New roles in companies in the era of servitization

    In the article you will learn:

    • Recent trends in the process of servitization
    • Why the role of Customer Success Manager is integral in growing B2B organizations
    • Where to look for CSM candidates

    Services have been an integral part of our life for many years. Without noticing it, we regularly use various services with a monthly subscription. So, we all pay for utilities, mobile communications, computer antivirus, cable TV and much more. With the advent of the Internet in every home and every mobile device, the number of services began to increase dramatically. At first, most of them were related to the distribution of digital content, for example, a subscription to Apple Music. But very soon the trend of servitization penetrated into other industries. There were more and more new connections between traditional products, services and digital services.

    Today you no longer have to buy a car to drive it. If necessary, you can use the online service that will offer a car for rent near you and will only charge for the time of use. Well-known print publications, such as The New York Times , offer their readers to subscribe to their digital version online, and huge corporations on a regular basis use the services of a number of cloud services. More and more companies and enterprises, paying attention to the trend of servitization, are moving from the usual sales model (physical and digital) to the service model, which allows them to receive money from customers on an annual, monthly or even daily basis (SaaS).

    One of the most successful examples of such a transition is Adobe.. The company has stopped selling physical and digital copies of the popular, but at the same time expensive, packages of Photoshop and Illustrator, offering in return a monthly subscription for these products to its customers. This approach helped Adobe’s management to simultaneously solve two tasks: the company's software became more affordable for customers, and the problem of piracy was closed.

    Buyers often win when companies move from a proprietary model to a subscription. For example, when Apple Music appeared in Russia, the price for a subscription was set quite reasonable, however, society still put pressure on the company to reduce it. Some time later, when Google and Yandex launched similar services, Apple was forced to reduce prices in order to remain in the market. In the same way, some magazines offer a special price that is an order of magnitude lower than usual in the event that a customer subscribes to a digital subscription for at least a year.

    The trend is obvious. But it is even more obvious that even more companies will switch to a new sales model in the coming months.

    And just like any other process, servitization has its own characteristics. If in the traditional model, the main problem for organizations was to sell the product that they produce, then, with the transition to the subscription model, it became necessary for companies to think about how to “force” the customer to first subscribe and then update it regularly. And if in the first case the task is not easy, but it is described and solved with the help of marketing tools and a qualified sales department, then with the second one the situation is much more complicated.

    Having just a good product is no longer enough. Competition is constantly increasing. And only those companies that are able to provide the buyer with excellent service throughout the organization’s entire cycle will be successful. After all, service is always building personal relationships. No online bots and answering machines can replace human communication. And that is why more and more companies are adding Customer Success departments to their organizational structures.

    In Wrike Customer Success, managers work in all offices around the world. Since the company's product is built on the SaaS model ( Software As A Service), it is important for the company that customers continue to use it. CSMs need to be able to build long-term relationships with customers. It implies regular calls to the customer to find out how useful the product is to the customer, and customer training on the entire functionality of the product, not only technically but in terms of solving specific tasks, and analytic work to identify the best practices of using the product and the ability to share them. Our major customers, such as Airbnb and TGI Fridays, receive a personal CS manager who advises them on all product issues. Other clients also have the opportunity to ask their questions to CS managers during webinars, which Wrike regularly conducts.

    Customer Success manager and his role in the company is a relatively new phenomenon. If you ask representatives of several companies what it is, then the answers are likely to be different. However, all respondents will be unanimous in at least one thing: among the main goals of CSM activities will be indicated customer support and development of clients throughout the life cycle of their activities. Customer Success managers should not only be experts on the product / service that their company provides, but also be able to deeply understand customer needs and propose suitable solutions.

    CSMs should be able to adapt to the changing needs of the client at different stages of the development of his business. And of course, the role involves developed communication skills for building and maintaining strong and long-term customer relationships.
    Where to find a suitable employee for this role? We have already listed the skills that a candidate should possess. Consider candidates with expertise in consulting, customer support and sales and relate their strengths to the goals you set for the new organizational unit. Be prepared to invest time and money in developing your Customer Success team. Remember that you are working on an ambitious goal: to make your customers reliable partners for the entire life cycle of their business. And this goal is definitely worth it to work hard on.

    According to Gartner , by 2020 all new market participants and 80% of traditional software vendors will switch to a subscription-based business model. The result will be a significant redistribution of the organization’s revenues in their overall structure in favor of income from existing customers. For a developed business built on the basis of the SaaS model, it is not unusual that the income from existing customers is 10-20 times higher than the income from new customers.

    The key task of the Customer Success Manager, generally speaking, is to maintain and increase revenue from existing customers. And it can be achieved by a whole set of actions. For example, some CSMs may receive a commission or bonus for extending or renewing a subscription. Other CSMs can only be responsible for onboarding and assisting customers in implementing the software into their work. However, regardless of the chosen format of CSMs, they are responsible for the successful implementation of the product / service and the value it brings to the client’s business. After all, this leads to an increase in the income of the entire company and an increase in the profitability of its products.

    Peter Lyon
    , Co-Founder Customer Success

    Also popular now: