How to create a Customer Roadmap Plan

There are several schools of thought on how to create an expansion plan for a SaaS customer. In some cases, it depends on whether the Sales team owns the expansion revenue goal or the Customer Success team. This approach is mostly seeded in a tactical sales approach where it is dependent on the customer to tell the sales or CS team what they need and when they need it.

I recommend a different approach where the SaaS company creates the best practice Customer Roadmap plan that provides a step by step guide on where they should start and how they should expand their use both deep and wide across their organization.

There are basically two elements to expansion:

1. Deep Expansion = Expanding the use of the product capabilities and using more of the features, functions, integrations and reporting.

2. Wide Expansion = Expanding the number of users or units of the software across the company.

For customers to expand deeper in the use of the product capabilities requires either a deeper education of the product’s features and functions and/or some best practice processes and standards to be put in place that will allow the technology to enable a more effective and efficient process to be operationalized.

For customers to expand wider across an organization or company requires a pathway to increase the users within a department or across departments and business units. If the software is sold by a different unit of measure (i.e. CPUs, # of units), then it can have a pathway for the customer to increase the unit of measure organically or across business units, while still receiving value and ROI.

Depending on the pricing model for the software, the contract value can be expanded by adding features and function or users or both. There are some software companies that have additional fees for the use of more advanced, high value features as well as for additional users. These can be more complex for customers to manage the overall cost of the solution, but if the pricing model is fairly simply, they will be able to manage and budget the total annual cost of the solution.

However, if left to the customer to figure out their own growth and best practice roadmap plan, they will try to work the pricing model and negotiate based on price only.

A New Way to Plan the Customer’s Expansion

The best way to manage your customer base growth in NRR is to design a best practice Customer Roadmap Plan for how they should expand both deep and wide; making the software solution the standard across their company.

To create a best practice Customer Roadmap Plan, it starts with having a deep understanding of the customer’s architecture, business model and maturity. This information is what will help to ensure that where they start in the plan and each additional phase of growth has a specific set of high value outcomes that lead to an ROI that can be tracked and proven over time. The outcomes are designed to produce ROIs that are impactful to their business operations.

Many SaaS companies have a customer dashboard with several metrics that show a wide range of KPIs and customer stats to help CSMs understand how the customer is using the solution, but even if all those metrics are tracking at the ideal score, it doesn’t mean they will expand.

Expansion comes from a plan provided to the customer that shows them a pathway to improving their business efficiency and effectiveness. The results of the plan can be measured and proven to make the cost of the solution worth their time, money and resources to implement. The plan has to show the customer how they will be able to lower their overall costs or drive improved revenue streams as the end game ROI. There may be several soft ROIs that are realized initially, for example, increase in productivity, reduced cycle times, improved data integrity and accuracy, etc. However, these soft ROIs need to turn into hard ROIs in the long term for customers to continue their investment in the solution.

The Customer Roadmap plan should be designed with the customer’s strategic plan and top priorities and objectives in mind for each year. The Roadmap plan can be modified from year to year to provide recommendations on how your solution can help enable any pivot in the customer’s strategy, acquisitions or new product innovations.

The plan should not be a one time event, but an on-going annual planning cycle that happens between the CSM and the Customer’s key Leadership team members that are the stakeholders and economic buyers.

Building the Customer Roadmap Plan

• Step 1: Discovery

• Step 2: Assess Maturity Level(s)

• Step 3: Determine Compelling event and priority outcomes

• Step 4: Define the vision state for your solution

• Step 5: Develop each phase of the roadmap plan to get to the vision state

• Step 6: Annual Strategic Planning

Step 1: Discovery

It starts with a discovery session in the beginning of the implementation cycle. This session is used to learn about the customer’s current state, challenges, goals, objectives, priorities and key results required to make a business impact.

Most SaaS companies will use a Design/Discovery questionnaire that starts in the sales cycle and continues to be further developed in the implementation cycle. This document is a living, breathing document that continues to be updated and maintained with the details of the customer requirements, goals and objectives and expectations of deliverables and timeline.

Step 2: Assess Maturity Level(s)

Armed with information about your customer’s objectives and priorities, it is easier to focus on these areas to assess the current state of processes, standards, procedures and policies within the area the technology will be applied to improve efficiencies. The next step is to assess their maturity within these areas. Maturity models can be established for a specific market and/or process by big consulting companies or by the leaders in the industry. The following is an example of a maturity model for Digital Government:

There are several ways to assess a customer’s maturity level. Some software companies create a formal process with a questionnaire and provide a score and a level. However, most companies utilize a maturity model graphic, like the one above, to show customer’s the different levels and simply ask where they believe their organization is at on the maturity model.

I have used this approach in hundreds of sales cycles and find that it sparks a good conversation amongst the customer team members. They may even share that some of their processes or departments are more mature than others and that their goal may be to get the entire organization standardized to a certain level within a specific time period to improve consistency across the company. This is all great information to understand and incorporate into the roadmap plan.

Step 3: Determine Compelling event and priority outcomes

With the solid intelligence on the customer’s organization, architecture, standards, processes and procedures for how they operate today, the next step is to understand the compelling events the customer may be facing that could drive a specific timeline for a Go-Live date.

They may have specific milestones and outcomes they have to deliver within a short timeline. This information will drive where they may want to start in the roadmap plan to show a quick win and business impact within a shorter period of time.

However, the one caveat is that the customer will need to ensure that the outcomes and deliverables defined in the first phase has enough of a business impact to create a value that can be measured and verified in some manner. Remember, the first 30 to 60 days of the implementation will set the stage and course for the entire engagement. It will be important to show value and an impact in the first phase.

Step 4: Define the vision state for your solution

To create a vision state for the solution it will require some coordination across the Product and Customer Success teams. The SaaS company will want to bring together the experts on the product, usually the senior members of the professional services or consulting team, and the Product Managers who own the product roadmap plans. In some cases, some of the Senior CSMs and CS leadership team members may contribute as well.

These teams will brainstorm and whiteboard what a customer should look like when they have fully operationalized the solution. This includes having the right best practices and roles in place to optimize the use of the solution in the right way to prove the business impact. It also includes the areas, features and functions of the solution that should be utilized and to what extent.

If the definition varies by department, process or business unit, then the teams would define the vision state for each area specifically.

It is also helpful to define if there is a logical order to how a customer should implement the varies functions and processes to ensure the solution can be operationalized effectively.

Step 5: Develop each phase of the roadmap plan to get to the vision state

Armed with the customer information on goals, objectives, priorities and timeline, the Customer Roadmap plan can be developed to guide the customer from where they are today to the vision of operationalizing the solution in a phased approach. It’s rare that a customer would tackle a large scope and complex requirements all in one shot. It is best to define smaller scopes and objectives with high value outcomes that build on each other.

The Roadmap plan will usually have multiple phases. The key is to plan a scope of work that will allow the implementation of the solution to provide a solid set of high value outcomes that produce a few ROIs even if they are softer ROIs. In some cases, the customer will have a few high priority deliverables they want to focus on for the first phase. These can be included in the Phase one plan, but also add additional scope and deliverables that will elevate the use of the solution to provide a significant change to their operations where the customer will realize the business impact. The impact can be soft ROIs like reduction in cycle times, increase in productivity, reduction in errors, improvement in data quality or improved visibility as a start.

The results from the first phase should create a solid foundation to build on with the plan for the additional phases. As the plan incorporates the goals and objectives of the customer, it should also include the addition of best practices and maturity capabilities to improve standards and processes that optimize business operations. This is where the plan will expand the use of the solution either deep or wide. The definition of the next phases goals, objectives and value outcomes may include expanding the use of the product capabilities and using more of the features, functions, integrations and reporting and or expanding the number of users or units of the software across the company.

Here is an example of a simplified Roadmap plan the incorporates guiding the customer through various maturity levels, operational efficiencies and improved processes to drive a more effective way of operating at the highest level of maturity, which yields the highest ROIs. Notice that the plan incorporates specific functional capabilities that are driving the use of the solution both deep and wide across the organization and company business units.

Using the example above, a Customer Roadmap plan could be developed using the bubbles as the various phases which could be customized to the customer based on priorities and areas that will have the highest business impact.

Each phase will have a set of KPIs and/or metrics that can be measured, tracked and monitored over time to prove the ROI and business impact.

Step 6: Annual Strategic Planning

Once a customer has completed the initial Roadmap Plan, the last step will be to strategize on an annual basis with the customer’s leadership team, stakeholders and economic buyers to ensure the solution stays relevant and innovative in meeting the customer’s business needs.

A common theme I have observed over the years is customers who have a tenure of over 2 to 3 years with a solution and the vendor has not continued to provide any strategic or innovative solutions to meet there changing business needs. The customers begin to look to new players in the market that seem to be hungrier for their business, more attentive and innovative in their approach and sometimes more cost effective.

It is important to stay connected to the key stakeholders at each customer and ensure they are taking advantage of the solutions innovations and making the internal changes on the customer side to take advantage of new technological advances. This can be done easily with an annual Strategic Roadmap Planning session with the customer team and their leadership, stakeholders and/or economic buyers.

In this session, the customer will share their annual strategic goals, objectives and top priorities. The CSM and Solution Architects can work with the team to understand where and how their solution can contribute to their ability to deliver on their annual goal and objectives. This approach shows the customer that you care about their success and can provide the appropriate guidance and support to ensure they are successful in delivering on their objectives and targets from year to year. 

The Impact the Customer Roadmap Plan has on Expansions

When Customers have a comprehensive roadmap plan that shows them where they should start and what should come next and how to build on the capabilities that have been implemented and launched, they will realize real ROIs in a short period of time.

When the software company develops these plans in partnership with the customer, they get buy in from the customer implementation teams as well as the key sponsors and economic buyers. The professional services team will use this plan to drive the customer forward from phase to phase until they have fully operationalized the solution.

The Customer Roadmap plan ensures the customer’s have planned for the expansions and continued use of the solution. It provides the business case the customer needs to prove the value and requirement for continuing to invest in the solution.

If this expansion approach is operationalized within a software company, they will not be chasing renewals and expansions, they will be planning in partnership with the customer from year to year on how the solution will continue to enable the execution of their strategic and operational plans that can drive results.

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