#13: 3 Steps To Define And Measure Customer Outcomes

In today’s issue, I’m going to share 3 very simple tips that you can use to start measuring customer outcomes.

As customers become more price sensitive due to the macroeconomic environment, the best strategy to retain and grow your customers is to lean into the value you provide. 

You don't want to be the company that makes big claims about what their product can achieve, but isn't able to reliably measure these outcomes.

Here is the 3-step process to define and measure customer outcomes.

🎯 Why Do Your Customers Buy Your Product?

Everything starts with understanding what your customer is hoping to accomplish with your product. Unless this is crystal clear for everyone in the organisation, you will have customer-fit issues.

Sales will sell to the wrong customers. Product will prioritise the wrong features. Customer Success will be reactive and spend most of their time fighting churn. 

A trap that organisations often get into is thinking that every customer is different and has unique goals. This is a lazy excuse for not having a strategy. 

Establishing market fit is one of the main jobs of an early-stage start-up. If you have survived that lifecycle stage, you should know what problem you are solving and for whom. 

If your customer goals are not well defined and mapped today, it's time to sit down with your counterparts in Marketing, Sales and Product and create that list. Here is how you can prepare for this conversation:

1. Review Marketing, Sales and CS Data. What industry, company size, and persona are most likely to purchase our software? What content is resonating? What's the profile of those who are staying and growing with us? What's the profile of those who are leaving us? 
2. Define Your Ideal Customer Profiles. Based on what the data is telling you, take qualitative feedback to define the 1 to 3 customer types that your product has the biggest impact on. 
3. Get Clear On Their Goals. What is your ideal customer trying to accomplish and why is it important?

 Once you do this, make sure it's well understood across the business.

🎯 Know Your Jobs To Be Done (JTBD)

JTBD is a product development framework used to centre product teams around the key "jobs" their customers need to do in order to reach their goals. 

For example, if you are a Marketing Automation Platform, one of your customer's main goals will be to increase the number of marketing qualified leads that it generates. 

But understanding your customer's goals isn't enough. You got to get granular and look at all the tasks customers must perform in order to achieve it.  Why is this important?

Because it will allow you to map what great product usage looks like for your customers and create reliable metrics of success that your CSMs can act on.

In this example, a marketer will need to: create content, implement lead capture mechanisms to their content, nurture leads until they are ready to talk to a sales rep etc. 

If you have a customer who is creating a ton of blog posts but isn't adding lead capture to their pieces, that's a red flag. You know they aren't likely to achieve their goal of increasing the number of leads if they haven't implemented mechanisms for people to register interest.

JBTD is the system to track and diagnose areas of risk and opportunities to drive outcomes for your customer.

🎯 Define Outcome Metrics

In order to be indispensable to your customer, you need to measure outcomes and clearly attribute them to your product.

The good news is that once you know the goal and you know the tasks, then defining the metrics is usually pretty straight-forward.

In the example of the Marketing Automation Platform, tracking the number of leads generated and displaying the progress of this number over time is the minimum requirement. This is why your customer bought this product.

Other metrics are also interesting. For example, is there a difference between the performance of some content vs. other? Are there leading indicators that can be used to drive the goal more effectively? 

That's where first-party data is invaluable.

Nothing is less compelling than an outcomes conversation where people are not using concrete data. 

Partnering with your product and engineering teams will be key to ensuring you are aligned on what's important to measure in order to demonstrate value for customers. 

 TL;DR

1. Use data and qualitative feedback to define your ideal customer profile and map their goals.
2. Get granular on how customers achieve those goals with your product using Jobs To Be Done. 
3. Build the mechanisms to capture this data inside your product. 

This will be harder for some companies depending on the nature of the value they provide. But no matter how difficult it is, it's a must-have. Without this clear understanding, you cannot scale your CS team successfully. 

See you next Friday.