Measuring Customer Value & ROI results throughout the Customer Roadmap Plan

One of the most challenging elements in any Customer Lifecycle execution is identifying and measuring the actual customer value throughout each phase of the customer roadmap plan.

It’s important to understand what is driving technology investments in the markets a software company is focused on in their GTM strategy. These are the areas that you will want to tie your ROI story to in order to get the attention of the Stakeholders and Economic Buyers. CSMs should also have strong relationships with these folks and be including them in the value and ROI discussions over time.

I like this summary from Deloitte’s Insights on how CIO and Technology leaders are thinking about the impact the technology spend has on the business and expected ROIs. The focus is more about what technologies innovate or optimize the business.

As we’ve discussed in the previous Newsletters, there are so many CX metrics that most software leaders focus on understanding how well they are managing the customer base loyalty, entrenchment, retention, growth, etc. These metrics are usually front and center in every leadership and board meeting to measure how healthy the customer base is and what the opportunities are for growth based on the health of the base.

The reality is that these metrics are lagging indicators and by the time they show a degradation to the customer’s expected goals, a lot of traction has been lost with the customer implementation roadmap plan.

The common CS approach to customer engagement is that they have an onboarding plan to show a customer how to use the software and get the first value. However, they assume the customer will take that experience and create their own internal roadmap plan to operationalize the solution throughout the company on their own. Unfortunately, that approach rarely sets the customer up for long term operationalization of a solution.

Customers would like to have a recommended roadmap plan from the software company that includes a best practice approach to operationalizing the solution. Customers assume the software CS team has done this dozens or hundreds of times before and will guide them to the promise land.

When the sales team has shown proven ROIs that have been delivered in their current customer base, the new customer assumes you will have plan to ensure their ROI as well.

Without a well defined roadmap plan, the customer will also not know what metrics to baseline and measure over time to understand the impact to their business.

By the time the CSMs check in with customers on a touch point meeting or Business Review, the customer may have already started to stall out. In most cases, the customer lacks the knowledge and understanding on where and how to expand the solution, therefore they do not have any plans to expand.

Setting up the Baseline Metrics to Prove the ROI throughout the Roadmap Plan

Baseline metrics and KPIs associated with implementing a new technology is defined during the Design or Discover stage of the implementation methodology. To be clear; if you have a methodology with the typical stages of Plan, Educate, Design or Discover, Build, Test, and Deploy; it would be in the Design and Discover sessions with the customer where you would define these goals and metrics to baseline and track post launch and over time to prove the ROI realization.

Let’s use the following use case as our example to follow each step of this process.

Step 1: Defining the Customer Expected Goals that drive a business impact

With every software implementation there is distinct problem that the software solves. The first step is to define the goals associated with the results the customer expects the product to provide as the business impact. Using the example above we are defining the specific outcomes as:

• Reduce average number of errors per order from 5 errors to zero

• Reduce average order cycle time from 7 minutes to less than 2 minutes

• Reduce order reworks from an average of 20/week to zero

• Reduce returns by 25% associated with incorrect orders

Step 2: Defining the Software Solution Outcomes that will realize the goals

The second step is to define the solution outcomes that the CS team needs to deliver to achieve the expected results above. Staying with the same example above we are defining the specific outcomes as:

• Operationalize the customer’s order to cash process with the automation and AI audit enabled within the solution.

• Automate the daily report on order stats for errors, reworks, cycle time and return associated with order error.

• Enable User feedback on all workflow and guidance content to evolve communication on areas of improvement.

• Operationalize Change Management process to improve communication on changes to policies, standards, processes and procedures to improve adoption of changes more quickly and effectively.

• Auto schedule weekly, monthly and quarterly reports showing the trends in the Business Metrics/KPIs define as business goals

Step 3: Customer Shares the current reports that track metrics and KPIs defined in Step 1

Once the metric and KPI goals are defined, ask the customer to share the report(s) used to track the metrics and KPIs weekly, monthly or quarterly.

Obtain agreement with the customer on the key milestones and frequency to review the progress on the trends and results compared to the baseline metric and KPI. For example, when would you review the results for the first goal? 

Reduce average number of errors per order from 5 errors to zero;

The questions for the customer are; What is your expected Time to Value to achieve the results of zero errors? Is it within 2 weeks, 30 days or 60 days from launching the new technology?

Some goals may need less time to achieve, while others may need more time for the users to standardize the process changes or automations for longer periods of time to achieve the goal.

In either case, establishing the frequency for reviewing the result trends for the metrics and KPIs over time is an important step to establish with the customer. It may be best to review the progress as part of a monthly status review, executive review or business value review meeting. However, if the expectation is in a shorter period of time, there should be a weekly status review meeting with the entire implementation team in place where the progress for these metrics can be reviewed and project adjustments can be made if the results are not trending as expected.

Step 4: Document results with a Customer Value Realization Summary Report 

As you are able to verify the progress in the trends in the right direction and/or the goals have been achieved, document the results in a one page Customer Value Realization Summary Report.

This report is an easy to review format that can be shared with all executive sponsors to share the results and impact on the business for each phase of the implementation.

For example, if the Customer roadmap plan is a three phased implementation plan, the goals above may be broken up and assigned to one of the phases. The roll out plan may be based on changes, processes and automations being rolled out over each phase or by group. The summary report will show the progress at the end of each phase. Once the last phase of the roadmap plan has been deployed, the summary report would show the results for all the goals. This will keep the executive sponsors informed on the progress and results that are being achieved over time and keep the committed resources and investment to the project. It will also keep the project a high priority within the organization.

Establishing a set of KPIs and Metrics to baseline and track over time with the customer to confirm they are realizing value and an ROI can be simplified when it is incorporated into a standardize implementation methodology.

Once you have these confirmed by the customer, you can discuss the financial impact to the company. If the customer team the CSM is working with doesn’t know how to convert these metrics to actual cost savings or increases in revenue, ask the team to bring in someone from the Finance team to help with the conversion. Most Finance teams have the costs for each cost center and track what the costs are to process an order. They should be able to help define an estimate of costs savings or increase in revenue percentage to help support the customer team in building a business case for annual budget approval.

Value Realization Workshops can be done in the Sales Cycle

A Value Realization workshop can be done in the sales cycle as part of a discovery session with the Sales team and CS partnership. The sooner you help the customer figure out what ROI would make the investment in your solution worth while, the easier it will be to define the long term customer roadmap plan. It will give you an execution plan to follow to ensure expansion and retention. It will also lead to a long term investment and partnership in the customer’s business as they grow.

The benefit of having an ROI roadmap plan is that it will get the attention of the executive leadership at the customer and these types of reports can be sent directly to the Stakeholders and Economic Decision Makers to ensure they are receiving the updated information on the benefit(s) of your solution on a regular basis.

The Stakeholders and Economic Buyers are the key to getting expansion opportunities across the organizations including departments, divisions, subsidiaries and other business units.

As always, I look forward to your thoughts and feedback. Please share our Newsletter with your friends and colleagues.