For our final Top 10 list in our series, we will focus on the Top 10 business Challenges that ServiceVantage has addressed (and continues to address) for our clients over the past 10 years.   Yes this blog post may be seen as a shameless plug for ServiceVantage, and to some extent it is, but hey, we’ve been around for 10 years and helped more than 30 technology firms so perhaps we deserve to.

However, that being said, all companies will experience business challenges to varying degrees at various times in their evolution – what will set them apart is their willingness to admit those challenges and proactively address them.

Here are the top 10 Business Challenges that ServiceVantage helps you address:

1.       No Systematic, Scalable Approach to Client Engagement

Across your organization, how consistently do you proactively engage your clients and ensure that they can interact with your organization in a way that positively impacts their business?  Do you have great visibility into client retention and revenue protection?  Can you leverage existing clients to close more deals? 

2.       Poor Client Adoption and Usage

It is absolutely critical, for all technology firms that their clients experience strong adoption and ongoing usage of their solutions.  Do you understand how to improve adoption and usage?  Is your client approach hurting or hindering this effort?

The math here is simple:  low adoption + low usage = churn.

3.       Little or No Actionable Client Intelligence

Too many organizations track only the basic information and are not able to identify patterns that have a significant influence on the overall client experience.

Organizations must be measuring and cross-referencing highly relevant and important client data to ensure the organization as a whole is making sound business decisions.  When your organization is empowered with good client intelligence, it will absolutely give you knowledge needed to cement existing relationships, secure renewals and protect your revenue.

What level and depth of client intelligence do you have?

4.       Difficulty Expanding Revenue within Client Base

Whether it is software modules or service offerings, you need to augment your business value to existing clients.   They initially purchased your service/software to solve a specific business need.  Are you meeting those initial needs and are you leveraging that success to expand your value (read: revenue) within?

5.       Little or No Client Driven Referrals

This should be an obvious, but many companies do not go far enough in leveraging their clients for referrals.  Yes logos on a website and case studies are good but they are very passive in their effectiveness.  Do you have clients that would happily take a call from a prospect, or even better, refer you to a peer from another organization who would also benefit from your solution?  Understand, per client, what type of reference they are willing to be, and leverage it – but don’t take it for granted either.  You need to continue to earn their reference.

6.       Poor Client Retention

This is a basic one.  Is the revenue that is leaving your company make you feel like you are on a treadmill?  The “fly-wheel” effect (the point when business starts to accelerate) only occurs when clients stay with you for years.  Is your company doing all it can to stem defections?

7.       Do You Hold Your Breath, Cross Your Fingers and Pray the Renewal Arrives?

It continues to amaze us when see companies who are surprised when a client does not renew or even when they do renew.  There are a number of factors that a client is going to consider and assess when they are making the decision to renew.  Many of those you can either influence or control.  Do you influence and control all renewal and retention factors?

8.       No Dedicated Executive Leadership

Do you have your client engagement groups reporting to an Executive of Sales, Operations or Development?  All companies get to a point where the bare minimum or the status quo begins to be a liability to their longevity and health.  Sometimes having access to strong executive experience, on a temporary basis can help companies get over key hurdles without prematurely expanding the executive head count.

9.       Great People, Lack of Experience and Learning Curve that is Too Long.

Many companies have leadership (Director or Executive) who show great promise, are making excellent contributions and overall are “keepers”.  However companies can find themselves in a situation where issues that require experienced executives to solve are coming in faster than their executives can gain experience.  Invest in your leadership stars, and give them access to a mentor/coach that they can use as an experience sounding board to accelerate their professional growth.  Are you helping them?

10.   Client-Focused Culture?

The points above are clearly all contributors to a client-focused culture; however it does merit stating on its own:  many companies need help to truly engrain a cross-departmental, client-focused culture within their organization. Getting everyone on-board and contributing to this will take strategic planning, collaboration and dedication.  How client-focused is your culture?

So take a hard look at your organization.  If any of these Top 10 items sound familiar, you owe it to your organization, not to mention shareholders, to improve.  Hopefully you will think of us.  We would welcome the opportunity.

One of the prime objectives of the ServiceVantage Client Lifecycle Methodology is ‘Consistent and Pervasive Adoption and Usage’.  These are absolutely key elements in Revenue Protection and Client Retention.  This means, of course, that all technology firms must be taking a proactive approach to ensuring that clients experience strong adoption and ongoing usage of their solutions.   Here are our top 10 strategies to improve adoption and usage:

1.      Workflow Training NOT Feature Training

Providing training on the features of a solution forces the user to connect the dots between the feature and their daily workflow.  For many, this is difficult to do and utilizing your solution can be more of a burden than benefit. When delivering workflow-based training, the focus is on articulating how the various features/functions flows into a user’s existing workflow or how it makes improvements on their workflow.  When users have a clear understanding of the improvements a new solution offers their day-to-day tasks and activities, getting the much needed adoption “buy-in” follows.

2.       Identify Success Criteria for each User Type / User Group

Different user types (Admins, Frontline, executive, etc.) have different business needs and expectations that must identified, up front, so that the “on-boarding”, training and ongoing client engagement will cater to their specific requirements and needs.  This may seem obvious, but I have sat through many training sessions going over features and functionality that I will never use.

3.       Executive Sponsorship

The executive (or senior manager) of your client must set the tone and expectations with his/her staff on the importance to the group, department or company for utilizing the solution.  They need to enforce the usage through individual compensation criteria, performance reviews etc.   During the sales cycle and on-boarding phases, it is critical that you get the commitment from the Executive owner and provide him/her with suggested approaches to encourage/enforce usage.   A great example that we have seen is with CRM deployments, where our client implemented a policy where sales people would not get compensated on any deal that was not properly recorded within the CRM.   They had no problem with adoption and usage.

4.       Eat the Elephant One Bite at a Time

By phasing-in subsets of the overall solution, you allow clients to realize immediate value, which tends to reinforce adoption and usage.  After the first quick win, expand the roll-out to the broader features and you will likely see that it is much easier to gain adoption, especially if you have a training plan that maps to this approach.

5.       Easily Consumable Training Videos

Provide readily available and easily consumable user training videos.  Not hour long videos, but rather quick, task specific videos that are 3 minutes long or less.  Make a series of these videos so that users can quickly “consume” the information they need, for any given topic or job task.  At the end of the day, everyone is busy.  Making long training videos that spans multiple aspects, with varying degrees of relevancy for a specific user is not an effective way to increase user adoption.  Focus on these quick and short tutorials and give them the ability to achieve quick wins.

6.       Job Aids

Similar to the training videos, creating small, post card size, double sided job aids that are task specific is also a good tool to help users grasp a specific job function.  There will always be a percentage of the user community that will prefer to have these short, task specific job aids at their finger tips instead of watching short, video tutorials.  Having these types of job aids shows your clients that you respect their time, and understand how best to help them use your solution.

7.       Combine Training with Mentoring

When practical, mentoring users post-training is a great way to not only develop a good rapport with your clients, it is a great way to show off your deep subject matter expertise and help them connect the dots between their day-to-day workflow and the new software they were just trained on.  Mentoring allows you to intervene, in real time, if there are issues that will prevent adoption and usage.  When mentoring is offered, making practical use of your software is more easily achieved.

8.       Product Roadmap Participation

When users have been given the opportunity to impact and/or influence the future direction of your solution, they become vested in your success, which in turn, creates an environment within your client’s organization that encourages ongoing usage and adoption, even as individuals are changed or replaced.  Give your user community the opportunity to get involved in various aspects of your product roadmap process such as new feature definition, prioritization of features/bug fixes, and being involved in beta testing.

9.       The Company You Keep

Having your software interact/interface with the broader software ecosystem that your clients also use is a great way to reinforce usage and adoption.  Being intertwined with other important tools that your clients also rely on makes it difficult to avoid using yours.  As example, salesforce.com has a great plug-in to Outlook that allows users to stay within their most frequently used tool (Outlook) and easily sync their email, calendar & task activities to salesforce.com account, case, activity and opportunity records.  This simple plug-in makes salesforce.com further entrenched in their client’s broader ecosystem of important software tools which has a very positive impact on overall adoption.  What is your “outlook plug-in” equivalent?

 10.     Get Intelligent about Usage

Using a tool like Totango, (www.totango.com), will give you great depth of intelligence, specifics and trends of how your clients use your software. This critical intelligence will empower you with the information you need to intervene when required and understand the areas that need to be addressed in order to improve usage and adoption.

In alphabetical order:

1 – Rob Bell, VP Support & I.T (www.Kinaxis.com)

Rob is one of a kind.  He has managed many different groups at Kinaxis and the client is always front and center in everything he does.  For Rob, the client (rightfully so) is the center of the universe and he ensures that his entire team understands the importance of being their “trusted advisor”.  He has a solid, client-focused reputation within Kinaxis and throughout their entire client base.

2 – Marc Brule, VP Client Services,  (www.halogensoftware.com)

Marc has been the VP Client Services at Halogen Software for many years now, yet he continuously does his best to innovate and ensure his department provides the best client experience in their industry, which Halogen has been recognized for, many times over.  He has surrounded himself with an excellent, client-focused team and I have no doubt they will continue to wow their current and future client base.

3 - Greg Hess, Developer & Pre-Sales Engineer (formally of Wrapped Apps, currently with www.Axentra.com)

I have been telling Greg, a developer, that he is in the wrong position for many years now.  Without question, the best pre-sales engineer (one of the many hats he wears), I have ever had the pleasure to work with.  He is incredibly client-focused, pours his heart and pride into his work, and is absolutely loved by the prospects and clients he works with.   His passion may be development, but his client-facing skills are fantastic.  The good news is that it’s awesome when a developer is truly and sincerely client-focused.

4 – Joanne Kern, Training Manager (www.dna13.com)

Joanne is absolutely one of the most impressive and effective trainers I have ever had the pleasure to work with.  Joanne’s ability to understand her client’s specific workflow and processes and ensure they have a high level of adoption and usage is second to none.  She puts every ounce of energy and heart into making sure that her clients have the best possible training experience and are extremely well equipped to take full advantage of what was sold to them.   Many of dna13’s clients would credit Joanne with being one of the prime reasons they have been able to adopt and use the dna13 solution.

5 – Jennifer Morin, Director Client Services, (currently Product Manager with www.halogensoftware.com)

I had the pleasure to coach Jennifer for more than a year when she headed up the support & services team for AutoSkill.  She made this list because she had to deal with many twists, turns and challenges that would have thrown off many people, but through it all, she maintained an incredible positive outlook and an environment that made it possible for her team to provide excellent customer service.  An additional bonus is that she made me laugh countless times throughout my time working with her, (in fact, I bet  she will be zinging out several jokes steeped in sarcasm as she reads this).  Now in a product management role at Halogen software, she is no doubt bringing her excellent client-centric focus to make Halogen’s products even better.

6 – Jeff O’Connor, Client Success Manager (www.dna13.com)

As a Client Success Manager, (formally the Manager of Support), Jeff has worked tirelessly, and often without the appropriate recognition, to provide outstanding client support, service and account management.   He has found himself in situations where providing excellent client service was nearly impossible to do yet consistently manages to rally the people and/or resources to pull it off.  His high level of client dedication is something that any company would kill to have as part of their team.   I have great confidence in his abilities to handle nearly any client situation and to do everything in his ability to secure renewals and retain clients.  He has completely embraced the ServiceVantage approach to client engagement and demonstrates by execution.

7 – Robert Ouellette, Engineering Manager, (www.Sciemetric.com)

Rob is an incredibly client-focused professional from Sciemetric Instruments.   Rob has been in many client-facing and engineer roles throughout his 15 year career at Sciemetric.  His superb subject matter expertise, problem solving talents and loyalty, to both Sciemetric and to his clients, truly makes him one of a kind.  The enormous respect Rob has earned from his clients and peers is second to none and the positive impact he has had is palatable.

8 – Ron Pawulski, Business Development Manager, (www.sciemetric.com)

When I worked with Sciemetric Instruments, Ron was in a Services/Support role.   In an environment that was often extremely stressful, with clients who were very demanding (rightly so) and often required him to work crazy hours and spend many days/weeks away from home, Ron’s impeccable professionalism and client-focused attitude never faded, – or at least he didn’t let it show.   He has taken many a client out of the“fire” and made them successful.  He is a professional who can always be trusted to do the right thing for the client as well as for Sciemetric.

9 – Jennifer Peckett, Client Success Manager, (www.Syncapse.com)

Relative to the others on this list, Jennifer has the least number of years of experience, but yet her professional maturity is outstanding.  Often under a lot of pressure with tight timelines and dealing with large, Fortune 100 clients, she takes incredible pride in her work and in the success of her clients.   When Jennifer is assigned to “On-board” a new client, the entire Syncapse team feels tremendous confidence in Jen’s ability to achieve a successful outcome.  I can only image where her career will take her 10 years from now. Note: the entire Syncapse Platform Success team is extremely strong – honorable mentions for Dre Noronha, Zainab Ali, and Darcy Voutt.  Syncapse has struck gold with this team – and their clients benefit from it every day.

10 – John Sicard, Chief Operating Officer, (www.Kinaxis.com)

Kinaxis is a world-class, client-focused, technology company with an incredible team.  Being one the original members of this team, John has worked in many, many capacities throughout the years and is one of the driving forces behind Kinaxis’ industry leading reputation.  He has tremendous subject matter expertise and ensures that the various teams that report to him zero in on what is best for their clients.  Development, Marketing, Support, Services, Training, etc., all think “client” in everything they do and produce.   Kinaxis’ reputation is well deserved – and John’s client-centricity and ability to surround himself with excellent client-focused people is at the heart of it.

This could easily have been a Top 20 list – as we have worked with many incredible people over the years.  What we have discovered is that all of these great, client-centric professionals have as their common thread, the following characteristics:

1) They take pride in their work (even if others don’t).

2) They show great empathy for their clients’ needs, concerns and issues.

3) They sincerely believe in the importance of their role, (again, even if others don’t).

4) They have very thick skin.

5) Their client’s success is a big part of their own perceived success.

Thanks to each of them, for making our work so enjoyable.

Over the years, we have helped many companies create Client Services strategies and Operational tactics.  Here are our top 10 characteristics of an effective client services team.

1.       C-Level Endorsement and Buy-in of the Strategic Importance of Client Services

Having the CEO and all other senior executives truly and sincerely understand the strategic importance of Client Services is a huge step towards having a world-class organization.  To quote a very over-used phrase, it all starts from the top.    The CEO sets the tone.  An effective Client Services team is equally as important as an effective Sales team – albeit for different reasons – New revenue vs Revenue Protection.   This should be communicated and frequently reinforced through actions and expectations.

2.       Strategic Client Services metrics as a component of the Executive “Dashboard”

When the Executive are tracking corporate performance metrics, key (C-level relevant) Client Services data should be front and center.  Example could be:

• Days between Sale and Revenue Recognition (bookings to revenue).
• Client Churn / Client Retention – Measured in Dollars.
• Client Renewal Health Score (see our previous blog:  The Equation for Customer Retention Predictability)

 3.       Quarterly Client Services Reviews

The Client Services Team should be accumulating vital information directly from clients and provide it, proactively, to Development, Marketing, Sales, Product Management and then Executive Team to ensure that their respective activities will continue to evolve and improve the overall client experience.  The Client Services Team is the hub client intelligence and is critical to the overall organization that it is shared with all key stakeholders.

4.       A Sound Self-Service Strategy

Client Services organizations should be empowering their clients to be self-sufficient (to the extent that they would like to be) through the availability and wide array of self-service tools.   Short, easily consumable, training videos, job aids, knowledge articles, support portals would provide clients with tools to seek out their own answers and to resolve their own issues, to their desired extent.

5.       An Interactive Client Community

Create collaborative forums (social media or traditional) for clients to communicate with each other.  Having a forum to communicate with peers to address challenges, talk about best practices and share success stories increases the overall creditability of your solution.  Connecting your client base in a way that augments your value is a definite characteristic of a world class client services organization.

6.       Client Advocacy

There should be dedicated individuals within the Client Services organization, such as Client Success Managers or Client Advocates, whose prime focus is to be a “trusted advisor”.   Their prime objective is to have a pulse of the client and to understand and proactively engage with them when assistance or intervention is required.   Additionally, they should be actively monitoring usage patterns to see if there are any trends that might indicate barriers to renewal.  Ultimately they are responsible for ensuring high client usage, renewals and hopefully, expanded business.

7.       Strong Subject Matter Expertise

It is extremely important that all members of the Client Services organization develop deep subject matter expertise.  They must all be product experts and must truly grasp and can talk with a great level of confidence and detail regarding the features and usage of the product or service; especially as it relates to the client’s unique environment, processes and workflow.

8.       Leverage Client Advisory Boards

Organizations should create Client Advisory boards to whom they can present marketing messages, sales approaches, and product roadmaps regularly (once or twice a year) to obtain feedback and keep their clients engaged and invested.  An effective Client Advisory Board is made up of strategic clients who having varying experiences with your organization.  It cannot be made up of only those who “love” your organization, but also those who hold criticisms as well.   In either case, they need to provide sound, objective and valuable feedback.

9.       Client Intelligence

A world-class Client Services Organization will be measuring and cross-referencing highly relevant and important client data to ensure the organization as a whole is making sound business decisions.

This can be as simple as having a CRM tool that has good categorization of issues, topics and subtopics, allowing Client Services organization to understand the patterns of interactions.   For example, finding out that 70% of calls generated from a specific module of the software are “how-to” type calls, gives the organization a clear understanding as to training needs or product management priorities.  Too many organizations track only the basics and are not able to identify patterns that have a significant influence on the client experience.

Almost as important as proper usage of a CRM tool is having great depth of understanding of how clients are using your solution.  A fantastic example for SaaS companies is Totanto (www.totango.com) which provides incredible insight into which individual users use specific feature sets, when they use them, how they use them and then trend this information over time.  This type of intelligence is beyond critical for any SaaS company.   The impact this level of usage detail has on client services, product management, development and marketing cannot be over emphasized.

When you can cross reference this usage detail with the CRM detail, your organization is empowered with a level of client intelligence that will absolutely give you the knowledge needed to cement existing relationships, secure renewals, protect your revenue and trample a competitor.

10.   Employee Empowerment

This is a point we have discussed before but it is essential that members within the Client Services organization feel empowered to make client impacting decisions, within reasonable boundaries.

If each individual has great clarity with regards to what their boundaries are, they will have the empowerment to make client impacting decisions that will be very valuable and helpful to their clients.

After more than 10 years working as a consulting firm, we have learned a lot about the realities and challenges
associated with being a consultant.  While I wouldn’t change a thing, I have decided to share some of these here with you.

Here are our Top 10 things we have learned about Consulting Life:

1.  Stay out of the Job Fair.

If you really want to be a consultant, be committed and make a go of that career, you can’t be one of those people with one foot in the job fair.  This is something we discussed in a previous blog posting: http://servicevantage.com/2011/01/so-youre-a-consultant-really-are-you-sure/.   It is important that you know where you are in your career, why are you doing consulting work and make sure this is the right step for you.

2.  People have Polarizing Opinions about Consultants.

The term consultant is right up there with the term lawyer and real-estate agent – people have polarizing opinions about
people in these professions.  In large part, this is because there are some who hold these positions who may have questionable skills, results or reputation. Consultants are no exception; there are so many people who call themselves consultants who are essentially contract employees with varying degrees of success, experience, and skills. When you tell someone that you are a consultant it will be received in one of two ways:  you are either seen as a high quality specialist that adds significant value to an organization or as someone who does work with questionable results.   As per my first comments about lawyers and real-estate agents, I happen to have a fantastic lawyer and my wife is a superb real-estate agent.

3.  Manage Your Weight.

Seriously, most of your business development activities will be done over breakfast, lunches, dinners, beers and other wildly caloric activities.  Eat light and get a gym membership.

4.  Stick To Your Knitting.

Sometimes it is very tempting to just follow the money from a business opportunity rather than to turn it down because it is not the right consulting gig for you.  Yes you can do it, but it’s not your core focus.  Or once you get into a gig, doing
things outside of your consultancy scope purely for the purposes of the dollar.  You likely won’t do yourself any favors in the long run – after you have spent far too long doing the wrong things for a company instead of building your reference-able client base for the things you do well.

5.  Revenue is Lumpy, Get Over It.

If you are looking for consistent pay then go back to being an employee for someone else.  It just does not exist for consulting firms.  Obviously there are things you can do to flatten out the peaks and valleys but know that revenue will be lumpy and adjust your life accordingly.

6.  Cold Calling.

Early on, know that you will be making hundreds of cold calls.  Absolutely be comfortable with that.  No one is just going to give you their business; you have to reach out to them.  Know that you will have to become a sales person rather quickly.  Frankly this is where most people fail…they might be smart, talented people but not good sales people.  Figure it out and go on your merry way.  Once you have an established practice, your reputation and client references will be the major source of new business.  Until that point, know that you must be a sales person.

7.  Understand your Business Goals.

If you are consulting purely as a lifestyle choice, that is a very different approach and strategy to consulting than when you are trying to develop a consulting business that may have multiple employees, consultants and partners. Start with the end in mind and conduct your business accordingly.

8.  Network Like Crazy.

You just never know where a referral is going to come from or who is one or two degrees of separation from a prospect.  That being said, in order to get anything out of your network, you must first be the one who contributes to that network.  With networking you get out what you put in…so put in a lot.

9.  Keep in Touch with Clients.

Stay in touch with and maintain your relationship with current and previous clients. As your practice matures, you will find most of your business opportunities coming from referrals of previous or current clients.   Of all the clients we have had in the last 4 years, almost all have been due to referrals.  For a “lifestyle” consulting practice, referrals may be all you need to keep going.  If you are trying to grow a consulting firm, then you’ll still need to combine this with some significant energy and effort towards lead generation and sales.

10. Know When To Get Out.

There is always a point in time when you hit the peak of your value for a client. The longer you stay with that client the more your value declines.  It is always best to leave on a high note when you have had the most impact and they are the
most satisfied.  More often than not your value declines and people will start to question why they are paying you for less strategic value.  Remember that the strength of the reference is directly correlated to the highest value you have provided – which will dilute the longer you stay beyond this point.

We have worked with clients of varying size and many of those have been Start-ups.  As we all know, Start-ups face some unique challenges and circumstances and we have written this blog to highlight some of what we have observed and experienced.

Here are our Top 10 Start-up Observations:

1 – Title Inflation. 

Sometimes, people that join a Start-up, as part of the initial team, are given inflated job titles such as VP of Department X, for the purposes of showing that the company has an executive team.  In reality however, this individual may have little or no executive experience, or more importantly, executive acumen.  Then as the company grows and they need to add seasoned executives to support this growth, the Start-up is in a position where they have a significant discrepancy between the original “executive” and an actual executive.  This puts the Start-up in a position of either demoting or releasing the original “executive” to resolve this discrepancy.  Not only does this set the wrong expectations for the company and the individual but this ‘VP’ now has a title on their resume that they may not be able to live up to.  Instead Start-ups should have less senior titles for some of the leadership to make room for the individual to prove their executive ability or to ensure there is room to add executive experience at a later date.

2 – Self-Inflicted, Top Heavy Organization.

We have seen numerous examples where a Start-up gets Venture Capital funding and then they go out and hire executives of every possible department they have in their organization.  In every case, this creates a very top heavy org-chart with an executive-to-employee ratio that is wildly unbalanced. This gets compounded when these executives then hire the “doers” required to execute and get things done.  When financial realities start kicking in, the Start-up then find themselves in a situation where they need to consolidate headcount and executives resulting in the org chart they should have had in the first place.

3 – Lack of Start-Up Experience.

Many Start-ups will hire seasoned executives who gained their experiences in larger organizations and have never previously been an executive at a Start-up before.  Although there are exceptions, this often can be a damaging mistake.  These people are used to working for larger organizations with an entourage to get things done.  Instead, Start-ups need people with good experience but who understand the constraints of a Start-up and who are willing to roll up their sleeves and get stuff done.  To use a train metaphor, a Start-up executive is deciding where to lay tracks, which direction they are going, and what kind of train is required to go down those tracks, whereas the larger company executive works in an environment where the track is already known and the executive is just jumping on the train that is already moving down these well-established tracks.  These are vastly different, albeit important, skill sets.  When hiring that key executive, make sure you know which one you are hiring.

4 – Selling to the Elephants.

Rarely should Start-ups sell to the large enterprises (the elephants) from the get-go, (http://servicevantage.com/2011/12/the-top-10-must-do%E2%80%99s-for-young-saas-companies/), but if you have recruited those non-Start-up executives, they will revert to what they know which is larger enterprises and will direct the Start-up to focus on hunting elephants.  More often than not, elephant hunting means big cash burn with not enough volume of sales success that would make it worth it.  It is far better to close many smaller deals, grow your market credibility and solidify you solution before you start chasing down the elephants.

5 –Revenue Protection?

With most Start-ups there is near exclusive attention given to new client growth, often at the expense of giving the appropriate attention to revenue protection and maintaining clients.   This is a dangerous scenario for any company let alone a Start-up who needs to gain credibility with a reference-able, low churn, client base.

6 – Sometimes the Shoe Does Not Fit.

Start-ups often find clients who do not adequately fit their solution.  Since they desperately need new clients, they spend enormous amounts of time trying to fix or alter their solution to fit a specific client.  It is critical for Start-ups to discover early on if the solution does not fit the client’s needs and to remove those clients immediately from their leads, opportunity pipeline, and customer list.  Focus on those that fit, don’t waste the time, money, and energy to force-fit a client.

7 – Too Development Heavy.

Many Start-ups put too much emphasis (in ratio) on development of the product than on building the market and ensuring that someone is going to pay for all that development.  Using an airplane analogy – some Start-ups would wait until the airplane is completely finished before they even think to look for a runway for takeoff.  Unfortunately most Start-ups that are looking for funding have great technology with no proven market.  In reality a Start-up should be building the plane in flight.  Create the minimal effective solution and continue to build from there, while in flight.  Once in the air they can more easily adjust the direction, speed, altitude etc.  Ultimately it is important to be nimble when addressing the market opportunity.

8 – MarComm is NOT Marketing.

This is not limited to Startups but bears discussion here.  Too many Start-ups don’t understand the difference between Marketing and Marketing Communications (MarComm).  They hire VPs of Marketing who are really VPs of MarComm when they really need Marketers who understand how to identify the target market, the effective messaging for that target market and understand how to position the company in its target space.   This is very different from MarComm whose prime role is to create market materials and write collateral and communications.  MarComm delivers on what Marketing produces. Know what you need and hire accordingly.

9 – Loss of Financial Discipline.

Receiving funding does not mean throwing out financial discipline.  If anything you should be more disciplined than you were beforehand because that funding came with strings and every dollar of that funding should be going towards the growth of the company.  That means you still need to be smart about who and when to hire, what equipment you purchase (everyone in your company does not need to get the latest laptop or smartphone) keeping an eye on travel expenses, etc.  Every VC dollar spent should have a direct connection to growth.

10 – Don’t Go It Alone.

Oftentimes Start-ups think they can conquer the entire market themselves.  The market is too big, there are too many players, and there is too much competition to go it alone.  It is all about the company that you keep and Start-ups need to establish strong partnerships, strong personal networks based on a deep understanding of their market.  Very rarely does a “go it alone” strategy work.  Strong partnerships make you look bigger than you are and will increase your credibility in your target market.

Since working with many firms over the past 10 years, we have seen varied approaches to the client experience and we have helped many clients make fundamental improvements to their approach.  As such, we have witnessed many  approaches that simply do not work or create significant barriers to a positive client experience.  Here are our Top 10 hurdles to providing an excellent client experience:

1.  Sales Territorialism.

In some organizations, sales become very nervous when others within the organization want to proactively communicate with “their” clients.  In fact they really don’t want you to call for fear that it may reveal challenges or issues that a client is experiencing.   To be direct, this is a ridiculous idea and position because it assumes that the client is blind to the point where they do not know that they are experiencing issues.  Of course they do!  Pretending they aren’t there, or simply hoping a client will forget is a great way to show them the Exit.  It is always better to meet client challenges and issues head on and with complete transparency so that you can actively show that you take their issues seriously and are working aggressively to improve.

2.  Outdated Leadership Attitude towards Client Service.

There are still some leaders who look at support and services as something they need to deal with when client issues arise.  They structure these groups to be reactive orientated instead of being structured for nurturing strong and lasting relationships with clients.  Oftentimes, these groups are considered cost centers rather than revenue protection centers.  Not seeing this group as a strategic part of the business is a mistake that, over time, will be fatal.  (See our previous blog posting:  ( It is Not Support – It’s Revenue Protection!)

3.  No corporate-wide ownership of client retention (aka Revenue Protection). 

Client services are often solely saddled with the challenge of client retention with little to no help from other groups.  The reality is that client retention and revenue protection is a corporate responsibility, where each major group has a role to play.  This may be the fulltime concern of the client services group – but other teams should feel the pain or benefit of corporate successes or failures with client retention.  Especially in the age of subscription-based revenue, client retention and revenue protection must be a corporate mantra.

4.  Sheltered Product Management.

If Product Management is not interfacing with clients regularly, you have the wrong product management team.   Too many times product management get client “feedback” from 3^rd parties (sales, marketing, support), and don’t actually get feedback from the source.  At this point, in 2011, including clients in product roadmap discussion and previews of yet to be release software is simply common sense.  Getting clients engaged at this level makes client loyalty thrive.

5.  Executives staying in their ivory tower. 

Executives need to interface with clients and not leave it up to “their people” to do.  I am not suggesting this should be their prime focus, but having an executive reach out to clients serves two purposes.  It emphasizes the importance any given client has to the business and provides the kind of direct feedback that will help them make better executive decisions.

6.  Minimal investment in client impacting tools & technologies.

Not investing in technologies that will improve the client experience through automation, self serve or allows your client to engage with your organization in a way that helps them be more successful with your solution will have negative consequences. Clients want choices on how to communicate with you, how to learn more, find answers and improve their experience with your software or service.  Understand that the overall client experience is, in their eyes, part of the whole product or service that they purchased from you.

7.  No dedicated executive leadership of the client services organization.

In many companies there is no dedicated leadership of the Client Services organization.  Often you will see, as example, a VP of Sales and Services or a VP of Development and Support.  The reality is that these executives often only judged based on the first part of their title, not the second.  The VP of Sales & Service is not going to get fired from a poorly executed services strategy.  They will get fired if they consistently miss quota.   At the end of the day, people will focus on the area that will mean the difference between having a job or not.   The second part of their title will get substantially less of their time and energy and is often the area that they have the least experience.

8.  Lack of empowerment.

Those who are working in client-facing roles must be empowered to make client impacting decisions.  Your clients need to have the confidence in whoever they are dealing with can and will help them.  It does not look good, and in fact it is quite frustrating when clients get bounced through levels of management to get an issue resolved. Obviously there needs to be parameters around the type of decisions they can make, and if a poor decisions was made, support them so they will learn from it because ultimately that decision was made in the best interests of the client.

9.  Lack of career path for those in client services roles.

Without a career path, a client services role becomes a stepping stone on their actual career path which can create churn within the group.  Every time someone leaves, you lose valuable knowledge which has a significant client impact.  Client-facing roles should be structured as to be a career onto itself.

10. Attempting to keep significant client impacting issues quiet. 

It’s always best to be proactive and upfront with clients when issues exist – never wait until they stumble upon it themselves.  Your client may not be happy, in fact they may be furious about the issue – but they will view you as being an honest company with high integrity.  If you are able to provide reasonable timelines for improvements and fixes they will consider you a trusted partner.

Over the many years of working with Software-as-a-Service (SaaS) companies of varying size, we have learned that there are some key strategies that young SaaS companies must consider in order to succeed with this business and delivery model. Here are our Top 10:

1- Easily Consumable and User Initiated.

Say that term again, then repeat. All client experiences including software trials, sales, on-boarding, training, expansion of product usage and support should all be done through the lens of being – say it with me – Easily Consumable and User Initiated. Prospects and clients should be able to interface as much or as little with you as they desire. Tools, information and flexibility should all be at their fingertips. Allow them to experience all aspects of your SaaS offering in a way that is painless, unobtrusive, easily accessible and available on their terms.

2- Hold off on the elephant hunt.

Too many new SaaS companies are looking for the huge win with big Fortune 500 companies. By definition, selling to the big Elephants requires long sales cycles, and significant cost of sale to close those kinds of deals.  Burning through a lot of cash in the process. Unless you are very well funded, (which most aren’t today), this will spell trouble.

I have worked with a company where upon hearing that of the 100s of leads, there were no Fortune 500 companies, the VP Sales famously (infamously?) stated ”these are the who’s who, of who cares.” Wrong. These were companies who were actually interested in their solution. Needless to say, putting too much effort into selling to Elephants nearly bankrupted the company. After righting the ship, inside sales selling more frequent, yet smaller, deals is what kept the company afloat long enough to get to an exit. They still closed the odd Elephant, but the inside sales deals made the revenue and cashflow far less bumpy.

Even salesforce.com started out selling to small and medium sized businesses. It was not until they had a larger mass of users, from 100s of smaller firms, that they began selling to the larger enterprises.

3- Configure, don’t customize.

Customizing a solution within a SaaS based delivery model will make it very challenging to scale because upgrades and updates to software, documentation, and training material become very difficult and costly to do. Instead, allow configurations, which do not change the core product, yet provide some tailoring to specific client needs and workflows.

4- Marketing can close deals.

If your software has the easily consumable and user-initiated ability to have prospects try, test, and ultimately buy, then it becomes all about conversion from lead generation to the purchase. Make this an expectation and incent marketing to close deals.

5- Understand your cost of sale.

Marketing, inside sales (over the phone) and outside sales (in-person) can all close deals. Each of those sales tactics has significant cost of sale implications with Marketing having the lowest, while outside sales traditionally has the highest. Given each method of sales, makes sure it maps well to the appropriate deal size. For example, it would make little sense to have an expensive outside sales cost attached to a $10,000 deal. Push smaller deal sizes to the appropriate bucket.

6- Understand usage rates.

Most SaaS solutions are easy to acquire and use, however this also makes them easy to remove and replace. For this reason it is critical to understand adoption and usage rates so that you can intervene if they drop. Sadly most SaaS companies have minimal useful usage data, yet it is absolutely critical, for many reasons, to have great detail in how, what and how often an individual user uses specific features as well as the application as a whole. We have come across a great solution called Totango (http://www.totango.com/). Totango is an online service which analyzes, in real-time, user actions within SaaS applications, creating reports and alerts that help organizations to better understand how their clients are using their software. The data Totango provides is crucial for Product Management, Marketing, Sales and of course Client Services. If you don’t have great visibility, get it. Feel free to contact us, and we’ll connect you to the great folks at Totango. (jbennett@servicevantage.com).

7- Have a Client Lifecycle Program.

We have discussed the importance of having a Client Lifecycle Program for all businesses and this is particularly important for SaaS based businesses that need to ensure client retention and recurring revenue. Read our last blog about the Top 10 Requirements for an Effective Client Lifecycle.

8- Don’t be an island.

As stated earlier, SaaS applications are relatively easy to replace – therefore you need to make it harder to do so. A great way to do this is to not be an isolated solution but rather a solution that integrates (via web services, API’s etc.) or is somehow interdependent with other solutions commonly used by your client base. Make sure your solution is intertwined with the greater ecosystem of products that your clients use. There is strength in numbers.

9- Broaden the impact of your SaaS solution through services.

Provide service offerings to compliment your solution. These services should focus on increasing your “stickiness” with your clients by focus on securing adoption or interfacing/integrating with complimentary solutions used by your clients or otherwise augments your overall business value. Where possible, make them user-initiated and easily consumable.

10- Make client retention a corporate mantra.

Churn kills. This is a well documented truth. While sales are trying to close or expand business, your entire company should be focused and incented on client retention. Sales, Marketing, Support, Services, Finance, Product Management and Development all have important roles in client retention. This is not just the concern of you client support group. Do not let all the other impacting departments off the hook.  Hold them accountable for their part in client retention.

The 2^nd topic in this series:  The Top 10 Things We Have Learned about Client Retention

Client retention is a critical component to any organization, but this reality is especially acute for technology firms who either have a subscription based revenue model or during an economy where new sales growth is harder to come by.  That being said, our experience has been that most organizations do not take a truly strategic and proactive view to this business challenge.  Over the years, we have learned a lot about client retention.  We have picked the most critical elements in this week’s Top 10 installment:

1 –Losing an executive champion opens the door for competitive bids at renewal time.

The executive champion after all, is the one who supported the purchase of your solution, but when they are replaced for one reason or another, know that there is a very high likelihood that the new executive will want to make his/her mark.  What this generally means is that they will scrutinize the status quo and the more critical your solution is to their group, the more likely they will want to see competitive bids before agreeing to renew.

2 –Many software companies are surprised when clients renew or leave.

In our experience, far too many companies do not have a good understanding of your client’s success (or failure) of using your solution long after the sales is closed.   Many companies we deal with really only have a grasp on a small  percentage of their client-base and are often surprised when a client renews or doesn’t renew.  We have written on this topic a few times, specifically about our methodologies, so it won’t be repeated here, but technology companies need to adopt a client lifecycle approach that removes the element of surprise.

3 – Understanding the true retention rate.

How are you tracking retention rates?  Many companies look at total number of clients at the beginning and end of any given year to determine their retention rate.  Although this is a good measure – what is arguably a more important  measure is to understand at what year did they not renew.   The reality is this.  Many clients will renew in year two more as a reflex then as a choice.  Unless you have failed them miserably, they likely haven’t take the time in the first 12 months to look at alternative solutions and if they feel they need to , will do so during the 2^nd 12 month term, making the 3^rd 12 month term less likely.

A measure you need to be tracking is the retention rate per subsequent renewal years.  For example, it would be of great strategic interest to know that only 60% of client renew going into a 3^rd 12 month term.  This is a statistic that would be hidden if you only tracked the retention rate within any given year.

4 –Having high client retention, frankly, is hard work.

Clients will not renew out of the goodness of their heart.  Their business must be earned and re-earned continuously over any given term.  Ensuring retention should be an all-consuming goal of your organization.  It takes work.

5- A disconnect between the purchaser and the user community spells trouble. 

User adoption becomes very challenging when the user community had a software/solution thrust upon them instead of being involved in the decision making process, especially if there was an incumbent solution.  This type of scenario results in lack luster and inconsistent adoption rates.   Companies rarely, if ever, renew a solution that is not being properly used.  Wherever necessary, you need to bridge the void between purchaser and user when a divide exists.

6 – The bad news – SaaS solutions are easy to deploy.

Why is this bad news?  If they are easy to deploy, they are also easy to remove.  In many cases, the risk is very low for companies to switch SaaS providers.  Retention is always a risk, when leaving you is painless – relative to the on-premise model.

7 – Client retention is strengthened when your solution is connected into a larger eco-system of solutions.

If your solution can integrate, communicate or otherwise “hook into” other key tools that your client needs such as financials, CRM, project management tools, etc., it will be far more difficult to pull the plug because it now has an impact to the larger ecosystem that is of critical importance to your clients.  This makes your solution far more valuable (read: more likely to retain) than it was when it was an isolated point solution.

8 – Complimentary service offerings positively impact client retention. 

Offering complementary services that will help to ensure that your software/solution is entrenched in your client’s business process and workflow will go a long way to cementing user adoption and overall usage. If you don’t have a mature, complementary service offering – you may want to start.

9 – Sales rarely take an active involvement in client retention.

Not because they don’t want to, but because they will have a very short career if they are not meeting the new revenue growth targets set by your company.  The challenge is that even though Sales is often responsible for all revenue they cannot (and I would argue, should not) spend the amount of time and effort on client retention (read: protecting existing revenue).  This is yet another reason why you need a client lifecycle approach that complements the Sales team and gives them the confidence to pursue new business because they know the company is pursuing client retention and revenue protection.

10– Clients will not renew if they think they have chosen a market loser.

As we discussed in our previous blog posting:  http://servicevantage.com/2011/11/the-top-10-requirements-for-an-effective-client-lifecycle/, many people will not take the risk to renew with a company that is perceived as a “market loser”.  Your Marketing and PR teams need to communicate you market wins to counter any perceived “market loser” symptoms.  I go back to my RIM example.  RIM, a great company, that has great products, but will lose clients not because their products or solutions, but because they are perceived (wrongly so) as a “market loser”.   No one, (with the exception of Leaf fans – kidding), want to be associated with a perceived loser.

So take a hard look at your organization through the lens of each of our Top 10 items, and adjust accordingly.

The first topic in this series is:  The Top 10 Requirements for an Effective Client Lifecycle.

Before talking about the top 10 requirements, it is important to understand that a Client Lifecycle Program is a proactive client engagement approach, that is unique to your specific business and industry that has these prime objectives:

a)      Revenue Protection – Also known as Client Retention.

• Business Driver Attainment – Your ability to meet or exceed the original and evolving business needs of your clients.  This is the cornerstone of how you should measure your success.
• Consistent and Pervasive Adoption & Usage – Over the course of the contract term and with personnel changes and additions.
• Interacting with Client – Client must understand that you are highly professional experts in your space who strive to add value with each interaction

b)      Expand Usage & Facilitate Revenue Growth – All items above make it far easier for sales to expand your presence within any given client.  And your client will be happy to do so.

c)       Market Reference Ability – Can you leverage your clients to promote your brand and solution to prospects?

The Top 10 Requirements for an Effective Client Lifecycle:

1.  Must be a corporate wide initiative – not just a client services initiative.

Without Board and CEO level visibility, buy-in and sponsorship this type of corporate-wide initiative can be challenging to have all key stakeholders involved and invested.  Although it is often lead by the client services team, a multi-departmental approach is necessary for it to be highly effective.

2.  Each Department Leader has a key role to play

 In a successful Client Lifecycle program, the leaders in departments such of Sales, Marketing, Product Management and Client Services all have a role to play at some point.  Their contributions provide the pieces to the puzzle for a client when they are decided whether or not to renew.

 3.  Market and Promote your client lifecycle program

When you develop and execute on a truly unique approach to client engagement that will absolutely be a differentiator from your competitors, brand it.  Market it.  Don’t be afraid to let people know that your whole company has an approach that will make your clients successful with your product & service over the long haul.  This added visibility also provides the appropriate amount of pressure to make sure your organization sticks with it.

4.  Have a designated owner who acts as a “quarterback” of Client Lifecycle program.

Coordinating multiple stakeholders does require ownership for a client lifecycle program.  The Executive owner is often the most senior client-facing (post-sale) executive.  Depending on the size of firm, this would be the CEO, COO or VP of Client Services.    This executive owner should be responsible for client retention.  From a client to client perspective the owner should be a post-sales account manager, often referred to as a Client Advocate, Client Account Manager or Client Success Manager who is measured on retention, and not new sales revenue.

5.  The Client Lifecycle activities should support the three main criteria that a client will use when deciding to renew: 

Although this is a potential point of debate, from our experience there are 3 key factors that your client assesses when deciding to renew business with you:

1. Is your organization meeting or exceeding their current business needs / business drivers;
2. Does your client have confidence that you will continue to meet their current, future and evolving business needs  business drivers, and;
3. The client is confident that they picked a market “winner” not a market “loser”.   For example, even though RIM continues to be quite strong on meeting the business needs of the corporate user community, they will still lose many clients because they are now perceived , wrongly so,  as a market “loser”.  No one will want to be the one that made the decision to go with a market “loser”.

Each of these three areas must be proven, measure, re-evaluated over and over again throughout the client lifecycle to ensure that the elements your can control or influence are in your favor when they are making a renewal decision.  There are other factors outside of your control, but they are just that, outside of your control.

6.  Should leverage, and take advantage of, your ability to use client driven referrals to generate new business.

This should be an obvious, but many companies stop at having a logo on a website, or perhaps a case study, as a method to use an existing client as a reference.   The reality is, that if you are doing a great job for your client, many of them would take a call from a prospect, or even better, refer you to a peer from another organization who would also benefit from your solution.  As a former colleague of mine used to say, “Don’t ask, don’t get”.   Understand, per client, what type of reference they are willing to be, and leverage it – but don’t take it for granted either.  You need to continue to earn their reference.

7.  Should concentrate on user adoption and overall usage rates

The user community within your client’s organization can change frequently due to layoffs, new hires, mergers, and other business events.  You client lifecycle approach must have a deep understanding of the user community and adapt to a changing and evolving user base within the client’s organization.  A strong client lifecycle approach is highly proactive in tracking usage & adoption and stays on top of the shifts in user community and reacts accordingly.   A fantastic product that could help you get great detail on usage is www.totango.com .  It gives a level of usage intelligence that is invaluable.

8.  Should provide client intelligence on the renewal health of each client

As per our previous blog, http://servicevantage.com/2011/07/the-equation-for-customer-retention-predictability/, having a client lifecycle program that measures, among other possible things, business driver attainment, Vendor-Client interactions, client’s willingness to be a market reference and usage rates provides an ongoing scoring ability to gain a solid understanding of the likelihood of renewal.  Doing this in regular intervals gives you plenty of time to change the course for any client who is on the path of not renewing.

9.  Measurable with centralized access for all stakeholders

A successful client lifecycle program is like a hub on a wheel with information “spokes” going to and from all key stakeholders in the your organization.  Each group will benefit significantly from the knowledge/intelligence gained about client activities, successes, failures etc.   In our experience, it can have a profound effect on who you market to, how your market to them, what the actual development priorities should be, etc.   With one of my clients, it provided great clarity into a market segment that just wasn’t right for their solution.  They pulled all Leads, Opportunities with prospects from this segment, and they exited gracefully from existing contracts that we knew were doomed to fail.

10.  Proactive in nature,

If your sole interaction with your clients is reactive by definition it’s a failure.  Getting ahead of a train, is far better than being run over by it.