Paul Henderson’s book, The Outcome Generation, starts with a story that may sound familiar to some of us.
Our solution is working great for our customers, it gets them from point A to point B...
But it’s not solving the problem and they want to churn. This happens because product success ≠ successful outcomes for the customers.
The details
In this post, we are recapping an episode from The Customer Success Channel Podcast, How to Focus on Success Driven Outcomes with Paul Henderson.
Paul is an author, speaker, Customer Success consultant, and founder of Outcomes Leaders. Through his program, he’s helped companies close million-dollar deals. Before this, he led the Asia Pacific region for an enterprise software company.
The Customer Success Channel Podcast is hosted by Planhat and they discuss Customer Success with SaaS entrepreneurs in the global start-up scene.
Here are the three takeaways from this recap:
What are “outcomes”?
D.E.E.P engagement
Focusing on success outcomes instead of product outcomes
What are “outcomes”?
One thing that Paul realized while working in enterprise resource planning (ERP) was that it didn’t produce success for its customers.
Paul and his team started looking at what they were doing and what they could do to help their customers be more successful. To do this, they looked at the outcomes that they believed the customers were trying to achieve when they bought an ERP software. One of those outcomes was to run the business well and for Paul, this meant that they needed to think outside of their own solution. What else did the customer need besides an ERP?
They needed processes, the right people skills, training and education, and change management skills. To achieve this the customers would have to use other consultants and firms so Paul’s team thought “wouldn’t it be better if we could help customers do all of those things?”And that’s when they introduced a whole range of new services, new methodologies, and, new KPIs all around the idea of helping customers become what they called “the effective enterprise”. This became their mantra.
Whenever somebody buys something, there’s an outcome they want to achieve. If you buy a hamburger, you want to be full. If you buy a movie ticket, you want to be entertained. If you buy a sports car, you want to be noticed. In the tech space, there are two types of outcomes:
Product outcome - direct benefit of using a product/service
Success outcome - the bigger outcome the customer is trying to achieve when they buy your product/service
Let’s look at an example:
If you go to a hardware store and buy a drill bit, the hardware manager knows that you don’t want to own a drill bit, what you want to do is drill a hole in the wall. So the product outcome––the direct benefit––is to drill a hole in the wall... but that’s not success. What you really want is that beautiful family portrait hanging on your wall. And that’s what success looks like.
Be very clear on the success outcome your customers are trying to achieve. This is the thing they care about and it gets them promoted and it gets them recognition.
D.E.E.P engagement
In his program, Paul focuses on four phases to create a customer lifecycle “a success lifecycle” and every one of those phases is based on enabling the success outcome. This is called “D.E.E.P.”
D = Develop, this is the lead generation. The Marketing & Sales messaging and the conversations they have with prospects all revolve around the success outcome. If you talk about product outcome, you’ll get some attention but if you talk about success outcome, the thing the prospects care about, they’ll engage with you.
E = Evaluate, this is selling but aimed at specific customers. Similar to “Develop”, the focus is on success outcomes instead of product outcomes. These discussions enable collaboration with customers and you’re able to identify projects that can improve the success outcome.
E = Execute - this phase is making it work (i.e.,onboarding/implementation) but you don’t declare that a product is working. The customer declares this when they’ve measured results and shared that back with execs that have sponsored the project.
P = Prosper - this phase is about continuous improvement. Recycling the process and keeping the customer in the loop of improving on the outcome.
These phases are high-level, within each one, you and your team will need to establish the steps in the success lifecycle. There’s typically between 8 and 12 for each phase and you’ll need to identify a deliverable or outcome. This step is very important!
Creating this for your team goes beyond serving them with a process, you’ll want your team to know what the outcomes are and what their effort means. Similarly, because they’re working jointly with the customer, you want them to understand the outcome that needs to be produced from each step. This means that if they run into an unusual customer situation, they have the freedom to make decisions since they’re clear on the outcomes.
Focusing on success outcomes instead of product outcomes
Paul says that ideally, the impetus for this will come from the top of the organization (he references Steve Lucas, CEO of Marketo, who is a big believer in success-driven outcomes).
But if this is not the case for you at your organization, there are still some things you can do. What Paul suggests is to figure out the success outcome. To do this, get a bunch of smart folks, have a drink/coffee, and work out what the success outcome is. Go talk to some customers and ask them “does this resonate with you” then try doing some small marketing campaigns. You can start with campaigns targeting existing customers and you should position your messaging around the success outcome.
You can then measure your tests and start identifying opportunities for up-sell/cross-sell. Once you’ve created some revenue, introduce the idea to Sales and have them start implementing talking points around the success outcome. And once they’ve generated revenue, take it to the exec team.
Summary
Product outcomes ≠ success outcomes - you don’t buy a drill bit because you want to make a hole in the wall, the success is actually seeing a family portrait hung on the wall
There are 4 phases of customer engagement and all of them are centered around success outcomes
Success-driven outcome is a methodology that starts from the top but if it doesn’t, you’ll need to execute it yourself and share your learnings to bring the team onboard
Shout outs
Thanks to The Customer Success Channel for hosting Paul on their podcast! You can go follow them on Twitter. And if you want to hear more from Paul, follow him on LinkedIn.