Presentation from session at Denver StartUp Week on Sep 19, 2014

1. The Developmental Stages of the
StartUp ~ Customer
Relationship
Joshua Forman
@joshuajforman

2. @joshuajforman
Agenda
• Thank You’s
• About Me
• Purpose of Presentation
• Developmental Stages
• Customer Success Evolution
• Early States of StartUp ~ Customer Relationship
• From Simple to Complex
• Developmental Lines of StartUp ~ Customer
Relationship
• Relative Maturity Rates

3. DSW Organizers
• Erik Mitisek
• Tami Door
• Ben Deda
• Countless Others
@joshuajforman

4. Title Sponsors
@joshuajforman

5. Business Track Sponsor
@joshuajforman

6. Partner Sponsors
@joshuajforman

7. Member Sponsors
@joshuajforman

8. @joshuajforman
Thank You Host

9. @joshuajforman
Community
www.pledge1percent.org

10. Depth of Experience
Held Roles As: Experience Includes:
@joshuajforman
About Me
20 years
In technology
8 years
Customer Success
Executive
7 years
In StartUps
Consultant
Business Technology
Consumer
Technology Product
Systems Integrator

11. Breadth of Experience
Working knowledge of how technology products are:
@joshuajforman
About Me
Built Marketed Sold Bought Implemented Adopted

12. Purpose of Presentation
You are better able to make relationships
with your customers and
Assess
Plan
Anticipate
How you make those relationships
@joshuajforman

13. Purpose of the Presentation
• Factors influencing your territory:
– Your target customer
• B2B / B2C
• Customer Demographics
– Complexity of Product
• Self-service functionality?
@joshuajforman
– Pricing Model

14. Developmental Stages
Growing companies and
customer relationships
is a mix of
science and art
@joshuajforman

15. Developmental Stages
@joshuajforman
For any stage, there are
developmental tasks
you must master before
moving to the next
stage
How you prepare to
engage tomorrow
How you engage with
customers today
Company
Development
Stage A Stage B

16. Customer Success Evolution
Then Now
@joshuajforman
One-Time
Transactional
Recurring
Lifetime Value
Revenue Approach

17. Customer Success Evolution
@joshuajforman
Graph From:
http://www.forentrepreneurs.com/why-churn-is-critical-
in-saas/
Impact of
Churn

18. Customer Success Evolution
UpSell to Grow Faster
@joshuajforman
Graph From:
http://www.forentrepreneurs.com/2013-saas-survey/
UpSell Opportunity

19. Customer Success Evolution
@joshuajforman
• Goal
– Continually Increasing Customer Lifetime Value
• Renewals: Reduce Churn
• Increase Upsell
– Create Value for Your Customers
• Strategy
– Master the developmental tasks relevant to your stage
– Plan for future stages

20. Company’s Early Stages
@joshuajforman
Product /
Solution
Fit
Product /
Market
Fit
Scale
Maurya’s
Running Lean
Stages

21. Company’s Early Stages
@joshuajforman
Product /
Solution
Fit
Product /
Market
Fit
Scale
Founders
Founders
start
delegating to
Others
Maurya’s
Running Lean
Stages
Who is
Responsible for
Customer
Relationship
Founders
start
delegating
responsibility
to delegate

22. Company’s Early Stages
Technology Adoption Lifecycle
As defined originally by Everett Rogers in “Diffusion of Innovations”, 1961
Made popular by Geoffrey Moore in Crossing the Chasm, 1991
@joshuajforman
Graph From:
http://en.wikipedia.org/wiki/Technology_adoption_l
ifecycle

23. Company’s Early Stages
@joshuajforman
Product /
Solution
Fit
Product /
Market
Fit
Scale
Founders
Maurya’s
Running Lean
Stages
Innovators Innovators
Early
Adopters
Customer
Psychographic
Organization Developing from Simple to Complex
Who is
Responsible for
Customer
Relationship
Founders
start
delegating to
Others
Founders
have
delegated
responsibility
to delegate

24. From Simple to Complex
@joshuajforman
Pictures From:
http://www.quia.com/files/quia/users/lmcgee/AP_B
io_Animals/Chpt_32_Animal_Diversity/AnimalEmbry
oDevel_L.gif &
http://blog.lib.umn.edu/chamb169/myblog/2011/11
/fetal-development-barriers.html

25. From Simple to Complex
Differentiation
Multiply Differentiation
@joshuajforman
Pictures From:
http://www.quia.com/files/quia/users/lmcgee/AP_B
io_Animals/Chpt_32_Animal_Diversity/AnimalEmbr
yoDevel_L.gif

26. From Simple to Complex
As Company Develops, Differentiation is a major developmental task
@joshuajforman
Founders
Customer Success
Marketing
Implementation
Support
Account Management
Lead Gen
Branding
Creative
Etc..

27. Developmental Lines
• Developmental lines of activities in your
customer relationships:
Those that provide value to
the Customer:
– On-boarding
– Technical Support
– Continuous Value
Creation
@joshuajforman
Those that provide value to
the Company:
– Feedback
– Referral Customers
– Market Advocates

28. Developmental Lines
Capability Maturity Model (CMM)
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
@joshuajforman
Process is being continually improved
Measurements are in place, and
reviewed regularly, leading to ability to
manage process
Process is defined as “the way we do it”
and documented
Process is repeatable, some learning has
taken place, and some documentation
New process in initial stage
Process Maturity

29. Developmental Line:
Repeatable
Documented
Processes
Develop Self Service, Template Implementation Processes Plans, Productizing Services
@joshuajforman
Initial
Deliver Initial
Product Value
Optimizing
Measure & Manage
Assess how to
grow customers
use of the
product
On Boarding / Professional Services
Defined
Self Service
Functionality /
Productized
Services
Are your services a product or a feature?

30. Developmental Line:
On Boarding / Professional Services
Start with initial on-boarding
process.
Eventually find repeatable
process that works
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc

31. Developmental Line:
On Boarding / Professional Services
More Complex Product:
– Develop project templates
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
Self Service On-boarding:
– Develop self-service wizards

32. Developmental Line:
On Boarding / Professional Services
More Complex Product:
– Measure project completion time
– Measure CSAT
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
Self Service On-boarding:
– Measure effectiveness of process
*You can’t just measure, have to use the metrics
to manage the process

33. Developmental Line:
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
Learning
Metrics
Internal Feedback
External Feedback
Continuous
Improvement
Improved Processes
New Metrics
Better Management
On Boarding / Professional Services
*Assess how to grow customers use of the
product

34. Developmental Line:
Optimizing
Measure & Manage
@joshuajforman
Phone &
Email
Ticket
System
Web
Portal
Knowledge
Base
Customer
Communities
Technical Support
ZenDesk, FreshDesk, UserVoice
NOT Remedy, ServiceNow
Initial
Repeatable
Defined
Tools
Social
Processes Heard, Understood, Satisfied

35. Developmental Line:
Technical Support
Heard, Understood, Satisfied
Process Step Key Factor
Customer
Heard
Customer
Understood
Customer
Satisfied
@joshuajforman
Quick
Response
Customer knows you
understand them, the
context, & the problem
Customer satisfaction
with you.

36. Developmental Line:
Technical Support
Heard, Understood, Satisfied
Process Step Key Factor
Customer
Heard
Customer
Understood
Customer
Satisfied
@joshuajforman
Quick
Response
Customer knows you
understand them, the
context, & the problem
Maybe show
them a
different way
to look at it
Customer satisfaction
with you.

37. Developmental Line:
Technical Support
Heard, Understood, Satisfied
Process Step Key Factor
Customer
Heard
Customer
Understood
Customer
Satisfied
@joshuajforman
Quick
Response
Customer knows you
understand them, the
context, & the problem
Maybe show
them a
different way
to look at it
You may not
have even
solved the
problem
Customer satisfaction
with you.

38. Developmental Line:
Technical Support
Having as needed one-on-one
conversations
Customers emailing individuals or
email alias
Email conversations not centrally
routed or tracked
May have process to be able to
repeat with multiple customers
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc

39. Developmental Line:
Technical Support
Implement a ticket system to easily move
to Defined:
– Requires you to define your workflow
of how to respond to customer
questions / issues
– Defines your portal experience
– Defines your knowledge base
– Can also define how you interact
socially
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc

40. Developmental Line:
Technical Support
Utilize canned reports (and build your own)
to measure and manage performance
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
*You can’t just run the reports, you have to
manage your processes with them

41. Developmental Line:
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
Technical Support
Learning
Metrics
Internal Feedback
External Feedback
Continuous
Improvement
Improved Processes
New Metrics
Better Manageability
Happier Employees

42. Developmental Line:
Continuous Value Creation
Stakeholder Capability Processes Matrix, Proactive Monitoring
@joshuajforman
1-on-1
Defined
Optimizing
UpSell:
Drive
Adoption &
Expansion
Differentiate
Customer Processes:
- No Touch
- Low Touch
- High Touch
Customer Health:
Monitoring &
Measuring
Totango, BlueNose, Preact
Initial
Repeatable
Measure & Manage
Tools
Segment
Customers

43. Developmental Line:
Continuous Value Creation
UpSell
• Two ways to drive UpSells:
– Help new customer end users adopt existing
products and features
– Expand product and feature use by current or new
end users
@joshuajforman

44. Developmental Line:
Continuous Value Creation
Adoption & Expansion
@joshuajforman

45. Developmental Line:
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
Continuous Value Creation
“Regular” customer check-ins that are
adhoc conversations. No repeatable
process on what to ask or how to
connect.

46. Developmental Line:
Continuous Value Creation
Improvement Create repeatable processes for
@joshuajforman
Optimizing / Continuous
Measured & Managed
Defined
Repeatable
Initial / Adhoc
different customer segments and
touch frequency
Use customer success tools to define
when interactions are needed
- Customers in danger of cancellation
- Customers with upsell opportunity

47. Developmental Line:
Continuous Value Creation
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
Utilize canned reports (and build your own)
to measure and manage customer accounts
*Know what customers are doing, not just what
they are saying they are doing

48. Developmental Line
@joshuajforman
Optimizing / Continuous
Improvement
Measured & Managed
Defined
Repeatable
Initial / Adhoc
Continuous Value Creation
Learning
Metrics
Internal Feedback
External Feedback
Continuous
Improvement
Improved Processes
New Metrics
Better Forecasting

49. Developmental Line:
Customer Revenue Responsibility Matrix
Marketing Sales Customer Success
@joshuajforman
New Customer Leads /
Oppty’s
Responsible Consulted Informed
Close New Customers Informed Responsible Consulted
Existing Customer –
Renewal
Informed Consulted Responsible
Existing Customer –
New Oppty
Identification
Informed Consulted Responsible
Existing Customer –
New Oppty Close
Informed Responsible Consulted

50. Relative Maturity Rates
@joshuajforman
Optimized
Managed &
Measured
Defined
Repeatable
Initial
On Boarding
Technical Support
Continuous Value
Creation

51. @joshuajforman
In Closing
And in the end,
the value you create
is equal to the value
you make

52. @joshuajforman
Thank You
josh@forman-consulting.com
@joshuajforman
www.linkedin.com/in/joshuaforman
Blog: www.forman-consulting.com

53. @joshuajforman
References
• http://en.wikipedia.org/wiki/Diffusion_of_innovations
• http://www.insightsquared.com/2014/05/4-tips-to-perfect-the-
art-of-the-upsell/
• http://www.forentrepreneurs.com/2013-saas-survey/
• Crossing The Chasm, Geoffrey Moore, 1999
• Running Lean, Ash Maurya
• Modus Law
• Foundry Group
• Service Excellence
• Managing the Software Process, 1989 by Watts Humphrey
• Individual graphics references on specific slide