Berlin Office Hours: Driving PS and CS teams towards outcomes

In this session of Preflight Berlin’s Office Hours, Cohort Host, Srinivasan Shanker, spoke to Paul Henderson, Founder of Outcome Leaders, on driving Professional Services and Customer Success teams towards outcomes.

With nearly 35 years of work experience in global roles, Paul last worked as the APAC head at QAD, leading a team of 200 members across 89 countries serving 800+ enterprise customers. In the last five years, he designed and ran an outcome program for customers in the APAC region, a project that got him hooked on outcome-focused programs, and led to the founding of Outcome Leaders,

Outcome Leaders helps technology companies adopt an outcome approach to customer engagement. They facilitate outcome workshops for companies who want to adopt or improve an outcome program.

The session focused on:

1. Product outcome vs success outcome
2. Insights into an outcome program
3. The rule of six for running an outcome program
4. CS and PS Roles in the outcome cycle

Here are our top ten takeaways from the session.

1. The evolution of vendor engagement

A typical project begins with the customer

1. realizing that their current results (for a project/team/department) were not good enough
2. identifying problem/s responsible for the above
3. arriving at requirements to take to vendors who can help improve results

The engagement model that vendors use in this context has evolved as shown below:

1. Gen 1: Focused on features and functions

Tech vendors showed customers that they could meet requirements by showing how their features matched their current requirements.

1. Gen 2: Focused on problems, not on requirements (Solution Selling approach)

This approach leads to companies finding themselves in catch-up mode as they grappled with new problems.

1. Gen 3: Focused on enabling future results

Today, companies are focused on outcome generation to show and guide customers to reach their to-be stage. Companies such as Salesforce, Microsoft, SAP, Adobe, ServiceNow, and Mulesoft, currently have a focus on outcome generation in their projects.

2. Product outcome versus success outcome: Knowing your customer’s ‘picture on the wall’

There are two types of customer outcomes associated with any project:

1. Product outcome: The direct benefit of using your product/service
2. Success outcome: What the customer considers success

A good way to look at product outcome versus success outcome is the drill bit analogy; customers buy a drill bit not to get a hole in the wall, but to have a picture on the wall.

In this case, the product outcome is a hole in the wall, but the outcome that matters to the customer, i.e., the success outcome is a picture on the wall.

Even if you have a stellar product that works well,  it needs to be used to drive the outcomes that make the customer ‘feel’ successful – so they return to you the next time.

3. Six decisions customers need to take

The foundational principle of the rule of six is that every customer project at its core consists of six decisions that customers make. You, as part of PS or CS, need to influence customers to take each of those decisions in your favor. For this, you need to

1. know what each decision is
2. understand what it will take to guide each decision
3. establish an engagement model to elicit these decisions

Based on research from conversations with 150+ global executives, the six decisions you need your customers to take are:

1. Deciding to investigate the problem
2. Deciding what needs to be done
3. Deciding to engage you  
4. Deciding (signing off) that the outcome was achieved (by measuring results)
5. Deciding to be your product/service advocate, not just a reference/case study
6. Deciding to repeat this process year on year

As a vendor, your engagement model has one purpose – to elicit these six decisions

4. The six emotions to drive these six customer decisions

The foundation of your engagement model is ensuring customers feel the right emotions at each stage – to drive them towards these decisions.

5. The rule of six: 6 steps. 6 emotions. 6 decisions

You need to take the six steps outlined below to create the emotions that will drive customers to make the desired decisions at each stage.

Here’s how this should shape your engagement model:

6. The role of CS and PS in your engagement model

Customer Success acts in three ways (and as a result, levels) in the engagement model:

1. React (to handle issues arising within the project)
2. Protect (to protect the account from churn)
3. Expand (to grow the account)

At the lowest level, automate as much as possible to make the process self-serve.

It’s important to note that studies show that NPS is a good predictor of retention, not expansion, and hence is best limited to usage at this level.

At the retention and adoption level, the strategic direction should be to ensure product-led adoption, say by using the product to identify users logging in, or identifying users engaging with the product, but not using advanced features, to nudge them to engage more meaningfully with the product.

At the highest level, focus on having measurable outcomes to ensure that customers feel successful.

The PS team has one task: create a reference out of the customer.

7. The new engagement model for projects

‍Today, a customer project no longer follows a customer-vendor approach. It has evolved into a partnership based on shared accountability. The below image highlights what this shift looks like at each stage of the project journey.

8. Ongoing engagement: Roles that CS and PS can play in the outcome cycle

To summarize, any customer project needs to focus on two key things:

1. knowing what the customer’s ‘picture on the wall’ stage is
2. engaging them by using the rule-of-six (six steps to evoke six emotions to elicit six decisions)

A big part of this is understanding the roles CS and PS can play in the cycle, as illustrated below.

The primary shift is in how the CS team is no longer focused on software or product purchases, but instead, on helping customers design business initiatives. This means that CS translates into a lead generation engine for existing customers.

The PS team is tasked with primarily doing whatever it takes to create a reference based on outcomes.

‍9. Getting started with the outcome-focused customer engagement model

Here are three approaches you can take to get started with an outcome-driven engagement model

1. Model 1: Typically customers don't engage vendors till the initial stages (investigating the problem, identifying the problem, and establishing the next step/s) are complete.

In this model, CS takes the lead to intervene in these stages, and can be involved in a BILD (Business Initiative Lead Development) approach that changes the focus from trying to develop product opportunities to developing business opportunities.  

1. Model 2: Starts with Professional Services focusing on creating references based on an outcome model – before shifting the focus to selling, based on this approach.

This approach – where PS is tasked with delivering measurable business outcomes and not just achieving go-live – has been observed to help PS teams feel a greater sense of purpose, and thereby boosted their performance.

1. Model 3: Prompted by an executive-level decision to adopt an organization-wide change in the engagement model, this begins with an agile-style pilot that involves a few customers, staff, and partners.

10. Measuring results in an outcome model

Even during implementation, PS needs to look at quantifiable elements that draw from either revenue/cost/risk reduction.

Since it typically takes 3-4 months for customers to see results, there needs to be an agreement with the customer about who will drive the measurement of results.  

This can be driven by a ‘Success Consultant’, a role for someone who understands systems, people, processes,  partners, and supporting elements), who will come back to lead the measurement of the outcomes achieved.

The cost of this measurement needs to be built into your pricing.

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More resources

1. Implementation Stories from Preflight
2. Customer onboarding resources from Rocketlane
3. The Launch Station - a podcast for all things customer onboarding