casts for closers #11
Mapeando o Desired Outcome desde a VendaConvidado: Lincoln Murphy
- 19 abril 2016
Existe um fator vital no sucesso de qualquer operação de Inside Sales: a capacidade do seu vendedor tem de enxergar o que o cliente precisa receber ao comprar seu produto, e como ele quer compra-lo. E para falar mais sobre o conceito de Desired Outcome e como ele deve ser mapeado desde a Venda, trouxemos a referência mundial em Customer Success, Lincoln Murphy, para mais um episódio do Casts for Closers.
Diego Cordovez: Olá pessoal, aqui é o Diego Cordovez da Meetime. A gente está conduzindo mais um episódio do Casts for Closers, o seu podcast pra dominar Inside Sales e colocar suas metas no bolso. O tema de hoje é “Mapeando o Desired Outcome desde a Venda”. E para falar deste conceito a gente trouxe o especialista Lincoln Murphy para conversar com a gente. Vou apresenta-lo em inglês para que ele possa também acompanhar e conduzir a conversa com a gente. Então, a partir de agora a gente muda o idioma oficial do podcast para o inglês.
So, we are here with Lincoln Murphy. Lincoln owns the Sixteen Ventures blog. He helped more than 300 SaaS companies to grow and Lincoln is now Customer Success Evangelist. So, Lincoln, it’s a pleasure to have you here with us, thanks for coming.
Lincoln Murphy: Absolutely, thanks for having me.
Diego: We saw that you were here in Brazil. How was that?
Oh, it was incredible. I love Brazil, it was my second trip. This time around I got to work with the portfolio companies of different venture capital firms, and I got to see a little more of the country than I did the first time around. But also got to see what’s going on, some of the emergent startups in Brazil and got to see some of the challenges that are also being faced by companies in Brazil. So it was very mind opening and just an awesome time. I can’t wait to come back.
Diego: Yeah! So, you think we, as a country, are progressing at Customer Success?
Lincoln: Yeah, I mean, we have to take a couple of things into consideration: one, I was working with companies that are interested in Customer Success, right? So, they have already bought into the concept so that might kind of cloud the reality on the ground. So I don’t know how much Customer Success is really kind of taking up across the companies, but the ones that have expressed interest, have seen the potential value in focusing on the success of their customers have really bought into and are a really dedicated to this.
I hope, and I assume that what will happen, is that as more companies start to go down that path and start to thrive, just like we are seeing in other parts of the world, more companies will see that and take action on their own. So, even if not all the companies in Brazil are onboard with Customer Success yet, once those companies that are onboard are starting to thrive, more companies will see that and say “OK, I think it’s time we should get on that band wagon, I thinks that’s where the value is gonna be”.
Diego: It’s like a critical mass, right? A wave phenomenon…
Diego: So, let’s jump into our podcast. Lincoln, often times you use the concept of Desired Outcome on you blog, twitter and I believe on your Customer Success methodology, right? So, could you explain a little more this concept so our audience can catch up and be on the same page?
Lincoln: Absolutely! It’s one of those things that I discovered as I’m trying to help my clients and trying to do the work at Winning by Design, trying to figure out what’s really going on when they sign a customer. Actually, I would say to people “Customer Success is when we make our customers successful, right?” That’s obvious, but the question is: “what does successful mean?”.
And then it’s like “I don’t know!”. Success is often maybe tied to ROI, or something like that. And I started to think about: “there’s more to it!”. We need a better way to describe what the “Success” part of Customer Success really means. And so I, over time, over the years like you said, to those 300, actually probably closer to 400 companies that I’ve worked with personally over the last decade, I started thinking about what was really going on and I came to this concept of Desired Outcome.
Desired Outcome really has two main pieces: there is the Required Outcome. So that’s kind of the thing your customers are trying to achieve. To be really clear on that, that’s NOT the job to be done, it’s not even the functionality of your product. Nobody signs up to use your product simply to use your product. They’re not buying access so they can put data into a CRM or whatever. Ultimately, they want to achieve something.
The example that I always like to give because it’s that I think it’s one that I think we can all, it’s easy to understand and we can all wrap our brains around this is, if my required outcome is to get more people to come to my event, right? That’s something we can all, maybe we haven’t promoted an event before, but we can understand that. There’s a lot of different ways that I could achieve that Required Outcome, right? But that’s what I have to do, that’s what I need to do.
So, what I would do though, is some people are going to say: “in order to get more people to my event I’m going to choose e-mail marketing.” Ok? I could go down on the street and hand out flyers, that’s probably not the best way to get people to my very targeted technology event, but I could do that. But I’m gonna choose to use e-mail marketing as the method to achieve my required outcome.
The thing is, the person or the company, the customer in that case, they say they want to get more people to their event and the ones that have chosen that method of e-mail marketing, those customers are all going to have unique characteristics. We would say you could probably group them into different customer segments, right? So based on the characteristics of each of those customer segments, they’re going to have what we call appropriate experience.
And so, desired outcome has two main things: required outcome and appropriate experience. If we understand what the customer needs to achieve and we understand how they need to achieve that, so that’s the appropriate experience. Now we know their desired outcome, and we can build our product, we can build our pricing, we can build our sales processes, we can build our engagement or onboarding and everything around that.
If we don’t understand what the appropriate experience is, and we only understand what the required outcome is, then we’re not gonna build something that truly resonates with those customers, which is what you see a lot. We build a product, that will actually functionally help them theoretically achieve their required outcome, but we get to them in a way that is inappropriate. We don’t sell it the way they wanna buy it, we don’t give them the level of support that they need, we don’t give them the user experience or the product itself, and then we wonder why, even though they were able to achieve their required outcome, why did they churn? Why didn’t they stick to us?
It’s because of the other part, the appropriate experience, wasn’t there. So if we can understand that, and build everything around, delivering that appropriate experience, in order to help them achieve their required outcome, that’s huge. And so that’s basically what desired outcome came from and that’s what it means.
It’s a big concept, but it’s one of those that once you get it, it’s really not that complex, it’s just kind of, a little bit different way of thinking about it, but once you figured that out, I think it will change everything you do. It certainly has for me, it certainly has to those companies that worked with me.
Diego: Yeah, specially technology companies, right?
Lincoln: Absolutely! Again, it’s one of those things where, especially with technology companies, who may look at the fact that their product functionally helps … If you use the product the way it’s designed, you will achieve that required outcome …
The problem is, very often, we are so proud of the product that we’ve built, we don’t take into consideration that it may or may not, and often doesn’t, sort of create that appropriate experience for the customer. And in fact so often we focus only on the product itself and the appropriate experience includes everything: every interaction with the customer, in product and beyond the product.
And that, if you start to think about what has to happen in the customer’s world, in order for them to be successful with our product, and be successful with their interactions through our company, that’s when you look at it from a holistic point of view. And that’s when you can truly create the experience that’s going to be appropriate and allow the customer to achieve their desired outcome. If you don’t do that, and you only focus on the product and only focus on the functionality, you are missing a huge portion of the overall relationship with the customer. And that, from a technology standpoint, we tend to very easily overlook that. We tend to miss out on the appropriate experience side of things. And that could be a problem!
Diego: Yeah, sure! A little more on this topic… Do you believe the desired outcome should be mapped by the Sales Reps, since the selling? And if yes, what are the tips for doing so?
Lincoln: Totally! Look: one of my favorite quotes is actually, it came from a book that was written in 1937 or something. And it was written by a marketer about his experience actually in the late 1800’s. It’s crazy! It’s the Robert Collier letter book, it’s a whole book of all his sales letters. It’s so funny that a quote from this guy, from so long ago, would be relevant today but it’s more relevant today than it was back then. And it says simply: “enter the conversation already going on in your customer’s mind”. Now, why that’s so powerful?
Back then, this is what’s funny, way back then this guy was trying to figure out how to cut through all the noise, in his customer’s world. That was back then! Imagine the way it is today. There’s so much more noise, right? So, in our sales, in our marketing, if we can enter the conversation already taking place in the customer’s mind, we are gonna be so much better off, because we are gonna be able to very quickly resonate with our customer.
What’s that conversation on their mind? It’s the desired outcome. It’s what they need to achieve, remember the actual business outcome they need to achieve, the thing that they really need to achieve, and the way that they need to achieve it. If we can enter that conversation that’s going on in their mind we cut through all the noise, we short cycle the sales process, and we can make it happen. That’s what I mean!
So this is really powerful stuff… YES, it should absolutely be part of the sales process, it should be part of our overall not just the message we put out there, but the way that we sell. Remember: appropriate experience. It’s just that, it’s appropriate! So I ran into this all the time in early stage startups, they say “I want people to buy my product with the credit card”. But you are selling a product to a customer segment that needs to buy with a PO, and an invoice and pay by check. You can either try to force them to buy the way you want to sell, and therefore miss out on doing business with them, or you can recognize that part of the appropriate experience is selling the way they need to buy and you will change it up. So that you can do business with them and not just turn them away.
So, even little things like that, which are actually kind of big deals, we have to understand. And then just overall, what the experience need to be? Does it need to be high touch experience? Does it need to be more consultative? Or does it need to be something that is low touch and more technical. Some products are sold to very technology forward customer segments, so we have to figure out what’s appropriate. That’s why I chose that word: appropriate. Because that’s what it is. So, if we can do that, it should be something that permeates everything from sales to marketing to customer success across the entire customer lifecycle. Desired outcome is that important!
Diego: It makes sense because you mentioned once, I was watching a video, that knowing your Ideal Customer Profile + their Desired Outcome = Sales Rocket Fuel! (Despite ugly design and bad Copy, right?)
Lincoln: Right, exactly! If I can actually have not so great sales copy, my designs can be not so fancy, but if I’m hitting on the right message on the right type of customer, that stuff doesn’t even matter. That’s what’s so amazing! I mean, and take it from me, my designs are terrible but I say the right thing to the right people and I’m gonna get those guys to sign on.
So if you can have those things and great copy and great designs that’s even better. But you are absolutely right: you can by an ideal customer profile with desired outcome and sky is the limit, for sure…
Diego: Yeah, if you think it makes a lot of sense because when the Sales Rep, he knows the desired outcome he can predict which customers are more likely to succeed and prioritize the sales pipeline and everything that follows on.
Lincoln: Absolutely! There’s a piece on my ideal customer profile that I talk a lot about, you have to come up with the actual type of customer you want to do business with, one of those inputs and it’s probably the most important input, if you are looking at long term customer growth, is success potential. Don’t acquire customers that doesn’t have success potential, if you want to have long term relationship with them.
The problem is, from a sales standpoint, and your audience may fall into this category, incentives are not always there to drive long term growth in our customer base. They are there to drive that initial sale, right? And so, salespeople are incentivized to simply close deals. Period! They are gonna close deals! From an overall business standpoint, there needs to be an emphasis on success potential and make sure we are not signing bat fit customers.
This becomes an incredibly important part of everything and knowing the desired outcome of the customer, having the salesperson really truly understand this, they are gonna know right away whether or not this customer has the success potential because their desired outcome isn’t either incongruent with what we have or it’s perfectly aligned. And if it’s perfectly aligned, not only the are gonna be a good customer, but they will probably close faster. That’s the thing!
Diego: Do you know any organization that maps the Desired Outcome since the selling? Could you tell us what is the impact on their churn rate OR revenue against those who don’t?
Lincoln: Totally! So this is something we implemented in a lot of companies over the years: what you said about churn is really important. So, churn is a symptom of an underlined disease. Ok? So, that’s what I always try to remember people of: churn is not, we sometimes look at it as the disease or just part of operating a business, and there might be requirement to have some, churn might be present always but I can guarantee you that it’s gonna be present in much smaller volume than we think it is today.
So in other words, actually speaking correctly, churn is just a symptom of an underlined disease. We sometimes think of churn as being, it just has to happen, that it’s just inevitable, and the reality is that it doesn’t need to be inevitable. But the reason we think is inevitable is we don’t really understand it.
Because if we look at it the right way, look at churn as being just a symptom we can do one of two things: we can actually treat the underlined disease or we can simply treat the symptoms. Most companies just treat the symptoms, they try to save customers offering discounts, they do whatever. Or the best companies recognize that’s really a symptom of a bigger disease, an underlined disease, they go and fix that. And that disease is usually a poor customer success strategy, which means generally we don’t understand what the desired outcome is for the customer.
If we don’t really understand what the desired outcome is for the customer we can’t solve for that desired outcome, we can’t create a customer success strategy. We can operationalize tactics, we can try to do some things that are gonna keep the customer, gonna retain the customer, we are gonna do some things and maybe try to get the customer to buy more. But if we don’t understand the desired outcome than we can’t operationalize around that understanding of the desired outcome. And we can’t truly get rid of the underlined disease that’s gonna cause churn.
But if we commit and say: “right, we are gonna focus on the desired outcome of the customer, and if we do that two things are going to happen: one, we are gonna stop acquiring bad fit customers.” Right? Because we are only acquiring customers that have success potential. So that means any of that churn that may have been thought of as inevitable, that churn that just was gonna happen, that’s gonna go away.
Because we are not gonna acquire those customers that are bad fit, that would just inevitably churn out. And then the customers that are good fit and that used to churn because of a poor experience, or whatever, they are gonna not churn out because now we have operationalized around their desired outcome. So that’s pretty amazing!
So what happens is we get rid of churn. But once you do that we build this into the sales process, marketing, customer success, the organization is constantly feedbbacking the sales and marketing: here is what’s going on with our good fit customers, here are the use cases that they are finding successful, here is the language they use, the words they use… All these things go back into the sales and marketing so that they can again be more closely aligned with the customers. That just creates this cycle of success and now we really get rid of churn and we only acquire those good fit customers. And churn becomes a non-issue.
So there’s a lot of companies that are doing this, we did this at Winning by Design certainly, Box is probably a great example of this focus on operationalizing focus on Customer Success, operationalizing the desired outcome for their customers. Slack is kind of a great example of a really low-touch customer success focused company, that’s been very vocal about how they basically built customer success into their entire process and into the product, and across the entire lifecycle.
There’s tons of examples of companies doing this. That said, there is probably a 100 or 1000 times as many companies out there that are not doing this, that they don’t recognize why this is so incredibly valuable. But they will get there, like you said earlier, critical mass! We get to a point where enough companies are doing this, are vocal about it, investors see this, they start pushing their other portfolio companies to do this on the public markets, they will start to be more transparent about what they are doing. That will put pressure from investors on other companies to start doing this, it will start to snow ball, and this is going to be the operating model for companies in the future.
So if you said “Lincoln, what’s gonna happen in 5 years?” I would say I have no idea, except that I would say probably Customer Success in this way of thinking about the customer and their experience, and operationalizing. That becomes the operating model for companies. That’s one thing I can almost say for sure, that’s what I’m betting on, this is this way we are going to operate in the next 5 years, the standard operating model.
Diego: Yeah, I believe that too. So, another topic that concerns our public, our audience, it’s very usual to see the client attached to the Sales Rep, resisting the transition to the Customer Success Manager. How can companies master this client’s transition from the Sales Rep to the CSM efficiently?
Lincoln: Yeah, it’s interesting and some things I learned and I’m always interested in other perspectives on this too, but some things I learned about Brazil and you kind of don’t want to paint one country with a broad brush, there’s differences regionally, but some of the things I learned are that maybe in Brazil a little bit more in the US, relationships are even more important. We know about having good relationships here.
So I mean I’m glad to have that validated but what that does mean is that we have a challenge, right? We have to know that those relationships can become negative. So, to your point: if I’m too tightly coupled with the AE, I don’t wanna be passed over to this other person.
I’ve seen this with some of the companies that I worked with, where they have a CSM (a Customer Success Manager) the customer is really tight with, and they don’t want to be turned over to another CSM but here is the thing: to your point about the transition from AE to CSM, but I think this even goes from the transition from CSM to CSM, at the end of the day we are working with human beings here.
Human beings are, well, we are human. We might get fired, we might quit, we might get hit by a bus, we might just be sick for the day. Whatever it is we cannot mismanage expectations with our customers to make them think in any way that this is the only person that they are ever going to work with. That doesn’t scale, it’s a big risk, and it’s just unrealistic.
So we need to recognize that going in, so what I say with AEs during the Sales process, certainly with you higher touch customers but I suspect this is where it will become a problem any way. You want to start bringing the customer success practitioner early in the sales process maybe 50 to 75% of the way through the deal, so as soon as you feel like we are about 50% gonna close or maybe 75% sure we are gonna close this deal, I want to bring the CSP or whatever that looks like.
Bring them in, introduce them early and indicate this is who you are going to work with throughout the rest of the process. Now, if the salesperson will come back in for renewal, will come back in for upsells or things like that you can lay that out, say: “I’m not gonna disappear, I’ll come back and talk to you when it’s time to buy that add-on, or when it’s time for renewal…