Does anyone participate in a deal review process allowing "approval" of a good fit customer?

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Does anyone participate in a deal review process allowing "approval" of a good fit customer?

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Miko Hinojosa

Hello Jeff!

We currently deployed a brand new post sales process map. We are a startup - more so starting to scratch the maturity now. In the past we had all the common pain points you can think in that regard (i.e. misalignment of customer expectations, execution first vs customer first, inconsistency in deliverables, limited understanding of product features vs capability, and the list goes on).

In this new Post Sales Process Map - we have now 8 stages which are as follows:

Proposal creation
Initiation
Requirements & Design
Configuration
UAT
Training
Go Live
Close-Out
Overall PM

During Initiation, there's a step called "Enterprise Readiness Session - where now us the CSMs own the first customer meeting. We focus on aligning business objectives, pain points, project scope, assumptions, risks, etc. Then we give "homework" to our customers core project team - we have them complete some of our mandatory trainings, have them provide us a clear list of documents / data to provide to the implementation team.

After that - we walk them through how we will execute the implementation: What to expect, governance, process, team structure and what will be needed from them.

Then we trigger our Discovery Process (requirement gathering sessions, Discovery KO with Product Demo to level-set a customer and align expectations and we try to include some of the stakeholders that may not be part of the sales process and have limited understanding of our solution.

During the SOW - we provide the final list and go through it together with the customer. If somewhere down the line - many things don't make sense for both the customer and ourselves - we trigger a 2nd round of validation (internal) with Pre-Sales, Sales, PM SA and CSMs. We can debate and argue, but in the end, now CSMs have been given the final decision to veto a customer. CS cannot fix bad fit customers (like never ever). Hence - we make sure AEs aren't just going out for a money grab - we want to set ourselves for success since Day 1.

Ely Lenik

@Jeff Breunsbach ,

I'm going to piggyback off of what @David Ellin just said. Deal review is an opportunity to put the brakes on a deal a bit to ensure long term success and profitability. Younger companies may not have this luxury yet and should think carefully on how something like this would be implemented. On an enterprise level though a deal review is an operations optimization process that can ensure time is being used as efficiently as possible across the sales and implementation teams.

I believe a deal review is a great way to invest a little money in the cost of acquisition which can dramatically increase long term profitability of a customer. Unless a sales-person is wildly overpromising there should already be a decent amount of alignment between customer needs and the product and a deal review will just help concretize those goals and put them down on paper. If there isn't any alignment, it's probably not worth pursuing because there is a near 0% chance they will successfully deploy and ultimately renew. Once the product and sales are in alignment and the deployment team understands both you can best bet for a successful deployment and a strong customer out of the gate.

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Ely Lenik
Director of Customer Success
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Original Message:
Sent: 10-15-2020 20:38
From: Jeff Breunsbach
Subject: Does anyone participate in a deal review process allowing "approval" of a good fit customer?

From our CS Leadership Office Hours...

Does anyone participate in a deal review process allowing "approval" of a good fit customer?

------------------------------
Jeff Breunsbach
Founder, Gain Grow Retain
Director of CX at Higher Logic
Top 25 Influencer 2020
------------------------------

Anastasia Magnitskaia

Jeff- from a very fresh perspective- here are my thoughts:

I would think it depends on a size of the account and complexity of the deal if CSM should be brought in to determine fit. For typical, routine customers- probably not. More complex - perhaps not a bad idea. You would not want to spend time approving deals which will create unnecessary work. You also want to be careful not to upset the sales team. With that said, I would imagine having a document that outlines ideal customer will be helpful where you can collaborate with the Sales team on definitions.

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Anastasia Magnitskaia
617-686-8286
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Original Message:
Sent: 10-22-2020 13:58
From: Jeff Breunsbach
Subject: Does anyone participate in a deal review process allowing "approval" of a good fit customer?

Would love for you to continue your thoughts here...

@Laura Lakhwara
@Shane Correa
@Anastasia Magnitskaia
@Numrah Irfan
@Ely Lenik

------------------------------
Jeff Breunsbach
Founder, Gain Grow Retain
Director of CX at Higher Logic
Top 25 Influencer 2020
------------------------------

Original Message:
Sent: 10-16-2020 06:05
From: David Jackson
Subject: Does anyone participate in a deal review process allowing "approval" of a good fit customer?

Jeff

Here's an expansion of a few thoughts I put into in the chat during the discussion.

CS getting involved in Deal Reviews is a bad idea because it is tackling the wrong problem at the wrong time.

Deal Reviews typically happen in mid-late stage opportunities by when the marketing and sales teams have invested time, money and have formed an emotional attachment to the opportunity. They think they have a good chance of closing it otherwise any sales person and process with half a brain would have disqualified it. From a company perspective, CAC has been incurred: in fact a Deal Review increases CAC and sales cycle time.

The fact that a Deal Review is needed suggests a failure to build and apply robust Ideal Customer Profiles. Done properly, ICPs set the guide rails that keep acquisition strategies on the straight and narrow. Done properly means they are developed collaboratively and implemented by all teams. They cover the three C's: Company (target businesses), Collaborators (individuals we deal with) and Context (the situations that trigger initial and repeated purchase). Done properly means that each prospect/customer has an ICP fit score and if a certain threshold is not reached, it doesn't get pursued. ICP fit score evolves to reflect context at different stages. It leaves sales managers free to do their job safe in the knowledge that we are all are on the same page.

There is one valid use of a deal reviews and that is as part of a review of ICPs, which should be revisited periodically to test their efficacy. The review should look at data like the three C's, CAC, sales cycle time, renewal rate, NRR, cost to serve and value achievement. The purpose is to identify any changes to the sweet spot of the ICP and adjust it and the engagement activities appropriately.

Scrapping Deal Reviews and putting the time into solving the root cause will strengthen collaboration and alignment and not risk painting CS as the anti-sales team.

DJ

------------------------------
David Jackson
CEO

Original Message:
Sent: 10-15-2020 20:38
From: Jeff Breunsbach
Subject: Does anyone participate in a deal review process allowing "approval" of a good fit customer?

From our CS Leadership Office Hours...

Does anyone participate in a deal review process allowing "approval" of a good fit customer?

------------------------------
Jeff Breunsbach
Founder, Gain Grow Retain
Director of CX at Higher Logic
Top 25 Influencer 2020
------------------------------

David Ellin

@Jeff Breunsbach, I'm in the camp that believes a deal review committee is valuable for enterprise-size customers. So on that note, I have to respectfully disagree with the Jackson Brothers - @David Jackson and @Craig Jackson - especially if you're in a younger, high-growth company where processes (and leadership) are not so mature.

My reasoning is discipline and accountability. The formality of the committee drives accountability, transparent communication, and discipline around living to standards. For a fast-growing company with limited resources, onboarding one misfit enterprise customer can severely strap resources and pull focus from other important initiatives. And, if that customer is a well-known logo, the impact from their experience can shake up the market if they share their experience.

Additionally, the formality of the meeting gives everyone a voice and drives cross-functional collaboration. In my experience, the folks who would participate in deal review are not the same as those who would be focused on root cause analysis and both are important. Once RCA is complete, the deal review team should review and learn from prior poor decisions.

David

Craig Jackson

Hi @Jeff Breunsbach

I believe deal review committee's are an extremely valid tool in the right circumstances and with the right goal in mind.

Speaking from experience, being part of a young tech business post series a, growing at 2.5x and overnight increasing customer acquisition from 5-10 pcm to close to 100. Our processes and procedures were understandably strained.

We had a clear Idea of an ICP but with such demand for our product and services it meant that our sales dept were in a position where business would need to be turned away... personally not met a sales person to turn down a deal yet.

That did result in a flood of new customers that wanted our product but had nuances to their requirements, requirements which we were unable to meet without the introduction of manual processes.

From a CS perspective its difficult to control - square pegs and round holes spring to mind with manual processes going wrong. Retention was a challenge as was reputation damage. As a result we introduced a process quite similar to @Laura Lakhwara

Our deal committee brought together a representative from each stakeholder dept for a bi-weekly review of all enterprise tier customers outside of our ICP. It was a great tool for sales and product to understand our service limitations, also prioritise our product roadmap not from a CS perspective but an acquisition.

It helped spark a shift in priorities to be far more delivery focus, cast a wider net to product market fit and tie renumeration into the LTV of the customer.

I agree with @David Jackson, not because he has an excellent surname - but if your processes are mature enough and clear commitment from each department then the concept of a committee is almost redundant. Hindsight is a wonderful thing but it definitely got us through 2017 and dramatically reduced our churn.

Cheers

Craig

Laura Lakhwara

We have gone through the following process since launch of new product in Nov '19:

Started with deal review meeting with sales, deployment (PS) and CS. We didn't reject deals, but provided guidance on deals of what we could commit to do. We didn't have data to inform good or bad customer. We were just getting started.
Discovery criteria added to sales process and Hubspot to move a deal through stages.
Deal review meeting ends and management only meets on key enterprise accounts.
First churn happens and kickstarts categorization of churn and feedback. Great article here: https://blog.nuffsaid.com/customer-churn-causes
CS and GTM partner on root cause analysis of churn.
1. Present findings.
2. Update sales materials and ICP. Agree @David Jackson
3. Update customer qualifications check list for sales @Andrew Marks called it a calculator today on GGR.
4. Action items from learnings for product, marketing, sales, deployment and cs.
Cadence to share data and learnings from CS to Sales of those clients that succeed and meetings between myself and head of sales to align goals and accountability.
Don't forget comp @David Ellin mentioned it on the GGR call today. Sales has incentives tied to long-term success of sale.

------------------------------
Laura Lakhwara
Associate Director, Customer Success
SoftBank Robotics
San Francisco CA
------------------------------
-------------------------------------------
Original Message:
Sent: 10-22-2020 13:58
From: Jeff Breunsbach
Subject: Does anyone participate in a deal review process allowing "approval" of a good fit customer?

Would love for you to continue your thoughts here...

@Laura Lakhwara
@Shane Correa
@Anastasia Magnitskaia
@Numrah Irfan
@Ely Lenik

------------------------------
Jeff Breunsbach
Founder, Gain Grow Retain
Director of CX at Higher Logic
Top 25 Influencer 2020
------------------------------

Original Message:
Sent: 10-16-2020 06:05
From: David Jackson
Subject: Does anyone participate in a deal review process allowing "approval" of a good fit customer?

Jeff

Here's an expansion of a few thoughts I put into in the chat during the discussion.

CS getting involved in Deal Reviews is a bad idea because it is tackling the wrong problem at the wrong time.

Deal Reviews typically happen in mid-late stage opportunities by when the marketing and sales teams have invested time, money and have formed an emotional attachment to the opportunity. They think they have a good chance of closing it otherwise any sales person and process with half a brain would have disqualified it. From a company perspective, CAC has been incurred: in fact a Deal Review increases CAC and sales cycle time.

The fact that a Deal Review is needed suggests a failure to build and apply robust Ideal Customer Profiles. Done properly, ICPs set the guide rails that keep acquisition strategies on the straight and narrow. Done properly means they are developed collaboratively and implemented by all teams. They cover the three C's: Company (target businesses), Collaborators (individuals we deal with) and Context (the situations that trigger initial and repeated purchase). Done properly means that each prospect/customer has an ICP fit score and if a certain threshold is not reached, it doesn't get pursued. ICP fit score evolves to reflect context at different stages. It leaves sales managers free to do their job safe in the knowledge that we are all are on the same page.

There is one valid use of a deal reviews and that is as part of a review of ICPs, which should be revisited periodically to test their efficacy. The review should look at data like the three C's, CAC, sales cycle time, renewal rate, NRR, cost to serve and value achievement. The purpose is to identify any changes to the sweet spot of the ICP and adjust it and the engagement activities appropriately.

Scrapping Deal Reviews and putting the time into solving the root cause will strengthen collaboration and alignment and not risk painting CS as the anti-sales team.

DJ

[Deleted User]

Would love for you to continue your thoughts here...

@Laura Lakhwara
@Shane Correa
@Anastasia Magnitskaia
@Numrah Irfan
@Ely Lenik

David Jackson

Jeff

Here's an expansion of a few thoughts I put into in the chat during the discussion.

CS getting involved in Deal Reviews is a bad idea because it is tackling the wrong problem at the wrong time.

Deal Reviews typically happen in mid-late stage opportunities by when the marketing and sales teams have invested time, money and have formed an emotional attachment to the opportunity. They think they have a good chance of closing it otherwise any sales person and process with half a brain would have disqualified it. From a company perspective, CAC has been incurred: in fact a Deal Review increases CAC and sales cycle time.

The fact that a Deal Review is needed suggests a failure to build and apply robust Ideal Customer Profiles. Done properly, ICPs set the guide rails that keep acquisition strategies on the straight and narrow. Done properly means they are developed collaboratively and implemented by all teams. They cover the three C's: Company (target businesses), Collaborators (individuals we deal with) and Context (the situations that trigger initial and repeated purchase). Done properly means that each prospect/customer has an ICP fit score and if a certain threshold is not reached, it doesn't get pursued. ICP fit score evolves to reflect context at different stages. It leaves sales managers free to do their job safe in the knowledge that we are all are on the same page.

There is one valid use of a deal reviews and that is as part of a review of ICPs, which should be revisited periodically to test their efficacy. The review should look at data like the three C's, CAC, sales cycle time, renewal rate, NRR, cost to serve and value achievement. The purpose is to identify any changes to the sweet spot of the ICP and adjust it and the engagement activities appropriately.

Scrapping Deal Reviews and putting the time into solving the root cause will strengthen collaboration and alignment and not risk painting CS as the anti-sales team.

DJ