Measurable Results

Amanda Watson

I was listening to a recent GGR podcast with Greg Daines - 10 Customer Churn Benchmarks for Saas Leaders - and I was intrigued by the concept, "Measurable results is one of the largest factors in longer retention." In the podcast, Greg went on to say that companies that measure results for their customer have better retention than those who do not - even if the results weren't great.

I am curious if anyone provides measurable results for their customers and if so, how? What does that look like and how does that scale?

Here is a link to the podcast, if you are curious - https://podcast.gaingrowretain.com/e/10-customer-churn-benchmarks-for-saas-leaders/

erickingsbury

Hi Amanda,

Great question! In many of the CS orgs I've worked with and for, one of the big struggles has been proving impact with measurable results. The last company I worked with utilized AI to route L1 and provide solutions to some L2 tickets. They did a solid job of showing measurable results with a dashboard that they used to display support hours saved, which could be translated directly into headcount saved. With that said, customers often objected to the length of time they claimed it would have taken a human rep to solve each ticket, so they viewed the metrics with more than a bit of skepticism, but those are the types measurable results I assume they're talking about and they really can make all the difference when it comes to demonstrating value and driving renewals.

William Buckingham

Hi Amanda,

In a perfect world, you build this functionality into your product. However, that's only an option for newer, born-in-the-cloud offerings. That strategy also diverts development resources from building tools that achieve outcomes and instead toward tools that show customers that they did (or didn't) reach outcomes/ROI.

Let's imagine you aren't working with such a product. I think in that scenario it's all about having a clear value management practice that leadership blesses, is aligned on from pre-sales to post-sales, and is scalable. The other key piece is customer involvement prior to proclaiming the outcomes and ROI.

In my experience, it makes much more sense to start with customer outcomes/objectives, and then progress to ROI calculations. Align on some primary outcomes which are immensely common among your customer base, and assess which ones can indeed have some form of quantifiable ROI. Align these with all the GTM teams. From there, operationalize and enable the team on gleaning, tracking, reaching, and verifying those outcomes with customers. It's great to let the customer state these in their own words, and then internally know what larger categories of outcomes the customers' words fall into.

Once the field teams get good at this motion of intaking outcomes, reaching outcomes, and getting the customer to verify they indeed reached those outcomes, you can move on to ROI calculations. Note, many customer desired outcomes might not be easily quantifiable. Once you have a few outcomes which were verified by the customer, supply the team with a way to calculate that.

The calculation will likely require some industry-standard benchmarks and customer-supplied data points. This is where you start to see there is a massive amount of effort involved to go from verifying outcomes reached, to verifying ROI. The customer also has to contribute to this effort: by sharing their specific costs, revenues, and other metrics. Some customers simply won't share this, but if you do a good job showing the value they will be able to showcase internally, you might just get them.

I think an important trap to avoid is being so focused on quantifiable ROI, that you pass up the quicker, simpler wins of verified outcomes before you get there. It's much simpler for a customer to say "Yes, we got the average delivery time from 40 minutes to 30 minutes, and your solution played a role in that. The route planning feature directly contributed to faster deployment of drivers by 2 minutes per haul, and ~20% less rerouting during the deliveries". It's much harder, in this example, to get to what the exact, monetary ROI of this is. You would have to know:

• The fully burdened labor cost of the average driver
• The average fuel costs per minute/mile of driving
• The average time increase caused by mid-delivery reroutings
• Etc. etc. etc.

Calculating ROI is great, and there are some companies working to make this scalable and repeatable (ecosystems.us I am familiar with, and I think The ROI Shop also does both pre-and post-sale ROI models). I know Ecosystems also has a pretty expansive library on Value Management best practices.

I hope this helps. I think at the end of the day setting up a maturity curve for your org to get from not tracking outcomes/results, to tracking and verifying these, to eventually quantifying these is the real key. Best of luck.

Ed Powers

I've worked with many clients to improve their Customer Success Planning (or Value Planning, Joint Success Planning, etc.) process and clarifying how the customer, and more importantly each member of the account's decision-making unit, defines and expects value. Usually customers don't know how or when to measure it--they only know they are in pain and they want things to change. The CSM must come prepared with suggestions and examples of how other customers have done it, ideally showing benchmarks to better set expectations. One key goal during the sales-ops handoff is agreeing how success will be measured and to ensure measurement mechanisms are put in place either by the customer or the provider. Often it's not elaborate, a "back of the napkin" calculation will suffice.

It's also important to keep in mind that people don't make decisions based on numbers--they use numbers to justify decisions they have already made. Ultimately how customers feel and what they believe about you is more important than evidence.

Jeffrey Kushmerek

The key here is to report back on their key outcomes that they bought the product for. Ideally you have confirmed during onboarding, and now you show where they are on these outcomes. IF numbers is a part of that, by all means you need to show that, BUT you need to tie it back to their outcomes :)

Elizabeth Italiano

Such a timely topic as we are seeing companies slashing their tech budget around renewals due to the economic environment. CFOs are being rather ruthless in their renewals and demanding quantifiable ROI (and rightfully so).

One thing that I see companies and CSMs trip up on is that they base measurable KPIs back to product usage only. This is not enough. The most successful CS and AM teams are able to do the following:

1. Align with senior stakeholders and decision-makers on what the business level goals are that they are expecting to leverage XZY product for in order to achieve. These need to be quantifiable.
2. They align with their champion on how to best leverage their product in order to achieve their goals. The best of the best tie this back to what the champion is measured on in their role to keep the champion motivated and to ensure adoption.
3. They understand how their product ties into their overall tech stack and strategy so they can paint a vision that includes their product. They don't make their pitches and presentations about their product or company, rather they paint a picture that demonstrates how their product is an integral part of their overall strategy.
4. They use the product data they have at their disposal and work with their champion on the data that they track in order to calculate ROI and measurable outcomes.
5. Lastly, it's important to share the right metrics with the right audience. Understand what the power user cares about, understand what mid-level management cares about, and always understand what the decision makers care about and what KPIs they need to see. This way you can build a consensus for renewing (or growth) by addressing the things each stakeholder wants to see.

Amanda Watson

@Ed Powers That is great insight!

I especially like this point - It's also important to keep in mind that people don't make decisions based on numbers--they use numbers to justify decisions they have already made. Ultimately how customers feel and what they believe about you is more important than evidence.

Thanks for the input!

Amanda Watson

@Elizabeth Italiano I agree 100% - Product usage isn't enough - it is much more holistic! Thanks for sharing.

NickBell

Something that I often find it totally overlooked in these scenarios, is who the stakeholder is within the customer org who is going to be responsible for reporting on the success, and showing the results. Most businesses operate to a similar QBR style model in which you get your PoC and Exec into a meeting and show them a deck with your incredible results. Everyone in the room agrees that things are going incredibly well, but then you get to a renewal and find out that things aren't perhaps as smooth as you understood.

That 'sale' that you're attributing to your software has 5 other CSMs at other software vendors claiming that it was also them. That '$ saving' or 'time saving' that you're attributing to your hard work, is also being claimed by a manager within that org who was also running a project to do the same thing.

If you're in SaaS and you're not talking to someone with an analysis mandate, (usually in Ops and outside of your PoCs) about how your service is reported on internally, you don't know whether you're doing well or not.

This starts with Kick-off and onboarding. When you're aligning on the reasons for purchase, the goals going forward, and the metrics used to define success, 100% go the extra mile to do some proper discovery about where those results go, and how they're attributed.

simonbigbutton

I've always promoted the measurement of the video content we produce for our clients. It's only in recent years that it seems to have actually started happening in any meaningful way though.

Now, we have clients that will insist upon it (even if they aren't really sure what they are measuring). It's certainly in our interest to measure the effectiveness of video because we can either learn from our failures or prove our success. Our clients appreciate both.

So part of our role now is to educate our clients as to what they can and should measure and what metrics they should ignore (even if some agencies are telling them otherwise).