Increasing ROI and Strengthening Relationships
Gil Lhotka, Director of Customer Success at Kronos, dives deeper into the concept of “defining value,” as the first of the 5 Commandments of Customer Success.
Know your customers’ definition of “value.” Let’s face it; our clients don’t purchase our products and services or do business with us simply because they like us. Don’t get me wrong, that’s certainly part of it; but, what they want, need, and may have even put their careers on the line for is a return on their investment – on the partnership they’ve stepped into as one of our valued customers.
A McKinsey-Oxford study of over 5400 large IT projects demonstrated that the average return on investment was 56% lower than expected. How can that be? I believe it’s because change is not always fully embraced. Team members tend to return to the daily grind and go back to the way they’ve always worked. They lose sight of the original goal and their responsibility to keep improving it.
Software vendors can be just as guilty of this and begin thinking of “value” in terms of the product “features” rather than the organizational outcomes access to those features and functionalities can create. To influence the return on investment and the results the customer expects, we must truly understand what they see as valuable. But it doesn’t stop there. We have to know “the why” as well.
Let’s use a couple real world examples to illustrate the importance of “the why” in value attainment: A customer in the skilled labor field wants the ability for employees to use mobile devices to request time off and view their schedules from home. The client shares that they want to have a more engaged workforce. It’s clear that they have a desire to use mobile and will likely track how they leverage this functionality as a way to see if they hit their goal. But the real question is why do they want mobile, why do they want employees to be more engaged? From a customer success perspective, this is what we need to uncover.
So why? We do some digging and learn that the customer is also concerned with a lack of qualified and able workers to take on new roles. The increasing average age of employees and baby boomers retiring could affect their organization. Using mobile to create an engaged workforce may allow the average employee to stay longer before retirement. Doing so can reduce overtime costs required to continue to produce their product with a decreasing staff size.
Another customer in hospitality or retail is concerned with attracting and retaining staff. Something as simple as allowing requests for time off and access to schedules from home may set them apart from competitors and attract prospective employees to available job openings.
In both examples, the customer’s goal is to achieve an “engaged workforce,” but the root causes are different. Focusing on the success of the client allows us to make a real difference in their business outcomes. Additionally, this also helps us create a shared success path that monitors the correct data. In one example, we may be measuring overtime reduction and the average age of retirement. In the other, it may be hiring trends.
When working with customers, I encourage you to consider and uncover “the why.” Get to know them and their business. Ask follow-up questions, push the envelope a little, peel another layer of the onion to help them successfully reach the value they’re looking for and receive high ROI on their solution. The insights we gain and what we do with them will bring positive outcomes for all involved and result in stronger customer partnerships.