With a deep dive into how Customer Success Managers understand their customers in the following article, we delve into the psychology of customers on a high level; and how we can use these psychological theories to empower our strategy towards each customer segment.
Maslow’s Hierarchy of Needs is often referenced in psychology; proposed by Abraham Maslow himself in the early 1940s, it attempts to unravel the universal needs of society and the theories of human motivation.
Similarly, my observations as a Customer Success professional has led me to conclude that our customers have a hierarchy of needs (and what motivates them) depending on the stage of their maturity and understanding of your product. By understanding their motivations, we can help them to mature and move onto a deeper understanding of the software, helping Customer Success Managers uncover the long-term value of a Software-as-a-Service (SaaS) business model.
We are very, very small, but we are profoundly capable of very, very big things. Stephen Hawking
What: Apathetic customers are what we label as “disengaged” customers in the CS world. These are high-risk accounts that are misaligned internally on the outcomes that your product/software can deliver. This could be due to a Top-Down purchase, where the decision-maker was convinced that your product is a great investment whilst the end-user does not find value in your product to invest time and effort into implementation. It could also be that your product champion left the company after the purchase, and no proper hand-over process was in place to communicate the criticality of your software.
Who: Dedicate time on the end-users of your Apathetic customers, as they will be easily accessible to you compared to the rest of the organisation.
How: Focus on demonstrating the value of your product and make it easy for the end-user to adopt it. This usually takes some effort in engaging your users in enablement sessions or training sessions, but it is a necessity if you see the lifetime value of a well-adopted product. You may also need to be very concise in the adoption process, so that users can discover the efficiency in implementing your software. When your customer has succeeded in a good knowledge and implementation of your product, they would move onto the next stage of the hierarchy.
What: Active customers are usually regular users of the software, being able to use it according to their functional needs and have a good enough understanding to expand to other use cases. Often, they are engaged users, but are unable to invest time to have a robust understanding of your technology. They are aligned internally on the value of your product, and use it to empower their own technology stack to deliver value to their customers.
Who: Place more focus on the end-users, but also begin to nurture relationships with decision-makers in the software procurement process so that the customer’s organisation as a whole will gradually discover the additional value your product could potentially bring. It takes more than the end-user to decide on how much time an organisation would spend learning about product usage.
How: Business Reviews are a good way to regularly demonstrate the outcomes your product has helped to deliver, and a platform to discover other means of integrating deeper into your customer’s use case. Invite decision-makers into these conversations; they are usually very grateful to have visibility and knowledge over how much business impact their purchase has made. Also use these as discovery sessions to find out future developments in their company, and how you can weave your product in, to support and lead them to success.
What: Affective customers have a deep understanding of your product; to the stage where they know the limits to your product and use it very effectively anyway. These users are highly-engaged and often participate in activities to have more insight on your industry or product. With these customers, renewals are no-brainers as they are able to articulate the benefits your company provides to internal stakeholders. It could also be the case where a majority of internal stakeholders have recognised on the exceptional value you provide.
Who: A well-balanced conversation with both end-users and decision-makers/executives. At this point, customers are usually as knowledgeable as you on your products and services. What you should bring to the conversation has to revolve around qualitative value and strategic planning on helping businesses with their outcomes.
How: Many Customer Success Managers perceive this customer segment as the pinnacle of maturity. However, recent developments show that there is an even more desirable state for SaaS companies - the Customer Advocate. To reach the next stage, it takes more than just displaying tangible value, but also the intangibles. Fellow CS professionals can surface this by helping customers resolve organizational challenges; such as advising on industry-specific regulations or adopting innovative practices that help our customers grow & mature as a company. (e.g. If you are in Fintech as a customer success manager, it could be giving your customers information or data on how the industry is transforming, which will be valuable information in moulding their growth strategically.)
The penultimate customer type will be Customer Advocates. These are customers who not only use your product effectively, but are helping you sell your software by telling the whole world how good it is. According to Nielsen, 92% of consumers believe recommendations from friends and family over all forms of advertising. When you have customers raving about your product, you save on extraordinary costs on sales and marketing (Google/LinkedIn Ads convert on low single-digit percentages in most industries).
The Advocacy level takes time and resources to reach for some of our customers, but the returns on investment for word-of-mouth marketing are unimaginable. It is an exciting notion and a long-term vision if any SaaS business commits to nurture all their customers from Apathetic, Active, and Affective levels.
According to Nielsen, 92% of consumers believe recommendations from friends and family over all forms of advertising.
Using social and psychological theories, we may engage in an accelerated process of understanding the challenges that our customers face. However, we do not need to be famed academics to achieve this, sometimes all it takes is to do the right thing with a befitting sense of empathy.
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