The focus of many CEOs and investors at B2B subscription-based businesses is to increase their company’s growth rate. Usually that’s to achieve a valuation goal. But many struggle to achieve this. That’s because very few focus their entire business on aligning on and achieving customer success outcomes. As a result they have less satisfied customers, leading to higher churn and depressed revenues.
This article explains why embedding a customer success outcomes-based culture throughout your organisation will increase customer satisfaction, accelerate growth, and lead to more predictable revenue.
What is an outcomes-based culture?
A customer success outcomes-based culture means that every part of your company is focused on achieving customer business goals. This is different to a product-based culture, where every part of the business is focused on the solution it offers.
In an outcomes-based culture, the company keeps a digital record of each customer’s success goals and the business KPIs that will achieve them. Every department is given access to these records, and measuring against the KPIs becomes their core focus.
As a result, everyone at your business gets a shared understanding of what the customer wants to achieve and works together to see that happen.
This will help you reduce churn, increase revenue predictability and drive the long-term value you provide.
An outcomes-based culture starts with sales
Developing an outcomes-based culture begins during the sales process. It then continues throughout the rest of the business, including customer success, marketing and product.
When it comes to selling on outcomes, there are four main areas to focus on:
Discover and align: Your salespeople need to discover success outcomes and assess value collaboratively with the customer. Your salesperson should never lead the customer or tell them what value is.
There are three stages to discovery:
- Define the specific business challenges the customer needs to solve
- Identify which KPIs will be impacted by solving these challenges
- Use the SMART framework to define success outcomes
Differentiate on methodology and outcomes: Don’t focus on the capabilities of your product or solution. The chances are that your competitors make similar claims to you. This often leads customers to choose the provider with the lowest price. Instead, differentiate your offering by selling the outcomes you’ll help achieve and the methodology you use to get there.
Increase the priority of your solution: Build alignment with the customer on the outcomes they would achieve if they were to use your solution. Focusing on pains solved is more impactful than gains received. It’s not about having the biggest ROI!
Guide consensus and sign-off: Work with the wider buying group to discover more success outcomes and guide all parties to reach a consensus on their business goals.
An outcomes culture starts during the sales process, but it shouldn’t end when the deal is closed. Instead it should continue across your business. Here are two ways to make this happen:
Create a value framework: A value framework is a way of working that ensures the whole company is focused on achieving the customer’s goals.
On the right is an example of such a framework called the value wheel. The value wheel is a closed loop where each department focuses on fulfilling customer KPIs.
Each customer’s digital record of business goals and KPIs is accessible to your entire company and the customer. This gives everyone a shared understanding of their expectations.
Each department uses the digital record as a guide during every customer interaction. Afterwards, they track against KPIs discovered and challenges or issues encountered. The digital record is a living document that benefits all internal and external stakeholder groups.
Ongoing discovery: Discovery should continue throughout the value framework. During customer interactions sales, customer success, marketing and product are likely to learn new information that could impact the success goals. Based on this information, they should be empowered to adjust or even create new KPIs and business goals in the customer’s digital record.
This living document reflects the customer’s evolving needs.
Why we created Cuvama
Selling on outcomes isn’t easy. Salespeople need better tools to conduct consistent, collaborative discovery. Value and ROI calculators have lost credibility and suffer from poor sales adoption. That’s why we created Cuvama. Cuvama is a digital coach that helps salespeople to:
- Guide the customer through and collaborate with them on the discovery process
- Connect with customers on success outcomes
- Get consensus on these outcomes from the wider buying group
XaaS companies that use Cuvama increase their deal size, average selling price and customer lifetime value. Read our case study to learn more about our work with Zellis.
We take a different approach to sales based around three core truths:
1. Discovery, discovery, discovery
Great discovery is the heart of a successful outcomes-based culture—you can never do too much discovery! Ultimately, poor discovery costs your business money. It should be used as a methodology that leads to business change for the seller and the customer.
Good discovery involves asking deep, searching questions and:
- Uncovering customer pain points
- Understanding the organisational implications of challenges
- Identifying KPIs that will impact these challenges
- Teaching customers how your solution will overcome their challenges
- Understanding the psychology behind the customer’s decision making
2. Measure success, not ROI
Companies shouldn’t just measure customer success outcomes to prove what they have delivered. Instead, measuring success should be used to manage and increase the customer’s success with your solution. It should be at the core of your customer success strategy.
For example, say your customer success team has delivered on a KPI of reducing invoice processing time. But a couple of months later, the customer still hasn’t realised its business goal of increasing revenue.
Many companies would simply tick off the ROI and use this to justify the price of their service. But the customer hasn’t realised their business goal so they won’t be satisfied. The customer success rep should treat this event as an opportunity to explore why the company hasn’t met that goal and what it can do to achieve it.
The customer success rep should collaborate with the customer and ask questions like:
- Does this KPI rely on other KPIs to be completed before it shows a positive impact?
- Perhaps the KPI hasn’t been quantified correctly?
- Are there other factors that have affected revenue?
3. Selling and delivering success outcomes
Selling on outcomes involves moving the customer away from discussing functional and technical requirements. This allows you to better align on the outcomes that they want to achieve.
The result is that both parties will be clear on what success looks like. This means that the customer is more likely to be satisfied with your company’s performance because you understand what truly matters to them.
Discover Cuvama for yourself
Transforming to a customer outcomes-based culture allows your business to achieve its valuation goals. Cuvama provides the solution infrastructure and advisory services to achieve this.
If you’d like to learn more about how we help B2B subscription-based companies to realise an outcomes-based culture, please don’t hesitate to get in touch. Contact us at firstname.lastname@example.org.