They say that the only certainty is change itself. In our 27 years in business, we’ve witnessed the tech industry evolve rapidly — and we’ve worked hard to stay ahead of the curve.
Over the past couple of years, we’ve undertaken major transformations at Extensis to adapt to changing market conditions. It’s our goal to continuously evolve our business practices to enable our customers’ success. One of the greatest transformations we have undertaken has involved re-aligning our company around delivering “Customer Success Outcomes.” We’ve been building our agility and responsiveness to think bigger than just our core solutions — our value is greater than the tools we provide. We’re focused on understanding our customers’ desired business outcomes and how we can help them arrive at a better future.
To help us get there, we’ve partnered with Paul Henderson, author of “The Outcome Generation.” We sought out Paul to help us develop the skills to converse with our customers and translate their challenges into a desired outcome. Paul’s focus is on an outcome-based customer success model — the third generation of how technology providers relate to their customers.
One of Paul’s greatest gifts to us was helping us see our purpose in a new way. A theme of everything we do here at Extensis is to help control the chaos that our customers face in their creative environments, from brand assets and high-resolution images to their font collections. We play a vital role in helping our customers invent amazing, by helping create a state of calm around their digital assets.
I recently asked Paul if he would share more about Success Outcomes, advice for gaining better customer insights, and changes he’s seeing in customer demands.
You have a rich history running customer success programs for global companies. Through your own experiences in customer engagement, when did you start realizing the importance of making a shift to approaching customers and prospects with success outcomes vs. solutions?
I was running the Asia Pacific region for an Enterprise Resource Planning (ERP) software company. I sought new ways to grow revenue, both new business (new logo) deals and from existing customers.
I read the famous article by Harvard Professor Ted Levitt, Marketing Myopia. It prompted me to think about why companies buy ERP software. I concluded customers wanted to run the operations of their business more effectively.
I knew our software alone was not enough for customers to be effective. They also need the right processes, people skills, and integrated trading partners. I then realized we could provide advice, tools, guides, and services to help with these other elements.
So, we launched an outcome program to help our customers achieve the to-be state of ‘Effective Enterprise’.
What is are the major differences between the historic product and solutions-based approaches vs. success outcomes?
Product and solution-based approaches began over 30 years ago. In this model, vendors sell on-premise licenses by selling the ‘value’ of the software. Once implemented, the vendor considers their responsibility finished…. regardless of whether the customer achieves the value or not. For these vendors, it’s all about the software.
But customers buy technology to achieve a business outcome.
With an outcome approach, vendors specialize in the business outcome their customers desire. They then work on everything possible to help the customer achieve that business outcome. That includes processes, systems, people skills, partners, and supporting elements, not just the software.
In Extensis’ case, the outcome is ‘Controlling the Creative Chaos’. Creative teams aren’t noted for their discipline. It’s all a bit chaotic. And that’s a headache for leaders of creative teams. The chaos drags down productivity, leads to mistakes by creatives, and frustration for everyone. Extensis helps customers control that chaos.
This outcome approach lays the foundation for a continuous improvement engagement. The ‘chaos’ will never be perfectly under control. Extensis will regularly review the state of chaos in each customer scenario and advise on ways to make further improvements.
One of Extensis core values as you know is to “Think Like the Customer.” We’ve reorganized our entire company around outcome-based customer success, so we are not just delivering products, but outcomes that make a measurable impact on their business. What key pieces of advice would you give companies who are striving to think like their customers and better understand their desired success outcomes?
First, be crystal clear about the core outcome you help your customers achieve. If your company has one line of business, there is only one core outcome – a Success Outcome. This gives clarity of purpose and alignment across your company – everyone is crystal clear on what you do for customers.
Second, be clear about what it takes to achieve and improve the Success Outcome. That includes:
- The smaller outcomes that make up the Success Outcome – Contributing Outcomes
- PSPSPS – the Processes, Systems, People Skills, Partners, and Supporting elements needed to achieve each Contributing Outcome
Third, develop a repeating cycle of engagement. Focus on continuous improvement of the Success Outcome. This will drive ongoing business improvements for customers and expansion revenue for the vendor.
We’ve had the benefit of working with you to help implement outcome-based customer success across all departments of our business. For those who have not worked with you, can you discuss how you help companies to create outcome programs?
An outcome program usually begins with one person – a champion. That person needs to convince others to commit to a program. We help the champion get that commitment and plan a program. In the case of Extensis, commitment was easy – the champion was Toby Martin, the CEO.
There are four steps to an outcome program –
- Understand the benefits – short videos to understand why you should explore an outcome program further. This step is free.
- Learn the fundamentals – watch videos that explain how an outcome program works. This step is very low-cost.
- Develop a plan for your Outcome pilot – a series of planning workshops where you’ll develop an outcome program tailored to your business. We recommend a pilot.
- Prepare for and run your pilot – build the capability to run the pilot, including training. Then run the pilot and plan the next phase.
The program can be run across all departments or can begin in a single department such as Customer Success.
With easy access to customer reviews online, does that make more or less sense in your model? How would those fold into a model like Extensis has?
The availability of online information has dramatically changed the way customers buy. A decade ago, they got most of the information they needed from vendors. Now, they get most of the facts they need online before they contact a vendor.
The authors of the successful ‘Challenger Sale’ book series estimated the buying cycle is now 57% complete before a customer/prospect contacts a vendor.
For most of the first 57%, customers/prospects try to work out how to improve their business. It might be through better processes, or updated people skills, or better trading partners. Or it might be new software. While they are working this out, they are not interested in specific software products.
An outcome approach means marketing messages focus on the business outcome. And that’s what customers/ prospects focus on for most of the first 57%. This increases the chance of the customer/prospect engaging with the vendor. For example, Extensis’ message and advice focus on ‘Controlling the Creative Chaos’. That helps creative leaders work out how to improve their business. And that increases the likelihood the leaders will choose to engage with Extensis.
Are there any recent changes you are seeing in customer demands?
The entire technology industry is moving to ‘as-a-service’. Customers pay-as-they-go, not upfront as they used to do with on-premise offerings. This makes it easier to cancel. Or not grow their subscription. Both of which cost the vendor future revenue.
This has shifted power back to the customer. Now, to ensure renewal and expansion, vendors know the customer must feel successful. And success for the customer is not getting the software live. Success is achieving the business outcome they subscribed for.
So, customers can now be more demanding in requiring that business outcomes be achieved. That’s why other companies such as SAP, Microsoft, Salesforce, Adobe, Servicenow, and Mulesoft are adopting outcome programs. Extensis is at the forefront of this outcome movement.
