A Monthly PS Principles Newsletter For Decision Makers [October 2022]
In this edition...
View from the Summit
Professional Services Myths
Why Workbooks don't Work!
On Belay
Can We Under Promise & Over Deliver?
Free Climbing
Can PS Identify Account Expansion Opportunities?
Book Review
The Seven Pillars of Customer Success by Wayne McCulloch
Views From The Summit
Professional Services Myths
In this month's Summit, I want to spend some time on the myths that exist within the professional services arena and where possible identify why they exist and how, instead, we should think about the business.
These myths exist and perpetuate within our business because of a series of issues that are constantly at odds with each other and where the selection of “A” or “B” is not that simple. Take for example, making the customer happy or making profit. If we make the customer happy we will get a reference and they will buy more from us (or so the theory goes). On the other hand, we can make money and buy ourselves time to make another customer happy. While for a pure play services company I will always err on the side of making profit, but there are occasions where I’ll decide to invest in customer happiness. Then again, for a software company the lines may yet again be further blurred.
While in many circumstances the issue is one of balance, there are also simple do’s and don’ts that we have failed to recognize. In this month's Summit let’s explore some of these and where possible, get your take on what you think the right choice should be.
By way of example, let's examine the use of workbooks. When we will learn that just dumping a workbook on a customer doesn’t shortcut the requirements gathering process? Yes, there may be some moments where a workbook might be suitable to obtain simple information from a customer as a part of an engagement, but in most situations their promise has not been delivered.
The reason has to do with the Business Transformation Paradox which happens when a company buys and attempts to implement a new product. The paradox is that they can't effectively design a new solution using a product that they don't really understand. Especially, when they have been thinking about it through the lens of another product (even in terms of spreadsheets) for years.
Workbooks are ineffective because we are asking the customer to describe their requirements in a way that is foreign to them. As a result, the customer gets it wrong. The resultant misdirection, confusion and inaccuracy means that fixing the outcome of the effort is worse than just doing it properly.
We attempt to use workbooks to either save time, reduce cost or appear to be starting a project sooner than we are physically able. None of these are a good reason for shorting the customer the benefit of our experience. Leaving the customer to fend for themselves with a simple walkthrough of a workbook does not result in an outcome that moves the project forward in a considerable way.
If your workbook experience has been different, great! Let us know what situation it was used for as I believe this is the information we need to collect. As I stated, I think workbooks are not applicable in most of the situations to which they are applied. If there are some, then let's know how to make an informed decision.
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On Belay
Under Promising & Over Delivering
When I first started at IBM, the service delivery team was constantly telling me that the approach to selling professional services projects was to under promise and then over deliver. In my naivety I heard this from our senior people and took it to heart.
I then tried using this technique to help close services deals to little effect. I remember my mentor talking to me about the fact that I was "killing" the deal but I couldn't understand why. I was making sure the customer didn't walk out of the room thinking that their budget was going to include everything they wanted.
As time went by, I learned a critical truth. There is always someone in a competitive sales cycle that is happy to over promise. Especially in a market downturn. In a competitive sales process you never know how desperate your competitor is and you have to be prepared that if pushed, they will over promise to close the deal.
And why shouldn't they? In the end, when the promise needs to be corrected, they will suffer some customer blow back but if they handle it well, realign the customer to what can be done, give them a discount and take them out for dinner, all is forgotten and they now have a happy client that you need to win back!
To be clear, I do not promote the idea of over promising but we do need to recognize that the desperation of our competitors will lead them to do it. So, if this is what we are up against, then how do we compete? The answer is "differentiation". Being able to make an accurate promise is important, but that alone is uninspiring, even boring, in the face of a competitor's "over promise". Hence you need to caution that customer on the over promises being made to them by identifying the challenges they face ahead.
Our process for dealing with this is Journey Selling. Sell the fact that the customer wants to take a journey that is well recognized as not being easy. There are dangers in the decision to deliver a business change project. Simply acknowledging those dangers is a perfectly reasonable thing to do to demonstrate your expertise, but if that's all you do, the over promise will still beat you. You need to do more. You need to pair the challenge with your "proprietary" way of helping the customer overcome it on the journey.
Making this work is pretty simple. Imagine you were about to take a journey with me and a challenge along the way is a sudden cliff that drops three hundred feet to a river below. On the surface, this looks like a challenge to completing the journey without suffering some kind of harm. Let's say you have talked to two other companies before ours and they over promised and told you the journey was easy and that you would come to no harm if you took the journey with them. By identifying that there is a sudden cliff along the way, you start to question the motives of those who didn't. This gives you positive differentiation from your competitors.
Unfortunately, we have found that this is still not enough to clinch the deal. To win, you need to also explain to the customer that because of this challenge, you also ensure that every leader that you send out into the field carries a 350ft rope that has a blow up raft tied to the end of it. Neither the rope nor the raft are anything special. In fact, your competitors may also have these things. It is the fact that you helped the customer recognize that you care enough about their safety to have brought this to their attention pre-journey that separates you from those who simply want to win their business with fake promises.
We have used this technique all over the world and it is incredibly effective. It beats by a long way the idea that we should under promise.
Under promising and losing simply leaves us with no other option to correct the situation in the future and instead, gives the deal to our competitors who then gain market share that should have been ours. Ultimately, close everything you can. Yes, it makes for messy projects later, but this is far better than winning a few clean projects that don't help to grow our business.
Free Climbing
Expanding Accounts with Professional Services
In almost every software company I've worked in, I'm inevitably asked to see if services can find more opportunities to expand our existing accounts. The theory being that we are the first team that gets to dive deep into a customer's actual environment and hence we must surely be able to identify new opportunities for our software to help the customer be more efficient.
As much as I wish this were true, my experience in this area is that professional services will always be stunted in achieving any kind of success. Yes, we can always provide training and we could always be better, but even our best efforts in this area tend not to shift the needle on the sales pipeline.
Why? Because professional services is a transitory role. We arrive like a hurricane into the account and then leave with equal force. While not ideal, it is the mode of operation we have adopted because of the nature of who we are. We are the implementation experts who bill our time for profit. Hanging around any longer than the period of time for which the customer is prepared to pay means that we are beginning to give up profit.
Now, it's perfectly reasonable if we want to shift this mindset provided that when we do, a shift in primary success measurements goes along with it. We can't hold firm to wanting the services team to achieve a specific billable utilization target while also asking them to hang around without pay to help customers adopt their new solution.
The nature of our temporary role within the customer environment makes the identification of expansion opportunities difficult for many reasons. The first is that we are in the thick of getting the customer to understand what they actually purchased. It is common for the customer to first be shocked that the product doesn't work the way they thought it did in the demonstrations as well as be surprised that the scope they thought they had purchased was far more complex and must now settle for less or pay more in order to achieve anything worthwhile. This is not a good environment for identifying new leads.
Next, we have the question of skillset. While we can always train consultants on how to be better sales people, the reality is that their focus is almost always elsewhere. We are so focused on this specific business process that looking outward to find others is a wishful endeavor for which nobody really has the time. It would be like asking a Sales person to also service support tickets while closing deals.
I want to be positive and believe that services can identify expansion opportunities but I also want to be realistic about what we are asking. No matter how we justify the request, it is always going to be met with the reality that detail oriented implementation consultants will always struggle to identify big picture sales opportunities. There may however be some hope.
I do think that our approach to account management within software companies specifically falls short. Sales tends to disappear after the deal is done and then the Customer Success team tends not to want to get too engaged until the project is almost done. There is a lot of stuff that can go wrong in that time.
Wayne McCulloch, the author of the Seven Pillars of Customer Success, recommends that customer success teams engage as project sponsors as early as possible in a project as a way to provide the forward looking account view while the services team implements the project. This creates a much better account view for the software company that may help identify account expansion even while the first project is going on. The CSM is also "out of the fray" which means that if the project has challenges, the CSM is not mired in escalations.
This approach also allows the CSM to be more effective in monitoring adoption rather than expect the team trying to hit a billable utilization number to hang around and help the customer organize its change management plan. It creates a much more seamless approach to the beginning of a long term customer relationship.
In summary, professional services teams might in some instances be able to identify account expansion opportunities, but it is not a strategy that tends to yield significant results. Instead, the focus should be on utilizing the company's resources in a way that fits with their mode of operation.
While a book on customer success is not something you might expect to read here, there are a couple of reasons I think you should consider it.
This book gives all people within the technology industry a good operating model for how we should think about landing and expanding accounts. It provides a solid framework for how we should look to treat customers in order to have them return and love us.
I do think that when we look at customers through a customer success lens, we see more of ourselves than when we look at things through a sales lens.
That being said, there are still very large differences in how customer success and professional services see the world. Primarily, in how we propose to achieve "customer delight". A Utopian view would be that we are all trying to achieve customer success, which is true, but alas, the methods for doing it, because of the pesky nuance of context, can be vastly different.
A perfect example is that professional services' intent is to delight the customer by providing a solution that they love after we have left the building and not to focus on trying to have them love us while we are in the building. This is a foreign concept to those in the customer success space who need to ensure that at all times the customer is engaged and even if they don't love us presently, CSMs are working towards having the customer love us more in order to ensure that they do not churn.
Wayne's book is rightfully positioned in a way that helps us realize the importance of getting the customer not just live, but live and using the software effectively. Then, the customer success team can help the customer extract value from it.
I recommend this book to read not just because it is a great book, but because I also think that those in sales and customer success should read more about what we do. The more we learn about each other's motives, the more we can understand their behavior as not antagonistic but simply targeted at achieving the same result in a different way.
If you have a book recommendation, let us know at summit@psprinciples.com
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