Is it in the system? Require IT use at each project approval stage
The other day I was talking with a woman at a large non-profit that is trying to improve their enterprise knowledge management efforts. She said that they are using a CRM system and SharePoint to manage information related to all of their internal projects. The CRM is used to track all of the people involved and track key activities and SharePoint is used for sharing and storing all project specific knowledge content.
The problem, as you would expect, is that very few people were using either tool. Sure, there were some pockets of success, but for the most part each individual or team would just do their own thing. Obviously, this did little to preserve knowledge and make it accessible for future use.
She needed help and asked me what she could do to increase effective use of the systems.
Do you have different approval stages for your business projects?
When we were talking about how they manage their internal projects, she indicated they have various formal project reviews and approvals required for a project to proceed to the next stage. The reviews are primarily to manage quality and were required in order for the project to get funding. But they didn’t actually check to see if internal processes were followed or if people were growing the institutional knowledge of the organization.
Make complete & accurate IT use a condition for project advancement
One of the easiest things you can do to help increase effective IT user adoption is to integrate it into the workflow and approval process of your normal work activities. This can apply to internal projects as well as sales reviews.
To be effective, define very specific, measurable system use requirements that must be met in order to gain approval.
This could be things like requiring all related contacts and accounts (specify required fields) are entered, that all major pre-requisite activities are entered (specify required vs. optional activities), and that any required documents are entered.
Also, make sure that all naming conventions and status fields are correct. This is not just an opportunity to make sure information is entered, it is also an opportunity to maintain the quality of the data.
Include timely system use in individual performance reviews
If you want to encourage regular, timely use of your systems (instead of just ensuring data is entered immediately prior to an internal project review), think about including a quick audit of created dates as part of your project approval process. If an individual did not enter the data within required timeframes -- and thus deprived other people the ability to make use of the data in a timely way -- you can identify them and then take appropriate action.
For example, I know of a sales professional at one organization who made his numbers, but didn’t enter the information in the required timeframes. As a result, he was ineligible for a major sought-after reward, namely attending the President’s Club celebration.There are lots of ways you can encourage (or discourage) effective system use as part of your regular business processes. How can you do it in your organization?
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Customer Success Management (CSM): Your Critical Path to Customer Renewals
Most companies have a process for closing the initial sales
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 they don't have a plan for what happens next
And they lose a lot of customers at renewals
The problem is this: the customer has a different renewal process.
Including Customer Success Management activities after go-live is critical to renewals
Do You Have a Customer Success Management (CSM) Program? You should.
If you are like most SaaS vendors, you have a great product that is developed, implemented and supported by a team of gifted professionals. You can win new sales. Everything looks rosy.
But you have a problem. You keep losing customers at renewal time. And this is costing you big-time!
Customer Retention is Key to SaaS Vendor Success
The SaaS business model, with its low upfront costs and low, regularly scheduled payments means that SaaS companies need to keep customers longer in order to profit. Every customer that cancels their subscription – or even reduces the number of licenses under contract – has a dramatic impact on your bottom line.
The simple truth is you cannot have a successful SaaS business if you have high churn.
The impact of customer churn is cumulative and drastically underestimated
According to the resources developed by SaaS Capital, customer churn has a cumulative impact on the vendor. Not only does it decrease revenues in the period during which the customer cancels their subscription, it also reduces all future revenues.
For example, in their webinar, “No Churn: Keep Customers & Improve Your SaaS Company Valuation”, showed a comparison of two companies, one with a 95% customer retention rate and the other with an 80% retention rate. After 5 years, the company with a 95% retention rate had revenue that is 40% greater and a growth that is 50% higher. By year 10, revenue is 80% higher and growth rate is 2.5 times faster.
Recurring revenue is critical component of SaaS company valuation
With customer churn having such an impact on revenues and growth, investors are now looking very closely at customer retention when calculating SaaS company valuations. According to SaaS Capital, business are traded on a multiple of revenue (not EBITDA) and, “recurring revenue is a better proxy for future cash-flows than current income.”
Customer Success Management programs reduce churn, increase revenues
Given the importance of reducing customer churn, it is not surprising that you’re focusing efforts in this area. Effective CSM programs can help you reduce churn. And if your customers are getting more value from your systems, they are more likely to increase the number of licenses they purchase. All of this adds up to increased revenue for you.
Now the problem… how do SaaS vendors deliver the elusive customer success?
Sounds great, right? There is just one hitch. How do you create and deliver effective Customer Success Management programs?
This opens up a lot of questions.
- What tools, methods, skills, and resources do you need to facilitate customer success across your entire customer base?
- How will you build this new capability?
- How will you integrate this new service into your existing business model?
Resources to help with your Customer Success Management efforts
Once you realize that you need a Customer Success Management program, you then need to figure out what this looks like and how to build this capability in a quick affordable manner. If you are not sure where to get started, check out these resources:
- Tri Tuns Customer Success Management service can help you quickly assess your CSM needs and develop a strategy for moving forward. We can also partner with you to execute your strategy.
- Sign-up for our Customer Success Management email tips and insights.
- Check out The Hotline Magazine by Mikael Blaisdell. Mikael is a widely recognized thought leader in the Customer Success Management space and his events and writings reach a large global audience.
8 Factors to Review BEFORE Investing in CRM
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
3. Impact of future changes to users’ jobs and performance requirements
4. Identification of all drivers and barriers to IT user adoption
5. Formal assignment of responsibility, authority and accountability for ROI
6. Identification of resources & budget required to drive initial user adoption
7. Plan and budget resources for sustaining user adoption over the life of the system
8. Defined approach for ensuring the CRM system stays relevant
