The problem with organizational silos

Organizational silos create barriers to customer success by inhibiting the levels of coordination and cooperation necessary to retain and grow customer relationships. The hand off from one department to the next creates gaps between expectations set and how they are met.

Distinct organizations may also be motivated to achieve different and possibly conflicting outcomes. Most importantly the lack of coordination between departments inhibits the ability to fully understand customer needs and to act on them. Efforts to add success mangers, onboarding teams, or renewal and expansion sales roles are stopgap measures to address some of the inefficiencies of siloed post-sales organizations. These stopgap efforts are not enough.

The bottom line is that post-sales coordination and cooperation is the key to customer retention and relationship revenue growth and provides opportunities to achieve greater staffing efficiencies. If you cannot achieve the necessary level of inter-department cooperation it’s time to restructure and remove these silos.

Featured: The Transformation of The Service Organization

ServiceXRG examines the current state of service organizations and the forces at work that are driving organizational transformation. This study reveals how the isolated service silos of the past need to evolve into unified entities to drive Customer Success.

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Related Articles

The problem with organizational silos

Organizational silos create barriers to customer success by inhibiting the levels of coordination and cooperation necessary to retain and grow customer relationships. The hand off from one department to the next creates gaps between expectations set and how they are met. This study reveals how the isolated sales and service silos of the past can evolve to drive Customer Success.

read more

Understanding the Differences Between Technical Support and Customer Success

As we look to embrace Customer Success it is imperative that we have a shared understanding about what Customer Success is and is not. All too often we find examples of Customer Success initiatives that involve little more than changing the name of the Support department or adding a few new roles to focus on success-related activities.

Every step towards a Customer Success-oriented approach is positive, but if we truly want to pursue Customer Success, we need to understand what it is and why it is different from traditional Technical Support models.

The Journey to Customer Success

The term Customer Success seems to permeate the technology industry with nearly every company engaged in some type of success initiative.  The focus and awareness of Customer Success is timely and refreshing.  I don’t mean to imply that technology companies have not been focused on making customers successful in the past, but this emphasis on Customer Success creates a new level of awareness and commitment to truly impacting customers’ ability to derive benefits from technology.  Customer Success has profound implications for the ways that companies engage, serve, and retain customers.

Customer Success – Functions vs. Philosophy

It is important to distinguish between customer success-focused activities (functions) and Customer Success as operating model (philosophy).  Support and many customer-facing departments have been engaged in success-focused practices long before we started labeling them as Customer Success.  Today, perhaps we label too many things as Customer Success.

By instituting Customer Success functions (onboarding, driving adoption, customer health indexing, success management, etc.)  within Support, we do not necessarily achieve a customer success-focused way of conducting business. True Customer Success requires transformation and cooperation across many departments and introduces new ways to define and measure business performance.

The Customer Success – Spectrum

We need to recognize that there are variations of Customer Success. Customer Success has specific functions, roles, and ways of conducting business.  If you embrace one or even a few customer-success focused activities, or have roles with Customer Success in the title, it does not mean that you have fully embraced Customer Success. I have defined three distinct stages in the “success – spectrum.”  See the descriptions and comparisons below to determine where you are in your journey to Customer Success.

Technical Support

Traditional Technical Support functions focused on issue resolution and answering how-to questions primarily in response to customer questions.

Success Enable Support

Introduction of success-focused roles such as Customer Success Managers and adoption of success practices such as onboarding, health assessments, journey mapping and success planning. Introduction of proactive customer engagement.

Customer Success

Cross-functional cooperation or organizational alignment primarily focused on customer engagement and proactive service delivery. Primary business objective is to retain and grow relationship value.

Technical Support – A Cornerstone of the Customer Relationship

Technical Support is a practice that seems to be as old as the technology industry itself.  For many companies the Support department is the primary interface with customers after the initial sale.  The mission of Support is to be there for the customer when they needed help, but not necessarily to engage customers proactively to assure that they can use and apply their applications.  Once again, this is not to suggest that companies or Support organizations are not committed to helping customers succeed – some of the most committed and customer-centric people in the technology industry can be found within Support.  The fact is that traditional Support organizations typically do not have a mandate nor the resources to fully drive Customer Success outcomes.

Success Enabled Support – A Hybrid Approach

Somewhere between a traditional Technical Support organization and a full-fledge Customer Success initiative is a hybrid model that introduces success-focused practices and resources into Support. Success Enabled Support include success-focused roles such as customer success managers, onboarding and adoption specialists, and retention, renewal and upsell experts. Practices include formal onboarding, efforts to drive adoption and plans to define and drive successful outcomes (success plans and journey maps).

These success-focused resources and activities are a quantum leap towards Customer Success. Yet, they are often contained within siloed organizational structures or lack full organizational commitment and governance to truly drive an enterprise-wide coordination to maximize retention and relationship growth.

Customer Success – A Business Model

Customer Success is a strategy to maximize customer retention and create opportunities for revenue expansion within the customer base. It is not simply an organizational structure, function, process, team, or job description – Customer Success is a customer engagement and retention philosophy. It should be seen as a way of doing business that transcends all aspects of a company from the way it develops products to the way it sustains and expands customer relationships.

Customer Success is predicated on the understanding that a significant portion of revenue and growth comes from existing customer relationships and that for technology vendors to grow relationship value their customers must be able to apply and succeed with the products they have purchased.

Customer Success is a critical methodology for companies that depend on recurring revenues from license, maintenance, and other service subscriptions.  Customer Success is not however just for companies that sell products as-a-Service.  Companies that sell perpetual software licenses, equipment and devices can benefit from Customer Success to drive product adoption and to assure maintenance contract renewals.

Technical Support vs. Customer Success – Key Differences

The following table highlights some of the key distinctions between traditional Technical Support, Success Enabled Support, and all-in Customer Success business models.

 

Technical Support

Success Enabled Support

Customer Success

Primary Objective

Resolve product-related issues, answer “how-to” questions.

Help customers adopt and succeed with products.

Cross-functional approach to engaging, retaining, and expanding customer relationship value by helping customers to use and succeed with products.

Target Audience

Customers that are entitled to and request Support through warranty or service contract.

Targeted segments of the customer base (e.g. top tier accounts or customers that purchase a specific product or service type).

Customers that purchase renewable products and services, and/or buy specific success plans.

Entitlement Program

Support portfolio.

Success plan or add-on.

Success plan, add-on, or included with product purchase.

Monetization

Support fees.

Add-on fees for customer success programs.

Success program fees and subsidies from product revenue, retention, and growth.

Organizational Model

Stand-alone Technical Support organization.

Distinct team of customer success-focused resources within Support department. Some coordination and cooperation with other customer facing teams.

Cooperation across functional roles (Sales, Professional Services, Education, Support) organized by matrix or reporting structure.

Primary Functions

Cases resolution.

Onboarding, drive adoption, success planning, customer health monitoring, retention.

Onboarding, drive adoption, success planning, customer health monitoring, retention, revenue expansion.

Success Metrics

Time to Resolve (TTR), First Contact Resolution (FCR), Cost per case, Net Promoter Score (NPS), Customer satisfaction.

Process execution: Rate of adoption, success plan execution, retention, renewal rates.

Customer retention, revenue growth rate (Annual Recurring Revenue (ARR) / Monthly Recurring Revenue (MRR), renewal, growth)

Service Levels

Service levels and terms defined by support contract.

Defined by success plan terms or triggering events (e.g. customer health).

Ongoing touch points throughout the relationship or triggering events (e.g. customer health).

Service Delivery

Reactive, customer initiated.

Proactive, often triggered by customer milestones or events.

Proactive, often triggered by customer milestones or events.

Retention

Emphasis on contract renewal, typically the responsibility of another group.

Emphasis on recurring revenue renewal, guided by CSM team, booking often responsibility of another group.

Emphasis on recurring revenue renewal, coordinated by cross-functional success team equally accountable for retention/renewal/growth.

Growth

Possible add-on upsell, typically the responsibility of other group.

Opportunity identification because of customer engagement. Booking often responsibility of another group.

Opportunity identification because of customer engagement. Cross-functional success team equally accountable for retention and growth.

The Journey to Customer Success

The journey to Customer Success may not require the full transformation to an entirely new way of conducting business, organizing resources, or measuring business performance.  Adopting some success-focus activities and creating success roles may be adequate for your business.  For companies that depend upon recurring revenues, customer retention and relationship growth are paramount, and a true Customer Success operating mode is an effective strategy.  Be honest about where you are in your journey and what approach to Customer Success is appropriate to your business.  Be careful not to overstate where you are in your journey if you have farther to go.

Featured: The Journey to Customer Success

The journey from Technical Support to Customer Success requires more than a name change or the addition of a team of Customer Success Managers. To fully embrace Customer Success, Support must rethink its role and adopt new ways to engage, retain and grow customer relationships. This Playbook provides a guided journey across four key milestones to help you define essential Customer Success capabilities.

This Playbook is FREE – Register or Log-in to download your copy.

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*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

Related Articles

The problem with organizational silos

Organizational silos create barriers to customer success by inhibiting the levels of coordination and cooperation necessary to retain and grow customer relationships. The hand off from one department to the next creates gaps between expectations set and how they are met. This study reveals how the isolated sales and service silos of the past can evolve to drive Customer Success.

read more

Three Organizational Models to Describe How Sales and Support Can Cooperate

Sales and support staff often work with the same customer accounts, but not always in coordinated and cooperative ways.

How Sales and Support Cooperate

ServiceXRG has identified three organizational models to describe how sales and support can cooperate.

Sales and Support Independent Operation

Technical resources exist within both Sales and Service organizations. Technical resources operate independently from one another with objectives that are not typically coordinated and may conflict (e.g. Sales provides services otherwise entitled through a service contract).

Sales and Support Cooperation

Technical resources from Sales and Service are organized within a single customer facing organization or are aligned by similar or common engagement polices and performance metrics.  Coordinated customer engagement for larger accounts is common.

Sales and Support Coordination

Customer facing technical resources exist within a single department with coordinated responsibilities for both pre-sales and post sales technical engagement. Skills specialization may exist, but account engagement is coordinated, and all touchpoints are aligned to meet common performance objectives.

Recommendations

  • Select an organizational structure that can deliver an efficient and effective customer experience across the entire product ownership lifecycle.
  • Create a bench of technical resources that can be deployed to both pre and post-sales activities. This may include a “team” of Sales Engineers and Support Experts.
  • Coordinate account management across Support and Sales functions.
  • Established shared goals and objectives that transcend Support and Sales teams.
  • Make certain that everyone is incented to retain and expand customer relationship value.
  • Create training and career advancement opportunities that span Sales and Service functions.

Featured: The Transformation of the Service Organization

ServiceXRG examines the current state of service organizations and the forces at work that are driving organizational transformation. This study reveals how the isolated service silos of the past need to evolve into unified entities to drive Customer Success.

Log-in to get your copy.

Login to Access the Full Report

If you don’t have an account, create a free* membership.

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*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

Related Articles

The problem with organizational silos

Organizational silos create barriers to customer success by inhibiting the levels of coordination and cooperation necessary to retain and grow customer relationships. The hand off from one department to the next creates gaps between expectations set and how they are met. This study reveals how the isolated sales and service silos of the past can evolve to drive Customer Success.

read more

Are you organized for Customer Success?

Coordination and cooperation across customer facing departments makes good business sense. So why aren’t more companies creating unified post-sales organizations? ServiceXRG examines the current state of Service and Sales cooperation and the forces at work that are driving organizational transformation. This study reveals how the isolated sales and service silos of the past can evolve to drive Customer Success.

read more

The Demand for Your Support is Larger than you Expect

The demand for support by your customers may be far greater than current transaction levels suggest. ServiceXRG illustrates the potential unmet support demand by customers and suggests why responding to this demand is important but will likely increase assisted support demand.

Unmet Support Demand

There is a significant unmet need for support.  This is a potentially daunting scenario.  Imagine that customer demand for support would grow by over 100%.  Perhaps the more important consideration is the impact that lack of support will have on customers’ likelihood to remain customers.   

An unmet service need can result in a customer defecting to another product or situations where they stop using your product.  Both scenarios will impact the potential for retention, churn and recurring revenue.

This chart signifies an opportunity for technology vendors to provide more value to more customers through self-help and automated service interaction.  It is cost prohibitive to provide these extended services though assisted means, thus the web and mobile channels offer the best way to interact with more customers and positively influence their perceptions and encourage positive behaviors such as writing positive reviews, new purchases and continuation of existing relationships.

Support Demand vs. Support Need

Recommendations

Ask yourself, are all of your customers getting the help they need?  Are they getting this help from you, through Google searches, or not at all?  Consider the following:

How many customers use your self-help resources but do not seek live assistance?

  • Compare self-help service demand to assisted support.
  • Determine if customers get the answers they need through self-help.
  • Conduct a survey after self-help transactions to establish how effective self-help resources are.
  • Read Where Customers Look for Support Information (hint: it may not be from you).

What are you customers “talking about” on social platforms and communities – yours and other public forums? 

  • Ask customers if they are getting the rights answers.
  • Make certain customers know how to get support directly from you.

Do you conduct relationship surveys with customers (e.g. not post transaction surveys)? 

  • Establish how many customers need help with your products.
  • Determine how many customers seek assistance directly from your services group.
  • Does the expressed customer need match current demand?

How many active customers do you have (e.g. how many products have you sold in the past year, 2 years, 3 years, etc.)? 

  • Establish the size of your installed base.
  • Determine the percent of customer covered by a service contract.
  • Establish what percent of the total installed base you hear from.

Do you have a high churn rate? 

  • Conduct win-loss analysis to establish why you lose customers.
  • Determine if top churn issues are related to product usability.
  • Identify if/how support could lower churn rates by providing needed assistance.

Bottom Line

You have customers that need help but are not asking you directly.  When customers are in distress with your product but not getting the help they need you risk of losing them.

Yes, you have a full plate handling the customers that do seek assistance.  However, you need to engage the customers that need help, but do not ask for it.  If you don’t you will lose them. Customer onboarding, adoption, retention and other customer success related activities will likely increase support demand but lower churn – be prepared.

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*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

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Creating Positive Customer Experiences

The way we interact with customers directly affects the way they perceive us. When we are responsive, attentive, willing, and able to provide the information or assistance they need, we increase the likelihood of providing a positive experience. When we are difficult to do business with, unable or unwilling to satisfy customers’ needs, indifferent, inept, or rude, chances are the customer will have a bad experience. A satisfying customer experience is critical if we want to positively influence the way customers behave.

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The Demand for Your Support is Larger than you Expect

The demand for support by your customers may be far greater than current transaction levels suggest. ServiceXRG illustrates the potential unmet support demand by customers and suggests why responding to this demand is important but will likely increase assisted...

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AI – A Catalyst for Support Transformation

Since its very inception Support has been relentless in the pursuit of continuous improvement. Support organizations have adopted new technologies, enhanced delivery strategies, improved organizational design and staff development, successfully integrated self-help and automation, and have made tangible financial contributions to the overall business. Even with so many innovations Support has remained fundamentally unchanged for decades.

The State of Support

At the heart of Support are personal interactions where Support experts respond to customer information requests – to fix an issue or instruct customers on “how to” use a product.  Even with all the technology we employ and wide availability of self-help resources, Support continues to be a people intensive business.

The way we measure Support continues to focus on our ability to satisfy customers and meet financial expectations of the business.  Contributing to the satisfaction of customers and to the company bottom line are important, yet Support with its vast resources, deep product expertise and intimate customer relationships can contribute so much more to a business.

Many support organizations want to be more customer-success focused to drive adoption and success with products. Few organizations however have the excess capacity to fundamentally shift from transactional case management to nurturing customer relationships.

AI The Catalyst for Support Transformation

Support has relied on training, technology, and self-help to achieve efficiency gains, yet the potential of AI offers so much more.  Through the introduction of intelligence afforded by AI-enabled systems, we are not just streamlining the way we provide Support, we introduce the means to fundamentally change the strategic role of Support.

Introducing machine intelligence into support processes creates a significant opportunity to free Support staff to focus on critical activities to sustain and grow customer relationships. Here are some of the ways that artificial intelligence can impact Support:

Improve Support Efficiency

Improve the efficiency and effectiveness of established Support processes by:

  • Clarifying customer questions to establish a firm understanding of what the customer really needs help with.
  • Assuring that all information required to resolve an issue is collected.
  • Aligning open cases with the individual and teams most qualified to help.
  • Prioritizing open issues so that the most important cases are handled first.

Reduce the Level of Effort by Support Staff

Reduces the time and effort expended by Support staff to resolve customer issues by:

  • Helping customers search and find answers more effectively by understanding what they are looking for even if they do not explicitly ask for it.
  • Diagnosing issues and suggesting relevant resources to assist Support staff.
  • Eliminating manual processes to prioritize, route and escalate issues.
  • Suggesting top customer issues for creation of new support knowledgebase content.

Mitigate Risks to Customer Relationships

Identify and mitigate the risk factors that negatively affect customer relationships by:

  • Evaluating factors that affect customer relationship health based on analysis of sentiment expressed within customer interactions.
  • Identifying factors that are most likely to generate support demand.
  • Proactively identifying at risk configurations with products.
  • Prioritizing corrective actions for product or policy enhancements.
  • Mitigating potential issues through proactive intervention.

The AI Impact

The introduction of AI into Support processes will deliver three significant benefits:

  1. Machine intelligence assumes responsibility for some Support processes.
  2. AI makes human-activities more efficient.
  3. AI-enabled data analytics helps to reduce overall Support demand.

These three benefits of AI can be measured in terms of Full Time Equivalent (FTE) Support headcount.  How the AI Impact is applied to the business will determine the future path for Support.

Cash Out AI Benefits for Savings

Companies can choose to take the “savings” from AI enabled efficiencies and reduce overall headcount thus reducing the cost of Support delivery.  This assumes that service levels and quality can be maintained at a reasonable level.

Build and Sustain Relationships

Alternatively, companies can view AI as a means to free staff to focus on high value relationship building activities.  Note that staff displaced by AI enabled capabilities are not necessarily the same staff or roles required to deliver high value relationship building activities.

Cost Reduction or Relationship Growth

With a growing reliance on as-a-service licensing and clear evidence that sustained customer relationships are essential to profitability, Support must rethink its role within the company. Short-term financial motivation may compel some companies to look to AI for savings.  The best return from AI, however, is likely to come from the protection of recurring revenue and growth of relationship value.

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*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

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Webinar AI – A Catalyst for Support Transformation

Robert Johnson, CEO of TeamSupport and Tom Sweeny, CEO of ServiceXRG discuss the opportunities and implications of using AI in Support. This webinar explores some of the ways that AI will act as a catalyst to drive transformation of the support operating model. A link to the recorded webinar is provided below.

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AI – A Catalyst for Support Transformation

Support has been relentless in the pursuit of continuous improvement, yet the function of Support has remained fundamentally unchanged for decades. The logical evolution of Support is to focus more effort on developing and sustaining long term profitable customer relationships. Many Support organizations want to be more customer-success focused, but few have the capacity to change. To make this transition, Support resources need to focus on high value activities such as helping customers adopt and succeed with the products they purchase. AI is a critical catalyst to enable this inevitable Support transformation.

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