Six Characteristics of Highly Effective Service Organizations

Six Characteristics of Highly Effective Service Organizations

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Six Characteristics of Highly Effective Service Organizations

To be fully successful with services you must keep the customers you have and create opportunities to expand relationship value.

This means that you must deliver positive customer experiences and meet increasing customer demand and satisfy higher customer expectations – cost effectively.

Here are the six characteristics of highly effective service organizations.

1. Service Strategy Delivers Outcomes

A well-defined plan helps you to be successful with services.

Strategy defines what an organization wants to accomplish and how it will prioritize initiatives and allocate resources to achieve outcomes. Service organizations need a strategy to set goals, define priorities and establish plans.

Highly effective organizations define how teams including Services, Development, Sales, and Product Management cooperate and coordinate efforts across the company to cost effectively meet customer needs and attain business outcomes.

2. Service Offers Drive Growth

A well-defined portfolio of service programs is essential to retain and expand customer relationships.

Service programs establish customer expectations and define how companies monetize service delivery.

Service portfolios need to meet evolving customer needs from onboarding through adoption, support, success, and modernization stages of product ownership.

The right service portfolio design will engage customers, accelerate time-to-value, and increase the likelihood of renewal and expansion.

Highly effective organizations monetize support and success services by offering catalogs of high-value services that customers want and Sales can sell.

3. Service Team Design Promotes Collaboration

Organize the right people in the right roles to do the right things cooperatively.

Every team within an organization is accountable for contributing to customer outcomes. Organizations need to have the right people with the right skills and responsibilities incented to do the right things.

When teams cooperate and work towards common objectives, they are efficient and effective in delivering what is promised to customers.

Highly effective organizations break down organizational silos and maximize cross-functional cooperation to achieve shared objectives and deliver better customer experience at every touchpoint.

4. Processes are Streamlined and Cross-Functional

Define activities and actions to achieve desired service outcomes efficiently.

Process defines what organizations do and how they do it. Service processes need to encompass delivery of services, engagement, and renewal of customer relationships, and strengthen service delivery capabilities.

Highly effective organizations increase service efficiency when key activities are well-defined and best practices embraced.

5. Technology Drives Efficiency and Innovation

Innovate, automate, and scale service delivery cost effectively.

Technology enhances service capabilities and enables new ways to engage customers. The right use of service technology will scale delivery capacity, improve customer experiences, and deliver better business outcomes at lower costs.

Highly effective organizations leverage technology to streamline and automate core service functions and find new and better ways to serve customers.

6. Access to Data Leads to Meaningful Insights

Insights drive process improvement, efficiency gains, and better customer experiences.

Highly effective service organizations have the means to measure the contribution of service initiatives to specific corporate goals and objectives. They use insights to predict and prevent issues and escalations and identify opportunities to mitigate churn and expand relationship value.

Apply theses 6 characteristics of effective service organizations to maximize service success.

  1. Define your service strategy.
  2. Offer a robust portfolio of services.
  3. Organize teams to maximize cooperation and collaboration.
  4. Embrace best practices.
  5. Modernize technology.
  6. Develop and apply insights

Would you like to discuss how well you have embraced these Six Characteristics of Highly Effective Service Organizations?  Would you like examples of effective service strategies and metrics? Contact ServiceXRG. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a specific time.​

Accelerate Customer Success.

Download the ServiceXRG Playbook:  Customer Success Management and discover:

  • How to establish customer needs and plan for successful outcomes.
  • What it takes to help customers adopt and apply your products.
  • Key success indicators and the means to monitor progress.
Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

Retention is Paramount – Make it a Strategic Priority!

Retention is Paramount – Make it a Strategic Priority!

Retention is Paramount – Make it a Strategic Priority!

We have become too dependent on electronic surveys and NPS/CSat scores to tell us that our customers are okay. This cannot always provide enough insights to tell us why we lose customers.  To reduce churn, you need to do more.

Less NPS / More High-Touch Understanding

We have become too dependent on electronic surveys and NPS/CSat scores to tell us that our customers are okay. These are fine indicators but do not always tell us why we lose customers. Frankly many of the customers we lose may never have shared feedback through voice of the customer campaigns.

To mitigate churn, we need to dig deeper to understand why a customer stops (or never starts) using a product or why they do not perceive value from the services they pay for.

The best way to do this – pick up the phone or visit your customers and listen to their concerns! Don’t wait for customers to cancel before engaging them.

How We Keep Customers

Not every relationship can (or should) be retained, but if you listen carefully enough you will find that you can address many top churn factors.  Onboarding, adoption, success planning and account management are all powerful tools to mitigate risk factors.

Principles and practices of customer success are taking us in the right direction with an emphasis on retaining existing relationships. We need to make certain that we avoid the temptations to rely too much on tech-touch and keep personal channels of communication open with customers – especially the ones we do not hear from on a regular basis.

The Bottom Line

Retention of both relationships and revenue are critical indicators of business health.  Understand retention levels and underlying factors that influence them. Retention is paramount – make it a strategic priority!

Accelerate Customer Success.

Download the ServiceXRG Playbook:  Customer Success Management and discover:

  • How to establish customer needs and plan for successful outcomes.
  • What it takes to help customers adopt and apply your products.
  • Key success indicators and the means to monitor progress.
Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

The Right Metrics for Support and Success

The Right Metrics for Support and Success

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The Right Metrics for Support and Success

High customer satisfaction and Net Promoter Scores as the desired outcome of Support and Customer Success interactions, while positive, is not enough because it does not connect service delivery excellence with tangible business outcomes.

​The Right Metrics for Support and Success

Support and Success must focus on the attainment of tangible business outcomes. For the customer, this implies that Support or Success interactions must help the customer apply a product successfully. For a customer’s perspective success implies that they can use and apply a product to achieve their business outcomes.  For the technology vendors, providing these services must contribute to retaining relationships with hopes of expanding their value. This is why organizations must look beyond NPS (Net Promoter Score) or basic transitional metrics when measuring the impact of Support and Success on lifetime customer value.

The measure of Support and Success must be tangible and focused on “end game” results such as:

  • Can the customer use the product?
  • Can customers achieve tangible business outcomes by using the product?
  • Did Support or Success services help the customer attain their goals?
  • How will the customers’ ability to achieve their desired outcomes influence their ongoing relationship?

8 Metrics for Support and Success

What is the primary reason for offering Support and Success services?  In most cases these organizations are aligned to help customers adopt and apply products successfully. The rationale is if customer can use and apply products successfully, you will increase the likelihood that you can retain and expand these relationships.  A single, simple measure such as NPS cannot provide sufficient insight to indicate that Support and Success efforts are resulting in tangible business benefit.

Consider the following eight metrics for determining the impact of your post sales services.

Metric

Description

1. Onboard

The percent on that new customers have received formal onboarding guidance.

2. Adoption

The rate that customers have met adoption milestones.

3. Success

The percent of customer that have reached established performance goals or milestones on defined journey map.

4. Availability

The rate that customers business operations have not be interrupted due to downtime or outages.

5. Engagement Quality

The percent of all customer engagements that result in positive outcomes.

6. Retention

The percent of active customers that have committed to renew an existing relationship.

7. Health

The relative health of a customer relationship based on the composite rates of adoption, success, retention, and recurring revenue rates.

8. Net Recurring Revenue

The net growth or contraction of the total recurring revenue relationship value. Learn the formula for calculating Recurring Revenue Rate.

 

How effectively are you managing and maximizing these Support and Success metrics?

I’m here to help you get the answers you need.

Reach out anytime to get answers and insights about the best ways to engage and retain your customers. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a time to talk.

Fresh, authoritative, actionable insights for Support leaders

Exclusive Research Report:

Support Transformation: The Guide to Essential Practices and Metrics

Download the ServiceXRG Support Transformation 2021 research report

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Recurring Revenue Rate

Recurring Revenue Rate

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Recurring Revenue Rate

Recurring Revenue Rate provides an indication of how much recurring relationship value you are retaining, growing or losing. It’s a crucial metric of how well your Support organization is reaping the benefits of the subscription model. Here’s how to calculate recurring revenue rate.

What is Recurring Revenue Rate?

Recurring Revenue Rate indicates the percent change in the amount of recurring recurring revenue at the end of a specified period compared with the recurring revenue at the beginning of the same period.

Support and Success leaders can apply recurring revenue rate to a specific timeframe (e.g. quarterly or annually), or to tracking Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR). It’s an essential metric of the financial health of recurring revenue relationships such as service contracts and subscriptions.

(An important note: Unlike Contract Renewal Rate, where 100% is the maximum performance level, recurring revenue rate can exceed 100% —  indicating that the value of an existing relationship, or the net value of all recurring relationships, has increase from the previous period.)

How to calculate Recurring Revenue Rate

The formula is a simple ratio:

Recurring Revenue Rate = Recurring Revenue at End of Term / Recurring Revenue at Beginning of Term

Let’s apply it to a very basic example, calculating the recurring revenue rate for Q1:

Recurring Revenue Beginning Q1 = $100

+ Recurring Revenue Added in Q1 = $50 ($45 from new customers + $5 from expansion of existing relationships)

Recurring Revenue Lost in Q1 = $30 ($25 due to customer churn + $5 due to downgrade of existing relationships)

 

Recurring Revenue End Q1 = $120

 

Recurring Revenue Rate = 120% (20% growth)

How effectively are you managing and maximizing recurring revenue?

I’m here to help you get the answers you need.

Reach out anytime to get answers and insights about the best ways to engage and retain your customers. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a time to talk.

New, high-return revenue streams are waiting to be unlocked.
Here’s the key.

Exclusive ServiceXRG Whitepaper:

Using Services to Retain & Grow Recurring Revenue

Download the ServiceXRG whitepaper: Using Services to Retain and Grow Recurring Revenue

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Beyond Self-Service Deflection

Beyond Self-Service Deflection

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Beyond Self-Service Deflection

The use of deflection as a basis to justify investments in Self-Service fosters an expectation that it is only capable of reducing costs. The fact is that Self-Service delivers more tangible benefits that can strengthen relationships with customers and enhance Support’s ability to fulfill its primary mission to help customers use and apply products.

Beyond Self-Service Deflection

Deflection is a convenient indicator and well aligned to the desire to scale Support and reduce delivery costs. Deflection does not, however, inform about the impact of our Self-Services on strengthening customer relationships.

Why is the technology services industry obsessed with deflection and overly focused on cost reduction as a target benefit?  This is due in part to the legacy of Support and the persistent belief that Support is a necessary evil and a costly burden to the company.

The reality is that Support accounts for the largest single touchpoint with customers and is the cornerstone of any strategy to retain customers.

Deflection does not need to be dropped as a metric. When considering future investments in Support — such as additional staffing or technologies to help scale delivery capacity — look at both the cost reduction and revenue potential.

Making Deflection Savings Real

When 20% of case demand is deflected from assisted support channels, it does not necessarily translate to actual savings until companies take action to reduce the cost of delivering support.

Few companies are likely to reduce Support headcount by 20% due to deflection.  Companies may, however, curtail future Support staff expansion or reallocate some of the hours of existing staff to alternative activities. Deflection of case volume from assisted support channels is real, but the actual savings are seldom reflected in the accounting ledger. Actual savings can only be realized when action is taken to reduce the cost of delivering support.

How to Move Beyond Self-Service Deflection

It is time to move beyond the assumption that avoiding an assisted support interaction is an effective indicator of our ability to scale Support.  We need to know with certainty that the knowledge, self-help, and automation we provide delivers the answers and insights customers need.

To move beyond deflection, we need to reassess the returns we expect from our investments in capturing and sharing knowledge to scale Support.  We should focus on the following tenets of Support performance:

  • Customers receive the information and insights they need to overcome an issue or defect and/or help installing, configuring, using, and applying your products.
  • A quality answer is provided at the lowest possible cost.
  • A quality answer is provided in the fastest possible time.

Scaling Support

Although Self-Service is used widely across the industry, only 20% of companies cite it as a primary factor for reducing support demand. This suggests that even when Self-Service is offered, overall support demand does not decline, although the percent of support demand handled by support staff is likely to be reduced. This is not to suggest that Self-Service is not worthwhile. It cannot, however, be the only investment Support organizations make to reduce demand.

For additional strategies to scale support, get the ServiceXRG whitepaper: Four Imperatives for Scaling Support.

 

Ready to define the strategic role of your self-service initiatives?

We’re here to help you get the answers you need.

Reach out anytime to get answers and insights about the best ways to define and measure the effectiveness of self-service initiatives. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a specific time to talk.

Reduce your Support delivery costs.
Give your high-value customers the attention they deserve.

Exclusive ServiceXRG White Paper:

Self-Service Deflection — Maximizing the Use and Effectiveness of Self-Help and Automation

Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

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Six Steps to Measure Self-Service Deflection

Six Steps to Measure Self-Service Deflection

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Six Steps to Measure Self-Service Deflection

Self-Service deflection is the rate at which self-help and automated resources satisfy customers’ service demands that would otherwise be handled by assisted service staff.

Using an accurate measure of deflection is imperative. If deflection is not measured correctly, it is easy to overstate the impact of self-help and service automation on assisted support demand. ServiceXRG has developed a proven reliable formula for measuring Self-Service deflection rates in your operations.

Deflection Defined

Deflection is the rate at which automated, and self-help resources satisfy service demand that would otherwise be handled by assisted service staff. The attainable rate of deflection is highly dependent upon factors such as:

  • the maturity and complexity of a product
  • the skills of the end users
  • the quality of tools and content provided by the service provider.

It is easy to overstate the impact of self-help and automation by equating their overall effectiveness with reduced need for assisted support. Yes, many issues may be resolved through self-help and automated means. Yet not all issues are destined for or entitled to resolution through assisted support channels.

For a case to be considered as successfully “deflected,” it must meet the following criteria:

  • The customer submitting the case must be entitled to assisted support.
  • An issue must be successfully resolved.
  • The customer submitting the case requires no further action from assisted support resources to validate or clarify the answer provided through self-help or automated means.

Six Steps to Measure Deflection

ServiceXRG has developed the following approach to measuring deflection rates. Each of the inputs for the deflection calculation are described below. Here are the steps:

Step 1:

Establish the number of Self-Service events

Determine the number of self-help and automated service events during a specified period of time. You can include all:

  • Self-help transactions on the support web portal.
  • Automated self-help responses through chatbot or other automated means.
  • Any other activity that provides customers with an answer to a support case and did not require any support staff involvement.

Step 2:

Establish the Self-Service success rate

Determine how many self-help and automated service events successfully provide customers with an answer to their question and did not require involvement by support staff.

To capture the success rate, you will need to ask customers if they were successful through a web-based questionnaire (e.g. “did this answer your question”) or follow-up transaction survey.

Note: Self-help success is an important indicator to suggest how useful self-help tools and content are, but self-help success is not the same as deflection (read-on for the reasons why).

Step 3:

Establish customer entitlement

Determine the number of Self-Service events that were performed by customers that are entitled to assisted support.

Do not count Self-Service events that were conducted by customers that do not have access to assisted support.  You cannot deflect a case from assisted support if a customer is not entitled to access assisted support resources.

Step 4:

Establish intent (optional)

Determine how many Self-Service events are conducted by entitled customers that intend to request support assistance if they are not successful with self-help.

The purpose of this is to eliminate the casual browsers from your deflection calculations.  Some customers just browse a support knowledgebase but never really intend to open a case).

Step 5:

Determine that there is no further action after a successful self-help event

Establish the rate of self-help events that do not require any further action after an entitled customer successfully finds an answer.

Step 6:

Establish the deflection rate

Deflection Rate =

Self-Help Service Events by Entitled Customers Success Rate X Intent Rate No Further Action Rate

 

?

Need help calculating deflection or collecting inputs?

 

We’re here to help you get the answers you need.

Reach out anytime to get answers and insights about the best ways to define and measure the effectiveness of self-service initiatives. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a specific time to talk.

Reduce your Support delivery costs.
Give your high-value customers the attention they deserve.

Exclusive ServiceXRG White Paper:

Self-Service Deflection — Maximizing the Use and Effectiveness of Self-Help and Automation

Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

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