Account Management Crosses the Chasm: A New 80/20 Rule

Account Managers Are Playing a New Game–and It’s Called Customer Success

Not long ago, account managers and customer service associates were hired to maintain accounts. But now, companies who still see retention as the main goal for those groups are starting to lose market share. Why?

The account management program that drives revenue has changed. As Software as a Service (cloud) businesses continue to soar, sales teams have realized that they must keep pace with Agile product launches and feature releases, or risk losing clients to one of their many competitors.

It’s no longer enough to retain your customers, merely reaching out when it’s time to renew their service. Your friendly customer service team is now your strategic customer success team, and their goal is growth.

80% of your company’s future revenue will come from just 20% of your existing customers (Source: Forbes).

Customer Success Enters the Chasm

After hearing Geoffrey Moore (author of Crossing the Chasm) speak at an event last month, we were compelled to ask him about two common themes in his talk: customer success management and the trusted advisor relationship. The truth is, Moore says, “virtually everyone has some small number of trusted advisors, but the number of slots, and the people applying for those positions is like trying to get into Harvard.”

So, using Crossing the Chasm phases as a backdrop, how can high-tech CSMs use their business savvy to grow their accounts rather than just maintain them?

In the outline below, Moore not only defines the four actionable phases (aka engagement opportunities) of market development for customer success management, but he also maps each opportunity to the land-and-expand model widely used in SaaS selling. Viewing your customer relationships through the lens of the technology lifecycle will help you assess which opportunity to take.

Engagement Opportunity #1

Phase: Early Market / Landing

Trusted Adviser Relationship: Minimal

Customer Mindset: The person or organization who takes the bait in this instance is willing to experiment and exercise technology to the maximum. They like to be heroes, and they like to go ahead of the herd. Their goal is to differentiate their business in the market.

Your Charge: Continually associate the opportunity for growth with things that are visionary in this customer’s world. Do whatever you can to reinforce that spirit, while illuminating the match between the customer’s needs and your solution. Capture their imagination, and make your customer relationship (and your account strategy pitch) fun and adventurous.

How to Grow: Remember, this is not a one-size-fits-all customer. Focus on the bigger picture (and think outside of the box) in this relationship. Not only should you understand their business, but you should also be knowledgeable about their industry and competitive landscape. If done correctly, you can effectively close the gap between the customer’s vision and the business opportunity at hand.

The rest of the engagement opportunities Moore offers take place after the “chasm” (see diagram).

The next two phases, the bowling alley and the tornado, provide the greatest opportunity to engage using a customer success program. This is where growth happens.

Engagement Opportunity #2

Phase: Bowling Alley/ Landing or Expansion

Trusted Advisor Relationship: Required (with end-user)

Customer Mindset: These customers recognize that they have a problem that needs solving. Your solution is not a “vitamin” as with early adopters — instead, it’s a “pain reliever,” Moore says. These customers really value that you respect their problem.

Your Charge: Hook your customer with a dialogue around the problem and its solution. Avoid a pitch that is product-centered, focused on demos, or inundated with features. With the proper dialogue, you can map 1:1 how resources in your offer will address specific symptoms that your customer has described. As you build the relationship, check in with your customer to verify that you are making traction against the problem. Keeping the problem top-of- mind, not only allows you to build rapport with the customer, but also educates your team about your product’s weaknesses. Moore warns that while you will likely never solve 100% of the customer’s problem, you can relay feedback to your development and marketing teams.

How to Grow: Develop rapport by learning about your customer and his problem, not by talking about your company and your product. Understand your customer’s issues and empathize. When acting as a customer advocate in the SaaS world, feedback enters a loop (not a black hole) and swiftly turns into feature releases or bug fixes. With a successful feedback loop, your customer begins to see you as a solution wizard, Moore says.

Engagement Opportunity #3

Phase: Tornado / Expansion

Trusted Advisor Relationship: Required (with IT rep)

Customer Mindset: These customers have signed up for your solution because everyone and their mother is doing it. Although this group generally self-segregates by use case, they are all just looking for a good introductory user experience.

Your Charge: Don’t try to solve your customers’ most painful problems. Instead, give them an early win. Aim for an introductory user experience that warrants a positive response to the purchase, Moore notes. They should think: “You know what? This was worth the price of admission.” Recall that you cannot support every last use case in this phase.

How to Grow: Deploy and expand. Because your relationship is viewed as a utility by IT, you will mainly focus on basic product execution and technical support.

Engagement Opportunity #4

Phase: Main Street / Expansion

Trusted Advisor Relationship: Not Required

Customer Mindset: These customers have been using the product for a year or two and could easily churn without the proper amount of attention.

Your Charge: You’re talking to the converted. Look for a mid-life kicker to refresh the business relationship.

How to Grow: Talk about new releases and use cases, share best practices, and celebrate benefits. Use “more for less” to your advantage by describing how new features provide more value without the additional cost.

The probability of selling to an existing customer is about 70%. The probability of selling to a new prospect is less than 20% (source: Marketing Metrics). Is customer success management on your road map for 2014? How are you learning about your customers?

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