User Adoption Insights From Tri Tuns

Customer Success Management (CSM): Your Critical Path to Customer Renewals

SaaS vendors – or any vendor that sells on a subscription basis – know that retaining customers is critical for growing revenues and ensuring the overall prosperity of their organization. The challenge is that historically companies have focused on the initial sale and building new relationships. Renewals werenice, but not the top focus area.

Most companies have a process for closing the initial sales

Over the years, I have worked with lots of great sales and service organizations when they were implementing CRM systems. We spent a lot of time mapping out sales stages, defining sales activities, and building sales tools. 

What was clear is that they have invested lots of time and money in creating a sales organization that knows what it is doing and can close deals. That is, they could close new deals. 
But what about retaining customers?

But they don't have a plan for what happens next

The rise of SaaS and subscription pricing means that customer renewal processes need to evolve too. SaaS vendors need to identify what needs to happen to make the customer choose to renew year after year. And they need to look at this from both their perspective and the perspective of the customer. 
The image below shows the typical approach many SaaS companies take with renewals. Vendors tend to focus solely on the initial sale and then waits for the renewal period to come around. Sure, they will provide some customer support and will focus on maintaining the relationship with the buyer, but they do little to ensure the customer is getting value from the system….which is the main criterion on which customers base their renewal decisions.
To be profitable, SaaS vendors need to focus on Customer Success Management (CSM) to promote IT user adoption and measurable ROI.










Typical SaaS Renewal Process

And they lose a lot of customers at renewals

The problem is this: the customer has a different renewal process. 
That is, driving effective and sustainable user adoption and (therefore) getting measurable value/ROI are on the customers’ critical path for renewals. 
If they don’t achieve these two things, they don’t renew. Period.
To be profitable, SaaS vendors need to focus on Customer Success Management (CSM) to promote IT user adoption and measurable ROI.









IT User Adoption & ROI are critical path for customer renewals

Including Customer Success Management activities after go-live is critical to renewals

Sustaining user adoption and achieving measurable ROI has always been the Achilles’ heel for IT projects. Prior to SaaS software, these problems fell 100% to the customer. Now, for the first time, the SaaS model means the vendor has a vested interest in helping customers solve these problems.
So, what is a SaaS vendor to do to help customers? Establish Customer Success Management (CSM) teams to help ensure customers achieve their goals and renew they software. 
Quite simply, profitable SaaS vendors recognize CSM is on the critical path to customer renewals. And they must continue to provide CSM services over the life of the customer relationship, for once, a customer stops getting value from the system, and they stop renewing.
To be profitable, SaaS vendors need to focus on Customer Success Management (CSM) to promote IT user adoption and measurable ROI.














  

8 Factors to Review BEFORE Investing in CRM

The Consumer Financial Protection Bureau (CFPB) announced new rules for mortgages that will take affect in 2014. An article on CNBC.com reported eight factors the CFPB requires lenders to examine before making a loan. We have previously identified that lenders (and others) should treat their CRM investments with the same care and scrutiny that they do when making loans to others. So, here are 8 factors that you need to consider before investing in CRM systems.

1. Expected ROI over the life of the CRM investment

Don’t just look at implementation costs or total cost of ownership (TCO). Make sure the expected return and lifetime value is both positive and significant enough to warrant the time and effort required to implement and maintain the system. Perform a scenario analysis to weight the expected ROI to adjust for different levels of user adoption. Will this still seem like a good investment if you don’t get effective adoption?

2. Current level of user adoption of existing systems

A good guideline to follow is that just switching to a new system without any focused plan to drive and sustain user adoption of the new technology will result in the same or lower levels of user adoption of the new system. Quite simply, if you have low user adoption today, chances are good that you will have lower user adoption tomorrow, regardless of the IT. (User adoption is a people-based issue.) That is, unless you do something to address this problem.

3. Impact of future changes to users’ jobs and performance requirements

Implementing a CRM system doesn’t make users' jobs easier – it fundamentally changes the jobs. A new CRM can alter job responsibilities and how people spend their time. It changes the skills and competencies they need. In short, it changes performance expectations. Understand the extent of the changes to users jobs and then determine what you need to do to address these changes.

4. Identification of all drivers and barriers to IT user adoption

All too often we see that there are barriers to adoption that prevent people from using the system – even when they want to use it! These organizational barriers take many forms and they lie outside the users ability to control them. Executive action is required to address these items, yet often executives are not even aware that they exist, let alone know that they need to take action.

When starting a CRM implementation, ensure someone is assigned responsibility -- and accountability -- for CRM success.5. Formal assignment of responsibility, authority and accountability for ROI

A senior executive needs to be formally charged with ensuring the CRM investment is a success. This needs to include some very real reward or consequence (such as a major impact to their compensation) for hitting or missing ROI goals for the CRM investment. If you don’t have this, you are sunk.

6. Identification of resources & budget required to drive initial user adoption

Stop thinking that you only need training! Training is necessary, but insufficient, for ensuring CRM success. You need a plan for how you will quickly align users behavior and job performance (using the CRM tool) with organizational goals. If you are only focused on training or go-live focused change management, you are in for trouble.

7. Plan and budget resources for sustaining user adoption over the life of the system

The ROI on a CRM investment is just like the ROI on any 401-K or other financial investment: returns can be up one year and then down the next. So, put a plan in place for how you’ll monitor your CRM ROI and then make adjustments as necessary to get the returns you need.

8. Defined approach for ensuring the CRM system stays relevant

Change doesn't just happen at go-live. Your business will change. Your customers will change. Your workforce will change. The economy, regulatory environment, and competitive landscape will all change. Make sure that your CRM system continues to evolve as your needs change. 

More on CRM Success



Sub-Prime CRM? What IT Needs to Learn From the New Mortgage Rules

A recent article on CNBC.com reports that lenders will face new rules for extending credit in January 2014. The rules are an attempt to prevent breakdowns in the financial industry and help ensure that organizations be repaid when they lend money.

There are many lessons here for IT departments (and, arguably, the organization as a whole) before it invests in a CRM System.

New 2014 mortgage rules require lenders consider customers’ ability to repay a loan before extending credit

Yup, at the crux of the regulations, is the idea that lenders need to make sure they will be paid back for any money they lend – before they lend it. Hmmm, that's a bold concept. 
You would think that organizations would not need to be told that before they give away a pile of money they need to be sure they will get it (and more) back. Yet, this happens every day when it comes to organizations deciding how they will invest in CRM systems.

Lenders (and others) need to consider their ability to achieve ROI before investing in CRM systems

Organizations need to treat their CRM investments just like a lender approaches (or will, come January 2014) making a loan. They should:

1. Look at how much money you send out now (license and implementation costs) and how much value demand to get back (increase in sales, decrease in costs, or other measures of ROI on your CRM investment).

2. Critically examine and rate your ability to actually achieve the returns you require (ability to drive and sustain user adoption and benefits realization). 

3. Oh, and depending on the size of the investment, you may require some sort of collateral to help incentivize successful payback of your investment (for CRM investments, this may be tying executive compensation to CRM success).

Many organizations don’t do this – or at least, not really. They may say that they have defined a “business case”, but typically this is a largely fictional piece of work that is not based on a thorough understanding or assessment of the likelihood that the system will actually get adopted and used effectively by end-users. And as we all know, if a system isn’t used, it isn’t delivering any value.

Don’t invest in Sub-Prime CRM.
Require a User Adoption & ROI Plan before you spend a dime on CRM!

Before you write a check for any CRM system, make sure it is worth it. It is better to not make any investment than to throw away a pile of money and waste tons of time on a system that is doomed to failure before it even begins. 
Ask yourself these questions:
1. Is there a written plan for how we will ensure a positive ROI on our CRM investment? 
2. Have we done a thorough analysis to identify all the drivers and barriers that will affect user adoption (and ROI)? 
3. Have we defined exactly what ROI goals must be achieved in what amount of time before we proceed?
4. Is there a single, senior executive who will be held accountable (including having a personal financial stake) for meeting ROI goals on the CRM investment?

Are we changing yet?

I recently had coffee with a very gifted organizational change consultant and we got talking about different change challenges organizations face. She was telling me about one of her clients, a CIO for a large, global organization that is struggling to improve internal operations and performance.

After a few months of work, her client asked, “So, are we changing yet?"For business success, develop benchmarks of the change you're implementing so you can recognize change as it's happening.

The answer was no.

How will you recognize when change is happening?

How will you know if things are changing or if you are just spinning your wheels? 

Will you know where you are in the change process? 

How will you know when the change is complete?

While every organization has unique needs and challenges, it is important that you think about these questions. And write down your answers. The more you can do to recognize where you are in the change processes, the better equipped you are to make change happen.

Set specific change goals. And deadlines.

While some changes are harder to map out and recognize (e.g., organizational culture change) other changes (e.g., adopting a new system or adhering to new policies) can be mapped out with clarity. Whenever possible, setting SMART (specific, measurable, achievable, realistic, time-bound) change goals can help align efforts and drive action. Of course, these can then become the metrics against which both change and users are measured.

Managing your managers with specific change goals, deadlines and metrics will ensure your change will happen AND succeed.For example, many organizations do not even set specific user adoption targets when rolling out a new system. When I have helped organizations set targeted weekly CRM system use goals (like create 4 accounts week 1, create 3 opportunities in week 2, etc.) we have consistently seen rapid increase in effective system use.

Assign ownership and accountability

Making sure that everyone is clear on who is responsible for making the change happen, and how and when you will hold them accountable, is critical to your success. Many change efforts are focused on completing change activities, but they are not focused on achieving change outcomes. 

If you want a specific change outcome, make sure your change leaders understand the outcome they must deliver and what happens if they hit/miss/exceed those goals.

Pivot when necessary

Change doesn’t happen in a vacuum and when you make one change, it kicks off a domino process. Other changes – some planned, many not – will happen. You need to make sure you are constantly monitoring your organizational landscape to address any emerging issues and opportunities.

But be careful. Pivoting to respond to emerging issues is important, and do it in a way that does not remove accountability for achieving stated goals. When you shift your goals (short- or long-term) make sure everyone is still clear on ownership, expectations, incentives, and accountability. 

How a Fortune 100 company did It - and you can too

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