Customer Success != Adoption

>What most vendors think equates to success for customers, is not what customers think. Why might this be?

Photo by Wendy van Zyl from Pexels

Following this excellent blog post from Dan Roedner, I was inspired to pen a few thoughts about customer success. It was actually quite painful to read in some ways, because we witness it so often, many times too close to home. In my opinion, not only are customer success stories about the customer not the vendor, but although no-one would like to admit it in most cases what the customer achieves is almost completely down to the customer.

​The majority of the time, the differentiation in the choice of technology, the implementation and adoption methodology are minor elements compared to the contribution that will, drive, direction, culture, adaptability, business environment, management, governance and any number of other factors within the customer environment make towards success. This is not a finite list, but it serves to illustrate the point that it's more about the customer than anything.

A brief but important aside about the economics of cloud. There is a school of thought that cloud has changed the buyer/supplier dynamic for the better. The subscription commercial structure of cloud means that revenues for the vendor are generated over time usually many months or even years vs the vast majority of revenues being up-front for the vendor in the on-premise world. It is a simple fact that the return on investment for technology programs for customers always takes time; often many months or even years. According to this theory, because of the financial dynamics, with cloud the business objectives of the customer and vendors are better aligned.

I contend this is an idealistic perspective and in fact is rarely the case. The proof of this is in the licensing/subscription model of the vast majority of cloud technologies. They are based upon metrics measurable by the cloud provider and more importantly under the control of the cloud provider. An example of this would be user-based licensing or sessions or another such metric. These are more about consumption than business value. Perhaps this is the reason that for many vendors, customer success is first about adoption, then renewal and expansion. Of course, there is plenty of rhetoric and good intentions about business outcomes,  key performance indicators and alike. However, as the foundation of the business model is different for the vendor, the reality of this misalignment is what undermines the theory.

So, why aren't enough vendors yet moving closer to subscription models based on real customer outcomes? There are many reasons, but when you peel back the layers the conclusion is that it's down to risk. The risk of not being able to control the many factors that enable customer success. For example, the best technology in the world will not make up for lack of management oversight  operational controls, proper training, usage, a reset of business priorities or a plethora of other external factors and herein lies the challenge.

In the technology industry, particularly with public cloud, we all truly work very hard to prepare, advise and equip customers with what we have seen work in terms of change management. It's generally centred around process change and adoption of processes. Of course, there is a rarely a blank canvas on which to establish these changes. There are innumerable subtleties: specifics about market, organisational structure, culture, customer behaviour, ecosystem and many more; each a reason to ignore or shun the change and retain the status quo. What happens in the end is out of necessity, a compromise on all sides.

Vendors are working towards an outcome based business model as espoused brilliantly by Technology and Services Industry Association (TSIA) leaders in Technology-as-a-Service Playbook. Also, customers need to work towards this too. Vendors need to take an empirical, scientific approach to customer success, real customer success and crucially with situational awareness. Conversely, customers need to admit that having unique ways of doing everything isn't a strength and can hold them back from the agility and responsiveness they seek.

I recall working with a large global bank some years ago. In the room for the kick-off of their business transformation, the CEO of Retail Banking made one, crucial point that has always stuck with me, "Whatever happens. Whatever anyone in my organisation says. We must keep to a standard implementation of the products in this [multi-vendor] solution". Business outcomes were the only thing that mattered. And one of the critical things was for the bank to regain lost agility through a foundation of technology and an operating model that they could benefit from now and into the future. The way that would be achieved was to remain as close to standard as possible with minimal customisation. Enabling them to benefit from new features and solution capabilities more quickly and efficiently than before. That was 2008 and a few years later as a vendor we would take a similar proposition and ethos to market as our cloud.

Since then, this mindset has become more prevalent in the customers I work with. In practice, the project and change management still needs work as sacrifices are often made and not always for the right reasons. But then so vendors need work too. The increasing momentum of outcome based agreements over the past ten plus years speaks to an appetite to change the dynamic for the better.

This willingness for customers to reduce the variables, with the quid-pro-quo that vendors will approach the achievement of business outcomes scientifically and commercially, is what will unlock one of the last remaining disconnects in enterprise technology. When that inflection point is reached, and I believe it is close, it will revolutionise technology purchasing and acquisition. Customer success != adoption. Customer success == business success for vendor and customer alike.|