We all know the facts about customer loyalty. It’s easier and less expensive to sell to an existing customer rather than acquire a new one. Loyal customers are also more likely to buy more from you and recommend you to other potential prospects. Take a moment to think about your own customer base. Would you consider most of your customers to be loyal? Or, could it be that some of those customers may actually be in an unhealthy, addictive relationship, rather than in a truly loyal relationship?
Addiction is when your customer feels that they are locked in. What we want to get to is a state of adoption, where the competition is locked out.
Delivering on the Promise of Customer Health: Watch this On-Demand Webinar to learn more about driving customer loyalty with a Customer Success practice.
Many customers feel trapped by their vendor because they have invested heavily over a long period of time and the switching costs are too disruptive to consider alternatives. This can be compounded if the customer is using proprietary features. Customers mitigate against this by choosing open source platforms, but in reality, once they have invested time and money into a platform they are reluctant to admit failure. This has prompted the market shift to subscription or cloud models which have protected the customer from investing fully upfront. Customers like the option of making an annual decision whether to renew or not based on the value being delivered.
Some gaming products have created an addiction amongst their users by asking them to pay for regular game updates to unlock the next level or a new feature. Unfortunately some enterprise software buyers may experience the same symptoms of an unhealthy addiction. Compulsive software use occurs when the customer feels that they have no other choice but to buy support and further licenses or subscriptions, regardless of the business outcome. This is an addiction that is bad for your customer’s health. Unless the software is enabling growth or reducing risk or costs, they may feel enslaved to the software platform and unclear of the value it’s adding.
So how do you know if your customer is feeling addicted to your software? What symptoms do you look out for? If your customer has a low Net Promoter score (I.e. they would not recommend your software to another customer) it may be a strong indicator that the customer feels an unhealthy addiction, particularly in customers who are otherwise showing strong sales growth figures and consumption rates.
Detoxing with Adoption
Treatment for addicted customers may be best compared to a new health regime. We do this in our personal lives with wearable fitness devices that come with apps to change behavior, so why not apply this to our customer success methodologies? Many customers may have been using your software platform for years without effective adoption. Initially the software platform may have met the business needs but changing business requirements may mean that it no longer does. Many organizations rely too heavily on one-directional telemetry data on product usage, consumption and deployment rates as an indicator of customer success. It’s the combination of bi-directional telemetry where we proactively help the customer with digital, customized support and content that can drive adoption in real time based on actual usage.
In addition we have created a Value Index to capture subjective measures that consider whether we have really driven successful adoption. Here we are looking for strong signals attributable to the solution that we are delivering tangible bottom or top line results or other business benefits that can help show the customer we are moving from the path of addiction to adoption.
Part of the challenge we face as Customer Success organizations is that software adoption is linked to process redesign, new working practices, new procedures, change in job roles and responsibilities within the business. Business benefits and value are not automatic outcomes of IT projects and must be actively managed throughout the lifecycle of the solution. By always referencing the business objectives, the new capabilities of the software can enable business changes, which will in turn drive further adoption.
Beyond Adoption: Institutionalization & Internalization
There are signals that can show how your products are being embraced within a customer organization. When they substitute your brand name and start using it as the generic term for a product or event then it shows high levels of commitment and acceptance. For example in Cisco we might say let’s have a “Webex” rather than say let’s have a “teleconference”. Or let’s “Jabber” rather than “IM” – just like how Hoover is synonymous with the vacuum cleaner. When users refer to products or services in this way they inadvertently promote further use and show that they have internalized the solution.
Another sign that adoption has gone well is when the customer adds your product to an internal software catalogue as the standard choice to solve certain business problems. Selecting other products requires additional approvals and justification. In short the competition is now locked out. It can also be evidenced by new RFI/RFP’s being issued which specify that any solutions included in a bid must be compatible with your software platform to even be considered.
Another noteworthy barometer of internalization is when customers agree to take part in user groups and communities. The members of these groups tend to be the early adopters of the products and can be instrumental in identifying adoption barriers through their own user experience. Often they are willing to test beta versions of new features and provide valuable feedback.
Good customer health can also be seen when the customer starts to sell the product for you. In my experience of selling software, many prospective customers ask for references before they sign on the dotted line. Champions of your software can articulate better than the vendor the business benefits of the software platform. That’s why achieving customer references are one of the measures I use to determine how my Customer Success Managers are rewarded. If senior executives within the customer organization become advocates of your solution, they are putting their reputation on the line and shows that they value your software platform. Seeing references and positive endorsements sometimes scare off the competition because salespeople will tend to spend their time with dissatisfied customers first.
Bringing it all Together
Customer Success teams and vendors need to act fast to identify customers who are suffering from unhealthy addiction to your software. Action can be taken to nurture addicted customers and help them back to full health via positive adoption. Healthy customers are a vendor’s most valuable assets as they are loyal, successful and happy to reference your part in that success. Never mistake addiction for loyalty.
On-Demand Webinar: Delivering on the Promise of Customer Health
Cisco is committed to helping you deliver consistent customer engagement and the experiences customers want. The goal is simple: drive value realization and grow the relationship over time. Watch this on-demand Customer Success Talk webinar to learn more about how to digitize, automate and scale your own customer engagement practice with a focus on improving customer health.