendors partner with customers to make sure the solution, once adopted, actually delivers results. According to our panel, this requires several skills like discovery, understanding what the customer really needs, expectation management, making sure promises made can actually be kept. And yes, account management, building and maintaining business centric relationships, and earning the right to ask for more business if initial results are strong. All of this said, the experience of the customer has to lead to satisfaction. And this includes not only assessment of results, but also the experience delivered along the way. Recall customers are willing to pay a premium for a positive experience. Success managers are charged with making this a reality.
Which leads to hard numbers. How do customers act when it is time to renew? We heard lots of ways to measure this. Renewal rates, usage, including consumption revenue, net revenue retention, expansion revenue such as upsell or cross-sell, and Customer satisfaction and net promoter scores. Executives at the forum were clear, the success function needs to impact most, if not all, of the foregoing metrics, which means that best practice service organizations are transforming from reactive to proactive. They’re adopting a strategic success management model that anticipates issues, builds alliances of clients, and drives loyalty and revenue upward. That means broadening the mission from simple break/fix to helping clients improve their processes and most importantly, their results. Like the sales function, success is moving from isolation to partnering with sales and marketing. With the sales function, they’ll team up to manage expectations and solidify relationships. With marketing, they’ll better understand and leverage the true voice of the customer. And perhaps most important, the new model clarifies that success is responsible for much more than maintaining a revenue stream from service contracts. It’s responsible for maximizing the value of a customer over the life of its business relationship with the company. This understanding informs everything the success function does from who they hire to how they behave.
In 2022, we’ll explore what makes such enduring leaders tick. Join us in the Leadership Series to learn more about the management principles that these companies follow. There will be three major events, Women Revenue Leaders Forum April 18th and 19th at the Four Seasons Hotel in Chicago, the Operations Forum on August 15th and 16th, also at the Four Seasons Hotel in Chicago and the Executive Forum November 16, 17 and 18 at the Waldorf Astoria Monarch Beach Resort at Dana Point, California. I look forward to seeing you there.