Attention all revenue leaders – CCOs, CS, CROs, and Sales Leaders – your responsibility extends far beyond just the end numbers. While revenue, growth, and customer acquisition are key, understanding the nuances of customer retention and early indicators can revolutionize your approach to boosting revenue.
Consider this: every 1% increase in Net Retention could spike the enterprise revenue multiple by 0.7x! Translate that to business language: a mere 3% increase in NRR can potentially double your company's valuation [source: Article Magazine Volume 02, Chapter 1].
While these metrics form the core, they predominantly offer a retrospective view.
In today's ever-evolving business landscape, staying one step ahead is more than a competitive advantage—it's necessary. Traditional metrics offer a look in the rearview mirror, but companies need to be forward-facing to drive sustainable growth. This section dives deep into forward-thinking metrics, the proactive tools that empower businesses to anticipate customer needs, gauge loyalty, and foster engagement. We'll not only introduce each metric but also provide a comprehensive exploration of their implications and applications:
All these metrics serve as critical tools for revenue leaders in pursuing sustainable growth, customer retention, and expansion. Here's a concise breakdown of what they offer:
These metrics empower revenue leaders with actionable insights to make data-driven decisions, optimize customer experiences, and drive revenue growth.
Now let’s discuss each further and why they may or may not be helpful to your organization:
The Two-Fold Value of Product Usage:
While product-led growth companies are seeking their own 'magic' formula of product usage (akin to Facebook's early days), product usage essentially boils down to two primary use cases:
However, consistent product usage doesn't necessarily correlate with customer satisfaction or perceived value. Case in point: Chilipiper enriches CRM contact data and, once integrated, works automatically. But mere integration doesn't guarantee perceived value. Similarly, the case of Chorus demonstrates that high product usage doesn't always equate to customer satisfaction or retention.
The Human Element in Customer Retention:
Customer Success Managers (CSMs) are the pulse-checkers of your customer relationships. Their insights, drawn from human relationships and not mere numbers, can be invaluable. However, individual CSM skills vary, and the reshuffling of accounts or changing CSMs can lead to losing customer insights. Relying solely on CSM sentiments can be misleading. For instance, a close relationship between a CSM and a customer contact can give a false sense of security regarding account health.
Relying solely on CSM sentiments for revenue forecasting can result in unexpected churn. Unexpected churn is detrimental to company health and morale.
Understanding NPS:
NPS measures customer loyalty and is simple to implement, with scores offering industry benchmarks. It's widely recognized in the corporate world and among VCs and board members. However, while NPS provides a clear score, it's not always actionable. Contrary to popular belief, high or low NPS doesn't always correlate with churn or retention. Some businesses find cultural differences in NPS scores; for instance, Japanese customers might have lower NPS scores but show excellent retention.
The Good and the Bad:
A health score is a customer's estimated health index to predict churn risk. It combines many data points like product usage, CSM sentiments, NPS, support tickets, etc. While it's become a standard among growing tech companies, its accuracy remains a point of debate. The challenge lies in constantly adjusting and improving the score, yet unexpected churns still occur.
A striking example is Oracle's 23-element health score, which ultimately found the customer's feedback as the most reliable churn predictor.
Valued Outcomes and Challenges:
Established at the onset of customer onboarding, this plan charts the trajectory of the customer journey by outlining mutually agreed-upon outcomes and consistently tracking progress throughout the contract term. Implementing such plans:
While the desired outcome method does yield positive results, with organizations like ChurnRX excelling at training teams to deploy this approach effectively, there are notable considerations.
The investment required financially in hiring experts like ChurnRX and in terms of team time is significant. This might be challenging for smaller companies. Additionally, these plans can be rigid and may not easily adapt to market changes or the departure of pivotal personnel from a company. For instance, the tech downturn in 2022 resulted in many leaders either being laid off or shifting positions, rendering many such success plans ineffective or obsolete.
While each metric has its strengths, relying solely on one could be misleading. It's essential for companies to maintain a holistic view, considering multiple metrics and ensuring regular feedback loops with their customers.
Constant innovation is required for collecting, curating, and distributing the right feedback in a world that has grown tired of surveys.”
Fred Reichheld, the creator of Net Promoter®
We found that the number one driver of survey fatigue was the perception that the organization wouldn’t act on the results.”
McKinsey & Company
NPS is dead. It is one of the worst metrics for this present time because it dilutes people into believing that that number is tied to a set of repeatable behaviors. We are betting it all on one spin of this roulette wheel called NPS.” —Karen Mangia, VP of Customer & Market Insights at Salesforce
Karen Mangia, VP of Customer & Market Insights at Salesforce
Net Promoter Score is a house of cards made to give executives a sense of security and progress when, in fact, no such security or progress is made. It’s intended to represent the sentiment of the customer when in fact there’s no evidence that it represents any such thing.”
Jared Spool, Founding principal of User Interface Engineering
Close the loop! Customers give their time and effort to fill out surveys yet they get nothing in return. Close the loop by sharing with customers the impact their feedback has.” —
Anita Toth, CS Consultant
The feedback landscape is changing. As the inadequacies of traditional feedback mechanisms become more evident, there's a push towards more agile and responsive feedback systems.
An innovator in this space is the Pulse Program by TheySaid. Some visionary CS and Revenue leaders from Ondeck, Customer Success Collective, Customer Success Excellence, CS Angels, and Pavilion use this as their feedback mechanism to improve NRR.
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Rather than relying on broad, infrequent surveys, this program aims to capture the heartbeat of customer sentiments in real time. As customers navigate their journey with a brand, TheySaid's Pulse Program is right there with them, ensuring that feedback is not just an annual or quarterly event but an ongoing conversation. Feedback from the Community on TheySaid's Pulse Program
People like how easy it is to start with the Pulse Program. It's simple, kind of like NPS, which most businesses already know. What's cool about it is that it doesn't just tell you what's already happened. It gives you a heads-up about what might happen next. So, you can see if customers might leave soon or if there's a chance to sell them something more.
“Measuring customer sentiment has always been a challenge within Customer Success! We’re currently leveraging a Pulse program to help us identify opportunities & and risk and then TAKE ACTION on each response.”
Angela Apinyavat, Head of Customer Success at Inscribe
"We’re using Pulses to provide us with a level of customer sentiment that I wish I’d had throughout my career. It gives us customer sentiment at each step of the customer journey and, more importantly, turns this feedback into actionable insight—much more than an NPS score can ever provide. Incredibly simple to execute, and we’re getting around 15-20% response rates.”
Martin Dove, President & COO of Outcome Chains, Inc
Navigating the sea of feedback from our Pulse Program was a game-changer, but it also felt like a lot to handle for many. So, we developed Customer Perspective Value (CPV) to simplify things.
Customer Perceived Value (CPV), pioneered by the founders of TheySaid, who were early employees of the globally recognized human insight platform UserTesting, offers an innovative approach to gauge the value customers discern from a business. With over a decade of experience collaborating with Fortune 100 companies on user research, these visionaries developed CPV as an alternative to conventional metrics like NPS. Their methodology was based on insights gathered from extensive interviews with 500 customer leaders, providing a deep understanding of the strengths and limitations of traditional models.
CPV operates on a five-point scale and takes into account four key pillars: Problem, Product, People, and Price.
The default weightage assigned to these pillars is Problem at 45%, Product at 25%, Pricing at 20%, and People at 10%. However, companies have the flexibility to adjust these weightings to suit their specific business needs and customer dynamics. This multi-faceted approach ensures a comprehensive customer experience assessment, moving beyond mere satisfaction metrics to capture a genuine understanding of perceived value.
Why CPV? Because businesses told us they needed a clear way to understand customer feedback without feeling swamped. CPV takes all that rich feedback from Pulse and turns it into a single, easy-to-grasp metric. Think of it as a shortcut to understanding what your customers really think and where to take action to impact Net Retention proactively
In the modern business environment, growth isn't just about acquisition—it's about sustainable growth through retention and customer satisfaction. For revenue leaders, this entails understanding the end numbers and the qualitative and quantitative metrics that foretell future challenges and opportunities. As we've explored, metrics ranging from traditional measures like NRR and Churn Rate to forward-thinking metrics like Health Scores and Customer Perceived Value are invaluable tools in this mission.
But, perhaps what stands out most prominently from our exploration is that no single metric can capture the multifaceted nature of the customer journey. While conventional measures like NPS may offer immediate insights, the combination of multiple metrics, feedback loops, and continuous improvement based on real-time data promises transformative outcomes. The introduction of innovative feedback models like TheySaid's Pulse Program and the holistic approach of CPV exemplify the evolving nature of customer success measurement in the digital age.
For revenue leaders aiming for long-term growth, understanding these metrics and indicators is not just beneficial—it's essential. By adopting a proactive and comprehensive approach to customer success, businesses can foster stronger relationships, anticipate market shifts, and consistently deliver value, ensuring not just growth but sustainable and impactful growth.
Let's chat if you are interested in proactively and automatically measuring the value delivered to your customers. Schedule some time with me here.
-Lihong
Of all places you’d want to find your sales opportunities, seemingly a pit would be one of the last, you’d think? Tales of the pit from Greek mythology (hello Tartarus, located in the underworld) or even a more endearing pit (we see you Andy Dwyer’s pit from Parks and Rec), never conjure visions of places you want to be. However, “pit” can be a great way to think of strategy when it comes to landing and expanding into customer accounts that are even harder to win in today’s economy. So what is this “pit” that we speak of when it comes to revenue?
Perceived Value, Incentive, and Timing (PIT). All of these elements have a specific and strategic component to play when it comes to harnessing new potential in expanding into your current accounts. By leveraging the power of these components, you can unlock new horizons of opportunity and deepen your customer engagements, further avoiding any other pitfalls that may come your way.
To help bring our precious PIT to life, let’s use a product we’re all familiar with: sunscreen.
Building a foundation of trust and loyalty begins with your customers perceiving the value they receive from your product. Seems simple, right? Perception may not always be reality, so it’s imperative to ensure that you and your customer are aligned on what value truly is for them.
Start by isolating the unique problems they face, carefully considering factors such as cost, skin tone, typical outdoor activities, and desired outcomes (i.e., are we getting a sun-kissed glow or not?). With this in-depth understanding, harness the collective good of your product and people to address these challenges effectively. However, delivering tangible results is just the beginning.
To truly win over your customers, it is vital to ensure that they perceive the value they derive from your solution. So when it comes to our lovely sunscreen, while some customers may readily comprehend the benefits of protection from UV rays, others may require a more nuanced explanation regarding the long-term advantages for skin health. Enlighten them on how your product influences their health outcomes, steadily cultivating a vision of value that spans beyond the immediate.
The question is: now, are they ready to buy? Not yet. Here’s where we move into the “I.”
Perceived value alone is not sufficient to fuel upsells and expansions. To inspire customers to invest further in your product or services, you must deliver on your buyer’s personal incentives.
This requires a deep understanding of their motivations. Explore the various types of motivations your customers may have—whether it be financial gains, recognition, career advancement, and beyond—it’s key to pinpoint the most resonant thread that will drive their action. Back to the concept of our helpful sunscreen. Suppose you have successfully communicated the perceived value of your sunscreen.
For our sun-kissed (or potentially sunburned) prospective sunscreen users, it’s not entirely hard to think about what incentivizes customers to use the product. Perhaps they’re looking to protect their skin from UV rays and increase their overall skin health. Or on the opposite end of the spectrum, they’re looking to earn the tan of a summer. Now that you’ve considered how your customers can benefit from using more sunscreen (or suntail oil), you have to tailor your incentive strategy to users' unique needs and aspirations of using it, nurturing a win-win scenario that propels both parties towards success.
Back to the question we asked previously: are they ready to buy? Darn, not yet. The final element of successful land-and-expand strategies lies in the “T”: timing.
Timing drives your buyer’s urgency to make a buying decision within the most successful land-and-expand strategies. It is vital to engage customers precisely when the pain to change is greater than the pain to stay the same.
In a world overrun with countless challenges, capturing your customer’s attention and securing their commitment to buy more or expand their product usage can be a significant task. However, by identifying those crucial moments when the pain is most immediate and urgent, you increase the likelihood of success.
Our final sunscreen scenario: Don’t reach out to customers in the thick of winter, instead target a sale just before their eagerly anticipated spring break vacation to a sun-soaked destination, where the necessity for dependable sunscreen becomes critical. By strategically leveraging these moments or opportunities, you can ignite a sense of urgency that moves your customers and advocates to action more quickly.
To achieve true success in any land-and-expand strategy, the secret lies in skillfully navigating the PIT: perceived value, incentive, and timing. By enabling customers to perceive the value derived from your products or services, aligning with their motivations, and expertly seizing the ideal moments for engagement, you can maximize your upselling and expansion opportunities. Remember, it is not solely about selling more; it is about constantly communicating value and ensuring that your customers see value in every interaction with your product and your people. If you’re not sure how to measure, TheySaid’s Customer Perception Engine ensures that you can understand the key pillars of customer experience: problem, product, people, and price.
Interested in talking more about actionable land-and-expand strategies and how TheySaid can help you measure the actionable customer voice along the way? Schedule a demo to learn more.
This weekend I was at a parent-kid hangout and met a fellow immigrant mum who is very curious about my career trajectory from a new immigrant to CRO, and then Cofounder and CEO of TheySaid. She was so curious about “How I did it”. Honestly, I have been asked about this question over and over but I hadn’t figured out how or why. Maybe I got lucky?
So I told her that I entered into B2B sales when I was @UserTesting. I started as a tester, then became a customer, then became an employee, and when I was the AE for UserTesting, my monthly sales number was 3x of the 2nd best sales rep in a good month and 2x of the 2nd best sales rep even in a bad month. She asked: Why, what is your secret sauce? Why is your number so much higher? It can’t be luck or coincidence, but repeatedly 3x or 2x? Why?
Exactly, why? That is the answer I have been searching for 10 years. UserTesting was my first B2B job, so I didn’t have any proper sales training, I had broken English and didn't even know how to use Salesforce. But why did I have such a higher close rate and close so many compared to others?
Soon, others at UT wanted to figure out how I did it as well. CEO @darrell benatar, tried to have me replicate myself by training my peers, so we could create a high performing sales team. I sat with other sales reps and tried to teach them my “ secret sauce”, but it didn't work. We had a sales coach come in and listen to my calls vs my peers, They didn’t find anything useful. We tried to pull salesforce activity, and at first it did show I have 3x the activities than other reps, maybe I worked harder, then found out the other reps just didn’t record their activities, so we were back to zero. After trying so hard to find the why, we gave up. Our CFO @tien anh nguye put my close rate and number as outliers in his book, so I don’t mess up his revenue prediction model. I still didn’t know why my process worked for me but not for others. It felt like we were doing the same things. The truth is, we didn’t know what the secret sauce was, so we couldn’t replicate it.
In order to find out why, I went to Haas MBA program and a year later I joined Gitprime as CRO. Gitprime was a YC backed startup with great vision and solution, but no sales. I was employee #5 and the only person who can’t code. So I started my life of building Gitprime during the day and the Haas MBA program at night. At Gitprime, I grew revenue from 0-$15M in about 4 years. We had 3x annual growth during my 4 years in that role. I replicated part of me and created the Gitprime revenue team called the Wild Dogs team.. Those were some of my best years, growing and learning every day as a leader, coaching others to be successful. We had Wild Dogs of the month and Wild Pups of the month to encourage learning and team culture. I hire sales people without any sales-related experience, but train them to be some of the best sales people in the country and some have gone on to become amazing sales leaders themselves. I have had the privilege to work with some of the brightest minds in the country at the Wild Dog team. To name a few @gresyon - cofounder and CRO at DX. @Josh Hicken, cofounder at TheySaid, @Brian clausen, cofounder at Kind energy, @Amy Long, head of CS for Pluralsight, Zonos and now with me at TheySaid.
I thought I had cracked the code and was able to replicate part of me, but deep down, I still didn’t know why.
Fast forward to early 2023, and I founded TheySaid. TheySaid helps companies deeply understand their customer base by doing win-loss interviews and journey pulsing. The goal is to guide business decisions and actions with the best quality customer data and measure success through TheySaid’s CPV (Customer Perceived Value). At the end of the day, I believe businesses exist long term to deliver value to their customers.
I interviewed over 500 potential customers in the period of 18 months before founding TheySaid, and have learned a ton, so I wanted to share some of my learnings here.
Instead of looking at traditional internal data (product usage data, Sales teams and, CSMs opinions) of whether or not a customer received value, we asked the customers directly. We believe customers should be the one to decide if they received value, not the company. And we won’t ask the selfish NPS question: “ how likely are you going to recommend my company to a friend or colleague” because customers care about themselves, not you! Most companies are asking the wrong questions, and then complaining that customers don’t respond to their survey. Industry average survey response rate is 1% to 4%. McKinsey wrote their study about the myth of survey fatigue in this article. “ The truth is: consistently, the number one driver of survey fatigue was the perception that the organization wouldn’t act on the results”
Really listen to your customers
I have also met leaders that believe customers don’t know what they want, if you ask what they want, they might say they want a faster horse. Sure, customers might not have the best solutions to their problems, but they sure understand their pain and what they don’t want. It is up to the willing-to-listen entrepreneurs to come up with the right solution.
Luckily most leaders I talked to value the power of customer insights, as TheySaid acquiring new customers, I am starting to see the power of customer insights unfold in front of my eyes. I was really blown away by what I saw. For example, one of our customers launched their CPV program. (we ask customers 4 questions: the 4Ps, problem, product, pricing, people)
How critical is the problem xx company solves for you?
How good is the product experience?
How easy is it to justify the pricing?
React to this statement: Xxx company’s team adds value to my overall experience.
As expected, they positioned themselves as a low price winner and their score in problem, product and people score were in line with other companies, with the exception that their pricing score is a lot higher than normal. So their team discovered that they have room to increase pricing and they did but their CPV score was still stable. This resulted in several millions of increase in revenue.
That small change equating to big money is just one of the things we can see as a result of constantly monitoring CPV. These guys are using TheySaid’s customer insights to test pricing elasticity!!
Another customers’ CPV score was really low in Problem and Pricing, and found that they were being compared to a low price competitor that only does part of their offering. Another interesting data point was that the SMB CPV score was a lot lower than Mid-Market and Enterprise customers’ .This means their SMB customers received less value despite so much resources invested in helping them. The team decided to move their business more toward Mid-Market and Enterprise segments and reposition their solution to help their clients get more clients, rather than a financial management system. This completely changed their business, unlocking growth.
What?! They are using TheySaid’s customer insights to identify ICP and making the right bets! I didn’t realize you can use customer insights to transform business like this. This is a huge differentiator for our customers to win against competitors!
What else can deep understanding of customers do to business? And to the team members?
And suddenly, I got the Aha moment, the answer I have been searching for 10 years! My secret sauce has always been an obsession to deeply understand customers. At UserTesting, the reason why my sales number was 3x the 2nd best sales rep is because I deeply understand our customers and UserTesting’s product and value. As SunTzu put it in his “ The Art of War” - "Know yourself, know your enemy, and you will not be defeated in a hundred battles."
This proverb emphasizes the importance of understanding oneself and one's opponent in any situation, as such knowledge can lead to a strategic advantage and increased chances of success.
I interned at UserTesting, then signed up to become one of their testers. Over the years, I became a customer while running Thinktank learning and lottoJar, eventually becoming UserTesting’s employee. . I had the unique opportunity to deeply understand both the value and use case of UserTesting, and the customers, because I am in both shoes every single day. No wonder other reps can’t compete.
When I moved to Gitprime, their target audience was engineering leaders, and they hated talking to salespeople, and I don’t know anything about coding or managing engineering teams. I got destroyed at every single call the first few months. Slowly I started to learn - to understand their pain and put myself in their shoes, even the way they talk and think.
Every single piece of jargon or industry-specific vocabulary I use in my pitch came from listening to customers. I remember one time after I pitched to a big engineering team, their leader was like: "This is great, ask your salespeople to talk to us about signing contracts” – I was like, “I AM the sales people, I just sounded like an engineering leader.” Haha!
With my personal success, the next step was to build a sales team that deeply understood our target audience. Instead of hiring experienced sales reps from other companies, I set out to find similar people to our target audience then train them on sales. I did personality matching, Wonderlic score matching, hiring only people that could be an engineer with training. Then train them on being an engineer, understanding the pain and everyday life of that target audience, and then finally, train them on Gitprime’s solution, product, and at last, how to sell.
Target audience training is the key, we even designed some games just for that purpose. I called it the Silicon Slope game: if you are also selling to engineering, I am happy to share, just PM me. The goal of the game is purely to let new hires suffer non-stop in the target audience's pain. The more chaotic the better, the more suffering the better. I believe sales people don’t deserve to sell a solution if they don’t truly understand the needs of the customers, and haven’t put themselves in the shoes of customers.
Knowing my secret sauce, I am so proud of what I am doing now - Building TheySaid. I have benefited my whole career from the power of deeply understanding customers, others should enjoy it too. But not everyone was lucky enough to land in a situation that happens to wear both shoes, or have the resources and energy to hire and train the teams. Plus, one of the difficult things is that your customer evolves and changes all the time. I remember at Gitprime when my team grew to 20+ 45+, then 70+ people, I couldn’t spend 6 hours per day listening to calls anymore, but I really wanted to know what the customers were thinking. Why did they leave us, why did they buy, what roles received the most value, who loves us, who is a blocker.
One of the things I regret I didn’t do is “ win-loss analysis” . I try to understand why customers leave by looking at CRM close-lost data filed by the team members, or listening to sales calls or talking to the CSMs. Why didn’t I just ask the customers directly? If there is a time machine, I wish I could have had close conversations with customers, do win-loss analysis continuously, so I could understand what customers think of us at any given time.
How powerful would that be? A team of super closers with a high win rate, a much lower churn rate! Figure out what bets to make for another year’s 3x growth? How about the land and expanding motion I always want to set up?
More Sales Insights this way: Land and Expand Strategies, Why CROs are surprised by churn, and CPV: The Crystal Ball for Growth
If you are a GTM leader building companies, and want to benefit from my secret sauce, I am happy to chat and share some of my learnings and mistakes. Ping me on LinkedIn at https://www.linkedin.com/in/lihonghicken/, or email me at lihong@TheySaid.io
Net Promoter Score (NPS) is a one-question metric that is tracked by two-thirds of the Fortune 1000 and is also celebrating its 20th birthday this year. Former IBM CMO Michelle Pelusa said, ”It’s more than a metric. One could use the word, religion.” (In 2017)
But are we celebrating a metric’s 20th birthday that is limited in its ability to answer this other simple yet important question — ”Why?” Two decades ago, NPS burst onto the scene and became the customer experience metric darling that had businesses swooning. In those 20 years, technology and consumer behavior have dramatically evolved, yet NPS has largely remained the same.
Companies are stuck endlessly asking "how likely are you to recommend," and promoting their NPS performance while failing to ask the other critical questions. As we report NPS trends to our board members and investors, is the score really painting a complete picture of customer value, and are we evolving along with customer needs or are we phoning it in?
It's fascinating to think about other relics from 20 years ago that have come and gone and what those companies could learn from asking the right questions.
Would you recommend this fax machine to a friend? Once, it might have been a burning question. But if the fax machine had evolved its question, it would be asking if its speed was faster than email by now. The lesson? Metrics have to grow with technology and customer needs.
Remember the days when you had to wait an hour (or days!) to see if your photos came out the way you wanted? The one-hour photo lab would have had a solid NPS score for 'speed' back in the day. But digital cameras and smartphones happened. Had the one-hour photo lab stuck with asking just one NPS question, they might have missed the boat on understanding why people stopped showing up.
A whole 500 songs in your pocket? Revolutionary! MP3 players would have scored high on the NPS chart for convenience and portability. Yet, here we are, streaming millions of songs from the cloud. Sometimes, being good at one thing is not enough.
Ah, the nostalgia of late fees and a physical store where you could touch DVDs. Imagine if Blockbuster had asked, "On a scale of 0-10, how likely are you to recommend our DVD late fee policy to a friend?" it might have told them that customers loved their selection but missed the streaming revolution entirely. A valuable lesson on why we need metrics that not just quantify but also qualify.
Paper maps might have had fantastic NPS scores for reliability—until GPS and Google Maps drove onto the scene. Navigating customer needs requires updating the map, not just following the old one religiously.
Net Promoter Score (NPS) has been the dial-up internet of customer experience metrics—revolutionary when it was introduced but increasingly limited in a world that demands more bandwidth, speed, and nuance. TheySaid CPV, by contrast, is the fiber optic connection that elevates customer understanding to unparalleled levels, thanks to the speed, customization, and actionability it offers.
Customer Perceived Value (CPV) is the subjective assessment a customer makes of the value of a product or service, considering factors like quality, cost, and brand reputation. It influences customer satisfaction, loyalty, and the likelihood of repeat business.
TheySaid's Customer Perceived Value (CPV) engine focuses on the four key aspects of customer experience: Problem, Product, People, and Price. Utilizing the unique Pulse methodology for higher response rates and more meaningful feedback along the customer journey, it employs expert-curated questions to extract valuable insights from decision-makers, enabling businesses to make informed decisions and enhance the value they provide to customers.
TheySaid's Customer Perceived Value (CPV) Engine innovates on traditional Net Promoter Score (NPS) metrics to provide deeper, more actionable insights for B2B businesses. We'll examine how the CPV Engine incorporates the strengths of NPS while enhancing its limitations, offering a nuanced understanding of customer sentiment across various facets of your business.
Read More: NPS vs. TheySaid's Customer Perceived Value (CPV)
Simplicity: One of NPS’s most significant contributions to the field of customer experience metrics is its simplicity. A single, easily digestible number cuts through the clutter, offering a snapshot of customer sentiment.
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Benchmarking: The universality of NPS allows companies to set their scores against competitors or even against different industries. TheySaid CPV acknowledges the power of comparative insights and builds on it.
Ask the Right Question: While NPS can tell you how many people might recommend your product, it doesn't offer much substance beyond that. TheySaid CPV goes deeper, seeking to understand the 'why' behind customer sentiment across the primary areas of your business:
This makes the insights not only actionable but beneficial for multiple departments—from product development to go-to-market strategy.
1. Asks the Right Person: Unlike NPS, which often casts a broad net, TheySaid’s CPV aims its questions at strategically chosen respondents. By targeting specific customers based on their interactions and stages in the customer journey, it ensures that the right voices are heard.
2. Asks at the Right Time: Timing is everything. TheySaid CPV recognizes this and moves away from the one-off survey model. With its 'Pulses,' CPV provides continuous monitoring, asking simple, yet meaningful questions in the context of where customers are in their journey. This real-time insight makes for an agile and responsive customer strategy.
3. Pulse Over Survey: By adopting a 'Pulse' model, TheySaid CPV enables ongoing conversations with customers rather than just intermittent check-ins. This model results in higher engagement rates and provides a steady stream of actionable insights specifically tailored to B2B needs.
Learn more about our Pulse methodology.
4. Rich, Qualitative Insights: Beyond mere numbers, TheySaid CPV gathers qualitative data that offer context and nuance. These qualitative insights make the metric incredibly actionable, allowing businesses to adapt and improve with a degree of specificity that NPS simply can't offer.
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In much the same way that fiber optic connections didn't erase the need for dial-up but dramatically improved the quality and speed of internet connectivity, TheySaid CPV isn't here to replace NPS. It's here to evolve it. By incorporating continuous, contextual feedback and focusing on actionability, TheySaid CPV addresses the limitations of NPS while building on its strengths.
Ready to experience the fiber optic speed of customer insights? Click here to learn how TheySaid Pulses can take your customer understanding to the next level.
You’ve seen it before. And as a revenue or customer leader, each time is just as painful as the last. When a customer leaves with seemingly no reason, we find ourselves wondering if we were missing the signals all along or if the warning signs of customer churn were ever really there in the first place.
As Chief Revenue Officers (CROs) and Chief Customer Officers (CCOs), we often ask why customers churn despite our best efforts. We try to give them the best experience possible, from leading-edge product features to high-touch customer service – so why are they leaving? After countless hours of analyzing data, developing customer feedback loops, and implementing retention strategies, churn should be low, right? Not necessarily.
It isn’t enough to simply understand what customers want; we need to create a value-based connection with them to ensure long-term loyalty. But value means different things to different customers. Let’s look at where we can untangle the twisted web of expectations and start delivering on the brand promises our customers are looking for.
When the notice of non-renewal arrives, the moment of reflection begins: “What went wrong?” The answer to this question is vast and perhaps has nothing to do with your product. Some seismic shifts within their organization may have prompted them to make a decision that caused your ripple effect. Whether the product adoption wasn't significant enough to continue the investment, the internal sponsor left, or their own budgets were slashed, the “why” still requires reviewing your data to look for potential clues to their departure.
Even the most evolved organizations use the available data to try and stay on the pulse of their customers to prevent unavoidable churn. Let's examine the three most common data points used to predict a customer's likelihood to continue their agreement with your organization:
Even with monitoring tools like Pendo and Mixpanel, you’ll need to append more than just metrics to get a comprehensive user journey. Like those customers, you may be seeing or hearing the feedback you want to hear rather than what you need to be hearing. For example, when it comes to product usage, it’s worth noting whether there is full adoption of the product, any power users, and the period of time, you’re evaluating the usage.
The same perspectives may be jaded or biased regarding anecdotal feedback from CSM or AM team members. Their job is to form relationships, and if they’ve done a solid job, it can cloud how their customers give feedback and to what degree of clarity.
Lastly, while NPS/CSAT scores may provide an organization’s stakeholders with greater data-backed metrics compared to other benchmarks of customer feedback, there’s a chance it won't always be cleanly sourced or reflective of all users. For example, the survey may not have only reached those users who have potential to provide the most valuable insights or reached them after a particularly high or low usage point with the product. To gain an accurate understanding of customer retention through data rather than just feelings and anecdotal feedback, you must carefully consider and select various metrics and how you consistently source them.
Attempting to predict future outcomes with your customers using data-backed resources is one thing. Actionably changing it by empowering your entire organization is another. It’s key to engage your broader team members in reducing churn and improving the customer journey.
Successful SaaS renewals aren't about making everyone a stakeholder; they're about getting the right stakeholders on board. Both customer success and sales leaders play important roles: customer success leaders ensure customers receive what they were promised. In contrast, sales leaders lead the charge in representing their brand and fulfilling the vision they initially sold.
What’s more important for your organization is that these two teams offer the best direct access point to decision-makers at your customer organizations. Their relationships can set up your larger team for success and provide a key source of strategic insight regarding product and marketing feedback, focusing on potential areas of opportunity and improvement. It might sound like a tall task, but when these roles work together, they can create an incredible team that makes SaaS renewals feel like a win for everyone involved.
After organizing the internal team for success, you also need to continue ensuring your customers are set up for continual success – delivering value to their business and as your brand champions.
Selling solutions is the end game of every business, full stop. It keeps the lights on for your organization, sustains careers, and simultaneously builds a vision for your offering and employees' future. But selling solutions goes beyond exchanging money for a product that solves a need.
The most successful organizations at selling have built fierce advocates for their brand and vision into the fabric of their existence. These people view your product as an essential part of their lives — the individuals who strongly believe in your offering that they recommend it to everyone around them. You know, consumer brands like Apple, Tesla, and Nike. These organizations also exist in the B2B world. So, what steps can you take to achieve this?
Every customer-facing stakeholder must aggressively pursue and position the two sides of customer value. Both sides must exist together for brand advocacy to exist. First, your organization must meet and deliver upon the customer objectives. This may seem simple, but it's a core foundation for brand loyalty.
Second, and perhaps most important, is delivering upon the unstated customer needs. This is where the challenging but most valuable part of building brand advocacy takes place. The challenge lies here because you can only capture so much with human-to-human interactions. Any organization stakeholder gets a small sliver of the customer experience and business context with each interaction. So, during those interactions, you must aggressively probe for risks and growth opportunities along the customer journey to understand how you can continuously reframe yourself as a vendor that fits their fluid points of need.
Like many solutions to a common problem, the answer lies in proactively approaching your renewal strategy. An effective strategy begins by understanding where customers feel discontent and points of friction far before their renewal date. This means managing all points of communication in both directions. Your organization can break the continuous churn cycle and transform transactional customers into an advocacy program by tracking success over time and staying aware of customer sentiment. Ready to see what true advocacy can look like in action?
Developing a product and delivering it into the hands of customers doesn’t mean they will get value. In fact, without a deliberate customer insight loop back to all areas of our business, we are likely to go to market without the right data. Sales, marketing, and success leaders need an “insights crystal ball” that reveals hidden customer intent and opinions, helping them uncover upsell opportunities, prevent churn, and guide go-to-market strategy. B2B organizations rejoice, as the crystal ball becomes one step closer to reality with the launch of TheySaid’s Customer Perceived Value (CPV) Engine, a modern voice of the customer platform.
Let’s take a closer look at what CPV is, its remarkable features, and how it will help you grow your business through your customers.
As a B2B sales, marketing, or customer success leader, you’re constantly navigating the intricate world of customer experience. As someone always on the lookout for growth opportunities, ways to increase customer retention, and insights that validate your go-to-market strategy, stop the guesswork of what your customers want and hear it directly from them.
The CPV Engine taps into the four essential pillars of the B2B customer experience:
With the CPV Engine seamlessly integrated with popular CRMs and CSPs like Salesforce, Hubspot, and Gainsight, you'll unlock a treasure trove of customer-driven insights. These insights will guide your decision-making, boost your competitive edge, and ultimately enhance the value you provide to your customers.
Gaining a deep understanding of your customers is the key to staying ahead of the game. Knowing what they truly want and how to provide the value they’re seeking is really half the battle. The CPV Engine shines the light on those dark, mysterious places to allow your team to uncover the meaningful insights that translate to success for both the customer and your business.
Here are the top three ways that modern B2B organizations gain value from CPV:
CPV empowers your customer success and sales teams to uncover hidden opportunities for upselling and cross-selling. By analyzing key voice of customer data points on customer intent and perception, CPV identifies signals that indicate qualified upsell or cross-sell opportunities by analyzing customer behavior. Additionally, it enables proactive churn prevention by detecting early warning signs and enabling targeted retention efforts.
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(Real customer insight)
CPV provides direct customer intent for insights for executives, marketing, as well as sales and success teams to align their go-to-market strategy. By understanding customer needs, preferences and perceptions of your competition, you can optimize your messaging, tailor your product roadmap, and refine your sales approach to win your market. CPV equips you with the necessary data to make informed decisions that help you stay ahead of the competition.
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(Real customer insight)
CPV acts as a guiding light, illuminating the path to a successful product roadmap and eliminating guesswork if you’re delivering the features your users need and want. By analyzing customer feedback, usage data, and feature requests, CPV helps you break through the noise and deliver product features and enhancements that ensure stability, support, and value your customers expect. With CPV, you can ensure your product consistently delivers value and stays ahead of the competition.
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(Real customer insight)
CPV operates on a proprietary methodology called Pulses. Rather than relying solely on surveys or sporadic feedback, Pulses establish a continuous feedback loop with your customers. By engaging them at critical touchpoints throughout their journey, CPV captures real-time insights and sentiments. This proactive approach ensures you have access to the most up-to-date and relevant customer data, allowing you to make informed decisions and drive meaningful outcomes.
If you're ready to unlock the actionabilityCPV and uncover the insights you’ve always wanted to know about your customer experience, schedule a demo to see how it works.
Will you be at Gainsight Pulse? Visit the team in person to see CPV live in action.
Stay connected with TheySaid as we continue to break down the four pillars of CPV: Problem, Product, People, and Price. Each has a unique place in the customer experience, and we look forward to sharing more.
Like many companies, you’re tired of hearing the “s” word: silos. Sales and customer success teams often find themselves stuck in silos, isolated away from the rest of your customer-facing teams. There’s an opportunity for true revenue leaders to unlock their true potential and drive customer growth like never before.
By integrating your sales and customer success (CS) teams, you can achieve outstanding results that transform your customer’s experience – and, ultimately, your bottom line. From improving customer retention rates, winning more deals with your existing customers, reducing churn, and even discovering new opportunities for high-margin add-on services, the impact collaboration can have is extensive.
But here's the catch: collaboration is not just a buzzword. It takes skill, expertise, and, most importantly, the right incentives to make it work.
Let’s explore how successful inner-team collaborations happen and share best practices to maximize their impact.
Upsells, cross-sells, renewals - oh my! There are unique approaches and ownership differences to consider regarding these crucial revenue components of your business.
To begin, upselling and cross-selling require a deft touch that often accompanies an existing relationship. There’s an art to encouraging customers to make additional purchases while communicating that additional value. For upsell/cross-sell, the ownership of this process typically falls on the sales team. To succeed, the sales team must be keenly aware of when a customer may be ready to get value from an upsell or cross-sell opportunity. Timing is key here; if a customer isn’t ready for an additional product or service, pushing too hard could lead to a negative experience.
Regarding renewals, ownership of this process typically falls on the customer success team. This team manages relationships with existing customers and ensures they get value from their products or services. They must proactively contact customers before their agreements expire to discuss renewal options and ensure they find value in their current solutions. Additionally, they need to identify potential issues throughout the customer's journey, address them quickly, and get back on a path to value.
With the constant drive to create great customer experiences, whether looking at upselling, cross-selling, or renewing a contract, all teams should focus on providing personalized offers tailored specifically for each customer and creating long-term relationships through delivering customers value. Organizations can build lasting relationships with their customers by continually monitoring and adjusting the value delivered, resulting in increased loyalty and higher retention rates over time.
Developing these relationships and maintaining retention rates has driven a renewed focus in organizations on revenue rather than sales.
Let’s look at what that means for the ownership of revenue within the business and how that translates to customer growth.
With customer growth at the forefront of every business decision, it's crucial to adopt a holistic strategic approach that guarantees your success. Who owns revenue has also notably changed with the rise of Chief Revenue Officers (CROs) and revenue organizations replacing sales organizations solely focused on generating new business.
CROs are responsible for setting comprehensive revenue targets comprised of all upsell, cross-sell, renewals, and new logo revenue. Upsell and cross-sell revenue have become increasingly important as they help to drive customer growth and increase revenue while new logo growth continues to sustain the customer pipeline.
One of the most significant benefits of upselling and cross-selling is the potential to increase customer satisfaction and loyalty. By offering customers superior options or relevant add-ons, you can enhance their experience and motivate them to engage more frequently or deeply with your brand. Additionally, these tactics can drive revenue growth, as increased per-customer spending can quickly add to significant gains.
New logo acquisition isn’t without its merits or challenges. In this year of economic downturn, organizations are heavily scrutinizing budgets, competition exerts more pressure, and new business is more difficult to win. Investing time, energy, and resources into nurturing existing relationships is more valuable than solely focusing on acquiring new ones.
By incorporating customer satisfaction and loyalty through all revenue-generating activities, businesses can drive sustained revenue growth and expand their reach within the market. Importantly, upselling and cross-selling should be implemented with thought and care, ensuring that the customer needs to remain at the forefront of all efforts.
Today’s upselling motion is hyper-inefficient. It stems from the relatively young relationship between sales and customer success – at just a decade old, it’s a child in the business world! Upselling has long been treated as an afterthought as it is not a new logo sale or a renewal, so handling this piece of revenue creation leaves business leaders scratching their heads for how to incorporate best with internal teams.
One of the most common challenges in preventing a frictionless upsell process is the siloed structure many organizations find themselves in. With departments living in their own world of roles, responsibilities, and metrics, this often leads to important conversations and action items getting lost in conversations and handoffs.
Sales reps, who are primarily responsible for handling new or existing revenue, are often out of touch with customers once the initial deal is complete. This lack of alignment with customer success teams can lead to confusion and losing opportunities.
The CS team’s approach is typically more qualitative by ensuring customers are satisfied, making their actions subjective, which can be difficult to measure or predict. However, customer satisfaction is still vital, so companies use metrics such as NPS, CSAT, health scores, or check-in calls to gauge customer satisfaction. While CS is the natural customer advocate, sales naturally play the role of wanting to identify upsell opportunities and increase revenue. It's because we are operating on different performance goals and priorities!
Despite the competing priorities, sales teams are keen to know the most opportune moment to engage with customers. To gauge this, sales reps usually poll other team members to understand when to engage, which can be ineffective in determining the best time to connect with customers or prospects.
To overcome these issues and improve upselling, organizations must work towards a common goal: better aligning sales and CS teams with customer objectives. This alignment helps solve the issues of lost conversations and handoffs, creating a seamless communication channel between Sales and CS teams and ultimately creating more value for your customers.
But creating a rainbows and butterflies moment between two critical revenue-generating teams will not create a more fluid upsell process magically. The true magic is in leveraging each team's true talents while sharing a common goal around: (1) Value Delivered and (2) Revenue Performance.
Sales and CS teams are critical players in driving business growth and success, but their responsibilities should be properly defined to maximize their effectiveness in achieving their objectives. Too often, we find that everyone is placed in the role of “revenue generator” when that really hinders each from focusing on their core competencies.
At the very basic levels, sales reps generate revenue by selling the company's products or services. Their primary focus should be identifying opportunities, qualifying leads, and closing deals. They are typically more successful when focusing on these priorities without distraction. When we place sales leaders as CS advocates, we ask them to take their eye off key revenue-generating tasks, putting those key activities in danger.
Want to discover upsell opportunities that you didn't know existed? Learn how TheySaid's Customer-Asking Engine automates this for your sales team.
On the other hand, customer success teams focus primarily on maintaining relationships and optimizing the customer experience. They are responsible for ensuring customers are successful and satisfied with the products and services they've purchased. They often serve as customers' primary points of contact, identifying customers’ value points, offering guidance, and building loyalty over time. By asking CS leaders to take on the role of a sales rep, we’re asking them to ultimately take their foot off the gas of relationship building, jeopardizing the feeling the clients may have of value and loyalty.
There will always naturally be points of overlap, but trusting those we have placed in these critical sales and CS roles to focus on these critical points of the revenue organization to focus on these tasks is key to long-term success. But while these critical teams may have different strengths, you must find alignment on performance goals to ensure that both teams are moving in the same direction towards growing revenue for your existing business.
One of the blessings and curses of a sales leader is that their metrics are always clearly defined in the revenue metrics. Their “quota” is set quarter after quarter, year over year. But what about metrics for the CS leaders? There are several alternative measurements that Customer Success (CS) teams can track to support revenue-oriented targets in addition to the standard "Net Revenue Retention" (NRR) metric. Let’s take a look.
"Percentage of Logos with Upsell/Cross-Sell Over Year" and "Percentage of Direct Customer Referrals" are alternative metrics that CS teams can own to support revenue targets. They incentivize CS teams to focus on increasing revenue opportunities and building brand loyalty. Curious how you can track metrics like this? TheySaid’s Customer Asking Engine enables customers to feed your team upsell, cross-sell, and churn risk signals along their journey - growing your customer revenue exactly when they tell you to.
At the end of the day, customer growth is a joint responsibility between CS and sales teams that requires shared KPIs and performance goals. It's essential to understand the fundamental dynamics and motivators between these teams to ensure they are working together, not against each other, to drive customer growth. With a better understanding of how to drive a better collaborative process among teams, a more healthy upsell process awaits.
As a Customer Success and Sales leader, you know how vital it is to capture timely customer insights to protect and grow revenue. Today, many companies do this through a hodgepodge of taped-together solutions.
TheySaid customers do this through a customer-asking engine, which targets your decision-makers with timely questions and check-ins along their journey about their experience. This generates a Customer Perceived Value metric, the most accurate qualitative signal for customer health available to SaaS companies.
Getting these customer insights is easier when small and nimble because you have fewer customers. But as you grow, the need to scale these customer insights grows with you. Understanding customer health, finding upsells, and predicting renewals is increasingly important. Meanwhile, it becomes increasingly difficult to help your team focus on the right accounts and value-add motions to accurately protect, predict, and grow revenue.
TheySaid dedicated our March roadmap to building features that deliver on enterprise scalability, offering customization and flexibility to the Pulses they are sending to their customer base to get the best response volume, renewal, and upsell insights.
Take a look at what we released in March:
With TheySaid Campaigns, you can create in-depth customizations across all the different segments of users from data in your CRM. This allows you to offer these segments personalized questions and emails, different schedules, sending limits, and playbooks. Some of the most commonly used segmentations are:
Most enterprise companies have global customer bases and are expected to communicate in various languages. As part of the new Campaigns feature, Pulses can now be delivered in any language. All you need is to provide the translation.
Users can now manage their contacts directly in Theysaid through a CRM integration, bulk CSV upload, or add/remove individual contacts directly in Theysaid. The CRM integration also allows you to add sync rules to automate the import/export of contacts based on CRM data, such as:
We like to call this the FOMO report. This view gives users visibility into how many pulses are being sent and to who and which Pulses, along with the response status. The view also shows upcoming pulses scheduled to adjust, cancel and plan your future Pulse activity.
Who rolls their eyes every time they read a social post that shouts “Customer Success is everyone’s responsibility!”? Sure, everyone agrees that if customers aren’t successful using your widget, the business will stall or fail.
What Customer leaders are really saying is “customers are churning and growing, and for the most part, that’s out of my control”.
And that’s largely true.
Customers churn because of missing features, product reliability, bad ideal customer profile fit, unsuccessful professional services projects, product is a nice-to-have, pricing doesn’t encourage usage, competitive threats, and ultimately low value received.
Customers grow because the Product and Services teams develop new offerings, they trust your team enough to upgrade their support package, and they adopt capabilities that lead to high value received and expand their licenses or other usage levers.
Because Customer teams don’t control Sales, Product, Marketing, ProServ, or Engineering, they’ve focused on what they can control–running a more effective team. Some example annual initiatives for Customer leaders include:
The trend: all of these initiatives are internally facing. They don’t increase value delivered to customers. But what if Customer leaders could influence other parts of the organization with customer data? What if Customer leaders could drive how pricing happens, which customers are acquired, and how the product roadmap evolves? Not only is it possible, but it’s the most important role that Customer leaders can play for the next decade of SaaS.
Now, it’s time to talk about Product Market Fit (PMF).
Marc Andreessen, Founding Partner at a16z, says “When an entrepreneur identifies a need in the market and builds a solution that customers want to buy, that's product-market fit.”
But, since most companies don’t have 140%+ Net Retention Rates, it’s clear that PMF is not a one-time event. Companies constantly add new features, products, geographies, buying personas, and since new competitors spawn frequently the PMF process must be ongoing.
Jennifer Dearman, CCO at Udacity and former CCO at Pendo, says “In order to prove and continually improve your company's Product Market Fit, you must balance product usage data with actually asking customers if they've received value. Hearing directly from the customer keeps you connected to the human who is using your product.”
The core of Product Market Fit is value delivered to customers. Great companies iterate on their PMF by increasing value over time.
So more value delivered = better Product Market Fit. Now we have to explore the different ways that companies can deliver value to their customers.
Maxie Schmidt-Subramanian at Forrester shared the 4 types of value that companies can deliver:
While most companies focus on economic value, like ROI statements, the other methods of delivering value will create engaged, lasting champions and relationships.
Note: Bain published a more detailed, interactive model that shows the 40 different ways to deliver value.
Measure value delivered
A common trend today is to measure value by recording a customer’s desired outcomes. This is a long-term losing strategy because it usually leads to product usage-based outcomes. That’s a problem because product usage only measures if functional value was delivered – did the product fulfill its purpose?
Only a tiny percentage of vendors can prove that usage of the product directly impacts the customer's goals. For example, if a customer’s objective is “make employees more productive”, can Slack prove that 1000 more direct messages last week helped the customer get more work done? No. It’s even possible the customer views those 1000 messages as unproductive distractions.
But let’s imagine a scenario where a vendor could directly prove that usage of their product saved the customer 20% of their annual Customer Support costs. Did the customer receive value? Well, maybe…
The customer still may not feel that they received value for these common reasons:
So even delivering on product commitments isn’t a guarantee that value was delivered. Because the customer didn’t actually want to buy a product. They wanted to buy a solution to a problem. We’re human and that means our minds change and our emotions impact our decisions. So the thing that’s missing is a way to connect to the human who uses your product. We need to understand how their needs and feelings evolve over time.
The easiest and fastest way to do this is to take the customer’s pulse along their journey, and ask them about how their overall experience was with Sales, Marketing content, Product features and UX, Engineering product reliability, ProServ quality, Support helpfulness, etc. Are you delivering Economic, Functional, Experiential and Symbolic value?
A Pulse program is a strategy that directly asks customers about value delivered along their journey. Questions are standardized for the entire customer portfolio so they can be normalized across product lines, geographies or business segments. A basic Pulse program has these components:
A pulse question might look something like this:
As customers start responding to your pulse questions, you can create incredible visibility for your company.
Product Market Fit scorecard
When your Pulse program is set up correctly, you’re getting constant real-time feedback about value delivered across the customer journey. Your Pulse questions will uncover how each department contributes to Product Market Fit (PMF):
You become the executive that owns PMF for your business. Youl scan across the entire customer journey, and direct other departments to fix the biggest problems and chase the biggest opportunities. For example, if the Sales team is overselling, show the Sales leader the 13 customers worth $2.8M are at risk. Since this is customer-reported data, it’s difficult to ignore.
A great Pulse program leads to a great PMF scorecard that includes the following:
Maturity model
The path to Level 5 maturity is a huge undertaking. Companies can use this model to plan out the steps they’ll take to level up the way they understand and act on value delivered to customers.
We improve Product Market Fit by doing a better job as a company measuring and taking action on value delivery, as follows:
LEVEL 1: USAGE METRICS
Our first baby steps are to measure the usage of the product. This is particularly useful for identifying customer usage changes, when there’s zero usage, or when the customer isn’t using our differentiated features (the features that prevent competitors from stealing them away). As we become more sophisticated, we can use standard deviation calculations to determine how customers use the product.
LEVEL 2: STANDARD CUSTOMER METRICS
Now we added internal metrics that attempt to estimate value delivered. These include scores like NPS, CSAT, and health scores but also time-based assessments like time to value and ticket resolution time. These are useful to identify trends across the portfolio over time, but we still don’t know if the customer receives value.
LEVEL 3: MEASURE VALUE DELIVERED
Finally, we’re measuring value. It’s important to have deep relationships with customers via Customer advisory and interview programs, record the business problems that customers want to solve, and then use a Pulse program to score the value delivered across the whole portfolio, and along the entire journey.
LEVEL 4: EMBEDDED
Now that we understand where we succeed and fail delivering value, we can embed that information into how the company operates. Rather than setting goals around NRR, a selfish internal metric, the company sets goals to increase value delivered (measured via the pulse program). Cross-functional meetings are used to set major company initiatives and leaders are required to include customer value data when they make decisions.
LEVEL 5: CUSTOMER-LED GROWTH
The company is ready to pursue Customer-Led Growth, a predictable, low-cost method for driving ongoing business growth. The company’s deep understanding of how to deliver value through marketing, sales, services, product, and success allows the company to finally chase a consistent 140%+ Net Retention Rate.
PMF is your future
Delivering low value to customers leads to poor PMF, and poor PMF leads to weak Net Retention Rates (anything under 125% NRR is weak).
Value can be delivered in many ways across many touch points. Although Customer leaders don’t own most of those touch points, they’re the closest executive to the entire customer journey. Customer leaders can take advantage of this role by pulsing customers and measuring value delivered to customers at each touch point.
Today, no one on the executive team “owns” Product Market Fit. No one has stepped up for their investors, CEO, and employees. PMF is the enormous opportunity for Customer Leaders. Not reducing time to value by 10%, not optimizing health scores, not adding more product usage data, but instead scoring, analyzing, and reporting on the company’s Product Market Fit.
And better PMF will lead to better NRR, and ultimately Customer-Led Growth will provide a new channel of predictable revenue at a lower cost.
That’s the path to become the SaaS superhero of the next decade. That’s how the Customer Leader becomes the most important executive on the team.
CONTRIBUTORS
This piece was a collaborative effort by Chris Hicken (CEO at ‘nuffsaid), Nick Mehta (CEO at Gainsight), David Sakamoto (VP of Customer Success at Gitlab), Mike Lee (Dir of Customer Success at PublicInput), Kristina Valkanoff (VP of Customer Success at TIME), and Ejieme Eromosele (VP of Customer Success and Account Management at Quiq).
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