We focus on our own business metrics and results, but in a SaaS or recurring revenue business, we also need to consider the results our customers get from doing business with us. What is the return on investment (ROI) our customers are realizing from our product or service? Recurring revenue businesses only succeed if their customers continue to renew their contracts, so our goal is to create a win:win valuable relationship for both parties. Customers may say they are happy with your team and your products, but if they do not see ROI, then they are on a path to churn.
A customer’s definition of ROI can take many forms: closed business, or pipeline growth, or customer / employee engagement - to name a few. It sometimes takes a lot of probing to figure out exactly how a customer views the ROI from your offering, but you need to keep digging until you have a clear articulation of how they measure success. It could be the original reason for purchasing from you, but more often than not, that is not the ultimate ROI measure. When teams license a platform to make themselves more efficient, efficiency is not always enough for the senior executives to approve the renewal. Execs do not always see team efficiency in the same light as the hands-on team, and they often do not measure ROI in the same way.
Defining how a customer measures their ROI from your offering requires detective work. Particularly in an enterprise environment where different constituents within the customer’s organization may have significantly different measures for ROI. As a vendor, you need to map the various views of ROI, and ensure you are delivering on the promise across the board. Unmet needs will sow the seeds of discontent, and in an enterprise setting, just one unsatisfied team can play their ‘veto’ card and suddenly the whole customer is churning. Account Management or Customer Success teams need to ferret out all of the influencers within the customer’s organization. It is not enough to just talk to the teams that are eager to talk to you - you have to find the quiet teams and the influential execs to ensure you are meeting their needs.
Traditional customer satisfaction surveys are a great tool to get directional feedback, but understanding customer ROI and ensuring they are achieving their critical results is typically not easy to discern from a customer satisfaction survey. Positive scores do not necessarily mean they are receiving value, and negative scores may be feedback about minor issues, even though they are getting great value. The CSAT answers rarely give you the real ROI answer you need, so a survey is just one step. You need to go much deeper with a real conversation to determine what is important.
A methodology I have used is to create an anonymous customer survey with a twist. Making it anonymous creates a safe space for customers to be candid, but here is the twist. Include conditional logic in the survey that determines if it was a positive of negative response. For negative responders, have the survey include a simple message from the CEO: “You gave us a low score and I am sure you have more to say. Are you willing to have a short conversation with me? Please share your contact info so that we can connect and I can learn what led to your opinion. It is important that we hear it, so we can improve.” In my experience, a surprising number of customers will accept the offer, and as painful as it will be to make these calls, you will learn a ton from speaking directly with detractors. For the most part their feedback will be constructive, and provide a window into what their organization really sees as the key to ROI.
Whatever you discover, continuously measure it and report about it. Open every customer meeting with the metrics and the trends, and never lose sight of your team’s role in achieving your customer’s ROI goal. You are only getting a renewal if the customer is receiving value that is greater than the cost of doing business with you.