Machine Learning, Predictive Analytics, and Customer Success

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“The future is independent of the past, given the present”
-Andrey Markov

Big Data has informed our world with insights and has brought technology closer to people and customers in meaningful ways. Not only are we able to understand more about behaviors and how to personalize experience but we are actually able to learn from these behaviors and predict what can reasonably occur next. The opening quote from Markov describes a memoryless property within statistics that was initially discounted in the late 1800’s when first theorized but has in the Big Data age enjoyed a renaissance of sorts. From speech recognition (as an example) to other machine learning applications we have come to understand a probabilistic future not in terms of a known past but a catalogued present. Through automation and deep learning we are able to rationalize the present as it occurs and extrapolate a broader real-time sample set that informs a probabilistic future.

The above has enormous reach and implication on how we build software and solutions that will over time enrich experience based on a more personalized and known set of user behaviors. As it stands today, if you are not leveraging these predictive models you are missing an opportunity to understand what is happening as it happens. In the world of SaaS, this methodology is a key tool to help align your technology and business focus on real derived value and where you can advance customers in the success of your solution. Today customer success teams are focused on the front lines of building blueprints, scorecards, and working with customers without often having key data and insights that are needed to help progress customers along their journey. Broad general trends are followed and all too often time is spent reacting to customer needs and expectations which expire as soon as they are considered. The customer journey evolves in real-time which means customer success teams need to stay ahead of the curve, to anticipate what can occur next and have an answer. This goes beyond understanding NPS scores and retention (also important) to focusing on workflow completion percentages, abandonment rates, and other key conversions against outcomes. It is these points of friction that require the most consideration and often indicate areas that need direct engagement or complete redesign.

It’s an exciting time to consider the possibilities of recasting traditional customer lifecycles and leveraging Big Data to further our insights and proximity to customers. The time is now to innovate and build new strategies based on predictive measures and to push the boundaries of technology and what it can help individuals and organizations achieve. Is your organization taking a leading position or on its back foot?

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Designing Customer Focused Services: The Inner-Company Experience

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Focusing on designing meaningful engagement and experience is the key to winning customers and retaining them. Countless examples from varied industries have proven that even in commoditized markets the key to winning is differentiating on the uniqueness of your brand experience. It is clear that growth comes from this focus as loyalty and retention are key factors towards driving company performance. The challenge is how to design an experience for your customers that is relevant, sincere and enabled by the company and its employees. Considered this way, it really becomes a question of creating human relationships at key touch points between your company and your customers. But think about the complexity of human relationships and how hard they are to determine or maintain. How does your outer-customer become part of your inner-experience as a company?

Design. There has been a lot of recent focus on this topic and specifically looking at design more broadly as it applies to experience and engineering context. A company such as Apple has successfully capitalized on matching design to customer desires and creating a meaningful and lasting relationship. Just think what the Iphone means to consumers and how they interface with current communication and media channels – for most it has become indispensable. What is important to understand in this relationship with Apple is that this customer experience and engagement was designed from the ground up as context that customers want to engage with and personalize. It’s acknowledging form and function such that a customer walking into a genius bar is nearing the end of a user-journey that begins with salvation. In other words, you can and should predict what will happen and determine the appropriate experience, product, and services all in conjunction with enabling success. This requires vision and building intangibles by informing your relationships with insight, context, and personalization. This is where insights matter and where you maintain an edge by knowing what your customer wants before they want it without saying “I told you so”. This is where the cross section of big data, social media, and mobile all lend themselves well towards closing the gap between customers and companies.  Consider leveraging fundamental design principles to create form and function and a place and time that draws your customers in – “if you build it, they will come”.

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Field Technical Services Align for Todays Software Customers

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More and more software companies are moving towards aligning their technical field organizations to a unified engagement model. SaaS companies have already crossed the chasm out of circumstance with Customer Success strategies / leadership and now traditional software companies are following their lead. In the age of the “Customer Company” this transition is much needed and requires integration where common practice was to separate presales functions from post-sales. Clearly, these practices are distinct and separate but in the eyes of customers the engagement model and experience stand as the same.

Having orchestrated these transitions they are not easy. There remains a stigma between pre and post-sales that their jobs are different and that a typical career path has you go from support to post sales consulting / training and over to presales. Indeed this is how it worked as software companies matured and understood how the needed to support and solution customers. This was the journey from product to solution sales. But the world has moved on dramatically and the solution mindset should now be firmly ingrained in every technology professional. Even value based methodologies and practices are now a common practice. And the next frontier is already here: insight-based selling.

Bottom line, customers have always enjoyed being delighted by vendors. Those vendors that stand out do so on the basis of their intent, originality, and ability to create an experience that sets itself apart as distinct and differentiated. In the context of traditional software companies the technical field organization is the pronounced face of the company. The time is now to focus on our craft of pre and post sales as a coordinated function that delivers solutions, value, and insight based on meaningful engagement and real customer success.

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4 Characteristics That Every Customer Success Manager Must Have

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1. Fanatical Drive for Success
You need to wake up every day planning on how you will make a difference. It’s not a competition with others as much as with yourself. How do you best solve a problem or make a impactful change? There is no ego involved here just pure ambition to want to make things better than they were yesterday. And the more you can affect others the more they will want to do the same. This is precisely how great companies are built and powerful cultures formed to solve problems in new and interesting ways.

2. Measure and Manage
The old adage of you can’t manage what you can’t measure applies. However, in the customer success world you need to have more than metrics but a strategy of how to avoid problems before they arise. To be proactive and anticipate customer needs and avoid constant fire drills and reacting to problems like a game of whack a mole. KPI’s are there to provide you with visibility markers but they will not deliver a decision matrix or specific action for thinking ahead of alerts. Whether its time to resolution, NPS, social engagement or any number of other metrics make sure to always set a bar above the trend line and push through what is directly in front of you.

3. Calmness in the Face of Fire
Escalations are a constant threat but need to be viewed as an opportunity. Specifically, an opportunity to get to know a friction point with your product or service and to identify its root cause and how to associate solutions that will benefit many. There is nothing worse than panic during these moments and a loss of orientation that results in a temporary solution to an emerging or common problem. Composure is often gained from experience and balancing priorities to know how to separate the signal from the noise.

4. Ability to Engineer Experience
This is perhaps the most innovative aspect of what customer success managers do –  they have the distinct ability to serve on the front line of customer engagement by providing an experience that represents their company brand and mission. It is often experience that can take a fairly routine product and make it stand out from the crowd.  Customer experience can be engineered and despite the usual scripts there are plenty of new possibilities to keep your customers guessing. As an example, you can delight customer with a company persona that stands out while providing meaningful engagement. This should be a creative and fun process where you can mix in things like gamification and personas for your teams – success ninjas, sherpas, or superheroes that come to the rescue. When done well you would be amazed at the reactions.

 

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Managing Customer Success with a Customer-Centric Dashboard

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As a customer success manager, your primary role is to own the customer relationship, capture the voice of your customers, and focus on retaining and delighting your customers. This means that you need to flip your typical org chart on its head, place the customer at the top, and subscribe roles directly to manage different aspects of customer engagement and experience. Think servant leadership with a hub and spoke architecture where every branch of the organization interfaces directly with customers. The organization needs to be focused on delivering real value to customers and continually feeding the underlying technology with relevant use-cases and best-in-class solutions.

If you consider the age-old adage “you cannot manage what you cannot measure” then metrics in our case become more important towards understanding what strategies work or need improvement. Because customers engage with your technology directly there are a lot of metrics you can collect which also means you can easily fall into a case of “analysis paralysis.” In these cases, your judgment can be impaired with conflicting data which then needs substantial narrative rationalization. Avoid this pitfall by keeping your KPIs simple, consistent, and well defined. A simple and elegant dashboard when developed correctly will allow for easy interpretation and accessibility by your organization to find individual agency and route to customer value. There is of course the need for additional communication, training, and overall alignment to company strategy, charter, goals, and objectives but if your customer-centric dashboard is poorly articulated or mismanaged you quickly descend into ambiguity. Even worse, potentially a scenario where you are ultimately doing the same thing over and over again and expecting a different result that do not move the needle.

The examples and high-level category explanations below should serve as a good reference and help you get started on building you own dashboard or evaluating appropriate vendors. I have deliberately omitted cohort analysis as this deserves its own blog post and allows you to segment your data into time-series views for further trending and historical context. This will be covered later and also worth noting that the dashboard below does not contain real data and used for illustrative purposes only.

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CUSTOMERS
Customer data is core to your dashboard so be sure you are capturing this information accurately and from a single datasource if at all possible. Data derived from your CRM, accounting system, SaaS application, or service provider can all be different and introduce inconsistencies when data integrity is not carefully managed. Also, do not focus only on revenue generating customers but think through customers broadly as partners and prospects that are leveraging free tools – these are your brand ambassadors and ultimately promote your solution and can provide you with valuable feedback. Visibility on additional metrics such as customer acquisition rate, churn, and average subscription lifetime all become important towards building a profile of your customer which you can be further segmented into cohorts as you go.

FUNNEL
It is very important to understand your sales process and funnel as this becomes a leading indicator for customer success and what you can predict for customer on-boarding, headcount planning, and general capacity to sustain quality service levels. Sales funnels are obviously subject to buying cycles, seasonality, and are volatile but managing customer success against trends is critical. It is important to also rethink the typical sales funnel and extend it to include nurturing activities as part of expanding opportunities post the initial sale. If you get this right, your customer lifecycle will be directly aligned with your sales process and you will be able to develop the appropriate customer touch points matched to a broader understanding of the traditional sales funnel.

REVENUE
SaaS companies live and die by recurring revenue so having a pulse on customer acquisition costs (CAC), monthly recurring revenue (MRR), and customer lifetime value (LTV) is your lifeline. If you are doing things right overall you will see your LTV trend upwards while your CAC trends downwards. LTV in particular can be difficult to calculate as there are many factors to consider and can include sales and marketing spend, support costs, etc. but again start out simple and be consistent. As an example, you can get started by focusing LTV on profit over revenues as follows: (Average Revenue per Customer * Gross Margin per Customer)/Monthly Churn Rate = LTV.

LOYALTY
Any opportunity to solicit your customers directly for feedback or engage within a community should be taken advantage of. This can be done simply with emails, social media interaction, satisfaction surveys (NPS), and most importantly through direct contact and developed relationships. Keeping tabs regularly will also help you further understand dips in revenue, impact of feature implementations or version releases, and generally provide you with narrative that can help fill in the blanks. Make sure to have quantitative feedback in the form of net promoter scores and simple satisfaction surveys that you can easily display and aggregate within your dashboard.

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Re-thinking Productivity – 6 Must Have Considerations for Innovative Businesses

images-innovationRecent debates around “work from home programs” and whether these initiatives are effective have been covered with an almost fanatical sensationalism largely defining two camps – those that are for and those that are against. What is interesting about these debates is that by and large the focus of the conversation tends to be on whether these initiatives are good or bad for business. More specifically, for companies that require a turnaround such as BestBuy or Yahoo is there any other option but to disband these programs altogether to stand a chance in regaining their once held market-leading position. In my mind, the core of this debate whether pro or against misses the point altogether. Decisions around work style and what makes sense for business comes down to specific role and job function – it’s more a management and individual decision as to what makes sense and best enables productivity in the broadest possible sense of the word.

In this day and age, we are more connected than ever so a company’s inability to align on strategy, goals, objectives, and execution plans indicates that the problem may lie elsewhere and perhaps there are other more important considerations. I am not suggesting the above companies are not thinking through broader issues around how to stay relevant (even leveraging the press surrounding this debate as publicity) but typically these types of top down absolutist management decisions suggest desperation more than a confident plan that will fundamentally reshape their business and allow them to remain relevant.

As business leaders and entrepreneurs we need to rethink what is possible and consider management as a constantly changing system that enables individual and organizational success by promoting the development of thought leadership, fostering research and development, institutionalizing new learning and development models, and generally continually creating and re-imagining new possibilities out of what otherwise looks like the ordinary. In my prior examples, clearly we have an aging retail and search business model that desperately needs profound change and focus on what has not yet been conceived rather that more / less stores or a new home page. Whether employees work from home or not is irrelevant but the above coupled with the must-have items below will make all the difference:

Culture
Culture sits at the core of any organization and enables everything that comes as a result. Culture is fundamentally a belief and way of being that serves as a powerful way to unite people to a common set of goals and outcomes. If an organization cannot get their culture right or has lost their way the only way back is to define a set of values that provides direction and restores belief.

Innovation
Is a constant and requires proper investment, thinking, and systems to be in place. Once a business stops innovating its really just a matter of time before the competition catches up and you are no longer relevant.

Shared Value
Earnings and profits are a reality for any business but capitalism and free markets also have a social responsibility towards the communities and people that they serve. Companies need to engage in a broader dialogue and focus on long-term opportunities rather than simple short-term gains.

Sustainability
The statistic is startling, 80% of our production ends up in a landfill as a waste. This applies to human capital as well which suggests there is an opportunity to consider waste broadly and think through how best to leverage our resources to their potential.

Leadership
The old organizational pyramids and hierarchies simply do not work and ultimately distance employees from one another. Leadership needs to look at ways of collapsing boundaries and re-thinking organizational models in such a way so as to promote understanding and true collaboration.

Customers
Customers are ultimately who every company works for. Customer value needs to be continually assessed and delivered in order to shape products and services that are meaningful and make our lives better. Focusing on customer engagement, experience, and working on shared goals and objectives will only strengthen your business and relationships for the better.

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Customer Success – SoLoMo, Insights, and Services

ImageCustomer Success management for cloud-based applications or even traditional Enterprise technology companies comes down to values and a culture that enables employees to adopt approaches that align customer insights with company goals and objectives. It’s not just culture and values but also tools that empower organizations and employees to understand their customer and collapse the gap between company perception and customer reality. With the explosion of social media, localization, and mobile technologies companies now have even more tools than ever to gauge customer insights and deliver value when and where its needed. This is the world we live in and customers expect this level of engagement as they themselves are more informed and vocal than ever and prepared to be your best or worst brand ambassador.

SalesForce this week unveiled its new company message touting the “Customer Company” which replaced its prior slogan of “Social Enterprise” and effectively continues to build its relevance and revenues by taking customers into the cloud and empowering them and themselves in the process. There is a lot to learn from SalesForce in terms of their disarming messaging but also through their consultative approach. But its not just SalesForce but an entire movement with giants like IBM to smaller players alike all innovating and making the following areas all key to their strategy and success:

Social Media
Simply cannot be ignored and needs to be leveraged for direct customer engagement across all channels and tailored within customer field engagement functions. From technical support to education, consulting, and even sales dialogues need to be fostered, measured for effectiveness, and managed to a strategy of brand development and thought leadership.

Local
With localization technologies being so prevalent a company’s ability to segment customers and create situational fluency is unprecedented. Keeping up with customers on the go while also aligning them to communities and other customers that are local is imperative and there is no better way to build consensus than to have customers learn from each other.

Mobile
Mobile is the way we do just about everything these days. The way we work, live, and interact. The “applification” movement is creating applications out of the ordinary (what’s old is new again) and opportunities are everywhere to service customers in more relevant and creative ways. Its not just about building an app but servicing customers anywhere and anytime.

Insight Selling
Forget about solution selling as customers have moved well beyond this and are looking to think through solutions collaboratively and consultatively with informed business partners. Using Social, Local, and Mobile as a combined strategy will provide you with unprecedented information about your customer and analytics that you will need to understand challenges along with what would make a best-of-breed solution. Conversely, customers understand more about vendors so play to your strengths and know more rather than less. 

Services
Service economies continue to grow as virtually every product has a service component to it. Servitization (yes, it’s a word) is the norm and fundamentally a people business where an organization can truly differentiate itself by simply being more informed, more responsive, and the de facto thought leader in a space. You could even have an inferior product and win with superior service. Knowing your own products, industry, and customers is critical so services organizations need to be empowered with all of the above points and aligned to the overall customer success management objectives and culture. 

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Social Buying is Now

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Social Media has revolutionized communication and has created transparency where it has otherwise either never existed or been protected. It has collapsed traditional boundaries that have deliberately been created between institutions, markets, buyers, and sellers to the point where it is now ordinary to engage in discourse with virtually anyone, anytime, and anywhere – a media revolution that the likes of Marshall McLuhan predicted with his famous expression: “the medium is the message” and “global village.” Truly a connected marketplace that is unprecedented in its reach and power to shape the world that we interact with daily. We now see both the supply and demand side connected in an exchange that has yielded countless technology innovations that helps better serve markets by aligning businesses to consumers through predictive analytics, just in time transactions, and fundamentally more intelligence to make informed decisions. Consumers and businesses have never been closer to the point where we now have leading technology companies on the forefront of this revolution claiming the “Customer Company” where customers sit at the very core of shaping products and services which help determine success, shared value / risk, and a fundamentally new ways of doing business. Gone are the days of successful companies driving less than expected products into a market and hide behind poor services, challenging cultures, and misaligned value statements – these factors and more can now be exposed and readily tested as advertised.

All of this is well and good but we are clearly still transforming and on a journey. There are still legacy paradigms and dynamics in play that suggest we have a ways to go. As an example, companies still take a leading position relative to their products and how they go to market, position to consumers, distribution, etc. Companies such as Google (as an example) use an impressive array of analytics to prescribe or at the very least guess what it is that you may want or find interesting enough to buy. This quantified intelligence is hugely powerful by providing probable options that a consumer is more likely to end up selecting then using classic segmentation as a prior and known technique.  The problem, however, with all of these models is that they all rely on second-guessing the consumer whether through profiling or behavioral targeting and personalization its still fundamentally a guess, albeit an educated guess. And all along the consumer as stated before is becoming more and more educated. Educated to the point where they can almost reverse engineer an entire supply chain or distribution model to determine true cost and available margin to negotiate a better overall price. 3-D printing and home manufacturing will further revolutionize this space and determine value pricing to the consumer by further empowerment. All of this is coming and the time is now for social buying to take stage and make its mark by providing a platform to empower consumers to drive markets and decisions rather than inherit those that are defined by company boards and manufacturers. Social buying promises to align the educated consumer to value (products and services) in a way that balances scales that are otherwise not quite in equilibrium. Innovation has already started in this space and more is to come – stay tuned and watch this space.

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From Services to Success in a Customer-Centric World

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The technology services space is undergoing a transformation now that SaaS technologies are becoming more and more prevalent. This paradigm is forcing organizations that support SaaS offerings to consider new engagement models that drive higher value, faster time to market, and better overall adoption and success results. Shelf-ware is simply not an option in this world. If you consider the classic paradigm of licensed on premise products versus cloud-based SaaS offerings you can by nature of deployment see that there are major differences. On-premise products need to carefully consider dependencies for deployment, technology refresh cycles, change control, staffing for support and maintenance, etc. – the list goes on and on. Whereas in contrast SaaS offerings do not have these same constraints and instead create a new set of challenges where new services methodologies, engagement models, and approaches are needed. The old rules simply do not apply.

SaaS offerings by definition are literally a technology service. So, the need for a service to support a service becomes redundant if considered in this way. Instead companies that deliver SaaS offerings need to consider customer acquisition, retention, and strategies that protect recurring revenues and deliver consistent customer satisfaction with increased customer lifetime value.  In these cases, organizations need to solution their SaaS products by mobilizing customer success teams that deliver meaningful customer experience and engagement that are frictionless, results driven, and clearly aligned to customer business and technical objectives. Engineering customer experience and engagement in this way takes a SaaS company from being reactive to proactive by anticipating customer needs and requirements and differentiating themselves from the pack with personalized just-in-time solutions. Cultures need to be created to foster shared values and success models yet allow individual agency, creativity, and to play to formed strengths. Clearly a disruptive and game changing time for the Services space as technology continues to push the boundaries of how we structure organizations and relationships with customers to support this constantly changing world.

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Zero to 60: Building Global Services within a Product Company

images 3Going from zero to sixty is about time to market (speed) but also about critical mass (people) and building a sizable business (revenue); yes, there is a double meaning here which applies. Time to market along with quality is important but can be categorized as competing priorities when racing to drive product adoption with customers, maximize revenue potentials within a sales process, and provide best of breed knowledge to maximize ROI for customers. In other words, when PSO becomes a strategic part of your overall business you have to get it right as there is a high price to pay for people and getting it wrong. Getting it right means creating a PSO brand and product that shapes competency within an industry and creates best practices and a trusted advisor role that sits between customers and the business they serve. Bottom line, building this capability from the ground up requires a lot of careful planning, communication, and measure for success to keep an organization aligned and aware of changes taking place as they are happening. When adding PSO capabilities to a traditionally Product-focused organization there is also a cultural change that needs to be accounted for which introduces ambiguity with elements that are both intangible and at times somewhat immeasurable. To minimize risk and in further keeping with the theme of objectifying your business, both hard metrics (revenue, utilization, etc.) and soft metrics (enablement activities, practice development, etc.) with tangible KPIs need to be brought forward and used as indicators for what success looks like.

As the title suggests, this article seeks to take you through some considerations for building a successful PSO and leave readers with a model that reconciles both theory and practice and helps create a PSO brand and product that makes its way into daily life and as such becomes indispensable  Zero to sixty is about building critical mass with unblemished quality while also operating under growth pressures and profitability demands that ultimately delivers PSO as a key strategic weapon in the solution selling world we live in.

The Tipping Point – Plan the Work and Work the Plan

In a perfect world, the process of building a PSO would start on day one when a company is formed but this is not the reality of how things actually work. When an idea is born and unique intellectual property is generated there is of course the need to seek validation in the marketplace through demonstrated sales results and customer feedback. It is typically at the point where a unique idea and the organization overall have organically evolved and the equation of product actually deployed is outweighed by product sold. As this equation plays itself out organizations often hear the worst from customers as they drive deeper and deeper into capabilities and functions with no real understanding around implications and how the solution was designed to work against known use-cases and business benefits. It is at this point that PSO is typically introduced to help unlock customers and take the company to the next level of execution.

As touched on in prior, building a solid business plan is the first step towards establishing PSOs role and contribution to the organization; again, this needs to be concrete, measurable, and definitive in terms of strategy. As an example, a PSO business plan establishes a timeline which depending on assumptions and overall business drivers puts a stake in the ground which from a management perspective provides guidance around execution. As an example, a PSO business plan should address the following areas at a minimum:

Vision and Strategy

  • Mission Statement / Organizational Objectives
  • Go-to-Market Plan
  • Channel and Partner Strategy
  • Investment Plan

Organizational Structure

  • Headcount Plan and Organizational Model
  • PSO Delivery Methodology and Engagement Framework
  • PSO Organizational Alignment and Footprint
  • Sales Integration

Financial Model – Building Profitability

  • Investment / Revenue Plan
  • Services Attachment
  • P&L
  • Margin Growth

It is important to emphasize that starting off with a simple mission statement and well-formed set of organizational objectives is the most fundamental part of the planning process and provides a foundation from which everything else is built. As an example, a mission statement which dictates building PSO as a profit center as opposed to a pure enablement function changes the course of decisions and planning. This is not to say that you cannot build a mission statement which takes profit and enablement into account with a single statement but these priorities need to be articulated as such and invested accordingly. Any changes to the mission statement will have implications on the rest of the business plan and may involve months, if not years, to change the course of direction so try to get this right the first time.

Shaping Capabilities and Sales: Building a Professional Services Funnel

As discussed above, when people are your product there is a considerable amount of effort that goes into building your brand and managing to the strategy and plan outlined. Hiring to tiers (junior, senior, etc.) initially is simply impractical so it is most important to hire seasoned personnel that require focused deep technical enablement and have the rest accounted for. The fact is, teaching technology is relatively straightforward but the soft skills associated with PSO and consultative acumen take years to cultivate and in some cases simply cannot ever be established; so hire top talent and clearly profile individuals back to your mission statement and goals and objectives. Again, the business plan created is the beacon that guides all decisions and keeps the organization honest as it develops – if there is misalignment take immediate action to remedy and protect your core strategy. Along with people, a solid methodology is required to provide a framework and maturity model for your customers. Although a methodology is a methodology is a methodology, much like the mission statement a solid methodology becomes the basis of how you progress customers through a lifecycle, build portfolio services, and generally sell to customers as success. The more you build around your methodology in the way of tools and offerings, the more value your PSO generates as you can speak to customers about an end-to-end story and how you step them through a process that makes them successful.

Once you have established a core team, and outlined a solid methodology, it’s now a question of sales and building a funnel and backlog of projects. Simplicity is key and nothing beats block pricing when it comes to turning on the sales engine and mapping this scheme to all your services products. As an example, you could go to market with capabilities and bench tiers and sell those discretely but this not only represents a finance nightmare but also introduces a fair amount of complexity for your sales team to articulate to customers. Even if you can effectively enable your sales team to speak to tiers and value you will always get customers who will argue against project management, substitute a junior resource for a senior, and otherwise boil everything down to a pricing discussion that in the end requires a compromise and deviation from the engagement model that your PSO is built around. The answer to this is block pricing which at a high level blends your rate structure and bench tiers to a unit of pricing that includes everything that is needed to make a project a success in one rate. As an example, a well-formed project includes a certain percentage of project management (to manage your efforts to time and budget), senior architects (technical leads to create the solution), and implementation resources to execute. As an example, please refer to the chart below:
Dmitry Blocks Pricing

The elegance of block pricing is that it allows you to protect your engagement model, drive healthy margin, and give sales a simple way to have a services pricing discussion. In the end it is about selling success and with a unit of pricing that includes the right balance of resources, expenses, etc. you now have a rate card that becomes the basis of all your custom and packaged services. Another benefit to block pricing is the margin flexibility that affords you the flexibility to build Partners into your engagement model which will eventually provide you with scale and extended capabilities.

Conclusion – Planning the Work and Working the Plan

As PSO makes its impact across the broader organization you should start to see and capitalize on further benefits with measured KPIs in the form of lowered support calls or less time per incident, increase in sales transactions, more qualified feature requests, and stronger relationships with customers and partners gathered through satisfaction surveys. We have discussed how to build a strategy and go-to market plan but how this plan is actually operationalized takes time and success with execution – taking care of building your foundation right the first time will make all the difference as you mature. Ensuring success with a strong strategic plan, a well balanced portfolio of services, coupled with strong operations (quote-to-cash and PSA tool) to efficiently drive scale, is in the end what makes all the upfront work worth it. Developing a PSO portfolio and capabilities that seamlessly wrap themselves around your Product to drive solutions, product adoption, and value is both an art and a science as indicated at the start of this article. To tell this story is one thing but to actually deliver true consultative solutions requires focus, a culture of excellence, and an eye on innovation as a key value within the organization. Over time, as PSO offerings become more predictable, customer references take shape through documented case studies (testimonials), and key Partner and Alliance relationships begin to create market pull and drive self-sustaining revenues, you will have confirmation that your plan was worth the time and effort invested upfront to create the necessary alignment to build your PSO for long-term success.

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