THE ERA OF OUTCOMES IS NOW
So, imagine this scenario: you completed your agreed implementation services and you're now in a meeting with your customer to review the next steps. An awkward moment arises where your customer doesn’t feel that they have what they need as a result of your implementation.
This isn’t an especially unique scenario but it is one which highlights the importance of knowing what your customers mean when they refer to ‘outcomes’. The disconnect here between how your company delivers such outcomes versus simply implementing your product or services comes as a result of your customers demanding that value to be delivered from your product, not the product itself.
In this current era, fulfilling your customer's outcomes means the difference between a happy customer who stays with you and advocates on your behalf, helping you grow your annual recurring revenues (ARR) versus unfulfilled customers who stop using your products and eventually churn. To help customers achieve their outcomes Professional Services (PS) and Customer Success teams (CS) need to adopt a collective approach.
So, how are you ensuring your business is fully aligned with your customer by defining what their outcomes are?
WHAT DO WE MEAN BY OUTCOMES?
People are willing to pay for implementations but no organization wants to pay for just an implementation of your products. To be successful, you need to truly draw out what your customer hopes will be achieved as a result of that implementation. So, what do we mean by ‘outcomes’?
For us, outcomes represent value for your customer or goal-driven value shown over an agreed period which is often linked to larger business transformation projects. Identifying where that customer sees value and how they require your solutions to help solve their business challenge is where PS and CS teams should start. The next key action should be listing out all of the critical outcomes your customer expects to see delivered once you’ve completed their implementation and they’re using your services. Understanding these outcomes upfront helps you get better aligned with your customer while achieving metrics like Time-to-Value and Time-to-Outcome. It also means that your resource allocation and resource planning is optimized.
WHY ARE OUTCOMES IMPORTANT?
Understanding what your customers are hoping to achieve during discovery and communicating this downstream (to delivery) means better alignment with your customer’s expectations and thus help your PS team identify likely risks upfront as well as providing an outcomes roadmap to the customers with the timelines in which they will be achieved. Common risks your team and your customer can experience are:
Poor alignment between sales and your delivery team with a mismatch between what was promised to the customer versus what is delivered
Delays caused by the customer not knowing what requirements and dependencies they are on the hook for, and when
A lack of visibility of your teams work stack, both internally and externally
Multiple internal teams having differing KPIs on the same project
Negative impacts to the project budget, your customer's cash flow or how they recognize revenue
Bad customer experience with a greater possibility of them churning
On the flip side, some of the benefits your customer can access when you agree with them what outcomes they’re looking for and what that means for their business are:
Better internal team alignment on the project, where your PS and CS teams work smarter, working collaboratively with sales to give your customer the outcome they’re needing and when further services can be provided (up-sell, cross-sell)
Having a clear view on managing your capacity and the requests you have of your customer pre, during and post-implementation, clearly explaining why you’re doing what you are doing at various steps of the project delivery and explaining how this will get your customer to value quicker
Having a tracked repeatable process for delivering your customer's project (here, knowing your customer's baseline for how they’ve managed the business issue in the past in order to see how to improve the process now and solve the issue itself is important to the success of the project) defining profitable proposals, based on previous performance and results
Visibility of all of their data, preferably in one place in one platform which is often an important customer outcome (such as in Precursive PSX)
Shortening the time between implementation and delivery so your customer sees value from your service in a tangible way
Delivering cost savings or better identified revenue across your customer's organization
Supporting how your teams maximize the long term success of the customer lifecycle
Useful and actionable reporting based on agreed metrics which enable more immediate decision making for continued product adoption and demonstrable ROI.
By separating ‘delivery’ from ‘outcomes achieved’ the customer can gauge if their expectations are due to be, or have been met.
Now that you know what your customer expects as an outcome of using your service, your teams can use that information to inform the KPIs that show value. This helps you map success and value to points of the customer's lifecycle. Feeding this information into how you create smart project automation to deliver your service implementation will move your customer from their initial outcomes to continued long-term success. Your PS and CS teams can now seamlessly pivot between sales activities in the early phases where the future world being outlined for your customer as part of your product delivery is aligned with the agreed KPIs and your customers' outcomes. In some cases, PS teams have layered in Cost-per-Outcome as a metric (similar to Time-to-Value) to show your end customer that they are paying for results, which is another upside of discussing their ‘outcomes’ early on in your process. It’s also a differentiator among PS teams that now have to show what ‘success’ means.
Avoiding those awkward moments where your service delivery is misaligned with what your customer is looking for (as an outcome) requires transparent discussions at the start on topics such as value, business challenges, past processes and where that customer wants to be with the use of your service, a year from now for instance. Whilst it will also help your customers see how their KPIs have been achieved you’ll start seeing tangible results from better revenue recognition or discovering new growth opportunities. This shift from time-driven to more of a value-driven model allows the outcome-based model to give companies more flexibility in their initial investments – and clearer visibility on the ROI they’ve received. Delivering outcomes at speed and at scale consistently helps your customer to see value in each stage of your project delivery and continued business relationship.