“People don’t want to buy a quarter-inch drill, they want a quarter-inch hole.” So pronounced Harvard Business School Professor Theodore Levitt in his 1974 book Marketing for Business Growth.
This quote is so well-known, Innovator’s Dilemma author Clayton Christensen quoted Levitt in his 2016 book The Clayton M. Christensen Reader.
Just one problem: it’s wrong.
Let’s say Mary wants to hang a photo of her parents. She doesn’t want a drill to be sure, but she also doesn’t want a hole. She doesn’t even really want to hang the photo. What does she want? The emotional experience she gets when she looks at the photo.
Such is the challenge of customer delight. It’s not sufficient to deliver products customers are willing to buy. Even meeting the expressed goals of customers isn’t good enough. We can’t stop until our customers are delighted.
So, have we finally cracked open the mystery of sales and marketing? Have we put our finger on the essence of a successful business?
Not so fast. “What is customer delight? It’s bullshit, that’s what it is,” espouses Michael Redbord, Vice President and General Manager, Customer Hub at HubSpot.
Customer Delight vs. Customer Success
Redbord is speaking somewhat tongue in cheek, differentiating between true customer delight and what he calls ‘manufactured delight.’ “While manufactured delight can lead to great press, it’s not much of a customer generation or retention strategy in practice,” he continues.
Case in point: online shoe retailer Zappos, whose CEO, Tony Hsieh, wrote the book Delivering Happiness. “If you’ve ever ordered or called Zappos, you know that the foundation of their customer team isn’t the one-off manufactured happiness,” Redbord adds. “It’s the consistent delivery of quick, accurate, and on-brand product and service day-in and day-out.”
Such consistency of service may very well be delightful to be sure – but the shoes must be delightful as well, and furthermore, must enable customers to achieve their goals. After all, a pair of shoes may tick all the emotional boxes, but if they don’t fit, the customer is still returning them.
In the B2C space in particular, marketers must carefully balance customer outcomes and the emotional context of customer delight – a delicate equation that factors in product functionality, brand value, and other elusive elements.
In the B2B context, in contrast, emotional considerations, while still important, play a backseat to customer outcomes. Even in today’s technology-driven world, human relationships are still essential for doing business – but if a product or service doesn’t solve the customers’ problem, the emotional component of the sale will inevitably fall short.
You might think, therefore, that for B2B companies, customer success centers on customer outcomes. Sometimes it does – but in a surprising number of companies, purported ‘customer success’ misses the mark.
How Customer Success Went off the Rails
Focusing on customer outcomes may seem obvious to sales and marketing people in many industries, but the enterprise software market traditionally focused on enterprise license deals.
Once a vendor closed such a deal, the customer had little choice but to pay for years of service and support. Inevitable customer problems were simply more ways to extract funds from hapless customers.
Then cloud computing came along and changed everything. Because cloud-based SaaS vendors sold their wares as subscription-based services, customers had to renew their contracts periodically – and if they weren’t happy, they’d take their business elsewhere.
Customer churn suddenly became a reality for the software world – and with it, the rise of customer success initiatives. “Virtually all Customer Success Management initiatives start out as ‘churnfighters,’” explains the Customer Success Association web site. “You either actively manage your customer relationships as strategic portfolio assets, or you effectively cede control over them and your company’s future to chance and/or the competition.”
McKinsey refers to this focus on reducing churn as ‘Customer Success 1.0.’ “Many customers became understandably frustrated, resulting in low adoption and usage rates, which eventually led to greater churn,” explain Charles Atkins, Associate Partner at McKinsey; Shobhit Gupta, Business Strategy and Operations Lead at AllyO, formerly Engagement Manager at McKinsey; and Paul Roche, Senior Partner at McKinsey. “According to one McKinsey study, the SaaS vendors with top-quartile revenues achieved their strong showing by investing more in customer-success initiatives aimed at churn reduction.”
Customer Success 1.0, however, is fraught with problems. After all, no one wants their relationship with a vendor to be a ‘strategic portfolio asset.’ There’s scant customer delight there to be sure.
In essence, this approach to customer success focused on customer retention as the goal, not successful customer outcomes. In other words, sales and customer support simply had to do the bare minimum possible to keep customers from leaving – hardly a recipe for truly successful customers.
Nevertheless, some of the incumbent software vendors fell into the Customer Success 1.0 trap. “With [Oracle’s] unmatched set of products and services that give customers a huge range of choices to fit their unique needs and tastes, plus this new internal orientation toward customer success to ensure renewals,
Customer Success 2.0 Falls Short
Oracle’s single-minded focus on renewals and SAP’s attention to ‘go-lives’ (that is, simply not failing completely), rather than successful customer outcomes as ends in themselves, has resulted in customer pushback, suggesting a need to rethink customer success.
Enter McKinsey’s ‘Customer Success 2.0.’ “We’re at the beginning of a new era—call it customer success 2.0—in which many companies are focusing on growth in addition to churn,” Atkins, Gupta, and Roche continue.
However, even focusing on growth still falls short of putting customer outcomes first – a fact that McKinsey recognizes. “Handled poorly, a company’s new emphasis on growth can undermine a customer’s trust in [Customer Service Managers] and create a sense that they are simply interested in increasing profits.”
What, specifically, might McKinsey mean by handling an emphasis on growth poorly? Perhaps salespeople coming across as disingenuous when pushing for upsell and cross-sell deals? ‘Mr. or Ms. Customer, I want you to buy the enterprise version of this SaaS package, and I’m only telling you that because I want you to be successful wink wink’?
Rethinking Customer Success
Today’s B2B customers – especially at the enterprise level – are getting wise to such shenanigans. Customer success can no longer be a euphemism for ‘just enough to keep you from leaving’ or even ‘whatever it takes to sell you more stuff.’
In the digital era, customer-focused efforts must truly focus on customer outcomes. Profitability and growth must take a backseat. “Customers are not paying for your product, they are paying for their outcomes,” explains Jonas Stanford, Director of Customer Success at Unbounce. “It is not realistic to believe that customers will stay on a successful path, or discover new outcomes your product can deliver, on their own.”
Furthermore, customer success cannot be the responsibility of one team or department. “Customer success takes your whole company,” says the MindTouch Digital Team. “Customer success affects Sales, Marketing, Support, Product, and Administration in different ways, yes, but all play vital roles in turning your customers into product experts. By determining what customer success is—and what role each department plays in that goal—you can ensure that the customer experience along their entire journey is geared towards them becoming successful.”
One enterprise SaaS vendor who walks the walk is
ServiceNow’s CMO is on the same page. “Increasingly, the marketing organization is talking in the language of business value,” explains Dan Rogers, CMO of ServiceNow. “The modern marketer is stepping into that role, not just get the leads, get them to the sales team, but really thinking about the whole way through getting those customers to those end outcomes.”
The Customer Success End Game
While B2C customer success centers on a wide range of customer goals combined with emotional delight, the B2B world focuses on profitability (or the mission priority in the public sector). In the for-profit B2B world, therefore, customer success means focusing on customer outcomes in terms of your customers’ profitability, which inevitably depends upon the success of your own customers’ customers.
Such is the paradox of the digital era: we must put customer outcomes first and our own profitability and growth second, otherwise we jeopardize our own profitability and growth in the end.
This paradox is difficult for traditional businesses to understand, but from the customer’s perspective, the companies that get this right are the only ones we’ll want to do business with. And remember – we’re all customers.
Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, ServiceNow is an Intellyx customer. None of the other organizations mentioned in this article are Intellyx customers. Image credit: bazzadarambler.
