At a time when 75% of businesses said they are proactively exploring software alternatives before renewing their technology contracts (Gartner), value realisation is becoming central to improving credibility and customer experience.
While customer experience usually refers more to how the services are provided, customer success is increasingly considered part of customer experience. After all, if the promised value is never delivered, can you genuinely say you’ve had a great experience when what you actually got was a broken promise? McKinsey’s research demonstrates that improving customer experience can result in sales revenue growth of 2-7%, improved profitability by 1-2%, and an overall boost in shareholder returns by 7-10%. These statistics underscore the undeniable significance of value realisation boosting credibility and customer experience.
Nonetheless, the potential gains in revenues and profitability remain perpetually under threat due to the persistently high failure rate of transformation projects, averaging at 70% and showing little improvement over the years, according to McKinsey.
The numbers are staggering, especially considering that 50% of customers are willing to pay for services that facilitate value realisation, and an equal proportion are presented with customer success services. Yet, only 30% express high or very high satisfaction, with a small fraction willing to advocate for technology providers (Deloitte).
However, there is hope, as additional statistics reveal a potential solution to enhance the situation:
- Deloitte‘s data indicates that 66% of customers who receive assistance from their providers in tracking value express satisfaction, compared to 40% who track it themselves, and 36% who don’t track it at all.
- When it comes to planning to give more business to the provider, there is a relatively small difference between customers who receive regular business review support (81%) and those who do not (76%). However, the picture changes significantly for customer advocacy, which increases from 12% to 26% when customers are regularly supported with business reviews (Deloitte).
- Deloitte‘s findings also reveal that the likelihood of increasing spending with a provider stands at 85% if product feedback is incorporated into the product roadmap. In contrast, this likelihood drops to 62% when feedback is not incorporated.
These statistics underscore the role that customer support and feedback integration play in enhancing customer experience and customer retention.
How can technology providers boost credibility and customer experience and achieve promised value for customers?
1. Define value in partnership
Collaborate with your customers early in the sales process to define what value means to them. Ensure that this definition aligns with their short-term and long-term strategic goals. Additionally, identify the individual wins within the buying centre. These value discussions will not only uncover the levers to win the business but also set the foundation for a successful partnership.
2. Provide comprehensive support
Offer your customers the necessary leadership, processes, and tools for establishing baselines, measuring progress, and tracking delivered value. Recognise that your customers may have varying levels of existing processes and tools, and it’s essential to provide best practices throughout the customer lifecycle. This not only facilitates value delivery but also builds credibility and strengthens relationships.
3. Conduct regular, formal reviews
Implement a structured approach to conducting regular, iterative reviews with both higher management and the wider project team. Make sure that everyone is held accountable for the project’s success and remains updated and engaged in the project’s progress. Engaged and informed project teams are more likely to work efficiently and discover cost-effective, high-impact solutions when facing inevitable deviations.
4. Proactive deviation warnings
Identify deviations early in the process, whether they relate to value, motivation, deadlines, or other aspects. For value-related deviations, involve the broader team in root cause analysis and propose suitable remedies. When dealing with motivation and engagement issues, conduct a thorough review to pinpoint potential problems, such as sponsorship, skills gaps, resource constraints, process inefficiencies, or inadequate tools.
5. Use value realisation for customer satisfaction
After the implementation phase, value realisation becomes a tool for regularly measuring customer satisfaction. Gather feedback to gain insights and make improvements to your products and services based on customer inputs.
6. Establish a dedicated customer success team
Maintain a dedicated customer success team comprised of highly skilled professionals armed with valuable benchmarking data and outstanding tools. This team should have the capability to manage the entire value realisation process, communicate the story behind the data to customers, and offer strategic guidance for the best remediation strategies.
7. Set clear success parameters
Clearly define the factors that contribute to program success and communicate your expectations to the customer at both tactical and strategic levels. This involves securing strong sponsorship, encouraging higher management to set ambitious goals (McKinsey), assembling an internal team with the necessary skills, and implementing effective communication processes to keep all stakeholders engaged.
8. Incorporate value realisation in sales commitments
Consider including value realisation activities as part of your commercial commitments during the sales process. This may involve outlining the cost of any additional resources required to ensure program success.
In conclusion, the crossroads of customer success and value realisation plays a huge role in building credibility and customer experience. As businesses increasingly evaluate software alternatives and prioritise customer satisfaction, achieving promised value from technology investments is fundamental. McKinsey’s research underscores the financial benefits of improved customer experience, highlighting its significance in driving revenue, profitability, and shareholder return.
Nevertheless, the persistently high failure rate of transformation projects poses a significant threat to these gains. To address this challenge, technology providers can take proactive steps to boost customer success and realise promised value. This includes defining value in partnership with customers, offering robust support, conducting regular reviews, and addressing deviations promptly. Furthermore, incorporating customer feedback and maintaining dedicated customer success teams are key to building strong, lasting relationships.
It’s also essential to keep your internal team motivated and aligned with the goal of customer success. To achieve this, top-down and internal communication is paramount. There is often a lack of buy-in and enthusiasm for investing additional effort to drive change across an organisation. The primary objective of customer success is to cultivate satisfied customers who not only renew their partnerships but also become advocates for your products and services.
Ultimately, the pursuit of customer success not only benefits businesses but also ensures a brighter and more prosperous future for all stakeholders involved.
Read more on value realisation in our earlier article, if you missed it and download our PDF to discover more.