I recently saw a post (forgive me I do not remember who posted it) that said “Beware the watermelon customer...green on the outside red on the inside.” It was a reference to customer satisfaction metrics that indicate the customer is positive (green), when in reality they are mad on the inside (red) and about to churn. It is not unusual for customer success managers (CSM) to report that a customer’s metrics indicate satisfaction, only to be surprised when the customer fails to renew the license. In one company it was such a frequent occurrence that the CEO said the red/yellow/green reporting from the CSMs seemed like they were just holding a wet finger in the air and declaring a status. Despite collecting reams of data, there was no real meaning to the scores, and the reporting was essentially worthless.
There are a number of factors to unpack in order to get to the bottom of this situation. The first is to take a look at the metrics being tracked to establish a satisfaction score. Too often, these are “feel good” metrics. They measure motions, but not progress or value. Activity scores such as logins, page-views, data entered, reports created, etc. are all measures of motion. It is nice to see a customer using the platform, but it does not mean they are happy, or that they are receiving value for what they are paying. They may be using the platform because they have not yet found an alternative. They may be doing a lot of motion because your platform is inefficient, and the task should not require so much effort, so they are actually unhappy with the user experience. Seeing lots of motion may make us feel good about a client, but it is a far cry from telling us how satisfied they are.
One path for CSMs to improve the analysis is to actually have conversations with clients instead of just trusting metrics. Unfortunately, this is often just a second category of “feel good.” Depending upon how the questions are asked, the response may be full of praise and positivity, but not really honest. The user may tell us how happy they are and how much they like the platform and the team. You would think this is a good thing, which it could be. However, often the front-line user is not the beneficiary of the output of your platform, and they are unlikely to be the decision maker regarding value and renewal. Your platform may be critical for their job, but the output may not be all that valuable to their employer. The positive feedback makes us feel good, but it may not be truly informative.
One last “feel good” feedback occurs when the CSM has what a salesperson would call “happy ears.” I have written a lot about having healthy paranoia. Too often we only hear the positive feedback, and our CSMs are not sufficiently paranoid to hear the faint voice of discontent buried in the praise. Customer satisfaction usually does not go out like a light switch. There can be an event that just flips the switch, but more likely it is death by a thousand cuts. Once a seed of dissatisfaction is sown, every seemingly minor act or interaction can become supporting evidence for why they should consider a change. When they start to question their choice, they metaphorically open a file and start collecting evidence to support their position. Every broken promise or delayed delivery or slow response becomes evidence that goes into the file. Eventually, the file is stuffed full and the last bit of evidence is the proverbial straw that breaks the camel’s back - the customer churns. All along this tortured journey, the CSM may be hearing positive feedback with just occasional grumbles about ‘minor’ items, but the minor items are adding to the file. Without a healthy dose of paranoia, the CSM with happy ears will continue to think the client is green, when in reality they are sliding toward red.
The first fix for the watermelon problem is to broaden the scope of customer feedback. Insist that CSMs build rapport with the ultimate beneficiaries and decision makers in addition to the front line users of the platform. When a CSM has one go-to contact, they are essentially flying into the target. A few measures I like to track and report are the number of conversations per month, the number of individual people within a client that were contacted, and the number of levels in the organization. If the CSM is talking to multiple people at multiple levels, and gathering honest feedback, the resulting satisfaction report is likely to have a lot more credibility.
The next fix is to look at what is being asked and what is being said, and what behaviors or outputs are actually being measured. Insist that CSMs explore beyond the confines of your solution. What happens to the output, who uses it and how is it consumed? Your platform may be a small cog in a complex machine. If the output from your platform has to be transformed and sculpted to fit into a broader system, and if you hear words like “we take this result and put it in a spreadsheet to calculate the answer we need,” you should assume you are in trouble. If your system consumes effort and then requires even more work to deliver a result, chances are your system is ripe for replacement. This is sometimes measured in a Customer Effort Score (CES). The concept is to measure how easy it is for customers to interact with a company or use its products and services, and it can be applied to measure how much effort it takes to get to a desired result. Too much effort, and you are in trouble.
The bottom line to get past feel-good reporting of customer satisfaction is to focus on the value delivered to the customer. Have you managed to deliver a product or service that is truly valuable and has a positive ROI, and have you communicated the ROI to the decision maker who has the authority to approve your renewal? For the CSM, a clear view of value will improve how they communicate with customers, and how they feature the ROI to decision makers. Even more importantly, measuring and understanding value can have a profound impact throughout your entire organization that goes well beyond simply measuring customer satisfaction. When the sales team understands how happy customers value your solution, they are equipped to sell better and close more business. When the product team understands the true value of your solution they can focus engineering on building greater value, and therefore stickier relationships with customers. When the business development team and leadership team have a more comprehensive awareness of how customers perceive value, they can make better investment decisions and pursue more meaningful M&A to expand the scope of the business. The entire organization benefits from value analysis.
Understanding value unlocks the potential to improve it. Delivering value is the currency of real customer retention and expansion.