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How To Measure Your Customers’ Journey To Success

How To Measure Your Customers’ Journey To Success

Too many businesses don’t know if they have an effective customer engagement process. Their primary feedback comes from financial results – revenue and profit. If revenue and profit are ok, they assume the engagement model is ok.

But even if revenue and profit are ok, they may leave money on the table. They may miss additional revenue. Or, they may spend too much to bring the revenue in, reducing profit. To compound the issue, revenue and profit are lag indicators. They tell you after the fact there’s a problem.

Lots of businesses use surveys such as Net Promoter Score (NPS). NPS tells you whether the customer would recommend you. Customers unhappy with their engagement would score you low, so you’d get some insight. But unless the customers provide detailed explanations, you’re unlikely to get insight into how well your engagement process works.  

In the technology sector, there’s a new generation of technology vendors. Amongst the many things they do well is to define, track and measure their customer lifecycle. They know there’s a process the customers go through, a journey they follow. It starts with a buying cycle and moves into success realisation after the customer has bought. A well-designed lifecycle drives a smooth transit to success for the customer. And for the vendor.

Existing Customers

To illustrate lifecycle measurement, we’ll use the lifecycle with existing customers. The lifecycle for new business has some variations.

Let’s break the lifecycle into four major phases. We’ll look at how a technology vendor with complex products might engage with customers. And how they’d measure the effectiveness of their lifecycle.

Develop

In this phase, the vendor is building interest amongst customers. The vendor is crystal clear on the outcome the customer regards as success. Let’s call this a success outcome. They know that customers, particularly executives, don’t care much about the products. They care about the success outcome and how to achieve it. So, the vendor’s content marketing focuses on this success outcome.   Here are three steps in the Develop phase –

Attention – gain the attention of potential buyers in the customers and get them to vendor’s website. The measure for this step is number of visitors to the website.

Interest – gain the interest of potential buyers. On your website, you’ll provide information on how you can help the customer be successful. The measures include

  • the amount of time spent on your website,
  • the number of brochures and papers downloaded or videos viewed
  • the number of times people return

Interaction – move beyond providing information. Provide tools that provide the customer with information they can manipulate. For example, calculators that allow them to assess revenue or profit improvement. Or survey tools they can use for their own business. The measure is the amount of time spent using these tools.

Evaluate

The new generation of technology vendors have moved from selling products to jointly evaluating opportunities for increased success. They’ve agreed with the customer what success means to the customer’s top management. And they work to enable or improve that success. This is the success outcome.

Their engagement with customers revolves around periodic business reviews and joint evaluations of potential projects to increase success.

The potential steps in this phase include –

Periodic Business Review – Meeting with key customer executives. The group discusses how to improve the success outcome (what the executives consider success to be). The outcome is a list of possible projects. The measure for this step is the number and value of potential projects.

High Level Business Case Analysis – the customer and vendor jointly analyse the potential improvement projects. The outcome is a joint report providing the high-level business analysis for each potential project. The measure is the number and value of potential projects that have a positive high-level business case ie there’s a good case for proceeding.

Potential Projects Review – the customer and vendor jointly present the results of the high level business cases to the customer executives. The executives then decide which are worth further investigation. The outcome is a list of potential projects that will be further investigated. The measure is the number and value of potential projects moving to the next stage.

Detailed Business Case Analysis – the customer and vendor jointly conduct a detailed review. The vendor may be paid for their work in this step. The outcome is a report with everything the customer needs to get internal approval (assuming the project has a positive business case). The measure is the number and value of potential projects with a positive business case.

Project Decisions – the customer then decides on each potential project based on the business case. The measure is the number and value of projects approved.

Project Commitments – not all approved projects will move forward. They may need to be considered further in the budget process. Or circumstances may change. The final step is for each project to receive the go ahead or commitment. The measure is the number of value of projects that commence.

Prosper

The final phase is Prosper. The customer and vendor jointly monitor and measure the success outcome (the business result top management regard as success). They then cycle back to the periodic business review for ongoing improvements. The measure is the agreed measures for the success outcome, monitored over time.

Measures

Here’s how the measures of the lifecycle unfold for a vendor of complex products –

Develop

  • Attention – visitors to website
  • Interest – time and downloads from the website
  • Online Interaction – time on and use of interactive tools, value of suspects who approach the vendor

Evaluate

  • Periodic business review – value of potential projects
  • High-level business case – value of potential projects with positive high-level business case
  • Potential projects review – value of potential projects approved for further investigation
  • Detailed business case – value of potential projects with positive business case
  • Project approvals – value of projects the customer plans to move forward
  • Project Commitments – value of projects commenced.

Execute

  • Project setup – the degree to which the ‘ideal project’ is established
  • Project execution – the degree to which the ideal process was followed
  • Measure and report – the results achieved

Prosper

  • Ongoing measurement of the customer’s success outcome

From the Evaluate phase onwards, the measurement is done jointly with the customer. The vendor will separately measure elements such as retention, ideal product usage (key features), upsell and cross-sell.

Outcome of Lifecycle Measurement

The objective is to track a customer’s progress on the path to success realisation. Each step has a measure designed to track how the customer is moving through the lifecycle. By measuring each step, the vendor can see both their own pipeline of revenue and how well the customer is progressing towards their own success.

And if customers enjoy success, they spend more with the vendor. Everyone wins.

2018-07-30T23:30:40+00:00