It goes without saying that the overall experience customers have with a technology vendor can have a significant impact on the decision to renew when the contract expires. Integration, training, upgrades, user/community support, and delivery of service-level agreements are all crucial to the ROI ultimately realized by the customer.
No surprise then that eConsultancy recently reported that even for top performing companies, optimizing customer experience remains a key priority. Unfortunately, according to McKinsey & Co., many customer-experience transformations stall because leaders can't show how these efforts create value. Patiently building a business case can fund them, secure buy-in, and build momentum.
My company, Cherwell Software, a provider of SaaS and on-premises software that helps companies manage IT services/digital assets across the enterprise, recently achieved a 96 percent renewal rate. To do this, buy-in from internal teams wass critical. We also revamped our customer service approach. We did this by implementing a slew of new processes engineered to create more accountability, alignment, and responsiveness across all key stakeholders tasked with improving the customer experience.
If tasked with improving the customer experience and boosting customer retention rates at your organization, here are seven keys for success:
- Create a chief customer officer position, reporting directly to the CEO and responsible for all customer-facing functions, customer satisfaction and retention. Pro tip: Make sure that this position has the influence and authority to align and provide oversight across key stakeholders. Again, this takes full buy-in, as an approach like this represents a pivot for companies focused solely on cost/PL.
- Revamp resources as customer-facing. Cloud and SaaS vendors typically have most of their resources tied up in product development and sales. As a rule of thumb, realign resources so at least a third are pointed at customer-facing activities. This realignment should also include implementing aggressive standards for measurement and accountability. If the professional services team is disconnected from the customer care team, that's going to cause issues. Pro tip: If possible mesh professional services teams with customer care teams so they are in lockstep. When issues do arise they can be more readily identified at the root cause, and resolution is much faster. Additionally, require that all employees create customer experience (CX) goals that are reviewed regularly.
- Enterprise software users like to interact with other users. Take advantage! Create customer user groups that are easy to join and create a forum for sharing best practices, tips and tricks, product improvements, new feature wish lists, general daily issues, and so on. Pro tip: Customers want to talk with other customers in an independent forum. To ensure organic growth, make sure that customers define the topics. User groups best serve the community when they are customer- not company-driven.
- Build a knowledge-driven customer approach, not a sales-based customer approach. Knowledge based on a comprehensive, actionable view of customer needs and preferences always trumps a hard-sell approach. Discover what metrics are important to your customers by adhering to a customer lifecycle map. >Knowledge-gathering begins at first sales call. How many commitments did the sales team make? How were those commitments solved? How long does it take issues to be resolved in the dev Q? Can metrics be applied to implementation? To a particular function of the software? Pro tip: By understanding the good and the bad around those metrics, it becomes much easier to fill in issues/gaps at the root versus at the call center. The larger the number of listening posts, the more accurate an organization can be in changing the experience for its customers.
- Develop a mechanism for FAST resolution of customer service issues and elimination of the root cause. A good customer-facing organization not only solves problems quickly and efficiently, but also looks to understand the root cause of the issue. Pro tip: By the time an issue gets to the call center, it is probably systemic for the customer. For example, if there is an issue with the interface, a technician can provide a quick fix. But if the interface is not configured correctly, the issue will continue to plague customers.
- Constantly audit how things can be done better. Ultimately, retention is based on how well you can mitigate risk across your customer lifecycle. For starters, review metrics bi-weekly, and do it with the stakeholders who together are ultimately responsible for retention rates. Pro tip: Cherwell established a set of 30 key metrics that are reviewed by an executive customer leadership committee that includes people from implementation, training, professional services, customer services, call center, etc.
- Leave time for innovation and ideation. Sometimes it's just the case where a little tweaking not only solves the issue, but makes the whole experience for the customer a good one. To further ensure success, make it easy to bring problems up and position problem-solving as a way moving forward to make the organization better. Pro tip: Everyone is running at a fast pace. Set aside 20 percent of the new customer success organization to focus on innovation that mitigates customer risk.
Following the steps above creates a unified customer-first organization that aligns stakeholders toward the holy grail of customer retention. Listen to the customer and encourage direct feedback to better understand issues that go beyond P&L. Then correlate what you've learned and take the metrics to see around the corners to reduce risk. Combined, that's the smart pathway to excellent recurring revenue and renewals.
Ryan Pellet is chief customer officer at Cherwell.