Marketing Profs, May 25, 2010

Case Study: In a SaaS World, Customer Feedback Drives Competitive Advantage
By Barbara Bix

Most executives would concur that gaining deep insights into customers' preferences at every stage of the buying process is a good idea. That said, until recently gathering this information has been both expensive and time-consuming. Therefore, many technology companies have decided to rely heavily on the "second hand" information they've been able to glean from their sales people--and to a lesser extent customer support personnel--to drive product marketing decisions.

B2B technology companies are increasing their investments in pre-sales customer research

As I discussed in the article The Secret to Success in a Down Economy: Market Intelligence, many technology companies are increasing their investments in customer research. One impetus has been the need to discover ways to differentiate their solutions in an increasing competitive market.

Another impetus has been the declining cost of gathering customer information. In the past, because months or years elapsed between product releases, the primary focus of customer research was to assure a successful product launch.

Today, however, with the advent of browser-based technologies--such as web analytics, sales enablement systems, and Customer Relationship Management (CRM) systems--it's possible for companies to cost-effectively gather customer information at every stage of the buying process. What this means is that companies can now continuously hone their ability to attract qualified leads--and make optimal use of their marketing dollars.

In a SaaS world, post-sales customer research is more important than ever

Lately, it is becoming important to also gather customer information after the sale. Until recently, most software providers sold licenses that entitled purchasers to host a copy of the software “on premise”. These purchasers paid for future use of the software at the time of sale.

Today, however, many software providers sell their Software as a Service (SaaS). Customers “pay as they go”, on a monthly or annual basis for access, from web browsers to centrally hosted software. What this means is that unless customers continue to renew their subscriptions, SaaS providers may never earn the revenue that conventional software providers typically recognized upfront.

As Kadient--a company that now delivers interactive Sales Playbooks--customer satisfaction is more important than ever. As the company began development of a SaaS product for a new market, the management team identified a need for a formal process for gathering customer feedback.

"We know that learning from early customers' experiences feeds future success.", says Jennifer Peterson who heads the Customer Experience team at Kadient--a company that now delivers interactive Sales Playbooks . "So, we've always sought customer feedback when we've brought new applications to market."

"That said, we didn't always have as rigorous a feedback loop as we do today", Peterson adds. "One impetus for the change has been our transition to delivering our software as a service (SaaS)."

"That said, we didn't always have as rigorous a feedback loop as we do today", Peterson adds. "One impetus for the change has been our transition to delivering our software as a service (SaaS)."

The idea for the new Sales Playbook product was itself the result of customer feedback. The company discovered a need for a solution that would help sales organizations incorporate best practices throughout the sales cycle while selling "inciteKnowledge", a content management system that helps companies customize presentations, proposals, and other selling documents. Launched last January, Sales Playbooks replaces ad hoc efforts with systematic processes and materials to replicate the best selling activities across the sales team.

Kadient case study: Deep customer insights drive sales

Sales Playbooks was a new product aimed at a new market. Therefore, the executive team felt it was important to seek out customer feedback at every stage of the product development and delivery process--particularly post-implementation support. In so doing, one of the company's goals was to develop a story that would demonstrate the tangible value of Sales Playbooks. Another was to anticipate and address implementation obstacles.

The company started by forming a cross-functional "customer readiness team" charged with assembling knowledge gleaned from past customer experiences. This team sought input from Sales, partners charged with implementation of Kadient's existing products, internal personnel, and others that had experience implementing sales systems. Team members used this knowledge to develop the company's "ABLE" implementation methodology. The "ABLE" methodology has four stages: Assess, Build, Launch, and Evolve. At the outset, it calls for designating a team that will lead the implementation process.

Involve customer thought leaders early

The project team includes both Kadient and customer personnel. One member of this team is an Executive Sponsor, recruited from the customer's Senior Sales Management team to spearhead the implementation.

This individual, ideally the Vice President of Sales, then identifies several top sales people to contribute their best practices. The client team also includes someone or some people from Marketing and/or Sales Operations who will take responsibility for assembling and mapping the content and ultimately loading it in the system.

Learn from them what matters most

The sales interviews are guided conversations about the steps the best sales people took to close particular deals. One of the goals of these conversations is to identify which parts of their process are repeatable.

In the Build stage, the Kadient and customer teams design Playbooks to reflect the customer’s best practices, and build them into the Kadient solution. At the end of a few weeks, the customer has functional playbooks and can begin soliciting ideas for modifications.

Leverage leaders' reputations to promote engagement

In the Launch stage, the team strategizes about the best way to engage the end users. Strategies may include campaigns that highlight the contributions of the top sales people that contributed to the process, and show how the Playbooks solution can make the sales reps’ lives easier and help them make more money.

The Evolve stage starts once the new playbooks are deployed. During this stage, Kadient seeks customer feedback via a variety of methods. The Evolve stage starts once the new playbooks are deployed. During this stage, Kadient seeks customer feedback via a variety of methods.

Get regular feedback from multiple perspectives

They provide customers with a survey sample and work with them to add questions and survey all their users. They then conduct a focus group of users and managers in the first 60 days to help plan enhancements to the content, playbook design, and product. They also seek to work with users to document success stories within the first 6 months of the initial launch.

The knowledge garnered from this process facilitates future product development while reinforcing the value Kadient offers to customers. Customers' recognition of this value often results in the sale of additional licenses within the account.

Kadient also has internal processes for ensuring that the company gathers and responds to customer feedback. Here are two examples.

After the launch, the Product and Client managers meet with the Executive Sponsor and the Project Lead to get feedback; often the UI designer and a developer will also participate. The company budgets a given percentage of development resources for innovations that incorporate this feedback.

Act on lessons learned and reap the benefits

The agenda for Executive Team meetings regularly includes discussions about the status of installations, and lessons learned. The Executive Team then uses this knowledge to ensure that the balance between internally driven and customer-driven innovation aligns with the company's business goals.

Peterson reports that the company's upfront investment in developing a systematic approach for gathering customer feedback has paid off by providing important insights. For example, a request for “dynamic” Playbooks recently recommended through early feedback is in the works for release in the next few months, and has become an important selling point with other large enterprise prospects.

Survey feedback from users has identified additional selling tools and content they use regularly and want to see in the system. This has helped the implementation team appreciate what truly makes the system valuable to Sales Reps and provides important insights to Marketing regarding where to invest their limited resources and to the implementation team of what will truly make the system more valuable to their Sales Reps.

Is the customer always right?

Especially when it comes to technology products, customers aren't always the best predictors of their needs and wants--largely because they tend to be trapped in their own perceptions about what's possible. Nevertheless, deep customer insights are important to the development of any product.

For one thing, customer needs persist over time, only the possibilities for addressing them change. For another, while customers may not always know what they want to have, most know what will deter them from buying.

This is particularly true for existing customers faced with an upcoming renewal decision. Chances are these companies or individuals are evaluating a solution to meet the need for which they acquired the original product or service. Moreover, they have enough experience to know what aspects of the product or service were particularly gratifying or annoying.

Because existing customers will base future buying decisions on their past experiences, it's helpful for vendors to work from the same information. Today, thanks to improvements in technology--and steep declines in the cost to deploy them-- deep customer insights are now within the reach of even the smallest of businesses.

It behooves marketers, therefore, to learn as much as possible about their customers. As the Kadient case study shows, at a minimum, customer research helps avoid missteps and wasted resources. More often, however, customer research gives incumbents the inside track and ultimately leads to additional sales.

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