A few weeks ago, I was introduced to a new term in my world of business “Customer Success”. This was in my B2B marketing class where Suraj Mohandas came to speak on Customer Success. Now, customer success has been around for years now and it had slipped my radar somehow. In my understanding, it is when a service provider comes para-customer. Coming alongside the customer the provider ensures that the customer is receiving maximum value from the service and getting an excellent ROI. Customer success is different from CRM or Customer Service and is usually for SaS products with subscription revenue model. This is how I understand customer success.
I visited Suraj at SPEAR to see if the idea of customer success could be applied to products in some way? The contrast between services and products in this arena is stark. SPEAR, for example, has a layered learning process for its clients who are owners of Dentist Practices. The following is not the entire breadth of the process;
1) practice owners receive online theory and online training,
2) then they visit the SPEAR campus for in-person theory and
3) they attend on campus labs where apply the theory.
4) Then they leave, and they go to their SPEAR organized learning groups and they get together, discuss, and reinforce the material.
One can see that the points of contact with the customer are numerous. This could be becasue of the nature of services in general and SPEAR provides subscription-based services.
On the other hand, when it comes to products, contact with the customer becomes minimal or non-existent after the purchase. One wonders just how to creatively connect with the customer beyond the sale of the product and more than ad campaigns. How do you check if the customer is using the product well and gaining good ROI? Repair and maintenance are givens for customer service. However, customer service is a different business process fom customer satisfaction. Suraj pointed out that roughly speaking, firms are now comprised of 3 layers when it comes to delivering value to the customer. Those 3 are ERP, CRM, and Customer Success. All three give the ultimate competitive advantage.
Beyond customer service and its reactive and corrective measures, customers need to receive additional value especially when it is a subscription service. Because when subscribers are not continually receiving increasing value they simply cancel the subscription. This is unlike products which may be complicated to return after warranties expire and so on.
I visited SPEAR, interested in learning how Farai Pyro could benefit from customer success. Indeed, as a waste management company that converts plastic to diesel, there is a service component already in waste management area. However, my desire was to investigate how to turn the diesel manufacturing and sale into a case for customer success. I meant to potentially discover how a subscription business model could be retrofitted onto a product. A very interesting discussion ensued at SPEAR and Suraj brought up Goodyear.
Goodyear is a tire manufacturing company and they worked at converting their product purchase-based model into a hybrid with a subscription. How? Vehicle fleet management’s highest expense is tire purchase, replacement, and maintenance. In addition, tires are a cause of many road citations and truck breakdowns leading to fleet downtimes and delivery delays. Goodyear has found a way of putting wireless sensors into tires. The company has also created tools that can help measure tread depth, tire pressure and communicate it to a server. The data is available conveniently in one place for easier tire management and prediction of tire failures. Clients are paying for this service as a subscription. As such Goodyear has managed to combine a subscription model with its tire product. They did steer away from making the tire itself the subscribed product.
I am looking for ways to better our business model as Farai Pyro. Suraj helped me to begin to group certain aspects of our diesel customers’ activities into financially measurable and distinct quanta. How much diesel does it take to run a rotary kiln per month? Could we get the client to get us to supply the company with diesel for only one of the kilns. Farai Pyro then gets paid for that rotary kill every month as a subscription model? Could we add a service to go with the diesel?
I am interested to hear what you think? How can we turn Farai Pyro’s diesel manufacturing into a subscription-based model? Maybe the better question is: how can we reduce the risk of switching to our diels. Such that the diesel customers in Zimbabwe will try out our Industrial Diesel processed from plastic with? How do we ensure the success of the customer after the switch, so we can add more value?
Thank you Suraj for the SPEAR tour and engaging conversation, and thank you, professor Thomas Hollmann, for organizing a fabulous B2B speaker visit.
Life is a misery to be endured until we die. Even those with terminal illnesses find times of respite and laugh and enjoy their lives. So too is mortality a terminal illness. We will all die, I for one am glad this is so. But before that day I will define myself, I will not go without giving everything I have got, and I will love with all my heart.
I am proud to be an Afropolitan; a world citizen of African descend. I am called Allen and I love writing, eating, and singing in the shower!