Value perceived is the CS metric we need.
Just a quick timing note that this was written back in late October 2022, however due to some unexpected events it got delayed until now. On to the blog, hope it is interesting and sparks some conversation and debate.
Back when my original business partner and I were talking about building VCubed as an AI platform to uncover customer value, churn risk, expansion opportunity and unknown customer value we realized that current metrics were lagging indicators of what has happened and that there was no easy or accepted way to measure value and leading indicators of customer success and value. After many events and life experiences the AI platform company didn’t make it, out of its failure VCubed as a pragmatic CS services company was born. In the years between these original thoughts and today I have met many CS leaders and thought leaders and it wasn’t until I was on a call with Maggie from TheySaid (NuffSaid) late last year that this idea of Perceived Value as a metric was discussed. As we were chatting it is evident that Chris Hicken and the TheySaid (NuffSaid) team embraced this path which warms my heart. After the meeting I have been looking back at some of our original white board musings and thoughts and uncovered some work we were doing to redefine metrics. This first blog is about those original thoughts and hopefully sparks a conversation amongst the community about leading indicators and metrics that can be indicators of success for customers.
The thought process we had was that it is quite challenging to uncover if customers perceive value, can they subsequently articulate this value, understand the value enough to buy more and if where they are receiving value that hasn’t been quantified. We set out to start to unpack this idea and work towards what we thought could be measurable metrics that would help companies manage their customers better. Well this is where it started as you see very chaotic!
Hard to tell what we were thinking, this was a graphic that we built to show that within your company there are many factors impacting a customer's ability to realize value. We categorized them as follows:
Areas of impact on the customer What you do to measure and manage
Your product - Churn and Risk mitigation
GTM functions (Sales/Marketing/Customer). - Why buy? Value Prop & sales
How you interact with them (Operations). - Segmentation
Your people - Whitespace and expansion
Your competition - Adoption activities
The customers in a community
We asked ourselves what about this gives you a leading indicator of success which we struggled to uncover. So we started to look for a way to measure and benchmark a competitive advantage for SaaS companies that was leading not lagging and focused on the customers perception of value realized.
Well if you think this is a lofty and unrealistic goal, it is but that doesn't mean we shouldn't try right? And tada this confusing graphic that was never shared until now
With this craziness behind us we realized this was too hard to capture and frankly not easy to understand fancy words that don’t mean a lot. What were we thinking? We actually called it a dictionary, wow! This didn’t slow us down. We continued to work on this and landed in a place that I have been working to implement.
On to the the actual metrics we landed on which are as follows:
RBO - Realized Business Outcome - is a score to indicate that has been validated or a customer has provided to indicate that they have tangible and explainable business outcomes realized by using your solution.
Value Perceived or Achieved - is a score that has been validated with a customer persona or a customer has provided to indicate if the intended value at purchase has been realized by your customer.
Value Expansion - is a score that has been validated with a customer persona or a customer has provided to indicate their belief that there is potential for more value to be received than what is currently being realized and openness to buy. Also can quote Dave Jackson and his book Customer Led Growth and say this could now be NBV Next Best Value.
Value Unknown - is a score to track areas on customer value previously unknown to the company that is perceived by the customer.
Value Realized - is the culmination of the above scores to indicate perceived and realized value by your customers.
From my perspective I see these as another level of understanding of your customers and the value they receive. There are many ways to measure and manage your CS teams and I am very interested in pushing to find new ways to measure and manage so it can provide the right kind information about our customers to make them continue to grow and maximize their potential with our solutions.