Value Enhancement is All You Need in Times of Inflation Part 2
Inflation affects us as customers and as CSMs. With four easy ways, you can enhance customers' value and increase retention.
In my previous blog post, we learned about inflation and Value Enhancement.
Anyone who works in Customer Success or has taken any economics courses knows that
there's a correlation between price and demand.
As prices increase, Customer Success Managers must be prepared for the consequences:
possible decrease in demand (i.e. retention rates).
Recap: Inflation and Value Enhancement
* If you haven't had the chance to read my last blog post, I urge you to do it now.
CPI + Price Increase = Inflation
Inflation is the rate at which the prices paid by consumers for a basket of goods and services increase.
Each country creates its own basket based on the requirements and behavior patterns of its society.
In the U.S., this basket is called the Consumer Price Index (CPI). You can learn more about it here.
What does it mean for us - Customer Success Professionals?
Let's use the U.S. as an example.
When prices go up, $10 will allow you to buy fewer goods, which means we require more money to buy the same things we always buy.
As a result, customers will likely spend less money and be more selective in their purchases.
Anything that is not considered an absolute necessity is at a significant risk of being cut off.
The solution is quite simple-
Turn your product from a luxury into a necessity.
Enhance the Value of Your Product
The value of your product consists of two elements:
Support customers with their initial Job to be Done.
Help them succeed at their jobs and gain a positive reputation across their company.
The higher the customer's value, the higher their willingness-to-pay is.
Put differently, if customers achieve both elements with your product, they will renew it yearly.
4 Ways to Enhance Value and Stay Ahead of Inflation:
#1 - Identify the Value
In the last post, I asked you to take a piece of paper and write down:
Your customers' Jobs to be Done.
The value of your product.
Take a couple of minutes to review your answers.
Did you include all of the Jobs to be Done?
The only way to have a positive answer is by taking the time to speak with customers who represent your customer personas.
You see, here's where it gets complicated:
Different customers will gain different values from your product.
If you genuinely want to enhance your product's value, you need to identify what value is relevant for the customer you're speaking to.
Identifying the value starts with listening to customers.
Every meeting with customers must have one goal in place:
Get to know the customer and earn the right to become their trusted advisor.
This goal can be achieved by asking the right questions and implementing the answers when working on their success plan.
Here are a few discovery questions that can help you identify your customer's perceived value:
What made you come to [company] now? What changed?
What are you hoping to achieve with [product]?
What are your team's goals for the year?
What does success look like for you?
#2 - Highlight Product Innovation
You can start highlighting product innovation only once you've identified your customer's value.
Now, don't get me wrong-
When I say "product innovation", I do not mean sending product-centric emails to customers.
This type of email, which is heavily focused on your product with no mention of value, will not increase your retention rate. If anything, it can only increase churn.
Because customers don't buy products/features, they buy solutions for their Jobs to be Done.
So, please, forget about product-centricity and start with value-centric emails.
Highlighting product innovation will only enhance your product's value if you tie it to your customers' Jobs to be Done and desired outcomes.
This method is incredibly effective when a feature request becomes a product update.
As their Customer Success Manager, you must acknowledge that customers ask for specific features to make their job easier and their experience better.
By communicating new features (and specifically requested features), then we show customers that:
We listen to them when we design our product.
Thanks to the new features, their job will be more easily done.
As always, there's a catch:
In every email/phone call you have, you must put the customer's value at the center of the conversation.
This leads me to the third way, which is...
#3 - Value Communication
let me repeat myself again:
Customers don't buy products, they buy solutions for their Jobs to be Done.
(Yes, I know I've already said it multiple times).
Customers want their jobs to be easier and more successful.
As a CSM, it demands you to always place the customer's value at the heart of every conversation.
While it does not mean you should talk about the value at every interaction,
but you must keep it in mind while speaking with a customer.
Ask yourself, "how can I make this value easily achievable for my customer?"
Let's use an example.
You're a CSM at a company that sells the best CRM to Customer Success Teams.
One day, a customer reaches out to you with a fairly easy and technical question - where do I see customer health?
Instead of simply providing them with the technical instructions, you go the extra mile and
write a value-based response, encouraging the customer to achieve more than they expected.
In this case, a value-based response will focus on the customer's Job to be Done: retaining customers and preventing churn.
In addition to the detailed instructions, you can also encourage them to create automation, which will notify them when customers match certain criteria indicating potential churn.
#4 - Additional Services
The ultimate way for enhancing value is by adding more services to current subscriptions.
By now, your customers grew to expect the value of your product, so If you want to surprise them and boost the value of your product,
consider adding more services for free.
This practice works exceptionally well for companies that offer less than two products.
With one product and as time passes and prices increase, customers might have a harder time getting the buy-in from their Leadership Team.
Additional services don't always come with a price tag.
Let me guess; you're likely thinking to yourself:
"That's great, Tal, but I don't have extra funds now. In fact, my Leadership Team wants to cut back on spending!"
I get it. We're not inflation-proof and receiving extra funds is currently harder than ever.
What if I told you that some services don't require any funds?
All you need is to be creative and identify new use cases for the tools and platforms you already have.
Such a service could be offering patients coffee or tea as they're waiting for their doctor's appointment,
or send regular delivery updates to customers.
Ask yourself, "am I really making the most out of the platforms I purchased?"
In almost all cases, the answer would be "no."
When I asked myself this question a couple of years ago,
I discovered that even though our CRM offered a free Help Center, no one ever explored this option,
even though our customers did not have a Help Center to turn to if they had questions.
In less than two months and with NO extra funds, we released a much-needed new service (Help Center) AND truly became a self-service company, which enhanced our value and reputation!
A few ideas for additional services:
Live training sessions on a weekly/monthly basis.
Best Practices webinars that show customers how they can make the most out of your product.
Faster response time to emails and support tickets.
In this post, I've covered my top four ways to enhance customers' perceived value. If I had to sum it all up, I'd say the following:
Beating inflation requires you to focus on your customers' perceived value.
Once you've identified it, make sure to communicate it to your customers and include new services/features that would make them successful.
Which of these ways will you try this month?