Saturday, February 21, 2015

Customer Success Platform Decision



In Customer Success we occasionally receive requests for proposals from existing customers and find ourselves on the vendor side of selection processes. Often this can be the result of an annual review by a procurement team to ensure they are getting the best deal on the right software, or it can be the result of a failure to drive adoption and value at one of our clients. But regardless of how we get there the process is never fun. On a good day it requires coordinating full suite demos, requirements discussions and reselling the value proposition to an existing customer. On the bad days it requires complex RFP processes, detailed requirement validation, multiple demos to stakeholders with competing or poorly defined requirements and expectations, and a long grind to re-win existing business. Our Customer Success team knows what this feels like, so when it came time to select a software partner, we actively worked to avoid the common mistakes.

These days Customer Success software is a fast growing market, and with good reason. To effectively drive customer adoption, satisfaction, retention and growth, you need to fully understand your customer’s experience and be able to articulate their business results. To do this at scale you need the data collection, data management, reporting and analysis of a Customer Success platform. The market for these platforms has evolved considerably in the last three years. There are a couple of key vendors defining the space and new ones are popping up with some frequency. When it came time for HireVue to select a vendor (a process that is just getting underway) we didn’t want to repeat the mistakes we see customers make and require an overly complicated or bureaucratic selection process. We also didn’t want to challenge vendors to meet a set of requirements based on the way we have always done things. Instead we chose to follow a relatively simple selection process.

1.  Identify the real business problem
2.  Engage the vendor to understand what type of partner they will be
3.  Define requirements but remain open to the vendor’s recommendations and subject matter expertise
4.  Keep the process as simple as possible
5.  Have a plan to pay for it (it is funny how customers often skip this step)
6.  Have a plan to make it successful even before you decide on a partner


As a Customer Success team frequently challenged to compete in these processes to save accounts or win business a competitor is actively selling into the account, we have sought to learn from mistakes we’ve witnessed and practice what we preach in terms of vendor selection. The steps are relatively simple, and the following outlines the basics of how we think about the process.

Define the business problem  Our hope is that each vendor, especially if they are selling Customer Success software, would ask or help us define our business challenge and align their solution ROI to that problem. We started our internal process with the business problem in mind to ensure that as a team we knew and agreed what problem we were trying to solve.

Engage with the vendor executive team  The market for customer success software is both new and rapidly growing. In our view, the CEO and CCO should be happy to engage with a prospective customer. Engaging the executive team was important to us because we wanted to be sure that we were selecting a business partner that could grow with our needs and not just a vendor to sell us software.
Update: One of our prospective partners proactively engaged us on requirements discovery, leveraging our subject matter expertise to evolve their product even before we were in the position to buy software.

Outline and validate the requirements  We sat down as a Customer Success team (the core users of the system and data) and defined our requirements for the platform. We segmented these requirements by must have and nice to have. We kept the requirements simple. This is not a 200-item spreadsheet of corner case requirements, rather the basics of what we need the solution to do. We are optimistic that the vendors, and especially the partner we decide on, will come to the table prepared to show how they can meet our requirements and then share the requirements that we should be looking for based on their industry expertise.
Update: One of our prospective partners recommended (wisely) that we engage the broader organization, not just Customer Success team, to ensure that we meet the needs of key stakeholders. They recommended a smart and simple process for doing this that doesn’t dramatically slow down the decision making process but engages the stakeholders to help us proactively drive buy-in and extended use cases.

Budget  We know that the right solution isn’t always the cheapest, and any solution worth implementing is not free, so we budgeted for the software and ensured that the budget aligned with the decision making process. We know we may be off the mark in the total dollar amount we need (only slightly if you are one of the vendors reading this), but understand the flexibility of negotiating a multi-year agreement.

The decision team  We defined, as a team, what the decision process would look like. We are engaging the key stakeholders in the solution review but are not extending the initial review to the full team. Having been on the receiving end of too many cooks in the kitchen, we kept this team as narrow as possible and shared it with the vendors who asked.

The decision process  We are scheduling all four vendors, the leaders in the space, to present to the decision team in a two week period. Following our review and tentative decision we will ask that they present to the broader Customer Success organization to start the process of gaining their buy-in and support. We plan to mandate the use of the platform for all Customer Success activities, but want the broader team to share their perspective and be a part of the decision making process without slowing us down.

I have been on both sides of the vendor review and negotiation with companies of all sizes, and appreciate that this is not a revolutionary approach to the selection process. But by keeping the basics of this process in mind and maintaining a “simple is fast” approach to vendor selection, organizations can be confident they will end up with the right business partner and software solution that meets their growing business needs.


About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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