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SOA Best Practices Authors: Jason Bloomberg, Andy Thurai, Charles Araujo, Hollis Tibbetts, Pat Romanski

Related Topics: Cloud Computing, Agile Software Development, Change Leadership Journal, CIO, SOA Best Practices Digest, Microservices Journal

Agile Development: Blog Post

Failing at Customer Success? Add Recursion to the Value Chain

Customer success depends upon the success of your own customers’ customers

Last week, I published an article for Forbes entitled Customer Success? Pull The Other Leg. In the article, I bemoan the fact that customer success initiatives have largely gone off the rails, focusing on reducing customer churn or selling more to customers, rather than actually focusing on the success of customers.

I then left readers with a cryptic definition: customer success means focusing on customer outcomes in terms of your customers’ profitability, which inevitably depends upon the success of your own customers’ customers.

Astute readers might have noticed the suggestion of an infinite loop in this definition, a rabbit hole even Alice might not escape: what if your customers are themselves following this definition of customer success? Then your customer success depends upon their customer success, which in turn depends upon your customers’ customers’ customer success, ad infinitum.

Only this story isn’t ad infinitum. It’s recursive. And as with all recursive algorithms, there is always an escape hatch that prevents infinite loops.

In the case of customer success, what is the terminating condition of the recursive loop? The consumer.

The Relationship between Customer Success and Customer Delight

In the Forbes article I also discuss customer delight – that subtle, complex combination of emotional queues that gives us humans all the warm fuzzies we could ever desire when we interact with a company.

For consumers, outcomes fall into two broad buckets: customer delight and consumer goals. For example, if you’re buying a pair of shoes, you may select a pair that you love (customer delight). But if your goal is to wear the shoes, then they had better fit as well.

Note that delight and the goal often interrelate. You may be less delighted with a product because it doesn’t help you achieve your goals, and correspondingly, being delighted might very well be one of (or your only) goals.

Customer delight, however, is mostly a consumer phenomenon, so it’s primarily of interest to B2C companies. True, we experience customer delight in B2B scenarios as well, as human relationships form an essential role in such interactions.

Nevertheless, in B2B situations, customer outcomes are far more likely to correspond to quantifiable key performance indicators (KPIs) like customer profitability, productivity, cost savings, etc. Customer delight might very well be on this list, but it is far more difficult to measure.

We can thus come to the reasonable conclusion that customer success initiatives will only be successful if the people responsible for it take their focus off of inward-facing metrics like churn, upsells, and cross-sells, and instead give their full attention to such customer outcomes.

Beyond KPIs as Customer Outcomes

Just one problem: in the B2B scenario, simply focusing on business KPIs as business outcomes still falls short as a true metric for customer success. To explain this conundrum, take a look at the following diagram.

The Customer Success Recursive Loop (Click to enlarge)

In the diagram above, customer success divides into customer delight and the customers’ business outcomes. These two components of customer success are interrelated, and in the B2B case, business outcomes are usually more important.

In the B2C case, outcomes center on a combination of the consumer goal and customer delight, while in the B2B situation, we must up our game for those customers who are also interested in improving their own customer success metrics.

When our own customers are themselves looking to improve their customers’ business outcomes, then our customer success doesn’t simply depend upon our customers’ measurable KPIs, but also depends on how well we can support our customers’ customer success initiatives – in other words, our customers’ customers’ business outcomes.

Note, however, that our customers’ customer success is only a B2B priority. If our company is B2B and our customer is B2C, then our customers’ customer success is a combination of consumer goals and customer delight – and thus we must base our customer success on the success of those results.

If we unravel this spool of customers’ customers, it becomes clear that customer success cascades up B2B2B2C value chains, where there could be any number of B’s before we get to a C.

The Transformation: Customer Success Value Chains

In the B2B context, customer success has always depended in part on customer relationships – the human part of business that greases the wheels of commerce with everything from handshakes to expensive meals.

As customer success initiatives mature, however, they must increasingly depend upon technology, as there would be no practical way to gain the visibility necessary into the customer success value chain without it.

In the cloud services (SaaS) marketplace that launched many a B2B customer success initiative, such technology is relatively straightforward to envision.

For example, if my company sells SaaS-based customer relationship management (CRM) software, then one of my customers’ business outcomes is how much using my software increases their sales conversion rate – a metric I can build into my CRM app.

If my customers’ customers are themselves B2B companies, then my customers’ customer success initiatives depend upon how successful my customers are at ensuring their customers achieve their own business outcomes – a result that now depends on my customers’ offerings, rather than my own.

However, starting with the vendor and working our way down the chain doesn’t give us the insight we require (even though virtually every vendor takes this approach).

Instead, let’s begin with a consumer. Let’s call her Sally. Sally goes to the supermarket to buy some soap. The supermarket focuses on Sally’s customer outcomes: the emotions she feels in the store (ideally delighting her), and her goal, which in this case, is to bathe with the soap.

The soap manufacturer isn’t simply concerned with the supermarket’s outcomes, it must also focus on Sally’s outcomes, as do every company in the manufacturer’s value chain, including the suppliers of raw materials, the vendors of equipment in the manufacturer’s factories, and even the ad agency that put together the marketing campaign for the soap.

Furthermore, every one of these companies leverages IT – and every software vendor up and down the customer success value chain must not only focus on the success of its customers, but the success of every participant in the chain, all the way down to Sally.

The Intellyx Take

This entire story wouldn’t work without the right software, but building the ability to measure these outcomes into any offering is far more difficult than simply measuring the customers’ KPIs – which explains why few if any vendors are implementing this capability.

However, the writing is on the wall. Every time a company implements a customer success initiative that depends upon its customers’ customer success, one domino falls. Before long, we have complete value chains of dominoes that will fall in sequence – with the consumer customers of a B2C company at the end of each chain.

With all this talk of chains of companies, you might wonder where the digital transformation story lies in all this. The answer: the entire transformation to customer success centricity is inherently digital. Not only does software and its support for data support every step in the value chain, but software facilitates an unprecedented focus on the end customer.

The final result: a transformed data-driven economy laser-focused on customer success up and down every value chain, leveraging end-to-end technology all aligned to deliver a delightful customer experience to everyone, all the time.

Copyright © Intellyx LLC. Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: Intellyx.

DXWorldEXPO LLC, the producer of the world's most influential technology conferences and trade shows has announced the conference tracks for CloudEXPO | DXWorldEXPO 2018 New York.

DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City.

Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term.

A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throughout enterprises of all sizes.

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DXWorldEXPO | CloudEXPO 2018 New York cover all of these tools, with the most comprehensive program and with 222 rockstar speakers throughout our industry presenting 22 Keynotes and General Sessions, 200 Breakout Sessions along 10 Tracks, as well as our signature Power Panels. Our Expo Floor brings together the world's leading companies throughout the world of Cloud Computing, DevOps, FinTech, Digital Transformation, and all they entail.

As your enterprise creates a vision and strategy that enables you to create your own unique, long-term success, learning about all the technologies involved is essential. Companies today not only form multi-cloud and hybrid cloud architectures, but create them with built-in cognitive capabilities.

Cloud-Native thinking is now the norm in financial services, manufacturing, telco, healthcare, transportation, energy, media, entertainment, retail and other consumer industries, as well as the public sector.

CloudEXPO is the world's most influential technology event where Cloud Computing was coined over a decade ago and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals.

FinTech Is Now Part of the DXWorldEXPO | CloudEXPO Program!

Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expensive intermediate processes from their businesses.

Accordingly, attendees at the upcoming 22nd CloudEXPO | DXWorldEXPO November 11-13, 2018 in New York City will find fresh new content in two new tracks called:

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which will incorporate FinTech and Blockchain, as well as machine learning, artificial intelligence and deep learning in these two distinct tracks.

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Sponsorship Opportunities Here

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FinTech brings efficiency as well as the ability to deliver new services and a much improved customer experience throughout the global financial services industry. FinTech is a natural fit with cloud computing, as new services are quickly developed, deployed, and scaled on public, private, and hybrid clouds.

More than US$20 billion in venture capital is being invested in FinTech this year. DXWorldEXPOCloudEXPO are pleased to bring you the latest FinTech developments as an integral part of our program.

DXWorldEXPO | CloudEXPO are accepting speaking submissions for this new track, so please visit Cloud Computing Expo for the latest information or contact us at [email protected]

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Only DXWorldEXPO | CloudEXPO bring together all this in a single location:

Attend DXWorldEXPO | CloudEXPO. Build your own custom experience. Learn about the world's latest technologies and chart your course to Digital Transformation.

22nd International DXWorldEXPO | CloudEXPO, taking place November 11-13, 2018, in New York City, will feature technical sessions from a rock star conference faculty and the leading industry players in the world.

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Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS - software, platform, and infrastructure as a service.

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Speaking Opportunities Here

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Companies are each developing their unique mix of cloud technologies and services, forming multi-cloud and hybrid cloud architectures and deployments across all major industries. Cloud-driven thinking has become the norm in financial services, manufacturing, telco, healthcare, transportation, energy, media, entertainment, retail and other consumer industries, and the public sector.

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DXWorldEXPO LLC is a Lighthouse Point, Florida-based trade show company and the creator of DXWorldEXPODigital Transformation Conference & Expo. The company produces and presents CloudEXPO, DevOpsSummitFinTechEXPO Blockchain Event, the world's most influential conferences and trade shows.


More Stories By Jason Bloomberg

Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise technology and digital transformation. He is ranked #5 on Onalytica’s list of top Digital Transformation influencers for 2018 and #15 on Jax’s list of top DevOps influencers for 2017, the only person to appear on both lists.

As founder and president of Agile Digital Transformation analyst firm Intellyx, he advises, writes, and speaks on a diverse set of topics, including digital transformation, artificial intelligence, cloud computing, devops, big data/analytics, cybersecurity, blockchain/bitcoin/cryptocurrency, no-code/low-code platforms and tools, organizational transformation, internet of things, enterprise architecture, SD-WAN/SDX, mainframes, hybrid IT, and legacy transformation, among other topics.

Mr. Bloomberg’s articles in Forbes are often viewed by more than 100,000 readers. During his career, he has published over 1,200 articles (over 200 for Forbes alone), spoken at over 400 conferences and webinars, and he has been quoted in the press and blogosphere over 2,000 times.

Mr. Bloomberg is the author or coauthor of four books: The Agile Architecture Revolution (Wiley, 2013), Service Orient or Be Doomed! How Service Orientation Will Change Your Business (Wiley, 2006), XML and Web Services Unleashed (SAMS Publishing, 2002), and Web Page Scripting Techniques (Hayden Books, 1996). His next book, Agile Digital Transformation, is due within the next year.

At SOA-focused industry analyst firm ZapThink from 2001 to 2013, Mr. Bloomberg created and delivered the Licensed ZapThink Architect (LZA) Service-Oriented Architecture (SOA) course and associated credential, certifying over 1,700 professionals worldwide. He is one of the original Managing Partners of ZapThink LLC, which was acquired by Dovel Technologies in 2011.

Prior to ZapThink, Mr. Bloomberg built a diverse background in eBusiness technology management and industry analysis, including serving as a senior analyst in IDC’s eBusiness Advisory group, as well as holding eBusiness management positions at USWeb/CKS (later marchFIRST) and WaveBend Solutions (now Hitachi Consulting), and several software and web development positions.