Generating Customer Success Metrics: Harvesting vs Mining

KEY TAKEAWAYS:

• Customer success metrics are essential for demonstrating the impact of a solution, boosting credibility, and supporting future sales.

• Generating metrics can be proactive (harvesting, with planned metrics from the start) or reactive (mining, piecing together data later when continuity is lost).

• Effective metrics require seamless handoffs and documentation from sales to delivery; without these, the solution’s impact can be hard to track.

• When customer relationships drift, resetting by revisiting goals and reestablishing alignment helps recover the partnership and identify new metrics.

There is perhaps no more valuable content that an organization can provide to its sellers than the quantifiable impact that their solution has delivered to their customers. Metrics that clearly convey the value that has been delivered to a real customer raises the credibility of the solution, and can provide the basis for value stories that can help to generate and expand new opportunities. 

Let’s look at 2 examples.  

Here’s a simple example. We implemented a solution that cleaned up our customer’s CRM master data, which resulted in a 10% media cost savings. The $10,000 investment saved $30,000 in the first year.

Here’s a more complex example. We implemented a solution that helps our customer better track their inventory, and then align their inventory with delivery schedules. The new solution helps them to more quickly identify inventory shortages, allowing them to prioritize and optimize delivery schedules. In the first year they saw a 20% improvement in OTIF, on time and in full deliveries, and a 10% improvement in customer delivery satisfaction.

In the first example, the connection between the functional and business benefits is obvious.  The second example is not so obvious.  While the new solution can certainly claim to have contributed to these improvements, it may not be the only factor. Perhaps some of the underlying supply chain issues had been mitigated. Perhaps there were other changes involved in optimizing delivery schedules.

Capturing metrics is always a process that connects the capabilities of the solution to the functional benefits and ultimately to a business benefit.  Sometimes the connections are clear and straightforward but for most, it requires a focused effort to assemble the value story.  

“But don’t customers just know the benefits?  After all, they’re the ones that bought it.” 

Unfortunately, it is rare for a customer to self-generate metrics directly tied to your product or solution on their own, without help from the vendor.  Why is that?

There are a few reasons.  

First customers have short memories. Once a problem is addressed and a solution is in place, they’re moving on to the next challenge and they quickly forget what things were like prior to your pain solving solution being successfully implemented. 

Next is the challenge of attribution. It’s rare that a positive outcome is the result of one single factor as in the first example above. There are, of course other dynamics related to the economy, to supply chain challenges, to personnel or seasonality. The goal is to try to cut through these factors and gain agreement on the impact that your solution has delivered.

I think the biggest reason why customers failed to generate metrics is just a lack of focus. Metrics do not fall from the tree into our lap. They have to be nurtured, and harvested with intent.

When it comes to generating customer success metrics, there are basically two modes to achieving this and the difference between these two modes is largely attributable to sales execution. 

Harvesting - In the first mode, I’ll call “harvesting” the sales process is executed with rigor.  The customer is presented with metrics from existing customers that lend credibility to the vendor and show what’s possible.  We call these metrics M1s.  In the sales cycle, the customer identifies the metrics that they’ll use to define their success criteria.  We call these M2s.  Next there is a thorough transition to delivery, which provides a clear understanding of the targeted metrics to be harvested. We call these M3s.  The metrics are ultimately generated through a coordinated effort that was planned from the start. These new realized customer success metrics are then added to the M1 repository for marketing and fellow sellers to use in their prospecting and sales campaigns.   

Mining - The second mode I’ll call “mining.” Mining is harder work and can be the result of a lack of continuity from sales to delivery and requires the customer facing team to “mine” for the historical and present day information that will allow them to generate a metric story.  The challenge is to “create” the M3 without having already documented the previous state metrics. 

Harvesting Metrics- The best way to generate actual, realized customer success metrics starts with thorough execution during the sales cycle. This means not cutting corners and gaining agreement with your potential customer on their goals and potential impact of your solution (M2s). This requires a detailed understanding of the customer’s current state.

When we say “not cutting corners,” what we mean is thorough execution across every element of MEDDPICC.

I E M D D C C - In a nutshell, we’ve identified a meaningful problem that is aligned with the strategic priorities of the sponsoring executives and we have quantified the problem and potential solution and translated that solution into specific requirements which we have demonstrated our ability to fulfill in a manner that is differentiated and superior to the competition. The person responsible for the success of the project is fully supported and committed, as are all of the supporting stakeholders.

In the second metric example shared above, the seller would need to understand the pains and inefficiencies related to the customer’s inventory management and order fulfillment and delivery processes. They would need to understand the current state metrics related to on-time and in-full deliveries and the relationship between on-time delivery and customer satisfaction. There would be a business case justification presented as part of the final proposal (with M2s supported by the Champion), and a value pyramid that aligned the business process pains to the goals of the business.

As the deal moved into the closing stage, detailed implementation plans would be developed and stakeholders would be prepared. Those preparations would include baseline measurements of key processes and then tracking the implementation, adoption, and ultimately the impact of the new solution, M3s! Measurements could include:

• Accuracy of inventory master data

• Error free delivery orders generated

• Orders requiring changes to materials

• Orders requiring changes to delivery date

• Delivery rejection rate

• Delivery satisfaction rate

Imagine being the person responsible for delivering on this customer project and having your sales team provide you with these baseline metrics and a customer team of stakeholders aligned with these metrics, and the goals that have been set for each. Having technically validated the key capabilities of the solution during the sales cycle, this is an exciting opportunity for both the delivery team and the customer.

This should all sound very logical. So you might be asking yourself, “isn’t this how it’s always done?”

Harvesting metrics is the result of a very well coordinated sequence of events and processes. Unfortunately, these events and processes can be disrupted, resulting in a lack of continuity, making the process of generating metrics more difficult.

Here are few of the most common disruptions to the value delivery chain and the generation of metrics: 

• Baseline metrics are not properly documented or are not validated and accepted by the customer’s key stakeholders.

• Goals are not properly documented or aligned with executive sponsors.

• The handover process from sales to delivery lacks rigor. As a result, the delivery team is not prepared to configure the solution and measurement plan, resulting in a lack of clarity as to the impact of the deployed solution.

• Lack of clarity of purpose and lack of executive oversight can cause a project to be disrupted based on the wants and desires of the users.

• Poor communication and the ability to detect, escalate and resolve issues interfering with the project.

These are the “gremlins” that are lurking and waiting to sabotage the successful deployment and measurement of your success. Having the knowledge and experience that these gremlins exist, will provide you with the conviction and know-how to mitigate these risks and help all parties remain focused on the prize.

While some of the disruptions described above can be avoided, the reality is that we often find ourselves in a situation where our starting point was not well documented, customers goals may have changed, personnel changes, leadership changes, organizational changes, or other changes impacting the delivery of the solution and its measurement.

Hitting the Reset Button

Beware of customer teams that say: “We haven’t heard from the customer so everything must be fine.”

The reality is that things are either moving up or moving down and if you’re not in regular communication with your customer, then there’s a 99% chance that things are moving down.

So what do you do when you have an important customer and there seems to be a basic lack of alignment? You’re going through the motions, and perhaps the customer has even renewed, but there’s not a clearly stated purpose, or intention to measure the impact and value of the solution. Quarterly business reviews review issues and trouble tickets but lack executive involvement or plans for the future.

This describes a significant percentage of the customer engagements that I’ve seen in my career. So what shall we do? Continue to bump along until inevitably the customer terminates?

In reality, it’s almost always easier to repair a broken customer relationship than it is to land new business. It’s also interesting to note that customer satisfaction is actually higher when a problem has been identified and overcome as compared to a situation where there never was a problem. All the more reason why we should view problems as opportunities.

When we find ourselves in situations where we’re just treading water or we feel like there’s a gradual deterioration to a customer relationship, it’s time to hit the reset button. We need to escalate (ask for help) and we need to ask some uncomfortable questions.

• Why did the customer originally decide to do business?

• What were the original goals and what’s changed?

• What are the perceived benefits of the solution to date and who is aware? 

• What are the value opportunities that have been delivered upon?

• What are the value opportunities that have been missed?

• What is our current standing as a vendor and could there be an opportunity to improve that standing?

Hitting the reset button means that we are reestablishing strategic alignment, and that there is a mutual commitment to strengthen the working relationship and document and validate the value of the solution we’re delivering.

This can feel like we are literally reselling the account. One of the most common mistakes that’s made in these situations is the assumption that you have a champion. The harsh reality is that you probably don’t have a true Champion.  If you did, you wouldn’t be in this predicament.

The good news is that you are already in the account, so you have a serious advantage to identifying pain, gaining access to key stakeholders, Identifying and developing a champion, and ultimately gaining access to an executive with whom you could strategically align.

Let’s assume, now that you have recognized the need to hit the reset button, and you have successfully reset the relationship. You’re like the married couple that hit a rough patch, survived counseling, and is now re-committed to the shared future. Hitting the reset button has now progressed to reestablishing baseline measurements, and making the necessary adjustments to the engagement to maximize the value being delivered. This can begin to feel like the harvesting scenario as described above. Maintaining a focus on goals, good communication and the collaboration necessary to identify and resolve issues, will put you on a path to shared success.

Let’s now look at another common scenario where the relationship is functioning and cooperative, but for whatever reason the baseline measurements do not exist.

Perhaps there were things missed during the sales cycle or perhaps the customer’s goals have changed and new baseline measurements are needed. Whatever the case may be, we have an existing customer, but we are missing the essential information needed to build our success story.

Before we address the information, let’s address the essential building blocks to getting the information. In many respects, this will sound similar to the building blocks needed to run a successful sales campaign.

• Relationship- there’s a functioning working relationship built on mutual respect and trust.

• Communication and engagement- we work cooperatively to develop and execute plans of action to achieve our shared goals.

• Potential Value- we have a solution or service that has the potential to unlock value for our customer.

• Executive sponsorship- we maintain executive relationships to provide oversight and strategic alignment.

• Champions- we identify, develop and leverage respected leaders in the business, who have a vested interest in the success of our project.

Having these building blocks in place, or at least in development, will contribute significantly to mining for metrics.

Let’s turn our focus now to the information that needs to be mined to generate metrics and create our value story.

Compelling event - just as a compelling event can create a sense of urgency to drive a sales cycle, a compelling event can also create a sense of urgency for the creation of metrics. Compelling events might include an executive business review, a renewal or expansion opportunity, or even an employee review. It’s incredibly rewarding to know that you’ve armed your Champion with success metrics that they (and you) can take credit for.  

Value Pyramid - leveraging the building blocks above, we need to understand the customers goals as they relate to our solution. In all likelihood executives originally approved the decision to do business with you, because there were pains that needed to be addressed for the business to achieve its goals.

The value pyramid needs to include the specific gaps and challenges that need to be addressed by your solution.

• What were the customer’s functional requirements when they made the decision to purchase your solution?

• Are those requirements still valid?

• Has the solution been properly implemented and adopted and is it performing as expected?

• What has been the impact of the deployed solution?

Let’s consider the original business objectives.

• If we were to go back to the second example shared earlier the question we would ask is: has there been a measurable improvement to OTIF (on time and in full) delivery?

• If yes, then, how much of an improvement? And what are the contributing factors to the improvement? And how much credit does the solution deserve?

• If we would ask the people in inventory management, what would they say?

Putting the pieces together.  

From many solutions, the process of developing a compelling metrics story can feel like putting together a puzzle. If the solution in the example shared above, was to provide significant measurable benefits for inventory management then our investigation would need to progress through the remaining steps in the process.

• How have the improvements delivered to inventory management impacted order management?

• And how are the improvements in order management impacting logistics?

• And how have those improvements ultimately impacted OTIF?

In summary: 

• There’s no more valuable content to help customer facing teams, than metrics. Delivering with clear purpose and goals (M3s), leads to success story metrics that can be leveraged by the organization (M1s).  

• Unfortunately metrics do not grow in trees, and so customer facing teams must collaborate with their customers to generate metrics. 

• Having a proactive plan that provides continuity from sales to delivery to success allows these teams to work together to harvest success metrics (M3s). 

• When misalignment occurs and there’s not a mutual effort to document success it’s time to hit the “reset button.” 

• And finally the process of mining for metrics requires an investigation into the impact of the solution that connects the functional benefits to the business outcomes.