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Customer Success Driving the Top Line Part 2: ROI-Focused Adoption

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This is the second installment of our series about how Customer Success drives revenue. If you haven’t had the chance yet, check out Part 1: Building Long-Term Relationships.

In the old-fashioned days, which some of the legacy software vendors still apparently live in, customer success is viewed as an expenditure instead of a true revenue-driver. With Customer Success 2.0 we use quantitative analysis and specific metrics to show, and subsequently prove, our support teams substantially increase our revenue.

In this post we’ll discuss how we drive ROI for our customers through our adoption and enablement models. This ROI and stickiness of the product leads to future renewals and expansions which drives the top line for AppDynamics.

Adoption Model

It’s first important to know how we score our customers and get them to the optimized state.

We have 3 levels for customers to become fully adopted:

  • Level 1: Reactive

    • sporadic logins

    • small amount of users

    • use the basic functions of the product without any customization

  • Level 2: Aware

    • regular logins — daily or weekly

    • users from different teams

    • use the product in a few environments

  • Level 3: Optimized

    • continuous use

    • power users on multiple teams

    • product is used for several use cases throughout the customer account

Clearly, the goal is for every customer to be at Level 3. To track this and stay up to date, the customer success team is notified on usage metrics and can use these to facilitate proper touches. As we mentioned in the previous post, a customer success agent has to deliver value at every single interaction. Therefore, the agent often gives resources and further training to ensure the customer is receiving value from the solution. It’s important to note these training sessions and resources aren’t the traditional “professional services” other vendors charge for.

Legacy Players

Old-fashioned software companies also treat their customer success department as a hidden “gotcha” aspect for their customers. These “professional services” can end up being a large unexpected line item on your bill. They offer enablement tools and training at an incredibly high marked-up price. Sure they offer helpful consultants who can guide you to become an expert with the product. However, often they’re paid hourly and subsequently their salary is based on how many billable hours they rack up. This is inherently problematic when it comes to successfully enabling a customer. They are incentivized to slow down and drag on the adoption process. How is this an efficient model?

At AppDynamics, our model is based on our customers’ adoption. As I mentioned in the previous post, our CRM and TAM members have a fixed number of accounts they work on — no need to be stretched too thin on many accounts. Furthermore, they’re measured on the adoption rates of those accounts, not hourly work. We also offer the vast majority of our training tools for free in a self-service portal. Easily receive training guides, learning bytes, best practices, and onboarding checklists straight from our community and education portal.

Our entire customer success model, our team members pay structure, and our onboarding process is geared towards one thing: healthy adoption by our customers. We learned early that if we can help them see a large ROI from our product, then we will see healthy growth as a company.

We do have customized 1:1 help available for our customers in the form of enablement & training services but they generally less than 10% of the license cost.

We’re not focused on optimizing our margins, we prefer investing in our customers and building long-term relationships which eventually translates to driving our top line.

Tools

A carpenter is only as good as their tools, right? Well, we supply our customer success team with truly ground-breaking tools that could be products in their own right. Each tool, gives our team special insight into our customers and how they utilize our product. The agent can then help the customer by giving tailored tips and tricks to receive more value from the product.

Stay tuned for the next post to get a sneak preview of one of our most exciting tools.

The amount of focus and attention we place on creating these tools isn’t to tout our own cleverness and brilliance, but rather to grow our customer satisfaction scores. A satisfaction score represents a lot of things. It could mean a rating on a user’s experience with the product, the services, the teams, etc. It also implies if a customer is happy and has a high satisfaction score, they are getting value out of the product because they’ve adopted it to their specific use cases. Tools help show the value of AppDynamics quickly and identify other uses customers may be unfamiliar with.

As I mentioned in the previous blog post, we’re quite proud of our NPS of 84. It’s a testament to the entire company, not simply the customer success team. Our product team and engineers are equally responsible for having an innovative product that provides such value to our customers.

Also as I briefly discussed in the previous post, the ROI from customer success is derived from a constant loop of enabling your customers, building relationships, and ensuring they are receiving value from the tool. It’s a two-way ROI transaction.

Keep a lookout for the next and final installment in the Customer Success 2.0 series, Data-Driven Efficiency.

The post Customer Success Driving the Top Line Part 2: ROI-Focused Adoption written by appeared first on Application Performance Monitoring Blog from AppDynamics.

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