Is now the right time for cloud service solution providers to adopt a Customer Success approach?
By Jonathan Lee – ISSI Customer Success Practice Lead
Customer Success Practice Blog Series #1
The current state of Customer Success in the Cloud Partner community
From my experience consulting with channel partners, I generally do not see many having a “dedicated” Customer Success team. The TSIA LAER  life cycle for customer engagement defines four phases:
Land – the sales marketing activities to identify and “land” new customers.
Adopt – all the activities that go into making the customer is successfully adopting the new solution.
Expand – working with the customer to identify new opportunities to help them achieve their business objectives.
Renew – working with the customer to ensure a seamless contract renewal phase.
The role of Customer Success in the Cloud Partner community
First, there should be a mindset change – “Adoption” does not happen naturally once the workload is migrated into the cloud. JB Wood, in his book “Complexity Avalanche” , presented the term “Consumption Gap” – the difference between what enterprise technology companies deliver and what their corporate customers use. This can be due to a lack of time, understanding, usability, etc. Customer Success takes ownership of the “consumption gap” through adoption activities such as training/knowledge transfer, change champion, etc.
Second, many of the cloud solution providers also advocate “business outcomes” in their sales engagement with customers. However, there is no ownership in helping the Customer realize the outcome post-implementation; this is not the job of the project manager, implementation engineers, or post-sales engineers. Customers do not necessarily know how to realize business outcomes themselves and are frustrated with the lack of an owner to guide them. Customer Success provides this ownership by managing the outcome realization through linking adoption activities to the business case/processes.
Third, Cloud being a new platform means that many customers do not migrate their workloads all at once. They will migrate 1-2 workloads to test the Cloud reliability, usability, customer experience, etc. Hence, Customer Success through their intimate knowledge of the Customer environment and usage of the existing workload can play a major role in convincing customers to migrate more workloads onto the Cloud. Besides, it is much easier and cheaper to sell more to existing customers than to new customers. A recent article from Forbes titled “Why Customer Success Is More Critical Than Ever At Cloud-Native Companies”  further reinforces this point.
Last but not least, the typical channel partner contracts with their customers have an “End Date.” If the Cloud Service solution providers do not monitor the Customer’s health in terms of consumption level, customer satisfaction, and related factors, there is a significant churn risk.
As you can see, Customer Success does play a major role in supporting the Customer post-migration onto the Cloud.
How Customer Success supports the Partner’s Cloud business
To summarize, Customer Success supports the following “new” functions for cloud channel partners:
- Drives the organization to ensure that customers realize the business outcomes promised by sales.
- Supports customers in “Adopting” their solution through activities such as “knowledge transfer”, use case workshops, persona mapping, change champion, and program management, etc.
- Implements a “Lifecycle” approach in terms of “Land-Adopt-Expand-Renew” and improves the Customer
- Lifetime Value (LTV) by creating business value for the customer.
- Examines “Expand” opportunities for migrating more workloads by studying the current usage, features used, and customer’s business requirements (Data-driven Expand selling).
- Set up a “Customer Success Health Score” to measure the “health” of the customer in terms of Utilization, financial growth (Annual Recurring Revenue, Upsell/Cross-sell), Customer Satisfaction, Support, etc.)
- Incorporating Customer Success into the Quarterly Business Review – discuss the traffic usage, use case implementation, golden features usage, etc., beyond the current SLA focus discussion
In the industry, Cisco Systems has successfully implemented probably the first
- Customer Success specialization (they called it Customer Experience Specialization). Research has shown that Partners investing in Customer Success service have gained tangible business benefits in terms of increased renewal rate, incremental sales and increased win odds.
 https://www.tsia.com/blog/laer-explained-a-new-customer-engagement-model-for-a-new-business-era 
 Complexity Avalanche: Overcoming the Threat to Technology Adoption by JB Wood (2009) 
 https://www.forbes.com/sites/dharmeshthakker/2020/11/18/why-customer-success-is-more-critical-than-ever-at-cloud-native-companies/?sh=1c0292923582  https://www.tsia.com/webinars/identifying-the-strengths-and-gaps-of-your-customer-success-practice
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