Where to start

Congratulations! You’ve landed a Series A or B fund and are ready to start your growth plan. NOW WHAT?

Sales and Marketing are what seems the most logical choice to start with. After all without sales there is no point in the rest of the plan, right? Yes, but without successful customers that will continue to invest with you, there is no growth. Let me share another approach. It will enable a more effective and efficient plan to use funds to drive growth and plan for scale.

Start with the End Game

When you get on a boat or get in a car, you usually have a target end point that you are navigating to. Based on the destination, you plan accordingly. If your destination is in a cold climate or warm climate, you will dress or pack appropriately. You plan for how much gas you need to get there and food that will be required depending on how long it will take. Everything you prepare will depend on the end point destination and the expectations for the stay.

That’s how customers think when they buy new software. They are visualizing the end game of how that solution will be used operationally within the company. They are assuming the vendor will provide a plan for how to guide them from their current state to operationalizing the solution across their processes, teams and organization.

Every SaaS company has several very successful customers that are utilizing the solution to a fully operational state or fairly close to it. These customers can share the impact the solution has made to their operations, processes and teams effectiveness and efficiency gains since implementing the solution. These are the customers that hold the most valuable information to designing the best methodology and approach on how to help similar customers achieve the same success. 

From these similar customers, the definition of who the Ideal Customer Profile (ICP) will emerge and what roles within these types of customers are the influencers, economic buyers and champions that are most effective in promoting, funding, and operationalizing the solution internally.

Stop guessing at who and where to market for future sales growth. The solution was created to solve specific problems within specific target markets. Land a few of these and prove out the hypothesis that these markets want to pay to solve these problems. Obtain a few customers and make them successful with the solution.

Once a handful of customers within a target ICP have proved out to be able to operationalize the solution and achieve real value and ROI, the first draft of a customer lifecycle management approach has been established.

Document the definition of a fully operationalized solution. For example, if the solution is a work management solution. Fully operational may mean the customer uses the solution to manage their Company goals and objectives from the top down across all departments providing full visibility in the weekly status meetings for all projects in flight that impact each department’s ability to achieve and deliver on each goal and objective from quarter to quarter. If the solution has specific target markets by department, fully operational could mean for an Engineering department the solution is used to manage all global engineering work projects weekly that are aligned to product launches.

THAT’S WHERE WE START with the END GAME of what made these ICP customers successful. We can begin to define what created the success for the customer. What products and additional expertise and services were provided to guide them and deliver them to the vision state of fully operationalizing the solution.

Define the GAP

What is the GAP? The GAP is the difference between Product capabilities as a stand alone solution with no outside services or guidance required and the customers’ expectations for achieving operational improvements and efficiencies.

If the product alone can guide the customer to operationalize the solution within their processes and teams seamlessly, then there is no GAP.

However, if the vendor had to provide any type of professional services, education, support or customer success manager services to help the customer understand how to set up, utilize, transform and operationalize the solution in a production state, then there is a GAP.

From the end game of what Customer Success is (see above quote) the GAP can be defined by the types of services, methodologies and standards required to realize the end game for all customers.

Define Business Use Case and Value Outcomes for ICP

Once the End Game of Customer Success has been well defined, there will be some specific business use cases that are common across the ICPs that can be defined.

From each business use case, the vendor can define more specific outcomes, goals and objectives that are required to operationalize the business use case.

This can also include defining the specific roles and responsibilities that are associated with the standards, processes or procedures that will be impacted or require changes in order to achieve a new operational state utilizing the solution.

Defining the types of Services Required to fill the GAP

Determining the kinds of services required to fill the GAP starts with a review of all the additional services and guidance provided to the ICP customers to guide them all the way to the end game. This doesn’t mean where the vendor onboards a customer and points them in some direction and leaves it the customer to figure out how to operationalize the solution on their own. It means what services were required to guide and support the customer until they were fully operationalized with the solution.

For start ups, this could be the founders actually doing the set up, implementation guidance and support until the customer was in a fully operationalized production state. It could mean the founders were the customer’s point of contact for their first 3- 6 months to solve problems quickly. ANY type of additional guidance and services provided to ensure the ICP achieved their goals, objectives and value that can be defined and realized, is what needs to be defined.

Each of these types of services generally fall into one of the following types of services that can be fleshed out and further defined.

Types of Services

Define Best Practice Methodology and Unique Approach

Define the products, services, methodologies, processes and standards for delivering and implementing the solution for all ICP customers in a repeatable manner. Developing a unique best practice methodology and approach for customers to design and implement new processes and changes that are more complex can help expedite a customer’s ability to operationalize the solution more effectively and efficiently.

Using the successful ICP customers, determine what additional processes, standards or procedural changes were required to enable customers to standardize and operationalize the solution as their new way of operating. These requirements can be integrated into the best practice approach and provide proven recommendations to customers on how to adopt and innovate faster.

In more complex solutions, a maturity model may be required to help customers identify current state. Based on the maturity level, vendors can help customers plan how to phase the implementation plan to allow customers to mature internal standards and processes, which means they will be implementing the solution in phases and expanding the depth of use and user expansion over time. Having a best practice methodology and approach incorporates the maturity level and changes required into the design of the customer roadmap plan.

Develop Operational and Headcount Plan within current P&L Budget

Armed with ICP definition, list of ICP customers, end game definition, ROI business use cases, the GAP defined, types of services required, roles and responsibilities required and a possible best practice methodology and approach that together is the formula for generating repeatable customer success; a growth plan can be developed for scaling the company to self sustainability.

A plan for each department including Marketing, Sales and Product can be determined based on the insights gathered to design the CLM for each target market. Especially as it aligns the entire company around a specific solution offered to a specific target market and set of roles. All departments are aligned around what the solution requirements need to be to deliver the operational benefits and ROIs to the specific ICPs within specific target markets.

Once the roles and responsibilities along with the experience, knowledge and expertise required has been defined for each type of role, it is easy to put a headcount plan together using a capacity planning model for each role.

I recommend using capacity planning models for all roles in all departments. This will allow leaders to define each role and organizational structure for scalability based on an expected performance level for each role and how the teams will work together aligned to the CLM model.

As each role is plugged into a P&L model, the types of services can be evaluated as paid value add services or included in the price of the software. Analyzing various services revenue and headcount hiring plans along with other costs for operating a services organization will provide a plan to profitability. Making value added services a profit center will support a faster pathway to self sustainability.

As the product develops and improves, these elements should continue to be evaluated and modified. If the vendor is operating with a product led strategy, then the strategy may be to create a product that requires NO services within a set period of time. In that case, the services structure will change each year and eventually turn into all in-product guidance and help. If not using a product led strategy, then the services required, GAP analysis and CLM model requirements should be evaluated as part of the annual strategic planning process. As the product changes, the GAP is reevaluated to determine what changes in types and levels of services are required to keep ensuring customers can operationalize the solution in the shortest period of time.

In Summary

Whether the SaaS company is mature, high growth or a startup, they would benefit from developing a basic Customer Lifecycle Management model using the approach laid out above.

Great insights lie in the current customer base from the most successful customers who have taken a technical solution and operationalized it improving processes and performance in lower costs or improving revenue streams.

Using these insights to develop a focused Customer Lifecycle Management model for specific target markets will align the leadership team and drive better performance and faster results.

As always we welcome your thoughts and feedback. If you would like some guidance on how to create a baseline CLM model and improve your company’s ability to build a growing customer base, feel free to contact me at [email protected].