How Adoption and Success Services Drive Recurring Revenue

How Adoption and Success Services Drive Recurring Revenue

How Adoption and Success Services Drive Recurring Revenue

Services drive recurring revenue by helping customers to successfully adopt and apply products. When customers succeed with the products they purchase, it increases the likelihood of sustained recurring revenue and creates opportunities to expand the long-term value of relationships. 

The Pursuit of Recurring Revenue

Services drive recurring revenue by helping customers to successfully adopt and apply products. Many products have the features a customer needs, yet features are irrelevant if customers cannot use the product to achieve their desired business outcomes.  When customers succeed with the products they purchase, it increases the likelihood of sustained recurring revenue and creates opportunities to expand the long-term value of relationships. 

Landing the New Deal is Only the Beginning

Landing a new customer sale is the first step in creating a recurring revenue relationship.  While sales and marketing efforts help convince customers that your product has the right features at the right price point, it is not enough to assure the recurrence of future revenue. Customers don’t just buy your products because they like the features or the price.  Customers buy your products to optimize their business’ performance. 

The ability to establish and sustain recurring revenue from customer relationships demands that customers be successful with your products.  The greatest risk to recurring revenue is customer failure.  To mitigate failure companies must be prepared to supplement product capabilities with essential services to help customers effectively adopt and apply products successfully to achieve their business objectives.

Adoption and Success Are the Foundation for Long Term Relationships

For many technology companies, 70% or more of revenue comes from existing customers. When customers do not fully use what they have already purchased, they are less likely to purchase more or even renew current subscriptions. The key to sustained revenue growth is through the delivery of services that drive product adoption and assure that customers can use products quickly and effectively.

According to a study by ServiceXRG, the majority (93%) of customer that receive some form of onboarding and adoption services report that they feel confident that they have the skills to use a product effectively.

Customers that have access to success focused services are 2.8 times more likely to continue using the products they purchase or subscribe to, purchase more products and services, and renew existing relationships.  As the extent and effectiveness of success-focused service rise, the positive impact on retaining and expanding recurring revenue increases.

Ready to up your game! Check out Five Customer Engagement Best Practices to Develop, Retain, and Grow Relationships

Adoption Services

Adoption focused services are designed to help customers use the products they have purchased.  Adoption services may start with a formal hand-off from Sales to Services to assure the expectations set during the Sales process are carried forward to the implementation of the product.  Adoption services may include installation, configuration, and training.  These services provide a solid foundation so that customers have the skills they need to use a product effectively.

Most Effective Adoption Services

Source: ServiceXRG

Success Services

Where Adoption services help customers to get up and running with their products, Success services focus on helping customers to apply products to drive tangible business outcomes.  Success services often include success planning and guidance, account management, business reviews, health checks, best practices guidance, and expert resources.  Success services assure that customers can apply products to solve their business problems.

Most Effective Success Services

Most Effective Success Services

Source: ServiceXRG

Customer Success Drives Recurring Revenue

Services are the key to maximizing recurring revenue when companies have the capability to define, sell, and deliver the services customers need.  When companies lack these capabilities, product adoption and achievement of successful outcomes by customers is inhibited. When adoption and success is impeded, the potential for customer churn increases, placing recurring revenue at risk.  

Service capabilities aligned to the needs of customers are fundamental to ensuring customer success. A well-defined portfolio of services; effective service sales and marketing; and highly effective and scalable service delivery capabilities are fundamental to reducing churn and expanding recurring revenue. 

Learn proven practices for growing recurring revenue with Services.

Download Using Services to Retain & Grow Recurring Revenue and discover:

  • The 3 service-driven keys to revenue retention and expansion.
  • The 4 service-related imperatives for revenue retention and expansion.
  • A framework for planning and executing for sustainably increased recurring revenue.
Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

Customer Success Management

Customer Success Management

Customer Success Management

Customer Success Management encompasses the practices, programs, resources, tools, and metrics required to help customers successfully use products to achieve their desired business outcomes.

Understand The Outcomes Your Customers Need

Success Management begins by establishing an understanding about how your customers define success and understanding the role your products will play.  By understanding what your customers expect it is possible to align resources to help them achieve their desired outcomes.

Products + Services = Success

It is possible that customer expectations will only “scratch” the surface of what your product can do, or what they should do with it.  Sometimes asking customers what they want to accomplish should be supplemented by showing them what is possible.

Make a Plan

Help customers define and achieve desired outcomes by developing a success plan.  It is not necessarily your role to execute the plan and deliver the expected outcomes.  It is however your role to assure that you enable customers to be successful.  Customer enablement may include training and skills development, sharing of best practices and hands on coaching and expertise.

The Foundation of an Ongoing Relationship

Customer Success Management is not simply about the plan and initial delivery of best practices and service.  Success Management is the foundation of an ongoing relationship where your products and services evolve to deliver ongoing benefits to your customers.

Playbook and Assessment

ServiceXRG offers a playbook and assessment tool to help you identify the maturity of your Customer Success Management capabilities.  These resources will help you to establish where your success management practices are strongest, and where you have opportunity for improvement.  The Customer Success Management Assessment tool is available (no charge) at www.servicexrg.com/assessments.

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"

Is it worth competing for Service Industry Awards?

Is it worth competing for Service Industry Awards?

Is it worth competing for Service Industry Awards?

Service industry awards hold the promise of providing tangible business benefit including recognition, awareness and a healthy self-assessment from the application process. But, are service industry awards worth the effort?

The Pros

Service industry awards hold the promise of providing tangible business benefit including recognition, awareness and a healthy self-assessment from the application process.  Consider the following pros.

  • Award Winning – Being able to claim award winning service can enhance your marketing message, especially if your top competitors cannot make the same claim.
  • Clarify External Messaging – The process of completing an application often requires a review of current capabilities, accomplishments, innovations and strengths. Once the application is complete you have developed and revised the key points you need to communicate externally.
  • Self-Assessment –The application process often provides a healthy self-assessment of current performance and practices. An honest self-assessment will reveal both strengths and weaknesses.

The Cons

As with most things there is a downside to participating in industry awards.  The risk of losing the time invested to participate, and the potential for a disappointing return from the effort.  Consider the Cons when considering participation in awards programs.

  • Diluted Claims – The phrase “Award-wining” has become diluted by the claim of so many companies that they have won awards. Not all awards are created equal, nor are they all earned under the same conditions and timeframe. The often-used phrase “award winning” can appear with little explanation or substantiation.
  • Customer Impact – If you win an award will your customers and prospects even notice. The effectiveness of an award is directly related to the brand equity of the award or body presenting the award. Before participating in an awards program ask your customers and your sales team if it matters.
  • Winner or Loser – If you don’t win are you a loser? Some recognition programs publish both winners and the losers. If you do not have a high degree of confidence of winning are you willing to be classified as a runner up to your top competitor, or even worse labeled as a loser?
  • Time and Effort – Any award worth winning is going to require time and effort to develop a complete and compelling application. Be prepared to do it right.
  • Repeat Performance – Once you win, you are under pressure to continue to win.

Recommendations

Awards programs can offer sales and marketing benefit as well as an opportunity for self-assessment.  Consider the pros and cons outlined above to determine if it is worth your time and effort to participate.  When it comes to awards more is not necessarily better.  It is best to choose the awards that will provide the most benefit.  Consider the following recommendations:

  • Choose Wisely – Identify awards programs that are likely to carry weight with your customers.
  • Do Your Homework – Understand the judging criteria and the way that results will be published – win or lose.
  • Be Ready to Win – Be reasonably sure you have a chance to win. Do not enter an awards program just to see what will happen. Understand who the other likely participants will be and determine if you are ready to beat them.
  • Do it Right – Be prepared to invest the time and effort to submit a high-quality application.

Ready to Compete?

Are you thinking about competing for a service industry award?  Are you looking for the right program or category?

Give me a call, I can help.  I have written many winning award applications and judged numerous awards programs.

Tom Sweeny

CEO | ServiceXRG

Success Marketing and Portfolio Management best practices will help you position and sell the value of your Service portfolio

Download Success Marketing and Portfolio Management and discover:

  • The essential sales and marketing practices to position and sell Support and Customer Success offers.
  • Strategies for effective Sales enablement.
  • How to develop a compelling service value proposition.
Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

Service Planning Drives Results

Service Planning Drives Results

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Service Planning Drives Results

Effective Service planning must clearly define the role of Services within your company, prioritize service initiatives necessary to attain prioritized results, and establish metrics to track service performance and outcomes.

Service Planning Drives Results

To be successful with Services, you must establish a Service plan. To be effective, the Service plan must be aligned to corporate objectives, clearly define how Services will contribute, prioritize key initiatives, and have established metrics to track service performance and outcomes. Service team results are driven with a Service plan that incorporates the following actions.

Align service objectives to strategic business goals, objectives, and outcomes

Service teams should be focused on activities that contribute to attaining strategic business goals and objectives.

To align Service initiatives to corporate outcomes:

  1. Understand corporate goals and objectives.
  2. Establish which goals Services can contribute to.
  3. Define the extent to which Services can contribute.

Identify and focus on priority initiatives

Resist the temptation to spend time on less important things – you can’t accomplish everything.  Practical resource limits demand that you focus on what is most important.

To prioritize Service initiates:

  1. Determine which Service initiatives are critical to Service delivery.
  2. Identify Service initiatives that will yield the greatest benefits.
  3. Focus on initiatives that are attainable given available resources, budget, and time

For more information read:

How to Prioritize Service Initiatives

Align individual and team goals with priority Service initiatives

Every individual and team must contribute to the attainment of Service outcomes.

To connect individual performance to strategic service objectives:

  1. Align Services organizational goals to corporate goals.
  2. Align each Service teams’ goals to Services organizational goals.
  3. Align individual goals to team goals.
  4. Create performance management guidelines to evaluate performance at every level.

Define metrics for tracking Service performance

Modernize Service metrics to clearly correlate Service performance to tangible outcomes. To accomplish this:

  1. Establish key indicators for expected Service outcomes.
  2. Monitor Service performance for each indicator.
  3. Correlate Service performance to tangible outcomes.

Daunting but necessary

The Service planning process can be daunting – especially when there is so much to do, but not enough resources. As difficult as it may be to develop a Service plan, it is fundamental to attaining successful Service outcomes.

A plan is only as good as your ability to execute

Successful Service plans need to focus on attaining expected results, with the flexibility to adjust as circumstances change. Plans fail when they are underfunded, understaffed, or beholden to established practices and outdated measures of performance just because “it has always been done that way.”

We’re ServiceXRG – Service Success is our passion.

 Since 2004, ServiceXRG has helped leading technology companies transform and optimize their Service organizations to achieve Service Success.

 Let us know how we can help you develop your Service Success plan – Contact UsWe’re here to help!

Visualize, strategize, and optimize for service success and recurring revenue.

Download Transformation of the Service Organization, and discover:

  • An analysis of what’s working — and what isn’t — in current service organization structures.
  • The characteristics of mature, efficient, and effective service organizations.
  • The catalysts for organizational change — and how to overcome the inhibitors that get in the way.

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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