Meaningful customer data is the new gold
Every single client I have worked with shared the same initial problem.
They sit on piles of data but have very little customer insights.
9 out of 10 companies don’t even know whether their customers are successful.
That’s a huge liability for a business whose model is built on customer retention that depends on how much value customers get from their product.
The core of every customer-centric strategy is to understand your customers, their outcomes, and their behavior on a granular level.
1. Understanding customer goals and metrics
As the old saying goes - you can’t manage what you can’t measure.
You need to identify the goals customers want to achieve and how they measure them.
Because that’s how your customers will evaluate the ROI of your product - especially the CFO.
personal goals related to these outcomes
Tipp: If your customers don’t know what they want to get out of it and how to measure make qualified proposals.
2. Deconstructing the customer success journey
I’ve got another old saying for you (the last one I promise) - if you don’t know where you want to go there’s no right path.
You need to make sure that you understand the journey customers have to complete to transition from A (start) to B (goal).
Milestones (intermediate goals)
Problems to solve
Tasks to complete
Skills and knowledge to acquire
to ultimately understand the services and inputs you need to provide
Tipp: Talk to your most successful customers and understand their journey.
3. Customer profitability
Not all of your customers are equally valuable to your company.
It’s also dangerous to only look at revenue because a customer who is paying 10k per month but needs 2 full-time CSMs is not profitable.
Digging up the revenue numbers should not be a challenge - ideally, you have a 12-month history (or longer) to see how your profitability is developing.
Determining customer costs is more difficult but you don’t need to turn it into a science project.
A qualified approximation will serve the purpose well enough.
Tipp: Apply a “service intensity” score to every customer and distribute your service costs accordingly.
4. Performance metrics
Your customers’ success is the sum of solving a series of problems and completing tasks.
If you only measure whether customers achieved their desired outcome you will not be able to identify where things go south.
Forget about measuring how many customers watched a tutorial, downloaded a guide, participated in a webinar, joined a group training, etc.
What you need to measure is how many customers were able to successfully put their learnings to use.
Of course, that requires applying a specific goal to all your services and inputs.
You know the golden rule of customer success - deliver value with every interaction.
5. Customer feedback
Measuring performance will show your what works and what does not.
What you don’t get per se is the “why”.
That’s obviously very important to improve your services and inputs, add additional ones or replace them.
Context is something that you will rarely get from sending surveys to your customers.
So I recommend engaging in old-fashioned 1:1 conversations where you can ask all kinds of follow-up questions.
Tipp: A QBR is an excellent opportunity to get in-depth customer feedback.
6. Qualified feature requests
Building the wrong features is a real problem.
Too often roadmaps are influenced by the most popular features customers desire or who have the loudest voice.
In the end, SaaS companies build features that do not only not add value but rather dilute it by more complexity.
But if you have quality data of about 1-5 you are able to
understand who the request came from - your most profitable customers or those who will likely churn anyways
understand the context behind the request because you know the story
evaluate the odds of adding more value
Data is truly the new gold but you should never gather it for the sake of it.
You always need to understand the “what” and the “why” to make qualified, customer-centric decisions.