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

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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 such 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 salespeople—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 increasingly 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 ensure a successful product launch. Today, however, with the advent of browser-based technologies—such as Web analytics, sales-enablement systems, and customer-relationship-management systems—it's possible for companies to cost-effectively gather customer information at every stage of the buying process.

What that means is that companies can now continually 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, "on premise" a copy of the software. Those 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. So unless customers continue to renew their subscriptions, SaaS providers may never earn the revenue that conventional software providers typically recognize up front.

For example, at 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. "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."

The idea for the Sales Playbooks 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 and uses 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 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. The team sought input from Sales, partners charged with implementation of Kadient's current products, internal personnel, and others who had experience implementing sales systems.

Team members used that knowledge to develop the company's ABLE implementation methodology, which 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 Kadient and customer personnel. One team member is an executive sponsor, recruited from the customer's senior sales management team, to spearhead the implementation.

That person, ideally the VP of Sales, then identifies several top salespeople to contribute their best-practices. The client team also includes someone or some people from Marketing or Sales Operations who will take responsibility for assembling and mapping the content and ultimately loading it in the system.

The implementation process begins with a kickoff meeting to frame the project's scope, roles, and responsibilities. In the Assess stage, the team gathers input from Sales management and the top salespeople, with the goal of assembling best-practices.

Learn from them what matters most. The Sales interviews are guided conversations about the steps the best salespeople took to close particular deals. One goal of those 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 end users. Strategies may include campaigns that highlight the contributions of the top salespeople who 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 that stage, Kadient seeks customer feedback via various methods.

Get regular feedback from multiple perspectives. The team provides customers with a survey sample and work with them to add questions and survey all their users. The team then conducts a focus group of users and managers in the first 60 days to help plan enhancements to the content, playbook design, and product. It also works with users to document success stories within the first six months of the initial launch.

The knowledge garnered from that process facilitates future product development while reinforcing the value that Kadient offers to customers. Customers' recognition of that 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. For example, after the launch, the product and client managers meet with the executive sponsor and the project lead to get feedback; often the user interface designer and a developer will also participate. The company budgets a given percentage of development resources for innovations that incorporate that 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 that 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 up-front 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 users use regularly and want to see in the system. That has helped the implementation team appreciate what makes the system valuable to sales reps and provides important insights to Marketing regarding where to invest its limited resources and to the implementation team regarding what will make the system more valuable to sales reps.

Is the customer always right?

Especially in the case of 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.

That is particularly true for current customers facing a renewal decision. Chances are those companies or persons are evaluating a solution to meet the need for which they acquired the original product or service. Moreover, they have enough experience to know which aspects of the product or service were particularly gratifying or annoying.

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

It behooves marketers, therefore, to learn as much as possible about their customers. As the Kadient case study shows, customer research at a minimum 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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Barbara Bix is managing principal of BB Marketing Plus, where she helps companies enhance their brands by capturing and enhancing the customer experience.

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Comments

  • by Misty Strawser Thu Jul 29, 2010 via web

    Whether it's market insight or new product innovation and implementation, customer feedback is always beneficial. To really understand your customer, though, you need to go to the next level and become more than just a vendor.

    Kelly Jones with the Geehan Group addresses the concept well in her recent blog. Check it out at...

    http://tinyurl.com/32qzsar




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