For CEOs of B2B companies, are you starting 2019 planning for improved performance? To achieve better performance, have you made changes to strategy and tactics, waiting and hoping the changes will work?
It’s normal practice in a B2B company that the CEO is measured on a few key metrics like revenue & margin, customer acquisition & churn, market share and so on.
In turn you drive your team to hit those numbers year in and year out. You probably use some kind of Net Promoter Score poll to gauge how your customers are feeling about you.
The overarching question about operating this way is, “why do you and your team fuss about metrics that do little to ensure the longevity of your business?”. Obviously you’ll never ignore key metrics like gross margin trends and the like. I argue that they are subservient to a far more meaningful measure of your potential corporate longevity.
Here’s a radically different and much simpler idea that you could adopt as the guiding principal of your company.
Measure the extent to which your customers feel you meaningfully contribute to their success.
Think about that concept.
What could be more important than this metric? I know you’ll tend to want to revert to the traditional metrics I listed above.
Here’s the thing. If your customers don’t consciously feel you are meaningfully contributing to their success, then what does that say about your importance to them?
And it follows, that if you’re NOT important to them, they could cut you loose on a whim or a change of management or any number of other variables.
So, it obviates that the most important question you could ask your customer is:
“Are we meaningfully contributing to your success?”
And I agree that’s a scary question because if the answer is “No” or “Not really”, then realistically you have a heightened risk of losing their business.
In terms of the way you run your company, the culture you promote, the measures you apply to know how it’s performing, the ways you reward great work by your staff, could there be anything more powerfully motivating than, “do we meaningfully contribute to your success”?
What if all of that was distilled down to a single, all-consuming metric?
Ask your people, “do our customers agree that we contribute meaningfully to their success”?
The NPS-style question you can pose to your customers is simply this,
Please select how you relate to the statement below:
“Our company meaningfully contributes to your success”.
where 5=Strongly Agree, 4=Agree, 3=Neutral, 2=Disagree or 1=Strongly Disagree
Don’t ask this mamby-pamby NPS “Would you recommend us” question.
You need to know the answer to my version of the NPS question. Because only then can you know two things. One, are you a nice-to-have or an essential supplier and two, how easy is it for them to dump you or churn away from you.
Just imagine for a minute that you sent this question to all of your customers and you got these stats from those that responded:
~ 23% strongly agree
~ 14% agree
~ 32% are neutral
~ 22% disagree and
~ 9% strongly disagree
Right away you know far more than half of your customers don’t regard you as vital or important. Armed with this data you can devise your tactics to turn these numbers around and you can regularly measure how important you are to your customers.
Your customers are your lifeblood — cut to the chase and find out how important you are to them.
And if you’re not important, then you know how urgent it is that you start working on how you could become important.
You could also ask yourself the question, “if our ikigai (reason for being), isn’t to make our customers successful, then what the hell do we exist for?”.
Think too about your Board meetings and the traditional focus on the metrics you currently track. How valuable could it be for Directors to review corporate performance based on the Customer Success ratings? How would Directors react to knowing that more than 50% of your customers don’t regard you as important to their success?
I said at the start, “For CEOs of B2B companies”, because this kind of measure applies mostly for B2B relationships. Certain types of B2C companies could ask the question too, however for most B2C businesses the standard NPS question is likely still the simplest means to get a sense of customer satisfaction ratings.
Having said that, B2C CEOs could certainly do some A/B testing and ask both questions to get a sense of how you are perceived.
A final thought for CEOs to ponder is how this Customer Success management metric could help you change your corporate structure to ensure key staff take ownership for improving your Customer Success scores.
About the author:
Greg Twemlow is a Sydney-based Social Enterprise Founder | Startup Mentor | CEO |Writer | Speaker | Podcaster
We just sent you an email. Please click the link in the email to confirm your subscription!
OKSubscriptions powered by Strikingly