Dec. 13, 2021 | InBrief
4 themes that will define the next evolution of success and service models
4 themes that will define the next evolution of success and service models
Earlier this fall, West Monroe attended the Technology & Service World Conference, a gathering of more than 3,000 services professionals—ranging from software implementation, consulting, support, customer success, and product teams—to discuss emerging topics and industry trends and to trade operational strategies across the technology and service provider industry.
One common theme we heard was that technology providers are progressing to the next level of maturity in their service models. We agree. This new maturity will increase the discipline and rigor of these organizations in demonstrating their ROI on customer engagement and expansion.
This year’s conference had three days’ worth of working sessions and passionate conversations relating to this fundamental focus for West Monroe and our clients: scaled growth and smart digital engagement.
We took away four key themes from our time at the conference that fundamentally highlight how this next level of maturity will spur key business transformation considerations for our clients as we look ahead to 2022.
The fundamental drive for technology businesses going forward will be services delivery at scale
“Figure out how to do more with less” could have been the unofficial slogan of the conference. The SaaS industry has experienced impressive growth over the past few years (over and above any impact of COVID), with even larger groups of customers being onboarded over the past 18 months. But tech service providers have been increasingly disciplined about not growing costs in line with this incremental revenue growth. Indeed, given the “great resignation” of recent note, companies can’t even hire and onboard new resources fast enough to engage with customers.
The result? Our clients have been forced to get smarter leveraging the team members and resources they have to adequately serve their expanding customer bases. Investment in one-to-many digital engagement tools (e.g., digital campaign strategies and online communities) has certainly been one of the more notable strategies to support scale, but other creative options are on the table as well.
We’re beginning to see some sophisticated approaches to customer segmentation to enable a more effective coverage model. In addition to segmenting customers by size, tech providers are using their available data to be more predictive in their ability to assess customers’ likelihood to expand and upsell as well as the complexity of serving their customers. Indeed, this predictive modeling of complexity allows for more efficient capacity planning on success and support teams, as they can be better aligned to customer needs and efforts. As a result, tech providers can achieve significant capacity increases and can even adjust their segment thresholds to cover more customers per customer success or support team member.
Customers are looking to simplify their engagement with tech providers
Most customers of enterprise technology companies know just how easy it is to get lost figuring out who to engage with at the company for specific issues. It’s a complicated business, and it’s easy to see how we got to this point. Customer needs (and the means of solving them) aren’t always simple. Sometimes customers need particular product expertise that needs to be sourced; other times, there’s a sales or account management issue to be worked out. Specialized expertise is a necessary thing, but the cost is uncertainty about what to do and whom to talk to from the customer’s perspective.
This concern became a significant discussion point at the conference. In support of driving a coherent, exceptional customer experience and doing more with less, companies have begun developing and sharing strategies to cut through the labyrinthian complexity of their organizations to get customers’ needs resolved efficiently with reduced effort from the customer. Sometimes this takes the form of a more technical, tactical advocate for the customer who can be a main point of contact and also run point and do the legwork of working through the internal organization. Other times, this can involve predictive analytics and review of available customer data in order to determine where a customer will need help before they ask, and then provide it (e.g. proactive support, case deflection, planning for service requests, etc.).
In either case, managing the customer experience as a means of keeping it simple requires material investment in consistent and coherent customer intelligence and a single, source of truth data set on their needs, which is still a work in progress at most tech providers.
Digital engagement is necessary, but it must be personalized to your customers
One-to-many digital engagement is already ubiquitous and will be a core piece of the puzzle to solve customer engagement at scale. That said, customers themselves are becoming sophisticated, and they can tell immediately what communication coming their way is tailor made to them, and what is generic enough to be unimpressive. Essentially, the new maturity of customers, and the business of technology services itself, is raising the bar for what needs to be done to engage customers efficiently at scale.
Tech providers are continuing to leverage customer data creatively as a means of customizing digital engagement where possible. We have certainly seen customer data used to segment customer communication around specific trends, risks, and needs in a one-to-many fashion.
Tech providers are now looking to unify data from sales, marketing, product usage, and customer engagement to get even more specific in their campaigns and engagement with customers.
Indeed, this is one of the key use cases in the developing “revenue operations” or RevOps movement which is an attempt to streamline disparate customer, usage, financial, sales, and marketing data into a single source of actionable truth.
Services leaders and product management leaders will be tied at the hip to develop customer solutions above and beyond product features
The services arms of technology providers are creating just as robust a development roadmap as any product organization. Truth be told, an increasing number of tech providers are going to market with leading messages about their customer experience and service quality as much as they are their product. To meet these developing needs, we’re finding tech providers are working hard to facilitate a greater degree of collaboration between the services end of their businesses and their product management functions. This is often easier said than done. Regular collaboration between these functions is not always common at tech companies, and these functions might be so siloed that they only talk to each other occasionally.
Fortunately, conversations at TSIA and recent discussions with clients demonstrated that a significant mindset shift is underway in terms of services and product in collaboration. We’ve begun to see services organizations develop their own product management or innovation function and office to help push the thinking around service packages and the evolution of implementation and support engagement.
These product management functions on the services side operate very similarly to traditional product management and are beginning to operate as a key product management counterpart in tech companies. We’re also beginning to see product leaders treating product serviceability as a much more valuable investment for their development efforts in new features and functionality.
As an example, any effort on the backend of the product can result in greater visibility into customer product usage or reduce implementation hours by one-third, more than making up for their engineering resource investment dollars.
Keys to success for tech leaders in 2022
These conference themes underline West Monroe’s ongoing services and success transformation efforts with our clients. We are reaching the next level of technology innovation at scale, and an expanded and increasingly mature customer base is demanding more sophisticated engagement from their technology partners.
Our “be digital” mantra is fundamentally tied to this next evolution of the software business. As any TSIA participant will share with you, it’s no longer a question of if, but when, will you be in a position to robustly know each and every one of your customers in detail? And will you retain and expand their share of wallet if you don’t have the human capital to engage with them in one-on-one meetings?
The key to success will be how quickly a technology provider can leverage all the digital assets and strategies available to ensure customers that they are known, understood, and will be serviced on an individual level, even without an army of resources supporting it.
