Perfect Data Is a Myth. Waiting to Get Technology Is a Mistake
April 18, 2017
As Chief Customer Officer, I consider it a fundamental part of my job to work with Sales to ensure that we don’t sell to customers that aren’t ready for our product.
We’ve obsessed over our pre-sales readiness process and even dedicated a Customer Health Scorecard Measure to track its effectiveness. Our VP of Sales is formally accountable to our CEO for making sure that Scorecard Measure is Green for every customer. We even survey all customers a few weeks into their onboarding to ask whether their Account Executive set expectations appropriately.
Bottom line: Anyone on the Gainsight Sales team can tell you that selling to a customer that won’t get value from our solution, or setting the wrong expectations with a prospective customer, is a complete “no-no.”
That’s why it’s funny to me that we regularly hear from companies that they are concerned that they’re not ready to implement a Customer Success Management tool because their data “isn’t perfect,” or their organization “isn’t sophisticated enough.” Some of them plan to spend six months to a year perfecting workflows and cleaning data and then begin looking at putting software into place. Truly, I believe this is a mistake. You’re foregoing revenue growth for every week that you wait.
There’s a second set of feedback, a recurring sentiment that we hear just as frequently: “We wish we hadn’t waited to implement Gainsight. We should have pulled the trigger six-to-eight months ago.”
That’s the essence of this conflict: pre-Gainsight CSM orgs tend to want to wait. Post-Gainsight orgs tend to wish they hadn’t. Don’t take my word for it: hear it from our customers:
“We grew—our first year—2,000%. In our second year in 2015, we grew another 2,000%. We were growing very quickly, but we did need the playbooks and the health scores and all that to be proactive versus completely reactive. [...] And so it was something where we should have [implemented Gainsight] earlier with our growth, and it’s definitely been a game-changer for us.”
— Katie Rogers, Vice President of Customer Success, SalesLoft
“Perfection is the enemy of progress and waiting to implement Customer Success until it’s perfect is a guaranteed approach to losing revenue. Much like an agile software development process, an effective Customer Success effort requires fast iterations, failures, learnings, and improvements.”
— Ed Daly, Senior Director of Global Customer Success, Cisco
I could insert many more quotes here, but I’m sure you get the picture :)
It’s not just anecdotal evidence that illustrates the importance of using software to achieve your customer success goals. Our quantitative data support the conclusion that there’s an exponential increase in Gross Retention, Rate of Expansion, and Net Retention as organizations achieve Proactive and Predictive capabilities. Our Director of Customer Success Strategy, Scott Golden, gave a presentation on this at our recent CCO Summit. Keep an eye out for his blog post recapping his results and methodology in the next week, but in the meantime, check out this chart based on his findings:
As you can see, there’s a clear correlation between your operational maturity and your gross and net retention - you retain and expand customers more effectively as you progress from stage to stage.
You can’t do this without technology. Technology is what allows you to make the improvements necessary to move from Reactive, to Informed, to Proactive, to Predictive. Take it from someone who has seen countless companies struggle without software.
Technology is what allows you to operationalize all the best practices that the Customer Success community has been discussing vigorously for years. All the processes that I blog about -- driving a consistent customer journey, managing at-risk accounts, demonstrating value to your clients, accelerating advocacy, enabling coordination between your CSM team and Sales team on upsell, working together across functions -- I’ve never seen a company do this effectively without technology.
You cannot afford to put off those results while you perfect your data. If you’re at the mean of this dataset, you’re forgoing an 18-percentage-point increase in Net Retention from the Reactive stage to the Predictive stage.
At a recent “Office Hours” panel with leaders from Red Hat, Box, and Cornerstone OnDemand, each company admitted that they were hesitant about their data quality before they implemented Gainsight. Here’s what they said about how the Gainsight implementation process actually improved their data quality and organizational efficiency.
The data cleanliness you seek can be accelerated through the implementation process, as you integrate your data sources into a powerful Rules Engine.
The strategic sophistication you seek can be standardized across your team as you put best practices into action, using features like Vault (our best practices library in the product) and guidance from my team.
The lull in workload that you’re waiting for will finally arrive as you take advantage of automation tools and move beyond fire-fighting with proactive processes.
It’s like waiting to buy the car until you get to your destination. You need the car in order to get there.
At Gainsight, we’re very, very good at working with your embarrassingly dirty data and your super messy organization. We’ve worked with all levels of data cleanliness and operational maturity, and we can work with yours. Customer Success is a transformative discipline, and Gainsight is a transformative tool. Let us be your partner in your transformation. My team won’t let you down :).