Customer Success Management: Helping Business Customers Achieve Their Goals 3031261771, 9783031261770

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Management for Professionals

Michael Kleinaltenkamp Katharina Prohl-Schwenke Laura Elgeti

Customer Success Management Helping Business Customers Achieve Their Goals

Management for Professionals

The Springer series Management for Professionals comprises high-level business and management books for executives, MBA students, and practice-oriented business researchers. The topics span all themes of relevance for businesses and the business ecosystem. The authors are experienced business professionals and renowned professors who combine scientific backgrounds, best practices, and entrepreneurial vision to provide powerful insights into how to achieve business excellence.

Michael Kleinaltenkamp • Katharina Prohl-Schwenke • Laura Elgeti

Customer Success Management Helping Business Customers Achieve Their Goals

Michael Kleinaltenkamp Marketing Department Freie Universität Berlin Berlin, Germany

Katharina Prohl-Schwenke Customer Success Academy Berlin, Germany

Laura Elgeti Customer Success Academy Berlin, Germany

ISSN 2192-810X (electronic) ISSN 2192-8096 Management for Professionals ISBN 978-3-031-26177-0 ISBN 978-3-031-26178-7 (eBook) https://doi.org/10.1007/978-3-031-26178-7 # The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Independent of the industries you focus on or the product you sell, I can recommend the book to everyone who is active in the Customer Success space or looking to shift the career toward this field. The book provides hands-on practical guidance as well as a sound scientific background on how a Customer Success organization can be implemented and evolved—a combination I personally missed when I shifted my career into this field. It is a real honor for me having been interviewed for this great and unique project! —Andreas Tollschein, Director of Customer Success EMEA at Camunda Every business needs to think about customer success and this book makes it crystal clear why: Enterprises need to reliably deliver, measure, and improve customer value in order to stay competitive. Combining practical relevance with the stateof-the-art research in B2B markets, this book provides a unique guidance for organizations as well as individuals wanting to improve their CSM craft. It was my pleasure having been able to make a small contribution to this unique project! —Leon Strauch, Senior Customer Success Manager at Camunda

Preface

Customer success management (CSM) is on the rise. While in 2021 around 130,000 users of the professional business network LinkedIn indicated holding a position as a customer success manager, this figure has already risen to 178,000 users in October 2022. CSM was first implemented as a business function in industries that utilize subscription- or consumption-based business models like Software as a Service or cloud services where recurring revenues are center stage for suppliers’ financial performance. Hence, the original idea behind the CSM development is suppliers’ goal to stabilize or even expand customer relationships showing how the respective offerings contribute to the customer firms’ success. In the meantime, CSM applications are spreading globally across industries especially in firms offering servitized solutions that are characterized by complex offerings in which—same like in subscription-based or cloud businesses—value to the customer is created and experienced throughout the customers entire usage processes. In spite of its practical relevance, there is still some confusion about what customer success is and how it can be managed from the supplier side. Beyond this backdrop, the aim of this book is to explain the increasingly important topic of CSM for practitioners based on well comprehensibly prepared knowledge from practical and scientific resources. The book thus provides a practical how-to guide illustrated in an overarching CSM framework. At the core of our CSM framework is the interplay between sales, solution realization, and customer-related CSM activities that together build our “CSM Wheel.” This unique and empowering CSM Wheel is based on the latest scientific findings combined with state-of-the-art insights from business practice. The CSM Wheel offers an outstanding guide for providers to help their customers be even more successful. When the CSM Wheel starts spinning, it fuels the success of customers and their providers alike. The CSM framework is complemented by the drivers of CSM, its outcomes, and the structures that need to be implemented to make CSM work. Hence, beyond customer value monitoring and enhancement, the activities that form the core customer-related CSM process, the book deals with sales-related topics relevant from the CSM perspective, i.e. value-based selling and customer value proposition. It further addresses the customer onboarding and solution implementation as part of the solution realization which is the prerequisite for the customer-related CSM vii

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Preface

activities. Following the given structure of the CSM framework, the book also explains the drivers of CSM from suppliers’ and customers’ perspectives, the suppliers’ internal CSM structures, and the expected CSM outcomes for suppliers and customers. We thank Leon Strauch, Senior Customer Success Manager at Camunda, for the collaboration on the “Camunda” case study and his critical and constructive feedback on the CSM framework. Our thanks also go to Andreas Tollschein, Director of Customer Success EMEA at Camunda, for sharing his customer success story. We further thank Maurizio Strasser, Director Customer Success at Salesforce, and his customer success colleagues for the collaboration on the “Salesforce” case study. Moreover, we thank Dr. Prashanth Mahagaonkar, Executive Editor—Books Business, Management & Finance, from Springer for positively embracing the idea for this book and constructively supporting its publication process. Berlin, Germany November 2022

Michael Kleinaltenkamp Katharina Prohl-Schwenke Laura Elgeti

Contents

1

The Rise of a New Business Function: Customer Success (Management) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 4

2

Customer Success and Customer Success Management . . . . . . . . . 2.1 Customer Success from a Goal-Related Perspective . . . . . . . . . 2.2 Customer-Related Value Concepts in Business Markets . . . . . . 2.2.1 Expected and Experienced Value in Use . . . . . . . . . . 2.2.2 Relational Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Customer Success Management . . . . . . . . . . . . . . . . . . . . . . . 2.4 A Customer Success Management Framework . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . .

7 7 9 10 14 16 19 21

3

Customer Success Management Drivers . . . . . . . . . . . . . . . . . . . . 3.1 Customer-Related Customer Success Management Drivers . . . 3.2 Supplier-Related Customer Success Management Drivers . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . .

25 26 29 32

4

Value-Based Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33 36

5

Solution Realization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Onboarding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.1 Preboarding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.2 Internal Handoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.3 Customer Handoff . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Solution Adaptation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39 40 40 40 42 42 43

6

Customer-Related Customer Success Management Activities . . . . 6.1 Value-in-Use Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Value-in-Use Enhancement . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 The Link between Customer-Related Customer Success Management Activities and Value-Based Selling . . . . . . . . . . .

. . .

45 46 51

.

55

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Contents

6.4

Successfully Conducting Customer-Related Customer Success Management Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61 62

. .

65 66

8

Customer Advocacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69 74

9

Customer Success Management Outcomes . . . . . . . . . . . . . . . . . . . 9.1 Customer-Related Customer Success Management Outcomes . . 9.1.1 How Customers Assess Customer-Related Customer Success Management Activities’ Quality . . . . . . . . . . . 9.1.2 How Customer-Related Customer Success Management Activities Contribute to Customers’ Experienced Value in Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.3 How Customer-Related Customer Success Management Activities Affect Customers’ Behavioral Intentions . . . . 9.2 Supplier-Related Customer Success Management Outcomes . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75 75

7

10

Adapting the Customer Value Proposition . . . . . . . . . . . . . . . . . . 7.1 Activities of Adapting the Customer Value Proposition . . . . . . 7.2 Case Study “Salesforce”: How to Scale Up Tailored Customer Success Management Activities (in Cooperation with Salesforce) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55 58

75

79 85 87 89

Customer Success Management Structures . . . . . . . . . . . . . . . . . . . 91 10.1 Customer Success Management in the Interplay Between Customer-Related Management Approaches . . . . . . . . . . . . . . . 91 10.2 Creating Customer Success Management Structures . . . . . . . . . 93 10.3 Case Study “Camunda”: How to Ramp Up Customer Success Management (in Cooperation with Leon Strauch, Senior Customer Success Manager at Camunda) . . . . . . . . . . . . . . . . . 96 10.3.1 Company Background . . . . . . . . . . . . . . . . . . . . . . . . 96 10.3.2 Camunda’s Software Product . . . . . . . . . . . . . . . . . . . 96 10.3.3 Customer Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 10.3.4 Customer Success Management . . . . . . . . . . . . . . . . . . 97 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

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Customers have always been important in business. Without customers, suppliers cannot make money, and without making money, firms cannot survive. This dependence especially applies in a competitive environment where different suppliers compete for this scarce resource that is critical to a company’s existence. Therefore, practical applications and intensive academic discussions of such concepts as customer orientation (e.g., Jaworski & Kohli, 1993; Kohli & Jaworski, 1990), customer integration (e.g., Kleinaltenkamp et al., 1997; Moeller, 2008), customer centricity (e.g., Shah et al., 2006), customer retention (e.g., Bolton et al. 2000), customer experience (e.g., Becker & Jaakkola, 2020; Homburg et al. 2017), and customer journey (e.g., Hamilton et al., 2021; Lemon & Verhoef, 2016) or customer-related management approaches, such as key account management (KAM; e.g., Homburg et al., 2002), customer relationship management (CRM; e.g., Payne & Frow, 2005), and value-based selling (VBS; e.g., Terho et al., 2012) over the last decades are unsurprising. But somehow, something has changed—at least in business markets. A new business function has arisen and rapidly grown in importance over the last ten years: “customer success” (CS) or “customer success management” (CSM). It represents a new, different way of looking at and managing companies’ business relationships with their clients. At the outset of this book, we must point out that the terms “customer success” and “customer success management” are often used synonymously in practice—that is, all the CS managers at a supplier firm who are responsible for ensuring that customers achieve desired success (CS as the outcome of CSM) are also called “customer success” for simplification, though the correct term would be “CS managers” or “part of CSM.” (CSM, as a business function, is charged with creating and ensuring a customer’s success.) The novelty of this approach is that it does not focus on promising or selling value to a customer. Rather, CSM aims to ensure that the promises in a customer value proposition (CVP; e.g., Payne et al., 2017) are actually kept and that value is delivered or even enhanced when goods or services are used at the customer firm # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_1

1

Number of customer success managers

2

1 The Rise of a New Business Function: Customer Success (Management) 200,000

178,000

180,000 160,000 130,000

140,000 120,000

103,000

100,000 80,000

58,700

60,000 32,500

40,000 20,000

3,900

7,500

2015

2016

16,200

0,000 2017

2018

2019

2020

2021

October 2022

Achsentitel Year

Fig. 1.1 The number of LinkedIn members holding a CS manager position

(Macdonald et al., 2016; Prohl & Kleinaltenkamp, 2020). After all, these assurances are the only way to ultimately achieve a customer’s success. The importance of CSM development is evident in many aspects. The first is simply the presence of more and more CS managers. For example, in October 2022, 178,000 users of the professional business network LinkedIn indicated that they held a position as a CS manager (see Fig. 1.1). Second, the Customer Success Association (CSA) has been formed, and it boasted over 55,000 members worldwide in 2022 (Customer Success Association, 2022). It aims to provide CS managers and firms that are implementing or have implemented CSM with “the most relevant information about the continuing development of the profession” (Customer Success Association, 2022). Finally, several conferences have been established that give CS managers a venue to meet, exchange experiences and ideas, and learn more about the new technological developments relevant to the field. Examples include the Customer Success Conference, the Customer Success Summit, and the Recurring Revenue Conference. CSM emerged in response to key challenges that arose from disruptive developments in business markets mainly, primarily to digitization. Through these changes, the boundaries between products and services—as well as between data and software—have become more and more blurred. In turn, this shift has called into question not only existing marketing and sales but also supplier firms’ operational approaches. First, in an attempt to secure and improve their competitiveness and profitability, many manufacturers have expanded their service offerings. This expansion has led to business models labeled “customer solutions” (e.g., Tuli et al., 2007), “hybrid offerings” (Ulaga & Reinartz, 2011), or “servitization” (e.g., Baines and Lightfoot, 2013; Vandermerwe & Rada, 1988). According to a recent industry survey, approximately 65% of the world’s manufacturing capacity has switched from production to services as the main revenue source (The Manufacturer, 2017). These complex offerings that combine and integrate products and services as “end-to-end offers around customer activities and/or processes” have led to a “fundamental shift of the

1

The Rise of a New Business Function: Customer Success (Management)

3

vendor’s value proposition” in which “solution providers take on the responsibility to achieve specific outcomes defined by the customer” (Worm et al., 2017, p. 491). Since solutions, thus, must be adapted to customer firms’ critical operational processes (Kleinaltenkamp et al., 2021), they are typically characterized by a high degree of customization (e.g., Davies et al. 2006; Kleinaltenkamp et al., 2017; Sawhney et al., 2006; Tuli et al., 2007). Hence, solutions providers’ customers must themselves provide crucial inputs into a solution’s delivery, implementation, and application; thus, they contribute importantly to the realization of a solution (Elgeti & Kleinaltenkamp, 2022). Consequently, supplier firms lack full control over all the activities necessary for a solution’s success (Macdonald et al., 2016). This challenge can only be met with close cooperation between suppliers and their customers when a solution is used. Second, through the progressive digitization typical of modern “servitized” offerings (e.g., Kowalkowski et al., 2022), data on customers’ usage behavior and their inherent created value are available to suppliers. Consequently, not only monitoring but also securing and enhancing the value created for a customer firm have become much easier and more cost-effective (Kamalaldin et al., 2020). In the past, whether a customer had successfully used products, services, or software could only be determined after the fact—sometimes through laborious analyses and discussions. Today, however, often permanently available data enable such confirmations “on the fly” with even greater precision and detail. These developments have, thus, opened up new CSM opportunities for suppliers. Third, to lower customers’ entry barriers, many solutions are offered through subscription-based business models—especially digitized solutions. Therefore, by building a growing, loyal customer base, businesses that adopt such models can create stability and predictability even in volatile markets, making these models very attractive to suppliers (Ulaga & Mansard, 2020). However, at the same time, “the recurring revenue business model has shifted power from the vendor to the customer” (Mehta et al., 2016, p. 15), particularly since subscription contracts’ duration is typically shorter than that of traditional service businesses (Feng & Krishnan, 2021; McCarthy et al., 2017). Consequently, to avoid churn, subscription service providers must relate differently to their customers (Zuora, 2021). To deliver the CS promised in a CVP, they must proactively engage with their customers not only immediately after sales (Becker et al., 2020; Hochstein et al., 2020) but also throughout a contract’s term. Based on these developments, CSM was first implemented as a business function in industries that use subscription- or consumption-based business models, such as SaaS or cloud services, for which recurring revenues are central to suppliers’ financial performance (e.g., Ulaga & Mansard, 2020). Hence, the original idea behind CSM development was the suppliers’ wish to stabilize or even expand business relationships with their clients by showing how their offerings contribute to customer firms’ success. Meanwhile, CSM applications are spreading globally across industries (Bond III et al., 2020), especially among firms that offer complex solutions that—much like subscription-based or cloud businesses—create and

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convey customer value throughout customers’ entire usage processes (Kleinaltenkamp et al., 2022). This book addresses this new business function—from its meaning, tasks, and development drivers to the ways in which it is organized and its outcomes for customers and suppliers. We present this book because, despite CS’s practical relevance, confusion persists about what CS is and how it can be managed on the supplier side. Accordingly, this book aims to explain the various aspects of the increasingly important CS and CSM topics for practitioners, based on comprehensible information from practical and scientific sources. The book provides a practical “how-to” guide, including the CSM processes and structures that must be established, the roles CS managers must perform, the capabilities they need, and the expectations placed on them. Furthermore, this book shows how CSM differs from and simultaneously relates to existing customer-related management concepts and business functions, such as KAM, CRM, and VBS. The presented insights are relevant not only to readers who currently hold a CS manager position but also those who aim for such a role. The book is, moreover, pertinent to other supplier and customer representatives whose daily business involves CSM activities and CS managers.

References Baines, T., & Lightfoot, H. (2013). Made to serve: How manufacturers can compete through servitization and product service systems. Wiley. Becker, L., & Jaakkola, E. (2020). Customer experience: Fundamental premises and implications for research. Journal of the Academy of Marketing Science, 48, 630–648. Becker, J., Spann, M., & Barrot, C. (2020). Impact of proactive postsales service and cross-selling activities on customer churn and service calls. Journal of Service Research, 23(1), 53–69. Bolton, R., Kannan, P. K., & Bramlett, M. D. (2000). Implications of loyalty program membership and service experiences for customer retention and value. Journal of the Academy of Marketing Science, 28(1), 95–108. Bond, E. U., III, de Jong, A., Eggert, A., Houston, M. B., Kleinaltenkamp, M., Kohli, A. K., Ritter, T., & Ulaga, W. (2020). The future of B2B customer solutions in a post-COVID-19 economy: Managerial issues and an agenda for academic inquiry. Journal of Service Research, 23(4), 401–408. Customer SuccessCustomer success (CS) Association. (2022). Welcome to the Customer Success Association. Retrieved July 26, 2022, from https://www.customersuccessassociation.com/ Davies, A., Brady, T., & Hobday, M. (2006). Charting a path toward integrated solutions. MIT Sloan Management Review, 47(3), 39–48. Elgeti, L., & Kleinaltenkamp, M. (2022). Unrealized solutions in business markets. Industrial Marketing Management, 106, 31–46. Feng, S., & Krishnan, T. (2021). Contract length determination in the B2B service industry: Role of economic factors, business relationship, and learning. Journal of Service Research, 25(3), 422–439. Hamilton, R., Ferraro, R., Haws, K. L., & Mukhopadhyay, A. (2021). Traveling with companions: The social customer journey. Journal of Marketing, 85(1), 68–92. Hochstein, B., Rangarajan, D., Metha, N., & Kocher, D. (2020). An industry / academic perspective on customer success management. Journal of Service Research, 23(1), 3–7.

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Homburg, C., Jozić, D., & Kuehnl, C. (2017). Customer experience management: Toward implementing an evolving marketing concept. Journal of the Academy of Marketing Science, 45(3), 377–401. Homburg, C., Workman, J. P., & Jensen, O. (2002). A configurational perspective on key account management. Journal of Marketing, 66(2), 38–60. Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: Antecedents and consequences. Journal of Marketing, 57(3), 53–70. Kamalaldin, A., Linde, L., Sjödin, D., & Parida, V. (2020). Transforming provider-customer relationships in digital servitization: A relational view on digitalization. Industrial Marketing Management, 89, 306–325. Kleinaltenkamp, M., Ehret, M., & Fließ, S. (1997). Customer integration in business-to-businessmarketing. In H. Mühlbacher & J.-P. Flipo (Eds.), Advances in services marketing (pp. 27–48). Gabler. Kleinaltenkamp, M., Minculescu, I., & Raithel, S. (2017). Customization of B2B services: Measurement and impact on firm performance. Journal of Service Management Research, 1(1), 39–56. Kleinaltenkamp, M., Nenonen, S., Raithel, S., & Storbacka, K. (2021). Solution business fitness: Measuring and managing across business logics. Journal of Business & Industrial Marketing, 36(7), 1116–1129. Kleinaltenkamp, M., Prohl-Schwenke, K., & Keränen, J. (2022). What drives the implementation of customer success management? Antecedents of customer success management from suppliers’ and customers’ perspectives. Industrial Marketing Management, 102, 338–350. Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54(2), 1–18. Kowalkowski, C., Bigdeli, A. Z., & Baines, T. (2022). Guest editorial: The future of servitization in a digital era. Journal of Service Management, 33(1), 59–69. Lemon, K. N., & Verhoef, P. C. (2016). Understanding customer experience throughout the customer journey. Journal of Marketing, 80(6), 69–96. Macdonald, E. K., Kleinaltenkamp, M., & Wilson, H. N. (2016). How business customers judge solutions: Solution quality and value in use. Journal of Marketing, 80(3), 96–120. McCarthy, D., Fader, P. S., & Hardie, B. G. S. (2017). Value in subscription-based businesses using publicly disclosed customer data. Journal of Marketing, 81, 17–35. Mehta, N., Steinman, D., & Murphy, L. (2016). Customer success: How innovative companies are reducing churn and growing recurring revenue. John Wiley and Sons. Moeller, S. (2008). Customer integration—A key to an implementation perspective of service provision. Journal of Service Research, 11(2), 197–210. Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, 69, 167–176. Payne, A. F., Frow, P., & Eggert, A. (2017). The customer value proposition: Evolution, development, and application in marketing. Journal of the Academy of Marketing Science, 45(4), 467–489. Prohl, K., & Kleinaltenkamp, M. (2020). Managing value in use in business markets. Industrial Marketing Management, 91, 563–580. Sawhney, M., Wolcott, R. C., & Arroniz, I. (2006). The 12 different ways for companies to innovate. MIT Sloan Management Review, 47(3), 75–81. Shah, D., Rust, R. T., Parasuraman, A., Staelin, R., & Day, G. S. (2006). The path to customer centricity. Journal of Service Research, 9(2), 113–124. Terho, H., Haas, A., Eggert, A., & Ulaga, W. (2012). It’s almost like taking the sales out of selling – Towards a conceptualization of value-based selling in business markets. Industrial Marketing Management, 41, 174–185. The Manufacturer. (2017). Is servitization helping your business rise up the value chain? Retrieved October 10, 2022, from www.themanufacturer.com/articles/servitization-helpingbusiness-risevalue-chain/

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Tuli, K. R., Kohli, A. K., & Bharadwaj, S. G. (2007). Rethinking customer solutions: From product bundles to relational processes. Journal of Marketing, 71(3), 1–17. Ulaga, W., & Mansard, M. (2020). Future-proof your business with the subscription business model [white paper]. The Subscribed Institute in collaboration with INSEAD. Ulaga, W., & Reinartz, W. (2011). Hybrid offerings: How manufacturing firms combine goods and services successfully. Journal of Marketing, 75(6), 5–23. Vandermerwe, S., & Rada, J. (1988). Servitization of business: Adding value by adding services. European Management Journal, 6(4), 314–324. Worm, S., Bharadwaj, S. G., Ulaga, W., & Reinartz, W. J. (2017). When and why do customer solutions pay off in business markets? Journal of the Academy of Marketing Science, 45(4), 490–512. Zuora. (2021). 9 keys to building a successful subscription business. Retrieved October 10, 2022, from https://de.zuora.com/guides/nine-keys-building-successful-subscription-business/

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2.1

Customer Success from a Goal-Related Perspective

Business clients are suppliers in their own markets, where they try to offer their own customers better deals than their competitors. From this perspective, business clients ultimately aim all of their activities at gaining and maintaining competitive advantages in their own (sales) markets—that is, being more effective or efficient than the competition (e.g., Hunt & Morgan, 1995). Firms adopt this goal because, if they fail to achieve such competitive advantages, they will eventually disappear from the market. Hence, in simple terms, “customer success” is when a client firm succeeds in its own markets and is, therefore, profitable and viable in the long term. But if all of a business client’s activities are ultimately guided by this goal, all the products, services, or more general solutions they buy and use, and all the activities they pursue, are valuable only if they help the client achieve this goal. Hence, “customer success” is when customers achieve their goals, and customerperceived value represents the extent of a customer’s goal achievement. For this reason, this book adopts a goal-related perspective on CSM. This goal-related understanding of CS and customer-perceived value draws on the behavioral theory of the firm. According to this theory, organizational action is fundamentally goal-oriented (Cyert & March, 1963). However, a firm can pursue multiple goals simultaneously (Gaba & Joseph, 2013; Gavetti et al., 2012) that may relate to either the organization as a whole (e.g., profit, return on assets, or corporate social responsibility) or certain organizational subunits (e.g., innovation or safety; Audia & Greve, 2021). Hence, depending on their roles and responsibilities, an organization’s members may pursue different and sometimes conflicting goals (Kotlar et al., 2018; Macdonald et al., 2016). In each case, the extent to which specific outcomes contribute to a goal’s achievement measures performance and, thus, the value that a firm, an organizational unit, a workgroup, or an individual receives from the very outcome (Kotlar et al., 2018). Similarly, the theory of goal-directed behavior (Bagozzi & Dholakia, 1999) assumes that customers intend to behave in ways that help achieve their goals # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_2

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(Perugini & Bagozzzi, 2001). Originally conceived at the individual level, this theory views a goal as some “mental image or other end point representation associated with affect toward which action may be directed” (Pervin, 1989, p. 474). A goal, therefore, answers the question, “What am I striving for?” All goals are typically embedded in a hierarchy of superordinate and subordinate goals. In this sense, a superordinate goal represents desirability and explains why the customer wants to achieve a certain outcome, while a subordinate goal represents feasibility and describes how a customer can achieve a desired outcome (Bagozzi & Dholakia, 1999). Example

A purchasing manager may have a focal goal of negotiating a 5% price reduction with an incumbent supplier. This goal is linked to the superordinate goal of ensuring a stable job at a prospering firm and a subordinate goal of using effective bargaining tactics during price negotiation. ◄ At this individual level, goals are derived from people’s desires (Perugini & Bagozzzi, 2001). However, as collectives of individuals, firms do not have desires. Hence, the goals that a customer firm representative attributes to their firm are only ever an outcome of their ideas about what is desirable for the firm or its subunits (Kleinaltenkamp et al., 2022). Hence, such collective goals and their respective goal hierarchies are always based on an organization member’s individual perceptions of or assumptions about what is desirable for their collective (Huber & Kleinaltenkamp, 2020; Macdonald et al., 2011, 2016). These collective goals, thus, represent individuals’ thoughts or imagination about their organization’s desired endpoints. Example

For a firm’s CEO, relevant goals might include the firm’s profit or market capitalization. Meanwhile, for product managers, relevant goals could include the market share or brand value of the products they are in charge of. For quality managers, improved employee satisfaction or better working conditions are typical goals that they regard as desirable for their firm and, therefore, strive toward. ◄ Consequently, the achievement of collective goals is also always appraised by individuals who, from their personal perspectives, assess the extent to which a collective goal has been or might be achieved using a good or service or through a business relationship (Kleinaltenkamp et al., 2022). Thus, from a customer perspective, CS is primarily what a customer firm’s individual representatives think it is. From these people’s points of view, such assessments are based on the perceived extent to which customer goals—for either an organization, one of its subunits, or an individual—have been achieved. This backdrop shows that all the customer firm members with whom CS managers interact do not necessarily share the same

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understanding of (1) which goals the customer firm is pursuing or should pursue and (2) the extent to which a goal has been achieved. CS, therefore, is not identical for each member of a customer organization. Accordingly, the extent to which such goals converge or are consistent depends on individual actors’ agreement about what is desirable for their collective and, therefore, which goals the collective is pursuing or should pursue. These goals and their assessments can align only through frequent communication and ongoing adjustments (and readjustments) among the organization’s members. Consequently, to be relevant to some extent for the whole customer firm, these views must be reasonably stable and shared across the organization’s various members. Consequently, “customer success is a strongly held and shared belief that engaging with the supplier, integrating and using its resources contributes substantially to customer’s goal achievement” (Gehring et al., 2022; emphasis added). Summary • Customer-perceived value measures the extent of goal achievement. • Superordinate goals explain why customers want to achieve certain outcomes. Subordinate goals describe how customers can achieve desired outcomes. • Customer firms’ goals may relate to different levels: the organization as a whole, an organizational unit, a workgroup, or an individual. • Value, as the extent of goal achievement, can relate to different levels: the organization as a whole, an organizational unit, a workgroup, or an individual. • From a goal-related perspective, customer success is a strongly held and shared belief that engaging with a supplier and integrating and using its resources substantially contributes to a customer’s goal achievement.

2.2

Customer-Related Value Concepts in Business Markets

In business markets, customers reflect on goal achievement and, thus, perceive value in different situations. This process leads to three different value concepts: (1) “expected value in use,” which represents value assessments when customers enter into a (formal) exchange agreement with a provider; (2) “experienced value in use,” which describes the value perceived when customers use solutions; and (3) “relationship value,” which occurs when customers reflect on and summarily assess a business relationship with a supplier. Figure 2.1 shows how these concepts of customer-perceived value, which are explained in the following section, relate to each other.

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Fig. 2.1 Concepts of customer-perceived value in business markets (based on Eggert et al., 2019, p. 19)

2.2.1

Expected and Experienced Value in Use

In his seminal article, Woodruff (1997) defined “customer value” as “a customer’s perceived preference for and evaluation of those product attributes, attribute performances, and consequences arising from use that facilitate (or block) achieving the customer’s goals and purposes in use situations” (p. 142). Overcoming and integrating diverging perspectives, this definition captures, on the one hand, the value desired by customers and, on the other hand, the value they have received or experienced. This conceptualization of value for a customer, thus, is based on an understanding that purposeful behavior is triggered by a feedback loop involving goal-setting, action-planning and its implementation, the assessment of goals’ attainment or failure, and feedback to inform future goal-setting (Bagozzi & Dholakia, 1999). So, as a subjective measure of goal achievement, value can be both expected before it occurs and actually experienced when buyers use a good or service. In this context, the expected value in use (VIU) is what drives customers to agree to an exchange with a provider. Through any exchange, business customers ultimately want to obtain a solution to an operational problem, and they enter into an exchange agreement with a supplier (i.e., sign a contract) if they are convinced that the supplier’s solution will benefit them compared to their own or other providers’ solution to the problem. We use the term “expected value in use” (Eggert et al., 2019) because it reflects, compared to “value in exchange,” more precisely that this value results, based on the promises made in a supplier’s CVP, from a customer’s expectation regarding goal achievement through future use of an offering (see Fig. 2.1). Expected VIU is, thus, a point-in-time assessment of future value. Customers perform this assessment the moment they enter into an exchange agreement with a supplier—that is, when they buy a product, sign a service contract, or enter into a subscription. Following early conceptualizations from consumer marketing (Zeithaml, 1988; Monroe, 1990), the expected VIU offered by goods, services, and combinations thereof dominated both the practical and academic understanding of value in business markets for a long time (Eggert et al., 2018). Anderson et al. (1993) summarized this understanding by defining “value in business markets” as “the perceived worth

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in monetary units of the set of economic, technical, service and social benefits received by a customer firm in exchange for the price paid for a product, taking into consideration the available suppliers’ offerings and prices” (p. 5). In proposing a refined definition, Anderson and Narus (1998) emphasized such value assessments’ relative, competitive nature by explicitly adding “in comparison to the next best alternative” (p. 6). This perspective on value as a trade-off between something received and something given (Kumar & Reinartz, 2016) that is embodied in market offerings (Anderson & Narus, 1998; Plank & Ferrin, 2002) echoes early views of value in the supply chain management literature. Fallon (1966) long ago defined “product value” in this literature as “the difference, between product worth and product cost, . . . a measure of gain or loss” (p. 18; italics in the original). In business and academia, this understanding has resulted in various efforts to calculate value in economic terms. Such efforts were driven first—especially since purchasing managers must justify their decisions—by the usual approach of quantifying an offering’s benefits and costs in monetary terms. Further, growing competition in many markets during the 1990s put firms under substantial cost pressures. The importance of the purchasing function grew as firms sought to reduce costs by decreasing their purchase prices. Suppliers, in turn, tried to avoid price pressures by convincing customers to focus on the total cost of ownership (TCO), rather than a purchase price alone. However, this TCO focus requires vendors to clearly understand what their customers appreciate and value (Anderson & Narus, 1998). This development resulted in several approaches to identify and quantify the salient value dimensions of an offering—that is, “anything that affects the costs and benefits of the offering in the customer’s business” (Anderson & Narus, 1998, p. 7). Such studies have identified dimensions such as short-run and long-run prices, shortrun and long-run direct costs, TCO, and non-economic criteria (Plank & Ferrin, 2002). Furthermore, product quality, delivery performance, service support knowhow, time-to-market, and personal interaction emerged as benefits, whereas price and process costs represented sacrifices (Ulaga, 2003). Scholars have also distinguished between core and add-on benefits before structuring costs as comprising a purchasing price, acquisition costs, and operations costs (Menon et al., 2005). Consequently, customer value models and their underlying tenet that supplier firms must deeply understand, persuasively communicate, and effectively deliver value to their customers (Anderson et al., 2009) to succeed in competitive markets have vast practical impacts. As a result, in the early 2000s, value quantification and communication were firmly established as part of the VBS “toolbox” for many supplier firms (Terho et al., 2012, 2017). Example: Bearing Industry

To counter price competition and product commoditization, SKF—a leading international bearings supplier—shifted its market approach, reflecting its understanding, creation, and delivery of value to customers. It launched a

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Table 2.1 Approaches to quantify customer value in business practice Aggregated Customer-specific

Backward Market prices Experiments Field value-in-use assessments Value audits Case histories Return on investment (ROI) studies

Forward Expert estimates Econometric analyses Value calculators Total cost of ownership (TCO) Conjoint analyses Auctions

company-wide initiative to identify, document, and translate how its products improved customers’ TCO in quantitative terms despite charging premium prices. In turn, the company’s focus shifted from selling product features to selling value (Snelgrove & Anderson, 2016). ◄ In Table 2.1, we overview the common methods of quantifying customer value in business marketing practice (see also Liozu, 2016). These methods can be customerspecific (e.g., case histories and value audits) or aggregated over customer segments or markets (e.g., expert estimates). They can also be backward-looking (e.g., field VIU assessments) or forward-looking (e.g., value calculators). However, the development of service-dominant logic (Vargo & Lusch, 2004, 2008) and service logic (Grönroos, 2008, 2009; Grönroos & Voima, 2013) have especially and increasingly emphasized that value is not created for customers when they buy goods or services; rather, it is created only when customers use goods or services. Grönroos (2009), for example, pointed out that “a value proposition is a suggested value that has not been realized yet. . . . Suggested value must be followed up by value fulfillment” (p. 353). Similarly, Vargo and Lusch (2004) emphasized that “value is perceived and determined by the consumer on the basis of value in use” (S. 7). Accordingly, marketing activities should no longer focus on “value in exchange,” which is significant to buying and selling, but on experienced VIU (Eggert et al., 2018). Thus, in contrast to expected VIU, experienced VIU is customers’ actual goal achievement when using goods or services, and it is determined by their user experience or the quality of buyers’ respective experiences (Becker & Jaakkola, 2020). The usage of products and services involves a sequential or concurrent series of resource-integrating activities during which buyer and supplier firms’ representatives apply available resources to achieve individual and collective goals (Eichentopf et al., 2011). Example: Aviation Industry

Rolls-Royce’s archetypal “TotalCare®” solution began in 1997 with American Airlines. The approach was named “power by the hour” at the time of its introduction, and it combines the sales of an engine and its servicing in a longterm contract. Since the manufacturer retains reliability data across numerous

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airlines, it can accurately predict and pre-empt engine problems, providing a reliability benefit and reducing the airline’s financial risk (Kim et al., 2007). ◄ Thus, experienced VIU depends on the quality of the (1) supplier resources, (2) buyer resources, and (3) resource integration processes between supplier and customer firms (Macdonald et al., 2016) that customers experience during their usage processes (Pfisterer & Roth, 2015; see Fig. 2.1). At a customer organization, these experiences are determined by the various members of a “business usage center” (BUC; Huber & Kleinaltenkamp, 2020), which comprises, “from the perspective of a single actor, all resource integrators that draw on a focal resource within a usage process” (Kleinaltenkamp et al., 2017, p. 721). Importantly, depending on their personal background, job role, et cetera, a BUC’s various members may often pursue—at least partially—deviant goals at both the individual and collective levels (i.e., regarding the relevant work team, department, or customer firm as a whole; Epp & Price, 2011; Huber & Kleinaltenkamp, 2020; Macdonald et al., 2016). Thus, interactions between the various actors involved in usage processes may have different positive or negative effects on the experienced VIU as it is perceived by the various BUC members, depending on the resulting extent of goal achievement that they realize (Huber & Kleinaltenkamp, 2022). Thus, in contrast to expected VIU, experienced VIU is a dynamic concept. The value perceived by various BUC members changes over time, and these changes are not limited to assessments before versus after purchases (Flint et al., 1997, 2002). Especially when goods, services, or bundles thereof—such as capital goods, solutions, or subscription-based services—are used for a longer time, value experiences typically vary over the course of the usage period. For this reason, only the dimensions of experienced VIU have been identified so far (Bruns & Jacob, 2016; Huber & Kleinaltenkamp, 2020; Macdonald et al., 2016), including both general and context-specific forms (Kleinaltenkamp and Dekanozishivili 2018). In contrast, little knowledge has been established on how experienced VIU develops over time (Bulawa & Jacob, 2021), whether certain value dimensions are stabler than others, which value drivers most affect experienced VIU, which value experiences dominate a value assessment at a certain point in time, and how these aspects might affect rebuying decisions (Kleinaltenkamp et al., 2022). The concept of VIU, therefore, serves two fundamental purposes in directing customer behavior. First, assessments of expected VIU allow buyers to purposefully select from competing behavior options in order to attain their goals. Second, assessments of experienced VIU close the feedback loop from goal-setting to goalstriving, inform buyers about the extent to which they have achieved or failed to achieve their goals, and thereby initiate learning processes in customer relationships. Hence, on the transactional level, the dividing line between the two value categories of expected VIU and experienced VIU is established by the (formal) exchange agreement—for example, as a contract governing the exchange (Kleinaltenkamp et al., 2022). Before this point, buying center members can “only” generate expectations about the future performance consequences of using a solution to be

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purchased; afterward, the BUC members’ experiences can confirm whether these expectations were met or not or even exceeded. Hence, expected VIU sets the benchmark for experienced VIU at the transactional level (Woodruff, 1997; symbolized by the arrows leading from the boxes labeled “expected value in use” to the boxes labeled “experienced value in use” in Fig. 2.1). Then, in a rebuying situation, this experienced VIU influences a follow-up transaction’s expected VIU (symbolized by the arrows leading from the boxes labeled “experienced value in use” to the boxes labeled “expected value in use” in Fig. 2.1).

2.2.2

Relational Value

However, business customers do not perceive value only on a transactional level— that is, when either buying or using goods or services. Typically, B2B marketing and purchasing occur in customer–supplier relationships, representing a series of transactions (e.g., Dwyer et al., 1987; Morgan & Hunt, 1994; symbolized by the transactions numbered n-1, n, and n+1 in Fig. 2.1). Downsized supplier portfolios and the implementation of “preferred supplier” programs in many industries during the late 1990s and early 2000s steered product-based business models that had focused on one-time transactions toward ongoing business relationships (Kalwani and Narayandas, 1995; Spekman, 1988). This shift also fostered the practical importance, as well as the conceptualization and exploration, of relationship value in academia (e.g., Ulaga & Eggert, 2006). To achieve preferred status, suppliers had to understand what value they generated for customers from a relational viewpoint. Increasing interest in relationship marketing and the growth of services marketing during the late 1990s laid the groundwork for this relational understanding and conceptualization of value (e.g., Grönroos, 1997; Gummesson, 1997). In both fields, relationship value strongly informed predictions of customer–supplier relationships’ functioning and success. For example, Ulaga and Eggert (2006) proposed and tested a conceptualization of relationship value that “distinguishes between two fundamental dimensions of value creation (i.e., benefits and costs) and three levels at which these drivers operate (i.e., the core offering, the sourcing process, and the customer firm’s internal operations)” (p. 120). Differing decisively from views of customer value as either expected or experienced VIU, this conceptualization no longer regarded the reference object as the good or service or, more broadly, the solution being exchanged and used in a discrete transaction; rather, the reference object was the business relationship between a customer and a supplier firm. This version perceives value in a supplier relationship not as a trade-off between price and quality, for example, but as a multidimensional construct to which all the identified dimensions contribute. Research into the dimensions that can be used to describe and evaluate business partners and their relations also proliferated in the operations and supply chain management literature from the mid-1990s onward. Some lists included more than

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20 dimensions (Dumond, 1994; Tan et al., 2002; Vokurka et al., 1996) that can be classified as either objective measures (such as on-time delivery, accuracy, the quality of purchased items, actual versus target costs, and purchase order cycle time) or subjective measures (such as professionalism, negotiating ability, commodity knowledge, cultivating qualified suppliers, and teaming efforts; Chao et al., 1993). Similar to Ulaga and Eggert’s (2006) conceptualization of relationship value, these studies proposed summative value assessments instead of trade-offs between benefits and costs related to a specific supplier or relationship. The past experiences and future expectations that, together, determine relational value are based on and refer to the various transactions that build a specific relationship. Therefore, similar to its impact on expected VIU at the transactional level, experienced VIU also influences relational value (symbolized by the arrows leading from the boxes labeled “experienced value in use” to the box labeled “relationship value” in Fig. 2.1). Conversely, relational value either positively or negatively affects assessments of future transactions’ expected VIU elements (symbolized by the arrows leading from the box labeled “relationship value” to the boxes labeled “expected value in use” in Fig. 2.1). Summary • Expected VIU is a point-in-time value assessment. Customers perform this assessment the moment they enter into an exchange agreement with a supplier, and this assessment reflects customers’ expectations regarding goal achievement through future usage of an offering. This assessment is based on promises in the supplier’s CVP, on the one hand, and on customers’ experiences with that supplier and other suppliers, on the other hand. • Experienced VIU is a time-based value assessment. It reflects customers’ actual goal achievement when using a solution. It is determined by the user experience or quality of buyers’ respective experiences. • Relationship value is determined through a summative assessment of how much a relationship with a specific supplier benefits a customer (firm)—that is, the extent to which this relationship helps achieve a customer organization’s goals. • In rebuying situations, experienced VIU influences a follow-up transaction’s expected VIU. • Experienced VIU at the transactional level influences relational value. • Relational value affects assessments of future transactions’ expected VIU elements.

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Customer Success Management

Based on our goal-oriented perspective on CS and customer-perceived value, as well as the resulting differentiation between the three value concepts—expected VIU, experienced VIU, and relationship value—we can now delineate and define CSM. From a supplier’s perspective, CSM primarily aims to avoid customer churn by demonstrating or proving that a CVP’s promises regarding a solution’s outcomes at the time of contracting have been met or even exceeded during the solution’s use. Hence, firstly, CS does not refer to relational value because this value concept captures the value of a series of transactions during an ongoing business relationship with a supplier. In contrast, CSM primarily focuses on a single contract or transactional agreement. Second, since CSM only starts after a contract has been signed or a deal has been made with a customer, obviously, it does not primarily refer to expected VIU either. Instead, CSM seeks “to ensure [that] the value potential of product offerings is realized by the customer” (Hochstein et al., 2020, p. 3; emphasis added). Thus, CSM predominantly relates to experienced VIU as the extent to which customers’ goals are achieved when using a solution during a single transaction or contract period (Prohl & Kleinaltenkamp, 2020). However, since the three value concepts influence each other (see Sect. 2.2), CSM’s results from experienced VIU also influence assessments of the other two value concepts—that is, expected VIU on the transactional level and relational value on the customer–supplier-relationship level. Nevertheless, these CSM outcomes are only indirect. For all CSM activities, a solution’s experienced VIU as it is perceived by customers during their usage processes is central. The higher this experienced VIU, the more customer goals concerning the solution’s usage are met or even exceeded. Moreover, the higher this experienced VIU, the likelier the customer will rebuy the solution, renew a contract, or even extend a contract. If these effects are accomplished, the provider firm will also achieve its overall goal when implementing CSM: gaining sustainable profitability through loyal customers— especially in subscription-based businesses. This understanding resonates with the CSA’s definition of CSM as “a long-term, scientifically engineered, and professionally directed business strategy for maximizing customer and company sustainable proven profitability” (The Customer Success Association, 2022). However, our goal- and value-based perspective on CS highlights the core of CSM: ensuring and, if possible, enhancing a solution’s experienced VIU. To fulfill this task, first, experienced VIU must be monitored (Macdonald et al., 2016; Prohl & Kleinaltenkamp, 2020; Storbacka, 2011). For this purpose, key performance indicators (KPIs) that can capture the extent of a customer’s goal achievement must be defined together with the customer. This process includes clearly understanding the customer’s expectations regarding the VIU to be achieved using that solution (Elgeti & Kleinaltenkamp, 2022). These expectations must be included as an input variable into CSM activities, so CSM must also be linked to VBS and the related activities of renewal and CVP adaptation. Second, the identified KPIs must be measured and checked regularly to determine whether they are actually

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being achieved and, in the event of any deviations from targets, to initiate counteracting measures. Third, a reflection on opportunities for VIU enhancement is necessary, and these opportunities should be disseminated within the customer organization (Macdonald et al., 2016; Prohl & Kleinaltenkamp, 2020). Thus, proactively managing a customer’s goal achievement by monitoring and improving their KPIs when they use a supplier’s solution, i.e. VIU monitoring and VIU enhancement, builds the core of CSM (Eggert et al., 2020). However, the decisive prerequisite for VIU to arise at all is a customer’s buying a solution from a provider in the first place. Hence, the sales cycle that leads to ordering, implementing, and using a solution must be seen as part of CSM since it lays the groundwork for subsequent CSM core activities. This perspective is especially necessary because, during these processes, customers develop VIU expectations that should later be fulfilled through solution usage, reflecting their experienced VIU. Thus, the VBS that leads to a customer’s initial purchase decision and can be captured in a (contractual) exchange agreement, become the first CSM activity. Moreover, value for a customer—in any form—can only be achieved if a solution is actually realized (Elgeti & Kleinaltenkamp, 2022). Hence, the successful implementation of the solution that has been sold to the customer is a decisive precondition for CS. This implementation, thus, represents the starting point for the core CSM activities as soon as a contract has been signed. This solution realization basically comprises two elements. First, for this purpose, the customer firm or its relevant representatives must be familiar with the solution’s delivery and realization. This customer onboarding includes such activities as getting to know each other, becoming familiar with the solution’s technology, learning the supplier firm’s support system, and leveraging relevant documentation (e.g., McCulloch, 2021). Second, the solution must be adopted by the customer organization and its representatives. Solution implementation thus integrates the solution into the customer firm’s operational processes, including maintenance, troubleshooting, (ongoing) user training, implementation of new features, et cetera (e.g., McCulloch, 2021). Successfully ensuring and enhancing a solution’s experienced VIU is the prerequisite for renewing a contract, and it also presents an opportunity to expand the solution with the customer firm that uses it. Thus, value-based renewal and the corresponding CVP adaptation are the fourth CSM activity that aims to renew and possibly enlarge business with an existing customer. For this purpose, typically, an adaptation of the original CVP is necessary. This adaptation should integrate insights into the customer firm’s processes and requirements derived from VIU monitoring and enhancement. Such a CVP should lead to upselling or cross-selling—that is, adding new feature adaptations to a solution or selling and implementing new solutions incorporating the customer’s different business processes. Finally, successfully managing a customer firm’s success also lays an important foundation for supporting the growth of a supplier's solution business by fostering customer advocacy. This process aims to persuade existing customers to provide referrals, testimonials, and use cases, participate in events, or join advisory boards in

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Fig. 2.2 The CSM Wheel

order to inform other customers about their own CS and convince them to buy a supplier’s solutions. According to this understanding, CSM combines five activity categories that constitute the CSM Wheel (see Fig. 2.2): 1. value-based sales activities that convince a customer firm’s representatives to buy a solution and sign a contractual exchange agreement, which provides them with a superior expected VIU (VBS) 2. activities that focus on successfully implementing a solution that has been sold to a customer firm through customer onboarding and adaptation (solution realization)

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3. activities through which a solution’s experienced VIU can be monitored, enhanced, and—subsequently—integrated as an input into a supplier’s reselling efforts (VIU monitoring and VIU enhancement) 4. activities that target contract renewal or rebuying by the customer firm, which might also comprise upselling or cross-selling (renewal and CVP adaptation) 5. activities that foster a supplier’s solution business by inducing customers to serve as advocates—that is, by reporting positively on their user experiences and, thus, convincing other customers to also purchase a solution (customer advocacy) In this context, the VIU monitoring and VIU enhancement activities that are related to experienced VIU are CSM’s core since they focus on realizing CS for a customer. These CSM activities, thus, can be regarded as supplementary services (Vandermerwe & Rada, 1988; Wirtz & Lovelock, 2021) that essentially augment an offered solution by ensuring that the value promised to a customer in a CVP is actually achieved throughout a solution’s usage, thus avoiding customer churn or securing rebuying decisions. These supplementary activities can happen only if a customer buys a solution and—because these activities always relate to the specific solution that has been sold—if VBS and the solution’s implementation have established the preconditions for core CSM activities. Additionally, effective CSM creates a basis for further measures to foster solution growth through either renewing and possibly expanding an existing solution using value-based reselling or customer advocacy with other (potential) customers. Summary • CSM combines VBS, solution realization, VIU monitoring and enhancement, renewal or expansion, and customer advocacy activities. • CSM predominantly relates to experienced VIU as the extent to which customers’ goals are achieved by using a solution for a single transaction or contract period. • Ensuring and, if possible, enhancing a solution’s experienced VIU are the core CSM tasks. • Proactively managing customers’ goal achievement when using a solution by monitoring and improving customers’ KPIs is central to CSM. • Solution implementation is a precondition and starting point for CSM. • Effective CSM lays a foundation for solutions growth either through upselling or cross-selling (expansion) or through customer advocacy.

2.4

A Customer Success Management Framework

Building on the structure of CSM activities presented in the previous section (the CSM Wheel), we can now develop an overarching CSM framework. This framework also outlines this book’s remaining chapters (see Fig. 2.3).

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Fig. 2.3 The CSM framework

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References

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• To better understand the necessity for CSM and its design requirements, it is necessary to know what drives CSM implementation. Chapter 3 explains the customer- and supplier-related CSM drivers. • CS can only be proven and, if possible, extended when a customer buys a solution. Therefore, VBS that induces an initial purchase decision by a customer firm and shapes its representatives’ VIU expectations is the starting point for any CSM. Chapter 4 describes the preceding sales activities. • Next, Chap. 5 presents in detail solution realization activities as the precondition for CSM. • Then, VIU monitoring and VIU enhancement are the core CSM activities, as Chap. 6 explains. • Successfully monitoring and enhancing experienced VIU is the precondition for value-based contract renewal. These activities, which typically include a corresponding CVP adaptation, are explained in Chap. 7. • Moreover, successfully monitoring and enhancing experienced VIU is also fundamental to designing and performing solutions growth measures beyond a customer relationship. They focus on fostering customer advocacy, as Chap. 8 explains. • Based on the effects shown in the previous chapters, Chap. 9 portrays the CSM outcomes resulting from its implementation for both customers and suppliers. • Finally, at a supplier firm, organizational CSM structures that enable respective CSM activities must be established. These measures are described in Chap. 10.

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Dwyer, F. R., Schurr, P. H., & Oh, S. (1987). Developing buyer–seller relationships. Journal of Marketing, 51(2), 11–27. Eggert, A., Ulaga, W., Frow, P., & Payne, A. (2018). Conceptualizing and communicating value in business markets: From value in exchange to value in use. Industrial Marketing Management, 69, 80–90. Eggert, A., Kleinaltenkamp, M., & Kashyap, V. (2019). Mapping value in business markets: An integrative framework. Industrial Marketing Management, 79, 13–20. Eggert, A., Ulaga, W., & Gehring, A. (2020). Managing customer success in business markets: Conceptual foundation and practical application. Journal of Service Management Research, 4 (2/3), 121–132. Eichentopf, T., Kleinaltenkamp, M., & Van Stiphout, J. (2011). Modelling customer process activities in interactive value creation. Journal of Service Management, 22(5), 650–663. Elgeti, L., & Kleinaltenkamp, M. (2022). Unrealized solutions in business markets. Industrial Marketing Management, 106, 31–46. Epp, A. M., & Price, L. L. (2011). Designing solutions around customer network identity goals. Journal of Marketing, 75(2), 36–54. Fallon, C. (1966). Value analysis: A definition of terms and concepts. Journal of Purchasing, 2(4), 16–31. Flint, D. J., Woodruff, R. B., & Gardial, S. F. (1997). Customer value change in industrial marketing relationships: A call for new strategies and research. Industrial Marketing Management, 26, 163–175. Flint, D. J., Woodruff, R. B., & Gardial, S. F. (2002). Exploring the phenomenon of customers’ desired value change in a business-to-business context. Journal of Marketing, 66(4), 102–117. Gaba, V., & Joseph, J. (2013). Corporate structure and performance feedback: Aspirations and adaptation in M-form firms. Organization Science, 24, 1102–1119. Gavetti, G., Greve, H. R., Levinthal, D. A., & Ocasio, W. (2012). The behavioral theory of the firm: Assessment and prospects. Academy of Management Annals, 6, 1–40. Gehring, A., Eggert, A., Ulaga, W., & Hochstein, B. (2022, August 10). Conceptualizing customer success in business markets [Conference presentation]. ISBM Academic Conference 2022: Advances in B2B Markets, Chicago. Grönroos, C. (1997). From marketing mix to relationship marketing: Towards a paradigm shift in marketing. Management Decision, 35(4), 322–339. Grönroos, C. (2008). Service-dominant logic revisited: Who creates value? And who co-creates? European Business Review, 20(4), 298–314. Grönroos, C. (2009). Marketing as promise management: Regaining customer management for marketing. Journal of Business & Industrial Marketing, 24(5/6), 351–359. Grönroos, C., & Voima, P. (2013). Critical service logic: Making sense of value creation and cocreation. Journal of the Academy of Marketing Science, 41(2), 133–150. Gummesson, E. (1997). Implementation requires a relationship marketing paradigm. Journal of the Academy of Marketing Science, 26(3), 242–249. Hochstein, B., Rangarajan, D., Metha, N., & Kocher, D. (2020). An industry / academic perspective on customer success management. Journal of Service Research, 23(1), 3–7. Huber, M., & Kleinaltenkamp, M. (2020). A typology of business usage center members. Industrial Marketing Management, 85, 21–31. Huber, M., & Kleinaltenkamp, M. (2022, in press). How perceptions of business usage center members affect value experiences and behaviors in multiactor usage processes. Industrial Marketing Management. Hunt, S. D., & Morgan, R. M. (1995). The comparative advantage theory of competition. Journal of Marketing, 59(2), 1–15. Kalwani, M. U., & Narayandas, N. (1995). Long-term manufacturer–supplier relationships: Do they pay off for supplier firms? Journal of Marketing, 59(1), 1–16. Kim, S.-H., Cohen, M. A., & Netessine, S. (2007). Performance contracting in after-sales service supply chains. Management Science, 53(12), 1843–1858.

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Terho, H., Eggert, A., Ulaga, W., Haas, A., & Böhm, E. (2017). Selling value in business markets: Individual and organizational factors for turning the idea into action. Industrial Marketing Management, 66, 42–55. The Customer SuccessCustomer success (CS) Association. (2022). The Definition of Customer Success. Retrieved November 1, 2022, from https://www.customersuccessassociation.com/ library/the-definition-of-customer-success/. Ulaga, W. (2003). Capturing value creation in business relationships: A customer perspective. Industrial Marketing Management, 32(8), 677–693. Ulaga, W., & Eggert, A. (2006). Value-based differentiation in business relationships: Gaining and sustaining key supplier status. Journal of Marketing, 70(1), 119–136. Vandermerwe, S., & Rada, J. (1988). Servitization of business: Adding value by adding services. European Management Journal, 6(4), 314–324. Vargo, S. L., & Lusch, R. F. (2004). Evolving to a new dominant logic of marketing. Journal of Marketing, 68(1), 1–17. Vargo, S. L., & Lusch, R. F. (2008). Service-dominant logic: Continuing the evolution. Journal of the Academy of Marketing Science, 36(1), 1–10. Vokurka, R. J., Choobineh, J., & Vadi, L. (1996). A prototype expert system for the evaluation and selection of potential suppliers. International Journal of Operations & Production Management, 16(12), 106–127. Wirtz, J., & Lovelock, C. (2021). Services marketing: People, technology, strategy (9th ed.). Prentice Hall. Woodruff, R. B. (1997). Customer value: The next source for competitive advantage. Journal of the Academy of Marketing Science, 25(2), 139–153. Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence. Journal of Marketing, 52(3), 2–22.

3

Customer Success Management Drivers

CSM developed as a business function in the early 2010s in reaction to far-reaching changes in how firms interact and do business with each other (see Chap. 1). These changes comprised: (1) customer solutions’ growing importance, (2) the shift toward subscription-based business models, and (3) a massive increase in the available data on customer firms’ post-purchase usage behaviors. For supplier and customer firms alike, these developments threatened existing business models. At the same time, they offered opportunities to leverage their potential. For business clients, adopting complex, service-oriented offerings typically leads to greater dependence on providers as they take over more of these clients’ operational processes. Before accepting such risks, customers expect supplier firms to prove that the value promised in their CVP is actually delivered or even exceeded after their purchase. Similarly, to reduce customers’ perceived risk in subscription businesses, suppliers allow customers to easily terminate contracts within specified periods. However, this approach endangers providers’ businesses because their revenue streams can be exhausted. Hence, to avoid churn, suppliers must constantly try to stabilize or even expand existing customer relationships (Hochstein et al., 2021). These trends provide a basic explanation of why CSM has emerged and grown rapidly in business markets. However, these trends do not explain in detail why CSM should be implemented in a certain customer–supplier relationships, which form it should take, and which conditions must be considered on both the customer and supplier sides. Therefore, to better explain the necessity of implementing CSM and its design requirements, we must show what drives CSM’s employment both from customer and supplier perspectives. Deeper insights into these customer- and supplier-related CSM drivers enable both suppliers and customers to proactively identify and segment CSM opportunities. This knowledge, thus, provides an important foundation for designing all CSM activities that are explained and discussed in Chap. 4 onward. The main drivers of customers’ wishes or expectations for providers to perform CSM activities, on the one hand, and suppliers’ motivations to perform these # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_3

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Table 3.1 CSM drivers (Kleinaltenkamp et al., 2022, p. 342) Customer success Definition management (CSM) drivers Related to expected value in use (VIU) Common business practice Standards of behaviors that are widespread in business settings Existing supplier CSM A supplier’s skill set needed to conduct CSMactivities capabilities Lacking or poor customer A customer lacks or has poorly developed the skill set required CSM capabilities to conduct CSM activities Offering complexity A supplier’s complex, non-self-explanatoryproduct or service offerings Project type A project’s classification with respect to itspriority or length Value proposition Communicating and defining an offering’spotential value, which is often related to acontractual agreement Related to experienced VIU Lacking resources The lack of financial, human, and similar resources on the supplier or customer side Project or relationship phase The phase of a project or business relationship that a customer and supplier firm share Related to relationship value Relevance of the The importance that suppliers or customersascribe to their business relationship connection with each other Strengthening a personal Supplier representatives strive to deepen theemotional relationship connection among customerrepresentatives in order to reduce churn risk Striving to secure follow-up A supplier’s wish to conduct further projects with a customer projects and, thus, retain that customer

activities, on the other hand, relate to all three concepts of customer-perceived value: (1) expected VIU, (2) experienced VIU, and (3) relationship value (Kleinaltenkamp et al., 2022). Table 3.1 lists and defines these CSM drivers. Although their influencing factors are relevant to customers and suppliers alike, their importance differs, depending on whether they are seen from suppliers’ or customers’ perspective (see Fig. 3.1; Kleinaltenkamp et al., 2022).

3.1

Customer-Related Customer Success Management Drivers

Initially, customers anticipate that suppliers will conduct measures to enhance VIU because, among other reasons, they strive to secure follow-up projects. Hence, the more customers believe they are important to their suppliers, the more they expect those suppliers to conduct CSM measures for them. Moreover, in many industries, CSM has already become a common business practice. In other words, customers expect an appropriate VIU reporting tool to have been integrated into an offered solution. The absence of such a tool is perceived as

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Fig. 3.1 CSM drivers’ relevance from the supplier and customer perspectives (Kleinaltenkamp et al., 2022, p. 346)

negative, reducing the solution’s expected VIU and, thus, its likelihood of being purchased or rebought. For this reason, many suppliers have implemented CSM structures. As a result, customers’ expectations for suppliers to perform CSM activities are shaped by their recognition and appreciation of suppliers’ existing CSM capabilities. Example

Today, many customers that use solutions in manufacturing greatly rely on their providers’ expertise—for instance, in analyzing chemical processes. Hence, customers prefer suppliers with very strong customer service and the abilities and skills necessary to solve critical production problems. However, such capabilities can be developed only if suppliers maintain regular contact with their customers. Such activities also increase customers’ expectations that these efforts will continue during follow-up transactions. ◄ This driver is even more important when customers themselves lack CSM capabilities—that is, when these proficiencies are absent or have been poorly developed in-house. Consequently, the less customers are convinced that they can achieve a solution’s expected VIU through their own efforts, the more they rely on their suppliers’ support through appropriate CSM activities. Example: Mining Industry

In the mining industry, the equipment that customers use has become very complex. Hence, many firms have outsourced the detailed analysis and

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monitoring of their machinery to their suppliers because they have the expertise and trained professionals necessary to conduct these activities. Since customers no longer possess these capabilities themselves, they expect suppliers’ offerings to include such tasks. ◄ Accordingly, high offering complexity is often an important driver for customers who expect suppliers to perform CSM activities because customers do not perceive themselves as able to monitor and control a solution’s various elements that, together, deliver expected VIU. Conversely, customers do not regard CSM as useful; therefore, they see it as superfluous when they buy simple or standardized goods, services, or commodity software. Consequently, offering CSM activities in such cases can even be harmful since customers might feel forced to pay for unneeded services. Additionally, project type drives customers’ expectations that suppliers should offer and implement CSM activities. The more critical a solution project is to a customer firm’s timing, technological challenges, deliveries to their own customers, or financial risks, the more they expect suppliers to perform CSM activities in order to ensure a project’s promised success. A lack of relevant capabilities often also affects customers’ experienced VIU if customers do not participate in CSM activities despite suppliers’ offerings. The main reason for this impact is, typically, that the customer firm’s employees lack the necessary time to meet with suppliers, exchange ideas, and discuss achieving relevant KPIs. Such deficiencies are also often driven by the relationship phase, in which a project is executed. This aspect is especially relevant since VIU monitoring requires information-sharing that presupposes some trust on the customer’s side. Example: Semiconductor Industry

In such industries as semiconductor production, forestry, and biofuel extraction, solution providers offer the so-called total chemical management contracts that comprise a comprehensive suite of services integral to the manufacture of products. The performance of these services requires a mature, stable relationship that allows the partners to share information openly. Customers will only contribute such information if they believe suppliers always pursue their best interests and can deliver current and future needs. ◄ The aspects mentioned before become even more important when a supplier firm’s representatives seek to strengthen their personal relationship with responsible employees at the customer firm. This attempt typically encourages the performance of CSM activities because exchanging information about a solution’s usage and progress becomes easier and interactions become truly collaborative. At the same time, customer expectations increase, further intensifying the supplier’s CSM activities. Finally, providers shape customers’ CSM expectations through their value proposition. If a supplier firm sees a CSM offering as a way to differentiate itself from its

3.2 Supplier-Related Customer Success Management Drivers

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competitors and customers accept this offering as part of a solution contract, then the supplier is incentivized to also conduct such activities. From the customer perspective, identifying CSM drivers highlights opportunities for—and improves customers’ awareness of—situations in which considering or actively requesting a supplier’s CSM activities might be beneficial. A better understanding of which situations make CSM more or less relevant for them helps managers at the customer firm proactively identify and articulate their needs regarding such activities. Such insights could be used, for example, to include specific CSM activities as early as the tendering stage or segment potential suppliers in terms of their willingness and ability to perform specific CSM activities. Finally, by understanding which value concepts are most important for them, customers might be able to define and agree on more suitable KPIs to measure realized top-level value instead of certain sub-goals’ achievement (Prohl & Kleinaltenkamp, 2020). In contrast, from the supplier perspective, identifying the customer-related drivers of CSM activities and their characteristics helps CS managers identify and segment customers based on their potential and receptiveness to CSM activities. At the same time, since several drivers’ importance for customers may differ, situations in which customers may not appreciate or value CSM activities can be revealed. Because the implementation and performance of CSM activities are usually expensive and resource-intensive (Keränen & Liozu, 2020), better knowledge of their drivers from a customer perspective is critical to CSM efficiency.

3.2

Supplier-Related Customer Success Management Drivers

As the previous section noted, customer expectations regarding suppliers’ implementation of CSM activities strongly motivate suppliers to implement CSM. Like customers, in many cases, suppliers also view CSM as a common business practice that accompanies complex offerings in many business settings. Thus, from a supplier perspective, CSM activities have already become an integral part of their offerings. Solution providers increasingly, therefore, approach customers proactively to propose new solutions in order to enhance customers’ experienced VIU. Consequently, in many cases, suppliers have developed certain CSM capabilities that empower them even more to offer and conduct CSM activities. These capabilities encompass, first, analytical skills to reveal the potential in customers’ applications and, second, skills that allow the suppliers to actually exploit this potential. Hence, the more suppliers own such capabilities, the more they use them to offer and provide their customers’ CSM activities. Example: Chemistry Industry

Suppliers of chemical products to the pulp and paper industry have developed far-reaching abilities to analyze and simulate their solutions’ potential value for

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their customers’ operational processes. Increasing a paper machine’s effectiveness by, for example, 5% hugely increases value for a customer company. At a production volume of 400,000 tons, this higher effectiveness would increase output by 20,000 tons. At a selling price of €1,000 per ton, this benefit would add a value of €40 million for the customer firm. ◄ This CSM driver especially applies the more customers lack CSM capabilities themselves and the more suppliers are aware of such deficiencies prior to a contractual agreement. In this context, budget or time lacks that sometimes only become apparent during a usage process often drive suppliers’ CSM efforts. Example: Mining and Metallurgical Industry

For suppliers offering solutions to the mining and metallurgical industry, enhancing customers’ experienced VIU and demonstrating the impact of such measures is much easier when customers have poor or no CSM capabilities. Consequently, supplier firms focus on smaller projects in international markets and distant countries, where customers tend to have fewer or weaker capabilities and process know-how than suppliers. In these cases, suppliers can much more easily make customer systems more efficient than they had been and make the added value more visible. ◄ Similarly, offering complexity may lead suppliers to conduct CSM activities. An offering’s increasing complexity implies that the offering is less self-explanatory. Consequently, customers experience or expect greater difficulties in fully exploiting the solution’s value independently. Offering customers, for instance, product and technology training to disseminate VIU enhancement opportunities (Prohl & Kleinaltenkamp, 2020) reduces customers’ perceived risks and, thus, increases the probability of a purchasing decision. Additionally, project type—that is, a project’s length or priority—drives the decision of whether and to what extent suppliers offer and conduct CSM activities, as well as which and how many resources are applied to a project (Müller & Turner, 2007). An important driver of CSM activities’ frequency from suppliers’ perspective, is, for instance, project length. In very short projects, typically, only one customer meeting is held, higher-ranking individuals are involved at the end or middle of the project, and touchpoints with sponsors are conducted perhaps twice weekly. By contrast, if a project has been set up for a longer period, meetings must be more frequent and are often scheduled entirely according to the needs of the moment. Moreover, also the project or relationship phase in which a project is executed impacts the necessity of performing CSM measures. Especially during the postdeployment phase, securing and possibly enhancing customers’ experienced VIU are the core motivations for suppliers’ CSM efforts.

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Example

In media consulting, CSM activities become relevant once the planning phase has been completed and the actual campaign for the customer is running. During the planning phase, discussions center on a campaign’s possible directions, which advertising placements are appropriate, et cetera. Afterward, however, information exchanges focus on a current campaign’s performance, how improvements can be made, et cetera. ◄ Furthermore, as a means to communicate and define an offering’s potential value, which typically manifests in a contractual agreement (Terho et al., 2012; Storbacka, 2011), a value proposition drives the frequency and intensity of CSM activities. Especially if customers cannot fully and independently exploit the value of complex offerings (Eggert et al., 2020), suppliers’ value promises must be managed, redefined, and enhanced throughout usage processes—for example, if “continuous improvement” has been agreed upon. Consequently, CSM activities are or must be substantial parts of complex offerings (Macdonald et al., 2016) and, thus, specified in respective contractual agreements. Additionally, suppliers’ motivation to offer and conduct CSM activities stems from the desire to strengthen their whole business relationship with a customer. Accordingly, CSM then focuses on reducing a customer’s propensity to end a business relationship (Ulaga & Eggert, 2006). Consequently, the high relevance of a business relationship positively influences suppliers’ motivation to conduct CSM activities, whose extent and intensity are often based on customers’ importance to the supplier firm. Since CSM comprises activities in which not only suppliers but also customers actively participate, the goal to strengthen the personal relationship between certain representatives of the supplier and the customer is also an important factor. If supplier and customer representatives have not only a business focus but also a personal relationship, CSM activities can run more easily because they can also take place in informal settings. As a result, collaboration runs more smoothly, and if any problems arise, they are easier to solve because the firm representatives can speak openly and comfortably, thus avoiding unnecessary escalation. Therefore, a good personal relationship and empathy on both sides benefit the cooperation between customers and suppliers that is necessary for CSM activities (Prohl-Schwenke & Kleinaltenkamp, 2021). Finally, striving to secure follow-up projects is an important driver of suppliers’ CSM activities. Especially VIU enhancement measures often aim to develop new projects for and with customers. These measures include cross-selling and upselling opportunities, which also promise profit for suppliers (Prohl & Kleinaltenkamp, 2020).

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Summary • The most important drivers of CSM implementation from customers’ and suppliers’ perspectives are: – lacking or poor customer CSM capabilities – lacking resources – offerings’ complexity – the project or relationship phase – project type – the relevance of the business relationship – striving to secure follow-up projects – the value proposition • CSM drivers’ importance differs, depending on whether they are seen from suppliers’ perspective or customers’ perspective. • From a customer perspective, identifying relevant CSM drivers highlights opportunities to consider or actively request CSM activities by a supplier and to articulate needs for such activities. • From a supplier perspective, identifying CSM drivers and their characteristics helps CS managers delineate and segment customers based on their potential and receptiveness to CSM activities.

References Eggert, A., Ulaga, W., & Gehring, A. (2020). Managing customer success in business markets: Conceptual foundation and practical application. Journal of Service Management Research, 4(2/3), 121–132. Hochstein, B., Chaker, N. N., Rangarajan, D., Nagel, D., & Hartmann, N. N. (2021). Proactive value co-creation via structural ambidexterity: Customer success management and the modularization of frontline roles. Journal of Service Research, 24(4), 601–621. Keränen, J., & Liozu, S. M. (2020). Value champions in business markets: Four role configurations. Industrial Marketing Management, 85, 84–96. Kleinaltenkamp, M., Prohl-Schwenke, K., & Keränen, J. (2022). What drives the implementation of customer success management? Antecedents of customer success management from suppliers’ and customers’ perspectives. Industrial Marketing Management, 102, 338–350. Macdonald, E. K., Kleinaltenkamp, M., & Wilson, H. N. (2016). How business customers judge solutions: Solution quality and value in use. Journal of Marketing, 80(3), 96–120. Müller, R., & Turner, J. R. (2007). Matching the project manager’s leadership style to project type. International Journal of Project Management, 25, 21–32. Prohl, K., & Kleinaltenkamp, M. (2020). Managing value in use in business markets. Industrial Marketing Management, 91, 563–580. Prohl-Schwenke, K., & Kleinaltenkamp, M. (2021). How business customers judge customer success management. Industrial Marketing Management, 96, 197–212. Storbacka, K. (2011). A solution business model: Capabilities and management practices for integrated solutions. Industrial Marketing Management, 40, 699–711. Terho, H., Haas, A., Eggert, A., & Ulaga, W. (2012). It’s almost like taking the sales out of selling – towards a conceptualization of value-based selling in business markets. Industrial Marketing Management, 41, 174–185. Ulaga, W., & Eggert, A. (2006). Relationship value and relationship quality – Broadening the nomological network of business-to-business relationships. European Journal of Marketing, 40(3/4), 311–327.

4

Value-Based Selling

CSM can only occur if customers have bought a solution or signed a contract. Thus, selling a solution to a customer firm is the prerequisite for any CSM activity. Unsurprisingly, in today’s business markets, sales remain a top priority for companies. In the United States alone, companies spend $15 billion each year to train salespeople in selling (Loechner, 2018). B2B companies recognize the importance of upskilling salespeople and continuously adapting training programs since sales professionals must understand their customers’ most critical business goals and problems to position customer value as clearly as possible. Therefore, a growing number of companies are focusing on communicating value as an “approach that # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_4

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builds on identification, quantification, communication, and verification of customer value” (Töytäri & Rajala, 2015, p. 101). Companies increasingly adopt VBS strategies as their core sales process. The essential sales concept of VBS aims to craft and communicate CVPs, based on a deep understanding of a customer’s goals (Terho et al., 2017), in order to convince customers to buy a solution. Thus, VBS “drives” the CSM Wheel in the first place (see Fig. 2.2) and focuses on the expected VIU packaged in a CVP. CVPs are described as the outcome that a customer can expect from using a product or service. While collective value propositions focus on important goals for a customer firm—such as reduced costs, improved processes, and minimized risk—individual value propositions target the personal goals of a customer firm’s individual representatives, such as improving workflows, saving time, or creating more comfortable operations. A value proposition is, thus, a tool through which salespeople enable customers to compare their firm’s goods and services with competitors’ and categorize these offerings according to their needs and preferences. Essentially, a CVP comprises one or two easily understandable statements that echo a customer's goals (Yrjölä, 2015). Moreover, a CVP encompasses the steps through which a firm conveys to customers how the goal shall be achieved, e.g., “We help X (the target group) do Y (the problem) by doing Z (the path to the goal).” Example: Software Provider

Current CVPs often address the interrelated customer issues that arise when a firm digitally transforms its business processes using new software. For instance, Salesforce is currently promoting its new CRM product, Salesforce Genie, as the first real-time platform that helps firms save money and time while increasing their sales. This promotion includes the following CVP on Salesforce’s website: “Turn data into real-time customer magic. Meet Salesforce Genie.” ◄ Example: Software Provider

The company Userlane presents another example. It offers a fast way to help users with any software by guiding and supporting them directly in their applications and instantly making the software or process easy to grasp. The company uses a three-part value proposition: (1) “You drive change. We help you to do it faster”; (2) “You introduce new software. We help you to do it faster”; and (3) “You support and train your users. We help you to do it faster.” ◄ The CVP is, thus, the pivotal element that communicates how a company will provide superior value to customers. Indeed, a study of B2B SaaS companies found that 92% of buyers request a value proposition early in the sales cycle (Dimensional Research, 2020). Unsurprisingly, therefore, the term CVP is widely used in praxis. However, in their study, Frow et al. (2014) found that most interviewed companies frequently used the term, while only 10% of companies had a formal process to develop and communicate a CVP. Recently, the CVP concept has gained even more

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attention in practice and academia. First, many job descriptions have included the term “value” in their job titles, such as “value proposition director,” “value engineer,” or “value consulting” (Presales Collective, 2021). Second, marketing researchers have conducted numerous studies on CVP development frameworks to show how CVPs can or should be crafted (Anderson et al., 2006; Töytäri et al., 2017; Payne et al., 2017; Payne et al., 2020; Leroi-Werelds et al., 2021; Rintamäki et al., 2021). Still, salespeople often face difficulties in successfully communicating the potential of their goods or services to customers. Indeed, recent research has indicated that salespeople struggle to craft customized value propositions that resonate with the diverse goals of customer firms’ individual representatives (Keränen & Liozu, 2020). This difficulty is mainly due to a customer organization’s different members often expecting varying outcomes from the same (complex) offering (Pinnington et al., 2016). To overcome this challenge, as a key component of their sales approach, B2B companies must anticipate how value is created throughout a customer’s usage process and how it is experienced by a relevant BUC’s various members (Huber & Kleinaltenkamp, 2020; Macdonald et al., 2016). To create a value proposition that is highly relevant to a customer, the customer must be actively involved in the process of crafting the proposition (Terho et al., 2012). In particular, the customer should share their business goals (to some extent) so that the supplier can quantify the offering’s potential contribution to their achievements—that is, the offering’s potential to create value for the customer (Grönroos & Helle, 2010). To quantify this potential customer value, suppliers use a variety of methods, such as customer-specific value calculations or return-oninvestment studies (Terho et al., 2012; Prohl & Kleinaltenkamp, 2020; see Chap. 2). Besides value quantification, suppliers should also strive to communicate a value proposition credibly in order to reduce a customer’s perceived risk. In this regard, widely used strategies include positive customer reference stories and guarantees that signal a commitment to delivering the promised value (Prohl & Kleinaltenkamp, 2020; Terho et al., 2012). Consequently, since the expected VIU serves as the benchmark for the VIU experienced during the customer’s usage phase, VBS and CSM must be strongly linked. Thus, VBS is a prerequisite for—and an important input to—customer success strategies. However, a study by Prohl & Kleinaltenkamp (2020) revealed that this interface between sales and CSM often does not mesh very well in practice. In contrast, CS managers regularly do not know which goals or KPIs have been discussed with a customer. This tendency is not only surprising but also dangerous, given the importance of this interface between sales and CSM to help customers achieve their goals. Obviously, what sounds logical in theory is much more challenging to implement in practice. Therefore, the cooperation between sales and CS teams should be well planned and executed.

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Summary • VBS is a prerequisite for customer success. • Companies increasingly adopt VBS strategies. • VBS focuses on the expected VIU packaged in a CVP. • A CVP is a pivotal element that communicates how a company will provide superior value to customers.

References Anderson, J. C., Narus, J. A., & Van Rossum, W. (2006). Customer value propositions in business markets. Harvard Business Review, 84(3), 91–99. Frow, P., McColl-Kennedy, J. R., Hilton, T., Davidson, A., Payne, A., & Brozovic, D. (2014). Value propositions: A service ecosystems perspective. Marketing Theory, 4(3), 327–351. Grönroos, C., & Helle, P. (2010). Adopting a service logic in manufacturing—conceptual foundations and metrics for mutual value creation. Journal of Service Management, 21(5), 1757–5818. Huber, M., & Kleinaltenkamp, M. (2020). A typology of business usage center members. Industrial Marketing Management, 85, 21–31. Keränen, J., & Liozu, S. (2020). Value champions in business markets: Four role configurations. Industrial Marketing Management, 85(2), 84–96. Leroi-Werelds, S., Verleye, K., Line, N., & Bove, L. (2021). Value proposition dynamics in response to external event triggers. Journal of Business Research, 136, 274–283. Loechner, J. (2018). $800 billion for sales training. Retrieved February 18, 2022, from https:// www.mediapost.com/publications/article/326525/800-billion-for-salestraining.html Macdonald, E. K., Kleinaltenkamp, M., & Wilson, H. N. (2016). How business customers judge solutions: Solution quality and value in use. Journal of Marketing, 80(3), 96–120. Payne, A., Frow, E., & Eggert, A. (2017). The customer value proposition: Evolution, development, and application in marketing. Journal of the Academic Marketing Science, 45, 467–489. Payne, A., Frow, E., Steinhoff, L., & Eggert, A. (2020). Towards a comprehensive framework of value proposition development: From strategy to implementation. Industrial Marketing Management, 87, 244–255. Pinnington, B., Meehan, J., & Scanlon, T. (2016). A grounded theory of value dissonance in strategic relationships. Journal of Purchasing and Supply Management, 22(4), 278–288. Presales Collective. (2021). What is value consulting? Retrieved February 18, 2022, from https:// www.presalescollective.com/post/what-is-value-consulting Prohl, K., & Kleinaltenkamp, M. (2020). Managing value in use in business markets. Industrial Marketing Management, 91, 563–580. Rintamäki, Saarijärvi, S., & Saarijärvi, H. (2021). An integrative framework for managing customer value propositions. Journal of Business Research, 134, 754–764. Terho, H., Eggert, A., Ulaga, W., Haas, A., & Böhm, E. (2017). Selling value in business markets: Individual and organizational factors for turning the idea into action. Industrial Marketing Management, 66, 42–55.

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Terho, H., Haas, A., Eggert, A., & Ulaga, W. (2012). It’s almost like taking the sales out of selling – towards a conceptualization of value-based selling in business markets. Industrial Marketing Management, 41, 174–185. Töytäri, P., & Rajala, R. (2015). Value-based selling: An organizational capability perspective. Industrial Marketing Management, 45, 101–112. Töytäri, R., Nilsson-Ollandt, K., Rajala, R., & Keränen, J. (2017). A value proposition development framework for industrial services. In Proceedings of the 50th Hawaii International Conference on System Sciences. Yrjölä, M. (2015). Uncovering executive prioritization: Evaluating customer value propositions with the pairwise comparison method. Journal of Service Science and Management, 8, 1–13.

5

Solution Realization

The previous chapters have demonstrated that value for the customer—in any form—can be achieved only if a solution is actually realized (Elgeti & Kleinaltenkamp, 2022). Accordingly, providers help customers realize a solution by familiarizing them with related products and services, as well as installing and implementing them at the customer firm. Therefore, to explain the solution realization process in more detail, we analyzed the most widely read practitioner books whose authors have all initiated and established customer success very effectively at different companies, ranging from startups to large corporations. These authors have provided valuable examples from their business experience of how best to support customers’ implementation of a solution. In business practice, when summarized, # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_5

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Solution Realization

various essential steps of solution realization have often taken different names according to the industries in which they are conducted and the diverse backgrounds and experiences of the authors-practitioners describing them. Basically, however, they can be divided into two fields of activities: onboarding and solution adaptation.

5.1

Onboarding

Onboarding is the starting point for solution realization. It guides a customer firm’s representatives through the implementation journey ahead by appropriately setting expectations, including explaining CSM’s value. Onboarding can be differentiated into three steps (Levin & van der Kooij, 2018): preboarding, internal handoff, and customer handoff.

5.1.1

Preboarding

Because the beginning of any customer relationship is crucial (Weber, 2021), preboarding—sometimes also called “embarking”—starts even before a deal has closed. Since customers wish to become acquainted with the people they work with during a solution’s implementation and use, preboarding encompasses the introduction of CS and CS managers during the sales cycle. At this point, CS managers can even accelerate the sales cycle by presenting the stories of customers they have worked with and upon whose experience the CS team can report firsthand (Levin & van der Kooij, 2018, see also Chap. 8).

5.1.2

Internal Handoff

Preboarding is followed by the internal handoff. Through this step, CS managers gain access to knowledge about the customer’s goals that have already been shared with the sales team. This step is necessary and useful because customers typically do not wish to repeat their goals and objectives to the CS team. Instead, they want to unlock achievements through the solution they have bought. Therefore, CS should be prepared—ideally with the support of an appropriate CRM system—to validate the customer’s expectations and plan the onboarding process. A proper internal handoff from sales to CS, thus, helps build trust between the customer firm’s representatives and the CS team. However, due to poorly defined responsibilities and unclear expectations, many onboarding processes fail at this stage (McCulloch, 2021). Therefore, establishing formal processes to structure the handoff from sales to CS ensures a successful knowledge transfer (Chiang, 2019). The following handoff topics have been proposed for this purpose (Adams, 2019, pp. 55–56):

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1. Basic customer information including name, contact details and some background on what they do, where and how they operate, who their customers are, what type of relationship we have with them, etc. 2. A description of the products and services that were sold together with any customization, configuration or other professional services sold alongside them and any important contract terms including deadlines, qualities, duration, etc. 3. The required or anticipated outcomes from the solution that were specified by the customer or assumed by us, and a breakdown of any outcome commitments that were made by us. Information about any agreed measurements, milestones, and deadlines. 4. An understanding of the deal value, both immediate and predicted over the lifecycle term. An understanding of any other anticipated or desired outcomes such as contract size increases, additional sales, and/or advocacy. 5. A breakdown of the people who have been, are, and will be involved in the engagement on both sides (us and customer). 6. Information about any third-party organizations who are also involved in the project and a summary of their involvement. 7. A summary of the current situation together with any agreed activities and deadlines moving forward. An understanding of how well the project has gone thus far and any known problems. 8. A list of essential contacts relating to each product and service that is contained within the solution that the customer has purchased, including those from third parties. 9. An understanding of how often customer meetings have taken place and their style and format. An understanding of what information is already being reported to the customer and how this information is formatted and presented. 10. An understanding of how technical support and problem resolution services are provided, together with relevant contact details and authorization information. Depending on the complexity of the solution that a company is selling, sales can help CS segment customers by selecting a generic or customized onboarding approach. The simple, generic way to onboard customers is to prepare a “kit” of templated onboarding documents. This generic approach can also help scale up CS activities—for example, through onboarding videos that explain basic information instead of repeated descriptions by a CS manager to new customers. In contrast, customized onboarding should be adapted very precisely to a specific customer’s needs. Hence, depending on a solution’s complexity and necessary customization, the CS team should prepare an onboarding project plan (Adams, 2019). Moreover, the sales team should introduce the customer firm’s representatives and CS managers during a personal meeting. Without this introduction, customers may feel surprised and overwhelmed when the CS team suddenly contacts them (Weber, 2021).

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5.1.3

Solution Realization

Customer Handoff

Finally, the “kickoff” stage of onboarding ends by providing a clear vision of how the firms will work together, including greater specificity on how to reach goals in a project plan (Weber, 2021). At the supplier firm, the so-called playbooks offer guidance on establishing clear, appropriate communication between CS managers and customers—for example, a template for a welcome email. Moreover, to inform the customer about exactly which activities to expect and when to expect them (McCulloch, 2021), the so-called success plans illustrate how both parties define “success” and will measure success. Finally, during the customer handoff, when the onboarding process is complete, the next steps and whether any important issues may remain unresolved should also be communicated to customers by the CS managers.

5.2

Solution Adaptation

After onboarding, during solution adaptation, suppliers customize their solutions by integrating them into the customer firm’s business processes and helping customers finally use these offerings. Thus, the supplier firm “brings a CVP to life” by adapting it materially to the client firm. Typically, customers’ expectations and motivation are high at this stage. However, many hurdles of various kinds can arise, preventing or delaying a solution’s successful implementation. For example, the introduction of new software can also be associated with technical problems that cause frustration on the customer side. Moreover, actual users may not be enthusiastic about learning new business processes and procedures for a solution. Therefore, a supplier’s project management skills and change management experience are critical to successful solution adaptation. At the same time, the solution adaptation phase can be very instructive for solutions suppliers, teaching them about prosperous and less-successful customers’ different approaches during the adaptation process. Supplier firms can draw conclusions from these insights, identify their most successful customers’ behaviors, and generalize effective approaches. Example: Identifying a Customer Champion

Rav Dhaliwal had previously worked as a CS leader at Zendesk and Slack. On the Podcast Creating Customer Success by Daniel Cattini and Alex Truman, he shared some insights on how to identify the most successful customers and generalize their behaviors. He proposed asking the following questions to determine the common characteristics of successful customers: • Do successful customers have strong project management or technical skills? • Do successful customers have solid management support? • What five things do all of a firm’s successful customers have in common?

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Further, he suggested building a team elaborate and verify the identified similarities. ◄ To create a seamless customer experience during the adaptation phase, Weber (2021) emphasizes the importance of fostering collaboration during a solution’s technical implementation. This support might include migrating data, installing software, connecting data sources, and educating and enabling customers—for example, through self-learning courses or live meetings. Example: Software Provider

Salesforce created a platform (comprising a website and a mobile application) called Trailblazer. On this platform, customers can access ready-made learning programs that help customers start using Salesforce products. Additionally, videos of Salesforce experts and live events are presented. Overall, the platform’s highly entertaining learning style makes Trailblazer unique. ◄ Summary • Solution realization comprises two fields of activities: onboarding and solution adaptation. • The internal handoff is the most critical stage to ensure a seamless onboarding experience.

References Adams, R. (2019). Practical customer success management: A best practice framework for rapid generation of customer success. Productivity Press. Chiang, J. (2019). The startup’s guide to customer success. How to champion the customer at your company. New Degree Press. Elgeti, L., & Kleinaltenkamp, M. (2022). Unrealized solutions in business markets. Industrial Marketing Management, 106, 31–46. Levin, D., & van der Kooij, J. (2018). The SAAS sales method for customer success & account managers. Winning by Design. McCulloch, W. (2021). The seven pillars of customer success. A proven framework to drive impactful client outcomes for your company. Lioncrest Publishing. Weber, D. (2021). Onboarding matters. How successful companies transform new customers into loyal champions. Springboard.

6

Customer-Related Customer Success Management Activities

From suppliers’ perspective, building and maintaining long-term business relationships with customers is CSM’s overall aim. Hence, to stabilize or even expand a business relationship with a customer, suppliers must prove that the value promised in a solution’s CVP has been achieved, or they must take corrective measures if it has not (Storbacka, 2011). Moreover, they should try to find new ways to add value beyond the customer’s usage journey (Macdonald et al., 2011). Together, these measures build suppliers’ customer-related CSM activities, seeking to ensure lasting success for customers by managing their experienced VIU (Prohl & Kleinaltenkamp, 2020). The customer-related CSM activities that form the “tire” of the CSM Wheel (see Fig. 2.2), thus, comprise two types: (1) activities aimed at VIU # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_6

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monitoring (Storbacka, 2011) and (2) activities aimed at VIU enhancement (Macdonald et al., 2016).

6.1

Value-in-Use Monitoring

VIU monitoring focuses on verifying the extent of customer goal achievement through the customer’s usage of the supplier’s offering. This process comprises VIU identification and VIU reporting activities—that is, providing relevant insights to the customer firm (Macdonald et al., 2016). Thus, based on previously defined value indicators (i.e., KPIs), suppliers’ CSM endeavors must capture their customers’ experienced VIU and regularly report the achievement of respective indicators to the customer. Ideally, value indicators are derived from the customer’s goals. Hence, they should be defined together with the customer, and they need to be adapted as customer goals may change over time (Prohl & Kleinaltenkamp, 2020). To avoid very early mistakes and ensure that customer expectations match a solution’s VIU potential, as described in a CVP (Elgeti & Kleinaltenkamp, 2022), among the solution provider’s first tasks once a contract is operational is reconfirming the metrics defined in the exchange agreement—or adapting them in the case of any mismatches. Without such checks and adaptations, the risk of tracking ineffective or even detrimental metrics emerges (Neely & West, 2022). As Sect. 2.1 outlined, business customer goals are embedded in a hierarchy of superordinate and subordinate goals (Bagozzi & Dholakia, 1999; Kleinaltenkamp et al., 2022). In the long term, a business customer’s ultimate goal when purchasing a solution from a provider is to strengthen their competitive position by increasing their economic effectiveness or efficiency. However, this most superordinate goal’s achievement is often hard to measure. Typically, therefore, its accomplishment can be traced only indirectly by capturing whether and to what extent various subordinate goals have been achieved. Thus, firms often use and measure indicators related to low- or medium-level organizational goals for two reasons. First, drawing on such indicators appears less complex. Second, causally attributing changes in these indicators to certain business activities—such as a specific solution’s usage—is easier compared to relating them to higher-order measurements like revenue or even profit (Macdonald et al., 2011; Prohl & Kleinaltenkamp, 2020; Rugg et al., 2002; Tuli et al., 2007). Example: Corporate Language Training

The customers of a corporate language training supplier might typically request English training for a company’s team or department. Since teams and departments have become more and more international and English has become the international business language, many companies in non-English-speaking

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countries want their employees to improve their English skills in order to facilitate communication and enable better collaboration. Generally, such a supplier’s customers are companies seeking greater work efficiency overall, which ultimately strengthens their competitive positions. The supplier of corporate language training, however, can more easily use a standardized language-level scale, e.g. according to the Common European Framework of Reference for Languages (CEFR), to test how training participants’ English has improved (e.g., from English level B2 to C2) than they can create a survey that reflects actual increases in work efficiency. In this example, the increase in employees’ work efficiency is the superordinate goal (a high-level organizational goal). Meanwhile, employees’ improved English level is the subordinate goal (the low- or medium-level organizational goal). ◄ The following example illustrates the difficulty of measuring a complex offering’s economic value. This challenge arises because it is also influenced by factors unrelated to the solution’s implementation and, thus, cannot be controlled by the solution supplier (Prohl & Kleinaltenkamp, 2020). Example: Corporate Language Training

The customer of a supplier of corporate language training hired a new team lead. This team lead implemented different methods to increase their team’s work efficiency at the same time that the team began its language training. Hence, the supplier faced difficulty in using a survey to determine which of the measures (language training or the new team lead’s methods) increased efficiency and to what extent. ◄ Relying on low- or medium-level indicators, thus, implies that buyers and suppliers cannot determine precisely whether or to what extent a solution helps achieve their high-level—that is, superordinate—goals. Hence, as the following examples from different industries illustrate, the most important challenge for CSM is determining and measuring the correct low-level—that is, subordinate— goals in relation to a customer firm’s ultimate goals. Example: Shipyard Management

The company supports the maintenance and upgrade of naval warships and manages the overall infrastructure on the naval base. There was a tendency to measure what was easy to measure, rather than what was needed. The metrics measured activity, rather than improvement or efficiency, they often measured operational details rather than strategic issues (Neely & West, 2022). ◄

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Example: Wind Power Management

The Original Equipment Manufacturer (OEM) was contracted to construct and maintain the wind turbines on a new offshore wind farm. As part of the contract, the OEM was asked to guarantee wind turbine availability. By not considering the impact of wind seasonality on the earnings potential of the owner, the OEM showed a lack of customer understanding. Technical availability is not the same as commercial availability (Neely & West, 2022). ◄ These examples demonstrate that CS managers should diligently strive to analyze how certain low-level goals are related to a client firm’s high-level goals and which indicators can measure these goals’ achievement. Hence, understanding a customer firm’s business model and which outcomes truly provide value for its representatives is fundamental. This understanding helps avoid tensions in customer relationships that may arise when desired outcomes are not clearly defined or understood. Example: Wind Power Management

In a wind power management case, the provider was contracted to maximize uptime and delivered this. Unfortunately, uptime in July is worth less than uptime in November, simply because there is less wind to produce energy, which ultimately is the commodity the customer wants. By focusing on uptime, rather than energy generated, the misaligned KPIs created a tension that ultimately caused the contract to fail. (Neely & West, 2022). ◄ Hence, value indicators can reflect a customer’s goal achievement on different hierarchical levels. They may, thus, differ in their informative value regarding a customer’s top-level goal achievement (Prohl & Kleinaltenkamp, 2020). Therefore, clearly tracing how certain value indicators relate to a customer firm’s most important goals is important. A good example of such a clean analysis of cause-and-effect chains and, thus, relevant goal relationships is presented in the following case. Example: Corporate Language Training

When entering into a business relationship with a supplier of corporate language training, customers’ main goal is enhancing their employees’ work efficiency, which is linked to the subordinate goal of improving employees’ language skills. Thus, for VIU identification, the supplier assesses the employees’ English skills on the team or in the department before and after language training to determine whether their English level could improve. The supplier uses standardized tests according to the Common European Framework of Reference for Languages (CEFR) to assess how training participants’ English levels improved (e.g., from

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B2 to C1). This change is mapped using respective value indicators (e.g., the number of employees who improved from basic to independent English users or from independent to proficient). However, improved English levels are only the subordinate goal. They do not reflect the language training’s economic value for the customer. Hence, to demonstrate the attainment of the main customer goal— that is, enhanced work efficiency—the supplier surveys participating employees after the language training, asking them how the improved English skills influenced their work efficiency. These results are again mapped using respective value indicators (e.g., the number of employees who reported saving up to a certain amount of minutes per day by reading emails in English faster). In this case, an overall increase in work efficiency depicts the economic value of the supplier’s offering for the customer. ◄ Moreover, a lack of information-sharing between a supplier and a customer, or a lack of necessary customer resources, complicates or even prevents the measurement of a solution’s economic benefit. Measuring customers’ economic benefit usually requires sensitive data that customers do not always wish to share with suppliers (Prohl & Kleinaltenkamp, 2020). Furthermore, this information transfer often requires time and resources (i.e., labor) that the customer either lacks or does not wish to spend. Example: Corporate Language Training

A customer of a corporate language training supplier is unwilling to allow their employees time to complete a survey regarding their improved work efficiency. Hence, the economic benefit of the supplier’s offering cannot be measured with such an analysis. ◄ VIU monitoring concerns not only the measurement of value indicators but also reporting their achievement to the customer (Macdonald et al., 2016). Depending on the type of complex offering and the associated collaboration between a supplier and a customer, three different approaches to VIU reporting—i.e., passing on information about value creation to the customer firm—can be roughly identified. They differ in their degree of structuring the reporting and exchanges with a customer about value creation and in referring to an operational level or a strategic level (Prohl & Kleinaltenkamp, 2020). First, a rather demand-driven, unstructured exchange of information often occurs between a supplier and a customer daily. Such a close exchange is usual if strong dependencies have arisen between the parties during a solution’s usage—for example, because the supplier takes over entire business processes for the customer. This daily exchange is straightforward and can take place across various channels. For instance, some suppliers provide their customers with reporting tools that they can use independently to retrieve key figures. However, this information exchange can also take place by telephone or email and even in person (Prohl & Kleinaltenkamp, 2020).

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Second, a more structured but still rather operational approach to exchanging information can occur weekly. For time-limited projects, weekly coordination about operational issues and progress is common. Typically, these meetings take place via telephone or in person (Helander & Möller, 2008; Prohl & Kleinaltenkamp, 2020). Third, besides reporting approaches that focus on managing daily business, suppliers must often also promote regular strategic-level exchanges with a customer (Helander & Möller, 2008; Prohl & Kleinaltenkamp, 2020). Upper management should be involved in these strategic meetings, which are framed—for instance—as quarterly reviews. These strategic meetings’ purpose is to review value cocreation results over time and discuss such topics as the customer’s goals and milestones, sometimes also with regard to future collaboration (Prohl & Kleinaltenkamp, 2020). Example: Corporate Language Training

Semi-annually or quarterly, a supplier of corporate language training meets with its customers for a structured review. The central aspect of these meetings is discussing the results of surveys regarding language training’s impact on employees’ work efficiency at the customer firm. Additionally, the supplier is interested in hearing news from the client. Such information may relate to a change in the company’s strategy—especially its learning strategy—or other insights relevant to future collaboration (i.e., planned management changes). ◄ Finally, limiting the number of metrics that are measured and shared with a customer firm’s representatives and focusing on KPIs that are really important to the customer seem useful. Moreover, data must be translated into actionable information that a customer firm’s employees can easily understand. This translation can typically be achieved by adding short commentaries that place goal achievement into the customer’s business context (Neely & West, 2022). Summary • Value indicators must be defined in collaboration with the customer because they should derive from the customer’s goals. • Value indicators need to be adapted over time since customer goals may change. • Value indicators reflect a customer’s goal achievement on different hierarchical levels. • Measuring value indicators that reflect an offering’s economic benefit to a customer is typically a complex task. • VIU reporting can be operational and strategic, and it may be more or less structured. (continued)

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• Operational information is shared frequently (e.g., daily or weekly), while meetings about strategic issues are regular but less frequent (e.g., quarterly). • Upper management should take part in strategic meetings to align a supplier’s and a customer’s vision for the future.

6.2

Value-in-Use Enhancement

Extending from activities that aim to verify actual value creation, CSM also comprises activities that seek to enhance customer-perceived value. These VIU enhancement activities (Macdonald et al., 2016) relate to reflecting on opportunities to increase customer value, on the one hand, and actually performing these activities, on the other hand. When building and maintaining long-term business relationships, suppliers’ continuous effort to enhance customer value becomes particularly relevant because the business environment in which a supplier and a customer operate is not static; rather, it is dynamic (Hollmann et al., 2015; Neely & West, 2022). Thus, suppliers must recognize changes in their business environment and respond appropriately to associated shifts in customer goals and requirements (Bonney & Williams, 2009). Hence, precise knowledge about a customer’s goals and needs is a prerequisite for not only VIU monitoring but also VIU enhancement activities in order to act as quickly and proactively as possible (Nordin & Kowalkowski, 2010; Woodruff, 1997). The activities related to reflecting on opportunities for VIU enhancement can be roughly divided into four categories: 1. 2. 3. 4.

root-cause analyses, onsite visits to the customer, fairs and conferences, regular internal meetings.

A root-cause analysis is usually triggered by unsatisfactory value creation, which is revealed through value monitoring measures (e.g., underperforming KPI values; Prohl & Kleinaltenkamp, 2020). This VIU enhancement measure aims, therefore, to explain why customer goals could not be achieved to the desired extent in order to initiate countermeasures and avoid such misalignment in the future (Neely & West, 2022; Reichheld, 1996). Moreover, onsite visits to the customer are another important supplier activity to generate new ideas that enhance customer-specific value (Terho et al., 2012; Prohl & Kleinaltenkamp, 2020). Furthermore, fairs and conferences—often initiated by suppliers themselves— provide a platform for a supplier and a customer to exchange views on value

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enhancement potential. These occasions also offer an opportunity to bring together customers who face similar challenges and can, therefore, inspire each other’s applications of a supplier’s solutions (Prohl & Kleinaltenkamp, 2020). However, not only exchanges between a supplier and a customer or between several customers provoke ideas for value enhancement. Suppliers usually also have regular internal meetings to discuss potential improvements (Prohl & Kleinaltenkamp, 2020). In these meetings, brainstorming and information-sharing should occur not only within a CSM department but also with other departments, such as product management or sales. For this purpose, efficient interfaces between the departments of a supplier company (Storbacka, 2011) and good knowledge management (Gupta et al., 2000) are crucial. Example: Corporate Language Training

A supplier of corporate language training discovers deviations in value creation between previously set goals (e.g., unsatisfactory training results or no or low increases in work efficiency). They organize a meeting with their customer to analyze the cause of these problems (e.g., whether employees had generally rejected the course or just not made any progress). While this root-cause analysis is triggered in reaction to insufficient value creation, regular internal meetings to exchange value-enhancing ideas are proactively held by the supplier company. At these internal meetings, ideas on possible customer projects and their potential value for the customer are discussed by representatives of different departments (e.g., CSM and sales). ◄ To actually create value for a customer, VIU enhancement ideas must be realized (Prohl & Kleinaltenkamp, 2020; Macdonald et al., 2016). The activities to disseminate such opportunities for VIU enhancement can be divided into three categories: 1. empowering the customer firm’s employees, 2. resource-related measures, 3. solution expansion. The first category comprises activities that mainly aim to empower a customer firm’s employees to use a solution independently to ensure its effectiveness and efficiency. These activities include customer support, training, consulting services, and customer-supplier workshops. A solution provider’s customer support representatives are typically an initial point of contact for a customer company’s employees—if they need help using a supplier’s offering (Prohl & Kleinaltenkamp, 2020). Usually, these employees of the supplier firm can be contacted at any time (Negash et al., 2003), and they help customers with any problems or difficulties, thus helping realize a solution’s full value potential. Moreover, a supplier can conduct training online or onsite to teach the customer’s employees how to use a solution’s various features (Prohl & Kleinaltenkamp, 2020). As part of a smooth customer onboarding process,

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scheduling the first training session right at the beginning of a relationship is reasonable because it can familiarize the customer’s employees with the solution early (Prohl & Kleinaltenkamp, 2020; Helander & Möller, 2008). If the supplier takes over entire customer processes, the supplier’s own employees are significantly responsible for value creation, so they can also receive such training (e.g., training call center agents when a supplier operates a call center on a customer’s behalf; Prohl & Kleinaltenkamp, 2020). Consultancy services are another form of supplier support for their customers during the value creation process. Although consultancy services generally aim to increase customer value creation through a supplier’s own offering, they can also go beyond the supplier’s core business (Prohl & Kleinaltenkamp, 2020). A supplier of automation technology, for instance, advises a customer on process optimization in his factory. Thereby, the supplier’s core offering, the automation technology, is only one part of the consulting service. Further, customer–supplier workshops enable customers to fully exploit a solution’s value potential—especially if ambiguities between a supplier and a customer prevent a solution’s desired realization (Elgeti & Kleinaltenkamp, 2022; Prohl & Kleinaltenkamp, 2020). Hence, to promote joint learning processes and problem-solving (Imai, 1986), suppliers organize workshops with their customers. The second category of VIU enhancement activities pertains to resources (i.e., personnel, hardware, and software) that significantly influence value creation. This category includes such activities as the reallocation of resources. Aiming to increase a customer’s experienced VIU, a supplier can, for example, staff more or different personnel on a project (Engwall & Jerbrant, 2002; Prohl & Kleinaltenkamp, 2020). Moreover, motivating employees can help boost value creation in this regard by suppliers taking measures to either positively influence the motivation of a customer firm’s employees or their own employees if the supplier has taken over customer processes. Besides such activities related to human resources, activities related to deploying physical resources, as well as implementing software can also enhance experienced VIU (Prohl & Kleinaltenkamp, 2020). In this context, for example, maintenance services range from purely supplying spare parts (Helander & Möller, 2008) to taking over entire maintenance processes (spare parts or service personnel). The third category of VIU enhancement activities involves solution expansion in the form of cross-selling and upselling or (joint) product development. Typically, a customer solution is customized to serve a customer’s needs and help accomplish customer goals (e.g., Elgeti & Kleinaltenkamp, 2022; Ulaga & Reinartz, 2011). However, on the one hand, a customer’s goals may change over time, and on the other hand, suppliers usually include more products, services, and features in their portfolios than a customer has already purchased. Hence, in response to changing circumstances, and in order to strengthen a business relationship, suppliers may offer their customers additional products, services, or features over time (Prohl &

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Kleinaltenkamp, 2020). Nonetheless, suppliers should take care that customers perceive valueless cross-selling or upselling attempts as negative (Ansell et al., 2007), which may destroy trust and threaten an established relationship. Moreover, (joint) product development can serve as another supplier response to changing circumstances (e.g., technological progress). Accordingly, to address especially important customers’ needs as much as possible, suppliers often integrate these customers into their solution development process early on (Kaulio, 1998). This approach also increases the chance of developing products that attract other customers (Storbacka, 2011; Prohl & Kleinaltenkamp, 2020). Example: Corporate Language Training

A supplier of corporate language training has implemented various measures to continuously improve customers’ experienced VIU. The research and development department, for example, ensures that a virtual training platform is always technically up-to-date. Furthermore, based on best-practice examples at this company, a quality control process ensures that the virtual training platform is used most effectively. ◄ Summary • Suppliers’ activities that reflect on opportunities for VIU enhancement can be reactive (e.g., triggered by unsatisfactory value creation) or proactive (e.g., supplier-initiated user conferences to promote an exchange of ideas). • Fruitful ideas about value improvement potential can be generated through conversations between the representatives of supplier and customer firms, between several customers, or between different employees and departments at a supplier firm. • Activities that disseminate opportunities for VIU enhancement can be divided into three categories: 1. empowering the customer to ensure the supplier’s product or service effectiveness and efficiency, 2. supplier or customer resources, 3. expanding a business relationship.

6.4 Successfully Conducting Customer-Related Customer Success Management Activities 55

6.3

The Link between Customer-Related Customer Success Management Activities and Value-Based Selling

Although, by definition, the customer-related CSM activities as described in Sects. 6.1 and 6.2 take place solely during a customer’s usage process (i.e., after a customer and supplier have entered into a business relationship by agreeing to an exchange), they are not independent of the sales process or the supplier’s VBS efforts. For instance, through VIU monitoring activities, suppliers should track actual value creation for and with the customer during the usage process. Then, findings should be reconciled with the potential value quantified in the CVP. Ideally, respective VIU monitoring activities would then serve as the basis for continuous VIU enhancement activities, ensuring that the customer’s experienced VIU at least matches the quantified value promises. Thus, VBS selling activities and subsequent customerrelated CSM activities should be linked and together form one continuous process (Prohl & Kleinaltenkamp, 2020). Theoretically, progression from VBS to VIU monitoring and, finally, VIU enhancement should be linear. However, this process is iterative in reality, and a CS manager might need to shift between different process stages. For instance, activities that reflect on ideas for VIU enhancement may not always lead straight to realization. Instead, a CS manager must often first pass potential VIU enhancement opportunities to the sales department in order to initiate VBS activities. This interaction is often needed because the dissemination of potential opportunities might require services or features that a customer has not previously obtained from the supplier. Therefore, a buying decision may first be required.

6.4

Successfully Conducting Customer-Related Customer Success Management Activities

Providers should consider, in summary, three main aspects when implementing customer-related CSM activities: 1. The customer-related CSM process is dynamic since customers’ goals—and, therefore, their expected and experienced VIU—may change over time. Clearly defined customer goals are the prerequisite for successful customer-related CSM activities. 2. In addition to suppliers, customers must play an active role in implementing CSM activities (e.g., share information with the supplier; contribute resources in form of manpower), and they should consider the necessity of their contributions. 3. The customer-related CSM process should be closely linked to the sales process. All information from the sales process must be fed into the CSM process. The interface between a sales team and a CSM team must be organized accordingly. Table 6.1 overviews duties and considerations that might help successfully implement customer-related CSM activities.

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Table 6.1 Duties to implement customer-related CSM activities CSM sub-processes VIU identification

To-do’s Understand the customer’s goal (s)

Define value indicators that capture the progress of customer goal achievement

Measure the defined value indicators

VIU reporting

Plan the information exchange appropriately

Topics/tasks/questions - What provides value for the customer? - What are the pains and goals of the customer firm as a whole (collective level)? - What are the pains and goals of the customer employees that actually work with the solution (individual level)? - What did the sales colleagues tell the customer during the sales process about how those pains and goals can be addressed? - What promises are set in the customer value proposition? - What performance outcomes are contractually binding? - What value indicators reflect the customer goals most precisely? - Involve the customer in the definition of appropriate value indicators on collective and individual level. - Define value indicators that can actually be measured. - Be aware that the ultimate customer goal can be broken down to subordinate goals. The achievement of subordinate goals might be more easy to measure. - Make sure the update of value indicators is a regular item on the agenda in meetings with customers as their goals may change over time. - Measure value indicators on a regular basis. - Educate the customer that they may also need to contribute to the measurement of the value indicators (e.g. in form of information sharing). - How frequently should formal review meetings with the customer take place? - Be aware of the different possible channels for information exchange and decide which one(s) to use (e.g. online reporting tool, meeting in person, telephone, e-mail). (continued)

6.4 Successfully Conducting Customer-Related Customer Success Management Activities 57 Table 6.1 (continued) CSM sub-processes

To-do’s

Focus on the customer

Reflecting on opportunities for VIU enhancement

Be open

Lean on facts

Disseminating opportunities for VIU enhancement

Empower the customer

Take advantage of scalability

Topics/tasks/questions - Discuss frequency and channels of information exchange (operational and strategic) with the customer in the beginning. - Be clear about the agenda before each meeting and provide it to the customer as well. - Provide your information in a structured way and make it easy to understand (e.g. the reporting of value indicators). - Never lose sight of the customer’s goal(s) and refer to the degree of goal achievement. - Let the customer have his say and listen carefully. - Listen to the ideas of your customers. - Provide a platform for exchange for your customers (e.g. host a conference for your customers). - Promote exchange on ideas with your CSM colleagues and also those colleagues from other departments (e.g. product development, sales). - Share customer information internally. - Analyze the value indicators carefully and draw conclusions for optimization. - Know your product/service portfolio and its potential customer value. - What channels are most effective/ efficient in teaching the customer how to get the most out of the solution? - Learn from success stories. - Think about possible ways to make value enhancing activities scalable (e.g. standardized video tutorials instead of live trainings). - Recognize situations in which personal interaction is really necessary. - Develop material that can be used like a template (e.g. a slide deck for consulting purposes). (continued)

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Table 6.1 (continued) CSM sub-processes

To-do’s Think about the future

Topics/tasks/questions - Prioritize your customers. - Take a look into the past to understand the value of the business relationship from your firm’s and the customer firm’s perspective. - Promote engagement with key customers (e.g. joint product development).

References Ansell, J., Harrison, T., & Archibald, T. (2007). Identifying cross-selling opportunities, using lifestyle segmentation and survival analysis. Marketing Intelligence & Planning, 25(4), 394–410. Bagozzi, R. P., & Dholakia, U. (1999). Goal setting and goal striving in consumer behavior. Journal of Marketing, 63(4), 19–32. Bonney, F. L., & Williams, B. C. (2009). From products to solutions: The role of salesperson opportunity recognition. European Journal of Marketing, 43(7/8), 1032–1052. Elgeti, L., & Kleinaltenkamp, M. (2022). Unrealized solutions in business markets. Industrial Marketing Management, 106, 31–46. Engwall, M., & Jerbrant, A. (2002). The resource allocation syndrome: The prime challenge of multi-project management? International Journal of Project Management, 21, 403–409. Gupta, B., Iyer, L. S., & Aronson, J. E. (2000). Knowledge management: Practices and challenges. Industrial Management and Data Systems, 100(1), 17–21. Helander, A., & Möller, K. (2008). How to become solution provider: System supplier’s strategic tools. Journal of Business-to-Business Marketing, 15(3), 247–289. Hollmann, T., Jarvis, C. B., & Bitner, M. J. (2015). Reaching the breaking point: A dynamic process theory of business-to-business customer defection. Journal of Marketing, 70, 119–136. Imai, M. (1986). Kaizen: The key of Japanese success. Random House. Kaulio, M. A. (1998). Customer, consumer and user involvement in product development: A framework and a review of selected methods. Total Quality Management, 9(1), 141–149. Kleinaltenkamp, M., Eggert, A., Ulaga, W., & Kashyap, V. (2022). Rethinking customer-perceived value from an organizational perspective. Journal of Inter-Organizational Relationships, 27(1–2), 1–18. Macdonald, E. K., Kleinaltenkamp, M., & Wilson, H. N. (2016). How business customers judge solutions: Solution quality and value in use. Journal of Marketing, 80(3), 96–120. Macdonald, E. K., Wilson, H., Martinez, V., & Toossi, A. (2011). Assessing value-in-use: A conceptual framework and exploratory study. Industrial Marketing Management, 40, 671–682. Neely, A., & West, S. (2022). Aligning performance metrics in outcome-based contracts. California Management Review, 64(3). Negash, S., Ryan, T., & Igbaria, M. (2003). Quality and effectiveness in web-based customer support systems. Information & Management, 40, 757–768. Nordin, F., & Kowalkowski, C. (2010). Solutions offerings: A critical review and reconceptualization. Journal of Service Management, 21(4), 441–459. Prohl, K., & Kleinaltenkamp, M. (2020). Managing value in use in business markets. Industrial Marketing Management, 91, 563–580. Reichheld, F. (1996). Learning from customer defections. Harvard Business Review, 74(2), 56–70.

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Rugg, G. E. M., Mahmood, A., Rehman, N., Andrews, S., & Davies, S. (2002). Eliciting information about organizational culture via laddering. Information Systems Journal, 12, 215–229. Storbacka, K. (2011). A solution business model: Capabilities and management practices for integrated solutions. Industrial Marketing Management, 40, 699–711. Terho, H., Haas, A., Eggert, A., & Ulaga, W. (2012). It’s almost like taking the sales out of selling – Towards a conceptualization of value-based selling in business markets. Industrial Marketing Management, 41, 174–185. Tuli, K. R., Kohli, A. K., & Bharadwaj, S. G. (2007). Rethinking customer solutions: From product bundles to relational processes. Journal of Marketing, 71, 1–17. Ulaga, W., & Reinartz, W. (2011). Hybrid offerings: How manufacturing firms combine goods and services successfully. Journal of Marketing, 75(6), 5–23. Woodruff, R. B. (1997). Customer value: The next source for competitive advantage. Journal of the Academy of Marketing Science, 25(2), 139–153.

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Adapting the Customer Value Proposition

The CVP fulfillment lays the groundwork for future contract renewals. However, for repeat purchases and longer-term subscription arrangements, a CVP typically does not remain unchanged. In contrast, since customer goals likely change over time, a CVP needs to be adapted throughout a business relationship. Yet, in the traditional, one-time sales model, adapting a CVP for existing customers is therefore just as important when striving for repeat purchase is as it is in subscription-based markets, where continuous contract renewals are the order of the day.

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_7

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7.1

Adapting the Customer Value Proposition

Activities of Adapting the Customer Value Proposition

When adapting CVPs, providers must recognize customer needs and their changes in the course of an ongoing business relationship. Such needs include which problems they face, which features they use, whether they are willing to add new features or services, whether their business has emerged, and whether they want to upgrade, downgrade, or even suspend their service. Additionally, providers must determine what customers perceive as valuable based on their needs and goals—which is probably the most important part in maintaining a business relationship. Interestingly, a recent study of customer solutions showed that, even if customers do not currently use a solution for a variety of reasons, they do not necessarily view its features as worthless (Elgeti & Kleinaltenkamp, 2022). Example: Payment Solutions

A company offering payment solutions has customers that have bought solutions, however typically never use them because these customers only want to benefit from these solutions as standby options or as a security package. The solution allows for payment options, including many foreign currencies paid by credit card. Despite the unlikelihood of a rural shop having many customers who only want to pay with foreign credit cards, significant revenues may be lost if this option is unavailable when large foreign tourist groups show up. The solution provider addresses this need for security and backup solutions even though these service options are almost never used. ◄ Therefore, a deep understanding of a customer’s perceptions surrounding CVP fulfillment is needed. The concept of “value change” introduced by Flint and Woodruff (2001) suggests that “certain events within customers’ environment may trigger changes in desired value” (Flint & Woodruff, 2001, p. 324). Similarly, Ring and Van de Ven (1994) and Heinonen et al. (2010) indicated a temporal dimension to value propositions and stated that value perspectives may change during the sales process. In the same vein, Kowalkowski (2011) emphasized value propositions’ dynamics by referring to an “understanding of which value to emphasize, and when to emphasize it in the value proposition process” (p. 289). Kowalkowski (2011) also highlighted the importance of sparking diverging perspectives about what is perceived as valuable during negotiations and, especially, shortly before a deal closes. Consequently, Kindström and Kowalkowski (2009) underscored that providers must match different value dimensions to different participating buying center members in terms of timing—particularly when closing a deal. Practitioners have also recognized that experienced VIU as perceived by the customers changes throughout the post-purchase stage. Figure 7.1 illustrates how suppliers believe customers perceive their solution’s value in use during different phases in this regard.

7.1 Activities of Adapting the Customer Value Proposition

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Fig. 7.1 The staircase-shaped pattern of customers’ value perceptions

Initially, the expected VIU is very high. Then, after a deal has been closed, the experienced VIU is typically low, as the customer has not yet begun using the solution. As illustrated in Fig. 7.1., the implementation phase is still difficult because the customer confronts various challenges when implementing a new solution—for example, technological problems or missing customer data. However, experienced VIU rises during the usage phase as a result of CSM activities. However, if the experienced VIU remains low, providers must invest massively in CSM activities in order to convince the customer to extend their business relationship. Consequently, reflecting on this staircase-shaped pattern of how customers might perceive value helps suppliers to adapt a CVP for a successful renewal at different stages. Moreover, such an assessment can also orient the development of a customer health score (CHS), which shows the “health” of a customer relationship. In this context, “healthy” means a customer will very likely renew a contract. Meanwhile, a customer who is “at risk” will very likely terminate their business relationship. Essentially, a CHS condenses meaningful data regarding customers and, thus, helps predict how they will behave at a given time. Indeed, most companies agree on the general idea of a CHS (what it’s for) and the reason for its existence (why it was developed). However, the question of “how” to set up a CHS from scratch is far more complex (Gainsight, n.d.). The CHS is, therefore, an important tool with which a supplier can make decisions about allocating CSM resources (Pendo, n.d.)—that is, prioritizing customers, as well as the type and regularity of CSM activities based on answering the following questions (Pendo, n.d.); 1. Frequency: How often is a solution used by the customer firm’s employees? 2. Breadth: How many of the customer firm’s employees use the solution? 3. Depth: How much is the solution integrated into the customer firm’s processes?

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Typically, suppliers that offer software solutions can access a large amount of data to deduce the necessary answers. This can include the customer’s log-in behavior or the intensity with which the customer uses some software’s key features. The suppliers of other kinds of solutions must obtain such information differently— for instance, by talking to a customer or visiting the customer’s premises (Fontanella, 2022). Nevertheless, for suppliers, investing in developing a meaningful CHS formula is worthwhile because it is a powerful tool to identify not only at-risk customers but also the potential to expand business relationships. In other words, the knowledge and insights that is gained through the application of a CHS should be used when adapting a CVP in any case. Adapting a CVP also presents a good occasion to expand a business. In this context, the so-called land-and-expand approach is a helpful tool for suppliers. It suggests that companies first establish a foothold through a core product (“land”) and then successfully expand their revenues (“expand”) through further business transactions with their customers. However, to expand a business, offers must complement the core product. Thus, complementary product ranges are important for expansion. Example: Software Provider

Salesforce is a “land-and-expand” pioneer, having established a corporate foothold through its CRM tool. Then, the firm successfully expanded its recurring subscription base as a customer-focused company (Bain & Company, 2022.) For example, if a customer succeeds in using Marketing Cloud to automate and personalize its marketing and then wants to add analytical tools to optimize its spending on advertising campaigns, Salesforce can more easily expand its business relationship with that customer—based on previous success, trust, and cooperation—than if such applications had not yet been deployed. Indeed, Salesforce recently stated that its renewal business exceeds its new customer business (Salesforce, 2021). ◄ Summary • Embedding a CVP into a sales cycle can ensure that all sales endeavors are geared toward customer value. • A CVP is not renewed at a specific occasion; rather, its renewal process begins right after its sale because it should be adapted continually. • A CVP can be understood as a dynamic tool to address constantly changing customer needs and emerging goals. • Reflecting on the staircase-shaped pattern through which providers believe their customers perceive value helps with successful CVP adaptation.

7.2 Case Study “Salesforce”: How to Scale Up Tailored Customer. . .

7.2

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Case Study “Salesforce”: How to Scale Up Tailored Customer Success Management Activities (in Cooperation with Salesforce)

Salesforce is a software company that pioneered the concept of subscriptions, and it has experienced incredible growth rates over the last 20 years. It was also among the first companies to pursue a “land-and-expand” strategy. In this approach, suppliers start small with their customers in order to slowly expand into other business areas through upselling and cross-selling. For example, a customer initially uses a small software package of a provider, in which only limited functions are preserved. Once customer value is created and the customer has thus gained trust in the provider and its offering, the business relationship is expanded by an upgrade of the software package. At the core of this strategy lies the establishment of a trusting relationship with the customer to foster long-term business relationships (i.e., contract renewals with existing customers). Long-term business relationships are also a prerequisite for running a subscription business model successfully. Salesforce established a corporate foothold through its CRM tool. Then, it successfully expanded its recurring subscription base as a customer-focused company. Today, Salesforce’s renewal business even exceeds its new customer business. Since long-term business relationships are central to its business practices, Salesforce constantly seeks new ways to retain customers and invest in relationship marketing activities. As a result, it developed CSM two decades ago as a new management practice focused on reducing churn rates by ensuring lasting success for its customers. Now that Salesforce has practiced CSM for 20 years, this management approach is deeply rooted in the company. Specifically, “customer success” is defined internally as one of the most important values and, therefore, a priority in all of Salesforce’s endeavors. In this sense, “customer success” means that customers can achieve their desired business outcomes using Salesforce products. CS managers are responsible for helping customers to achieve these business outcomes and demonstrating or measuring this success. While the customer-oriented communication of success is based on desired and previously defined business outcomes, attrition rates are particularly important for Salesforce’s internal decision-making. This rate reflects how many customers did not renew their contract with Salesforce. Organizationally, CSM at Salesforce is strictly separated from sales. Importantly, customer success takes precedence for CS managers. While the sales department is primarily responsible for generating new business, the CS department is responsible for renewing existing contracts. Under the land-and-expand strategy, a trustworthy relationship with decision-makers and buyers at the customer company and user acceptance, in general, is particularly crucial for Salesforce products’ successful implementation. CS managers are responsible for ensuring that Salesforce products become a priority for the customer company’s managers and users. From an organizational perspective, Salesforce’s CSM also combines customerspecific, individual support with scalable elements. For instance, a CS manager must talk to a customer personally to understand their use case and needs. However, many CS manager tasks are scalable, and Salesforce takes advantage of this quality to

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continually improve efficiency. For example, coaching sessions and live demonstrations allow different customers to participate at the same time. For scalability, Salesforce is particularly developing tools for CS managers. This work is ongoing, so new tools—called “engagements”—are added regularly. These engagements aim to make CS managers’ work more efficient by providing readymade materials—such as slide decks for workshops, interview guidelines, and best practices for different customer touchpoints. A manufacturer from Northern Europe that is specialized in vertical transportation has been a Salesforce customer for over 15 years. To ensure that this customer makes benefits from Salesforce products as much as possible, Salesforce relies on a so-called premier success plan. Salesforce uses success plans to accelerate CS teams’ task completion and identify new, better ways of working. This approach also includes a constant dialogue between customers and Salesforce consultants. As part of a new project, the manufacturing-industry customer plans to expand the business relationship with Salesforce. Particularly, it wants to transform collaboration between its customers and employees by implementing the Salesforce Marketing Cloud. This powerful tool integrates the whole customer experience, offers great analytical potential through insights into customer behavior, and helps continuously improve interactions with customers. Summary To reflect on how Salesforce scaled up its CSM activities, answer the following questions: • Task 1: How would your success plan for the customer mentioned in the case study look like with respect to customer-related CSM activities? • Task 2: How would you design a workshop with this customer to increase its users’ acceptance of the Marketing Cloud? • Task 3: What could make Salesforce’s CSM even more scalable?

References Bain & Company. (2022). Why salesforce is the ultimate SaaS land-and-expand titan. https://www. opexengine.com/salesforce-com-land-expand-titan/. Elgeti, L., & Kleinaltenkamp, M. (2022). Unrealized solutions in business markets. Industrial Marketing Management, 106, 31–46. Flint, D., & Woodruff, R. (2001). The initiators of changes in customers’ desired value. Results from a theory building study. Industrial Marketing Management, 30, 321–337. Fontanella, C. (2022). How to score the health of your customers & accounts. HubSpot. Retrieved October 15, 2022, from https://blog.hubspot.com/service/customer-health-score. Gainsight. (n.d.). How to score customer health. Retrieved October 17, 2002, from https://www. gainsight.com/blog/customer-health-scores/. Heinonen, K., Strandvik, T., Mickelsson, K.-J., Edvardson, B., Sundström, E., & Anderson, P. (2010). A customer-dominant logic of service. Journal of Service Management, 21, 531–548.

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Kindström, D., & Kowalkowski, C. (2009). Development of industrial service offerings—a process framework. Journal of Service Management, 20(2), 156–172. Kowalkowski, C. (2011). Dynamics of value propositions: Insights from service-dominant logic. European Journal of Marketing, 45(1,2), 277–294. Pendo. (n.d.). Customer health score. Pendo.io. Retrieved October 17, 2022, from https://www. pendo.io/glossary/customer-health-score/#:~:text=A%20customer%20health%20score%20is, vary%20from%20company%20to%20company. Ring, P. S., & Van de Ven, A. H. (1994). Development processes of cooperative interorganizational relationships. Academy of Management Review, 19, 90–118. Salesforce. (2021). Renewals at Salesforce. https://www.salesforce.com/video/305347/.

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Customer Advocacy

No company can live on its existing customers alone in the long term. For instance, customer needs may change, technologies may develop, and competitors may poach existing customers. This challenge is all the more important for startups, which depend on new customers to make their business sustainable. However, convincing new customers is even more challenging when selling complex or subscriptionbased offerings since customers often struggle to assess solutions’ quality due to solutions’ numerous and varied elements and future-oriented nature. Therefore, prospective customers are not guaranteed that a solution promised in a CVP and the associated expectations of the resulting VIU will actually be realized when using the solution (Elgeti & Kleinaltenkamp, 2022). Prospective solution customers, therefore, need different and considerably trustworthy information when buying— for example—complex software or an integrated logistics solution. At the same time, customers are often overwhelmed by the flood of information they receive from a solutions provider or other sources in the marketplace, causing “information overload.” Consequently, prospective clients typically seek convincing “substitute information” that not only is available before a purchase but also can help resolve uncertainty and facilitate evaluation.

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_8

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Thus, referrals and references have always been an important source of sales and marketing leads in business markets (e.g., Hada et al., 2014; Lacey & Morgan, 2008; Boyd et al., 2022). Unsurprisingly, then, in a recent study, 54% of interviewed B2B firm representatives cited referrals as the most important source of high-quality leads (Sagefrog Marketing Group, 2022). Customers’ having experienced similar situations as prospects is a crucial influence because it constitutes “chunk information”—which is not only relatively easily detectable but also very valuable because it can substitute and group several other pieces of information that are otherwise difficult to access and interpret (Jacoby, 1975). Consequently, solution businesses benefit greatly from referrals since they help increase conversion rates and facilitate successful closing during the selling process. Research has shown that customer satisfaction positively affects word-of-mouth (WOM) referrals in business markets, which—in turn—affects new customer acquisition (e.g., von Wangenheim & Bayón, 2007). Hence, the decisive precondition for effective referrals is proving that the value promised in a CVP has been realized, such that the customer firm has achieved its desired outcome. For this reason, CSM is also relevant for customer advocacy to achieve solution growth. Customer advocacy is, therefore, the “accelerator” that makes the CSM Wheel for one customer drive the CSM Wheels’ of new clients (see Fig. 2.2). The first task in crafting convincing referrals is, thus, understanding which present customer firms are successful and to which degree they achieve their goals when using a solution. Such insights should be available through a supplier’s VIU monitoring activities (see Sect. 6.1).

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Once possible reference customers have been identified, the next challenge in gaining referrals is convincing customers to provide those. Over the course of a customer’s using a solution, repeatedly compiling their value assessments, collecting concise quotes, and creating infographics that illustrate the customer’s success facilitate such referrals. These records provide meaningful content that not only proves that a supplier firm is driving its customers’ VIU but also makes asking for a testimonial or permission to use this information in a case study much easier and more effective (McCulloch, 2021). Moreover, self-references can also be used to convince a prospective customer. This option arises when a supplier firm uses offered solutions itself and can, therefore, show their functionality and economic outcomes to customers at its premises. Example: Automation Solutions

To demonstrate that offered applications actually work, SEW-EURODRIVE—a German supplier of gear motors, electronically controlled drives, and automated solutions—has decided to operate an application hall where its technical solutions have been installed. Prospective customers are invited to visit the company to see these solutions and how they work live. Moreover, the facility hosts training and demonstrations, as well as acceptance tests for customer solutions. The hall’s construction and operation ultimately ensured that SEW-EURODRIVE’s solutions business had a breakthrough in the market. Due to the project’s success and sales processes increasing digitalization, virtual visits to the hall will soon be possible, which will increase the concept’s scope. ◄ Referrals comprise content generated by a customer firm or some of its representatives. Typically, this content is incorporated into testimonials, online reviews, or case studies that provide firsthand knowledge, insights, assessments, and recommendations. • A testimonial concretely advocates for a solution or solution provider on behalf of a customer firm representative. It typically refers to the quality and effectiveness of an offered solution. The better-known testimonial authors are in their industry—or the higher their hierarchical position—the greater the credibility of their endorsement. • Similarly, an online customer review comprises an evaluation by someone who has purchased, used, or experienced a solution. This review is published on the supplier’s website or on other websites relevant to target customers, such as industry information services’ websites and e-commerce pages. • Case studies tell a detailed story about how customers use a solution, their experiences with the solution, the solution’s provider and its representatives, and the value the customer firm has realized through the solution. Such stories can include all aspects of a solution’s sale and implementation—from impeccable delivery and onboarding to excellent customer support and achieving the

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customer’s desired outcomes. Case studies are typically published on a supplier’s website, in customer magazines, or in brochures. A useful structure for a case study comprises the following four steps (McCulloch 2021): 1. describing the state of an industry or market before a solution was offered to show how the solution solved previous issues 2. explaining implementation experiences and the solution’s capabilities to demonstrate onboarding and adoption processes and how a solution works 3. discussing improved numbers and metrics to quantify desired outcomes and realized value, as well as how KPIs were derived and measured 4. celebrating success and identifying the next steps to illustrate possible upselling and cross-selling options Modern-day information technologies have massively increased the ways in which referrals can be presented to prospective customers. These options include digital forums that facilitate prospective customers’ meetings and social media platforms on which content can be shared with prospective customers. Moreover, similar to consumer markets, “influencers” have even come to champion firms, brands, or solutions in business markets. And recommendations are also more and more given on professional networks such as LinkedIn in the form of written endorsements, needs-based tagging, or hashtags. To decide how many customers are featured in a customer reference (i.e., reference breadth) and the richness of the provided information (i.e., reference depth; Boyd et al., 2022), compiling a customer reference library is useful. This resource helps track referrals received and used for certain purposes to avoid using the same recommendations repeatedly or always needing to ask for new recommendations. Moreover, such a library can be used to group referrals according to target segments—for example, by industry, geography, company size, use case, outcomes, or metrics—which facilitates access to a suitable referral when needed. Despite the opportunities presented by such targeted referrals, in the solutions business world, most referrals come from WOM directly—that is, through “informal communications directed at others about the ownership, usage, or characteristics of particular goods and services or their sellers” (Westbrook, 1987, p. 261), which a solution supplier cannot control. This kind of information exchange occurs at industry conventions, events, trade shows, and exhibitions—and, simply, during phone or email conversations. Therefore, trying to influence—at least indirectly— such judgments by customers is all the more important. For this indirect, as well as the supplier-controlled forms of advocacy, knowledge about the different types of advocates is useful. A common typology distinguishes between four of these types (Ramos, 2020): • Educators are advocates who like to share their knowledge and provide tips or tricks. They are outgoing, enthusiastic, and able to teach other customers how to use a solution effectively, and they enjoy helping others. • Validators are well-spoken, fair, balanced, and trustworthy people who advocate on the record for something they feel strongly about.

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• Status seekers are ambitious but honest people who are typically very good at public speaking. Therefore, inviting them to company events is advantageous. They voice their opinions because they want to be seen as experts, to progress their careers, and to promote their personal brands at their own firm, as well as externally. Thus, status seekers typically have extensive networks—both on professional social media and in the real world. • Collaborators are typically senior executives who tend to focus on long-term strategy and, given this interest, are willing to devote their time and energy to helping. One way to motivate especially high-profile advocates is inviting them to join a customer advisory board (CAB). A CAB is a business-level focus group involving the CEOs and senior managers of strategically important customer firms that share a commonality, such as an industry, geographical proximity, or a type of solution used at their firm. The number of CAB members typically ranges from about 5 to 15 customer representatives. Basically, a CAB serves as a “sounding board” to discuss future business developments. Consequently, a CAB’s tasks range from “testing” new ideas and debating preliminary business plans to asking for advice about future improvements to offerings and processes. Moreover, firms may set up customer referral programs. Inspired by referral marketing initiatives in consumer markets, B2B firms also try to motivate their customers to advocate for their products and services by incentivizing referrals— for instance, on a website. Basically, this approach is initiated and managed by a company, and it seeks to motivate loyal clients and advocates to refer their networks to a supplier firm in exchange for rewards. Since these programs are typically run on a software platform, they can fairly easily encourage advocacy and reward behavior that results in, for instance, advocate points, gift cards, or any number of gimmicks. Example: Software Provider

IT Solutions, Inc., is a full-service IT company that focuses primarily on small and medium-sized businesses throughout Philadelphia. It runs a referral program that is straightforward and very simple to access and sign up for. The company is very upfront about referrals, stating outright that it will reward each referral partner with $1000 for IT Solutions, Inc., services when they sign up for a new service. Likewise, any company that refers another business will receive $1000 worth of services. And as an added personal incentive, the referred partner will also receive a $100 Amazon gift card (Mengoulis, 2019). ◄ Similarly, CS managers’ successful efforts to gain customer referrals may be rewarded through bonuses, weekend trips, or other financial or non-financial incentives. Such positive recognition of CS managers typically also reinforces and drives customer advocacy.

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Summary • Customer advocacy is a strong tool with which to improve solution growth beyond an existing customer base. • Referrals may include testimonials, online reviews, or case studies. • Customers’ advocacy behaviors can be motivated through membership in CABs or customer referral programs.

References Boyd, D. E., Sese, F. J., & Tillmanns, S. (2022). The design of B2B customer references: A signaling theory perspective. Journal of the Academy of Marketing Science. https://doi.org/10. 1007/s11747-022-00902-6 Elgeti, L., & Kleinaltenkamp, M. (2022). Unrealized solutions in business markets. Industrial Marketing Management, 106, 31–46. Hada, M., Grewal, R., & Lilien, G. L. (2014). Supplier-selected referrals. Journal of Marketing, 78(2), 34–51. Jacoby, J. (1975). Perspectives on a consumer information processing research program. Communication Research, 2(3), 203–215. Lacey, R., & Morgan, R. M. (2008). Customer advocacy and the impact of B2B loyalty programs. Journal of Business & Industrial Marketing, 24(1), 3–13. McCulloch, W. (2021). The seven pillars of customer success. Lioncrest Publishing. Mengoulis, A. (2019). Referral programs for B2B: 5 cases to inspire you. https://viral-loops.com/ blog/referral-programs-for-b2b-5-cases/. Ramos, L. (2020). Build an effective customer advocacy program by knowing the four advocate types. Forrester Research.. https://go.forester.com/blogs/build-an-effective-customer-advo cacy-program-by-knowing-the-four-advocate-types/ Sagefrog Marketing Group. (2022). 2022 B2B marketing mix report. https://www.sagefrog.com/ resources/2022-b2b-marketing-mix-report/. von Wangenheim, F., & Bayón, T. (2007). The chain from customer satisfaction via word-of-mouth referrals to new customer acquisition. Journal of the Academy of Marketing Science, 35(2), 233–249. Westbrook, R. A. (1987). Product-consumption-based affective responses and postpurchase processes. Journal of Marketing Research, 24(3), 258–270.

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9.1

Customer-Related Customer Success Management Outcomes

In business markets, not only customers but also suppliers are goal-driven, and pursuing competitive advantages ultimately determines their strategies and operational actions (e.g., Hunt & Morgan, 1995). By implementing CSM, suppliers typically aim to achieve a strong competitive position by reaching lower customer churn rates and, consequently, better overall firm performance (Hochstein et al., 2020). However, suppliers should recognize that CSM implementation will not likely affect firm performance directly. Similar to other approaches that can be subsumed under the umbrella of customer-focused management, CSM aims to build and maintain stable customer relationships in order to positively influence customers’ behaviors toward the supplier; in turn, this influence may finally lead to an improvement in the supplier’s financial outcomes (Palmatier et al., 2006). Thus, to comprehend supplier-related CSM outcomes, this causal chain that highlights the customer’s important role in the CSM context must be considered in more detail. Because CSM can only lead to a supplier’s desired outcome if it is also promising for the customer (Eggert et al., 2020), understanding how customers assess and value their suppliers’ CSM activities, as well as how this approach might influence their behavior during a business relationship, is particularly necessary. Accordingly, before addressing supplier-related CSM outcomes, this chapter first explains customer-related CSM outcomes.

9.1.1

How Customers Assess Customer-Related Customer Success Management Activities’ Quality

Although CSM is only a supplementary service alongside suppliers’ core solution offerings (Vandermerwe & Rada, 1988; Wirtz & Lovelock, 2016), it is important enough that customers assess its own quality (Macdonald et al., 2016; Prohl# The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_9

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Fig. 9.1 How CSM quality is assessed (based on Prohl-Schwenke & Kleinaltenkamp, 2021)

Schwenke & Kleinaltenkamp, 2021). Usually, customers are only aware of—and, hence, able to assess—suppliers’ customer-related CSM activities from their own perspective. When assessing suppliers’ respective VIU monitoring, VIU enhancement, and closely related VBS activities, customers judge—on the one hand—the quality of supplier resources and—on the other hand—the quality of the joint resource integration process in which both parties participate (see Fig. 9.1). This assessment implies that customers consider CSM to be suppliers’ responsibility but understand that they must also contribute to successful CSM implementation themselves (e.g., through information, resources, or capabilities; Prohl-Schwenke & Kleinaltenkamp, 2021). For example, to enable suppliers to measure and demonstrate how their solution contributes to customers’ goal achievement (i.e., value identification), customers must often share confidential information about their goals or certain KPIs. Furthermore, customers must invest time (i.e., human resources)—for instance, for participating in quarterly review meetings—in order to align their future cooperation with suppliers. When considering supplier resources, customers particularly assess their suppliers’ customer orientation during CSM activities (Prohl-Schwenke & Kleinaltenkamp, 2021). Customers want suppliers to understand their needs, prioritize them appropriately, and proactively derive necessary fulfillment measures (Macdonald et al., 2016). Therefore, suppliers should always act in their customers’ interest during CSM and highlight their measures’ customer-added value despite, of course, pursuing their own business interests (Prohl & Kleinaltenkamp, 2020).

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Example: Marketing Agency

A managing director of an energy federation (a customer) described the customer orientation of a long-term collaboration with a marketing agency (the supplier) as follows: “Also, here, this man [the employee of the marketing agency] makes suggestions on his own initiative. [He] says, ‘This [marketing activity] would actually suit you well,’ and we used to do that [other marketing activity] in the past. It wasn’t worth it. I would suggest we’re going in that direction. There, we can do something new.” The managing director particularly highlighted that the supplier had reflected on past performance and identified potential for improvement. The supplier’s competence in acting in such a customer-oriented manner was attributed to the long-standing business relationship and the supplier’s resulting customer knowledge. The supplier was even called a “member of the family.” Hence, through deeply understanding the customer’s needs and goals, the supplier could proactively enhance customer VIU (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Moreover, suppliers must excel in organizational competencies to receive positive evaluations of their CSM efforts from customers. Well-structured CSM processes that allow for flexibility (e.g., when a customer’s goals change), as well as the knowledge and physical assets necessary to adapt to customer needs (e.g., adapting the reporting style of reporting tools or review meetings to the customer’s culture), are particularly crucial in this regard (Prohl-Schwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). Example: Automotive Supplier

The head of corporate procurement at an automotive-industry customer assessed a supplier’s organizational competencies as follows: “And [the supplier] was able, both when we needed more parts, to get more out of the production lines, through special measures, through extra work or simply because he made the belt run faster. But he was also able, when we sold less cars, to level it out.” The customer was particularly positive about the supplier’s flexibility in adapting a scope of delivery with short notice. The reason for this positive view is that the customer operated in a dynamic market and needed to react to changing conditions through its own production with short notice. Hence, the supplier’s organizational competence secured or even enhanced the customer’s VIU (ProhlSchwenke & Kleinaltenkamp, 2021). ◄ Finally, customers reflect upon the competencies of a supplier’s employees when evaluating their CSM activities. In this regard, employees’ availability, skills, and professionalism that contribute to customer value creation are critical (ProhlSchwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). For example, customers want their suppliers to have skills that enable proactive value management by combining information and original thinking. Suppliers’ professionalism, for

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another example, is particularly in demand when difficult situations arise during cooperation and when constructive solutions to enhance value must be found in order to meet customer expectations (Prohl-Schwenke & Kleinaltenkamp, 2021). Example: Software Provider

A senior consultant in innovation management in the outsourcing industry (the customer) described the competencies of a software provider—particularly its availability—as follows: “Customer support, yes, you could probably make a distinction between the two [suppliers] . . . . So, here [with this software provider], there was someone available at any time of day or night.” Especially for software that is crucial to the customer’s own value creation process, the supplier’s availability was perceived as necessary. The availability of customer support in this example ensured value creation for the customer (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Besides the supplier resources deployed to perform CSM activities, customers also evaluate the quality of joint resource integration processes—that is, the collaboration between the customer and supplier firms (Prohl-Schwenke & Kleinaltenkamp, 2021). In this regard, customers primarily assess coordination effectiveness, which is the extent to which both parties’ CSM activities benefit the customer (Macdonald et al., 2016). For coordination effectiveness, suppliers’ collaborative behavior seems particularly relevant. Since partners usually share mutual goals and value is, ideally, created for both parties, customers assume that suppliers who see themselves as partners are more motivated to respond to their wishes and ideas concerning value creation. Other aspects that facilitate coordination effectiveness between both parties from the customer’s perspective include a good communication process and personal attachment (Prohl-Schwenke & Kleinaltenkamp, 2021). Example: Automotive Supplier

The head of corporate procurement at an automotive-industry customer described coordination effectiveness in a collaboration with a supplier of automotive production components as follows: “And, of course, that was also a criterion, which helped you or strengthened your opinion [of a supplier]. If they had examples where they could show cooperative behavior . . . examples with other customers, examples also for our company in other regions.” He further explained that boundaries were increasingly blurred between the supplier firm’s production and the customer’s production. This dissolution of the firms’ boundaries goes hand in hand with, for example, the customer’s having to share confidential plans for the future. Therefore, a trusting, cooperative relationship between both parties is particularly important (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Moreover, customers consider the extent to which joint CSM activities help maintain physical assets for their own benefit. This so-called asset management

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effectiveness (Macdonald et al., 2016) can be expressed in the form of availability guarantees (e.g., the guaranteed availability of a machine; Prohl-Schwenke & Kleinaltenkamp, 2021). Example: Software Provider

An area manager of a public-sector information technology customer described the asset management effectiveness of a collaboration with a software provider as follows: “So, basically, the software must not fail at all. If it fails, the company has to solve the problem within a certain period of time, which is predefined, so that they don’t fall below, I think, 96[%] or so.” These remarks illustrate that the software provider’s maintenance and repair activities decisively influenced the software’s availability and, therefore, value creation on the customer’s premises. Asset management effectiveness is, thus, a quality criterion that helps secure experienced VIU as perceived by the customer (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Summary • Customers judge the quality of their suppliers’ customer-related CSM activities. • Performing customer-related CSM activities is not only suppliers’ responsibility. Customers must contribute resources, information, or capabilities as well. • When evaluating CSM activities’ quality, customers assess a supplier’s resources and the joint resource integration process. • Customers judge a supplier’s resources with respect to the supplier’s customer orientation, organizational competencies, and employee competencies. • Customers evaluate the resource integration process with respect to coordination effectiveness and asset management effectiveness.

9.1.2

How Customer-Related Customer Success Management Activities Contribute to Customers’ Experienced Value in Use

Customer-related CSM activities can be understood as a series of resourceintegrating activities during which the supplier and the customer apply resources to help achieve a customer’s goals. Therefore, customers consider not only supplier resources but also the joint resource integration process when assessing CSM quality (Prohl-Schwenke & Kleinaltenkamp, 2021). CSM quality, in turn, determines the collective VIU related to a customer company as a whole, a work team, or a department—as well as the individual VIU experienced by each relevant BUC member throughout a usage process (Huber & Kleinaltenkamp, 2022). In other words, customer-related CSM activities can lead to a customer’s experienced

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Fig. 9.2 How CSM leads to experienced VIU (based on Prohl-Schwenke & Kleinaltenkamp, 2021)

collective VIU, i.e. “relating to the goals of the organization” (Macdonald et al., 2016, p. 102), and experienced individual VIU, i.e. “relating to the individual’s personal role and interests” (Macdonald et al., 2016, p. 102; see Fig. 9.2). Primarily, CSM activities aim to secure and enhance value for the customer firm at the collective level (Prohl-Schwenke & Kleinaltenkamp, 2021). This is because improving a competitive position by enhancing a company’s overall effectiveness or efficiency is often a business customer’s central goal when entering a customer– supplier relationship (e.g., Hunt & Morgan, 1995). Hence, ideally, suppliers’ CSM activities help a customer firm achieve or increase a competitive advantage. In this context, the resource integration process and, particularly, coordination effectiveness play a decisive role when customers assess CSM activities’ quality. A supplier’s interest in growing with their customer and the resulting collaborative behavior determine the customer’s experienced VIU. Example: Tool Manufacturer

The managing director of an e-commerce startup customer describes how a collaboration with a tool manufacturer (the supplier) led to a competitive advantage: “Well, as a start-up, we are basically still in a phase where we want to grow strongly. And, of course, it is important that the suppliers we work with are interested in growing quickly with us.” In other words, the director positively evaluated the supplier’s interest in expanding the joint business since this interest had strengthened the startup’s competitive position. The supplier’s regular onsite presence (i.e., coordination

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effectiveness) was seen as particularly effective in this regard (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Furthermore, suppliers can help customers improve their competitive positions by improving their innovativeness. In particular, measures to enhance VIU (e.g., the joint development of new products) that facilitate the generation and usage of new ideas might support customers in this regard (Prohl-Schwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). Example: Automotive Supplier

The head of corporate procurement at an automotive-industry customer explained how the VIU enhancement activities of a supplier of automotive production components had driven the customer’s innovativeness. In particular, the supplier’s developing and offering new or re-engineered components was positively assessed: A supplier is innovative if he is able to present new products in this product group . . . . Then, he [the automotive supplier’s representative] just came along and said, “Here. Take a look at this. This is my new component. It’s exactly the same as the old one, but it’s even more environmentally friendly.” Innovation is very important in this day and age, I think, and especially from our suppliers and partners, so that we are able to incorporate the latest developments into our vehicles. (Prohl-Schwenke & Kleinaltenkamp, 2021) ◄ However, the ultimate goal of a better competitive position is often broken down into subordinate goals related to improving a customer’s operational performance (Prohl & Kleinaltenkamp, 2020; Macdonald et al., 2016). Accordingly, fast problem-solving, avoiding downtime, low costs, and process improvement are highly valued performance goals for customers. For instance, cause analysis measures offer opportunities for VIU enhancement, showing that a well-organized and structured supplier can solve problems fast. Example: Software Provider

A managing director of an energy federation customer described how the customer orientation of a software provider had led to fast problem-solving: “He [the software provider] understands exactly what my problem is and could transform that into, let’s say, a very targeted solution without wasting a lot of time, for example.” (Prohl-Schwenke & Kleinaltenkamp, 2021) ◄ Furthermore, by guaranteeing availability (e.g., of a software product) as part of their VBS approach, suppliers can ensure their customers that downtime—and, thus, nonproductive time—will be minimized or avoided through future collaboration. In this context, asset management effectiveness is the central quality aspect. For instance, by performing maintenance and repair services, a supplier must ensure that a customer’s value creation process is not disrupted by the downtime of a good or service.

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Example: Software Provider

A senior consultant in innovation management at an outsourcing-industry customer explained the firm’s dependency on a software product’s availability from one provider: “We use this tool [of the software provider’s] in our operations. That is, as I said, so it would hinder us or, yes, our production . . . if the tool doesn’t work. Accordingly, it’s absolutely necessary that they [the software provider] are highly available.” Hence, if the provider’s software is reliably available and, thus, this asset is managed effectively, the customer company can avoid downtime (ProhlSchwenke & Kleinaltenkamp, 2021). ◄ Low costs typically result from operational savings that might be achieved through process improvement. In particular, VIU enhancement measures target process improvements and, thus, lower costs for a customer. In this context, a supplier’s customer orientation is crucial when a customer assesses measures’ quality (Prohl-Schwenke & Kleinaltenkamp, 2021). Example: Full-Service Agency

The global head of the communication and design business unit of a manufacturer in the electronics industry (the customer) expected continuous process optimization efforts from the customer’s suppliers, including its full-service agency. He explained that the company’s environment was dynamic and evolving, for example, through digitalization. Such advances also needed to be taken up by suppliers in order to enhance customer VIU: “So, [the full-service agency] must always strive to make it [the process] even better because the optimum does not exist. So, the world is changing, and— therefore—parameters are changing all the time” (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Finally, suppliers can reduce risk for their customers by ensuring transparency through value creation using VIU monitoring measures (Prohl-Schwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). Example: Consultancy

An IT project manager at an automotive-industry customer described how the regular VIU monitoring efforts of a consultancy company with whom the customer was working had reduced perceived risk: “Because I know exactly, ‘Okay. We have delivered those tasks. We still have to do those other tasks.’ If I receive regular reports [from the consulting company] about it, I can better assess whether I have to make adjustments, whether we face any risks, whether I have to take action.” (Prohl-Schwenke & Kleinaltenkamp, 2021) ◄

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Regarding goal achievement at the individual level, CSM activities can improve perceived task simplicity for an employee (Prohl-Schwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). If, for example, a supplier proactively proposes measures to enhance value in a customer’s solution application, it facilitates and accelerates BUC members’ tasks. Example: Technology Provider

According to the director of funding management at a manufacturer in the automotive industry (the customer), increasing task simplicity was the purpose of hiring an external supplier. He explained how a technology provider’s VIU enhancement efforts had improved his individual VIU: “[The technology provider’s continuous improvement effort] makes work easier. It reduces my work, my workload. Well, that’s actually the best. That’s what you want when you hire someone, to do work for you and not to cause you more work” (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Furthermore, when deciding on a solution, an employee or a group of employees at the customer company is usually mainly responsible for implementing and adopting a solution, as well as for its return on investment (ROI). This responsibility can increase perceived stress since purchasing a solution is often associated with large investments. A supplier that supports value creation through CSM activities can, therefore, reduce pressure on these individuals. A smooth communication process between a supplier and a customer seems critical in this regard (ProhlSchwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). Example: Technology Provider

The IT project manager at an automotive-industry customer described how a technology provider’s transparency regarding value creation through continuous VIU monitoring efforts had helped reduce the pressure he perceived in his daily business activities: “Well, that [information from the technology provider] is simply also important, so that I can report it myself. And if I’m not able to report, I or my boss will get pressure” (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Additionally, customers—especially employees who are responsible for buying decisions—face uncertainties when entering a business relationship with a solution provider. These uncertainties result from the customers’ relinquishing some or all of their control over certain processes and resources. Through specific CSM activities—such as regular meetings to exchange information on the operational level—suppliers can at least partially increase individuals’ perceived control. In this context, fast and open communication with a supplier is critical to the customer’s evaluation of CSM quality (Prohl-Schwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016).

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Example: Consultancy

A distribution manager of digital and new business at an automotive-industry customer explained how a good communication process with external suppliers had led to perceived control: “When we give a project to the outside world and they [the suppliers—e.g., a consulting company] develop it for us, it’s always important for us to know exactly where we stand” (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Furthermore, providing transparency to customers about value creation through VIU monitoring measures not only reduces risk on the collective level but also reduces uncertainty on the customer firm’s individual employee level (ProhlSchwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). Example: Logistics Provider

A managing director of an e-commerce company described how a lack of transparency by a logistics provider had led to uncertainty on his site: “And if there is no trust [in the logistics provider because he is not transparent], then that simply brings uncertainty into your own business.” Conversely, suppliers can reduce uncertainty through transparency with customers in the form of VIU monitoring activities (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ CSM activities characterized by personal interaction (e.g., a supplier’s onsite customer visits) can also promote social comfort among the customer’s employees who are involved in these activities. This effect occurs when these activities are implemented appropriately and determined through friendly interactions. In this context, coordination effectiveness is the decisive quality aspect (Prohl-Schwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016). Example: Marketing Agency

The global head of the marketing communication and design business unit of a manufacturer in the electronics industry (the customer) explained how coordination effectiveness can lead to social comfort: “For me, personal interaction is relatively important . . . . I like working with people I get along with, and I’m more into emotional intelligence.” He particularly described getting along well with the managing director of a marketing agency that his company was working with. As a result, important agreements regarding this cooperation—that is, VIU reporting activities—could be established informally and simply, even after work hours (Prohl-Schwenke & Kleinaltenkamp, 2021). ◄ Finally, customer employees can also improve their personal reputation at their company by enhancing value creation with support from their suppliers’ CSM activities (Prohl-Schwenke & Kleinaltenkamp, 2021; Macdonald et al., 2016).

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Example: Software Provider

An IT project manager in the automotive industry (the customer) explained that a software provider’s VIU enhancement efforts, which had taken the form of ideas to optimize customer value creation, led to individual VIU (i.e., personal reputation): “With that [the software provider’s good ideas], I could then simply surprise my customers internally, the customers I have—that is, the department I supply the system to—in a positive way. Or I could improve my position” (ProhlSchwenke & Kleinaltenkamp, 2021). ◄ Summary • Customers assess customer-related CSM activities’ quality, which determines customers’ experienced VIU on the collective level (e.g., the customer company as a whole) and the individual level (e.g., an employee at the customer company). • Experienced collective VIU comprises a competitive advantage, innovativeness, fast problem-solving, the avoidance of downtime, low costs, process improvement, and reduced risk. • Experienced individual VIU comprises task simplicity, reduced pressure, perceived control, reduced uncertainty, social comfort, and personal reputation.

9.1.3

How Customer-Related Customer Success Management Activities Affect Customers’ Behavioral Intentions

As Sect. 9.1.2 outlined, customer-related CSM activities can positively influence customers’ collective VIU (e.g., innovativeness through VIU enhancement measures) and individual VIU (e.g., reducing an employee’s uncertainty at a customer company through VIU monitoring measures) as they are experienced by BUC members toward a specific transaction (Macdonald et al., 2016; Prohl-Schwenke & Kleinaltenkamp, 2021). However, by implementing CSM, suppliers basically aim to build long-term business relationships with their customers (Hochstein et al., 2020). These relationships are typically characterized by a series of transactions, including upselling and cross-selling (e.g., Dwyer et al., 1987; Morgan & Hunt, 1994). Consequently, customers also summarily assess all past transactions and experiences with a supplier, which is reflected in relationship value. (See Sect. 2.2 for a detailed description of the different value concepts.) Hence, relationship value is influenced by the VIU experienced during one transaction (Eggert et al., 2019) and, thus, by a customer’s experiences with a supplier’s CSM efforts. From a supplier’s perspective, positively influencing a customer’s relationship value is particularly appealing because this influence enhances relationship quality.

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Fig. 9.3 The link between CSM and customers’ behavioral intentions (based on Prohl-Schwenke, 2022)

Relationship quality is mainly characterized by customer satisfaction, trust, and commitment (e.g., Hennig-Thurau et al., 2002; Ulaga & Eggert, 2006). In turn, it triggers a customer’s behavioral intentions toward a supplier (Ulaga & Eggert, 2006). In the CSM context, two studies have shown that the customer’s perceived extent of CSM implementation (i.e., the supplier’s CSM efforts that the customer actually perceives) positively influence the customer’s intention to expand its business with a supplier (Prohl-Schwenke, 2022), as Fig. 9.3 illustrates. Assuming that customers’ intentions lead to actual behavior, this finding proves that the method and intensity of CSM performance affect business relationships’ longevity. In other words, a customer who experiences greater supplier effort to actually manage a solution’s experienced VIU is more likely to conduct more business with the supplier. This effect has been found to be both direct (i.e., the customer-perceived extent of CSM implementation increases the intention to directly expand business with a supplier) and indirect, which means the effect is mediated by the constructs relationship value and relationship quality (i.e., customer satisfaction, trust, and commitment; ProhlSchwenke, 2022). Interestingly, the customer’s perceived extent of CSM implementation seems even more relevant to driving a customer’s intention of expanding business with a supplier than well-known concepts such as customer satisfaction, trust, and commitment. Activities that disseminate opportunities for VIU enhancement (e.g., joint product development) seem especially important in this regard, and they may particularly reward suppliers. Hence, surveying customers regarding the perceived extent of CSM activities could be an effective measure for customer segmentation purposes vis-à-vis CSM activities’ application and intensity. Due to a lack of resources (e.g., not enough CS managers), often, customers cannot all be approached with CSM activities equally. Therefore, a customer’s perceived extent of CSM activities could serve as a useful criterion when allocating CSM resources, alongside other criteria such as the general relevance of the customer relationship (ProhlSchwenke, 2022). The results of such a survey could also be incorporated into

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developing a Customer Health Score (CHS), which is intended to predict customer churn (Hochstein et al., 2020). Thus, suppliers must ensure not only that CSM activities are of high quality—that is, valuable for the customer—but also that the customer is regularly and extensively engaged in such valuable activities. Summary • There is a positive relationship between the customer-perceived extent of CSM activities and the customer’s intention to expand business with the supplier, i.e. the longevity of business relationships. • The positive relationship between the customer-perceived extent of CSM activities and the customer’s behavioral intention is partially mediated by relationship value and relationship quality (customer satisfaction, trust, and commitment). • The customer-perceived extent of CSM activities has an even stronger impact on the customer’s intention to expand business with the supplier in the future than customer satisfaction, trust, and commitment.

9.2

Supplier-Related Customer Success Management Outcomes

Since the term “customer success management” includes the words “customer” and “success,” the customer’s success could be deemed the ultimate outcome of CSM. This conclusion is not entirely true, however, because suppliers do not apply this management approach altruistically; rather, they apply it with the aim to prevent customer churn and increase upselling opportunities (Mehta, n.d.), which should benefit their overall firm performance. Suppliers’ approaches to making their customers use a solution as successfully as possible by proactively managing value creation are, thus, a means to an end. However, so far, no academic research has examined whether CSM really delivers its promises regarding suppliers’ performance outcomes. Nonetheless, the results of a study by Prohl-Schwenke (2022) suggest a positive relationship (see Sect. 9.1.3). At the supplier organization level, however, CSM’s impact on overall firm performance (i.e., financial return) remains unclear. One academic approach to addressing this question would be comparing stock returns before and after the announcement of a CSM implementation by publicly traded companies (Hochstein et al., 2020). See Fig. 9.4 for the causal chain between CSM and a supplier firm’s performance. Although supplier-related CSM outcomes are still largely unexplored from an academic perspective, suppliers have established approaches in practice to assess the financial return of a CSM implementation. In this context, suppliers commonly calculate the ROI of implementing CSM to derive an impression of its profitability (e.g., Pickens, n.d.). This performance measure is calculated by dividing the return

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Fig. 9.4 The link between CSM and a supplier’s financial return

(benefit) by the capital invested (Fernando, 2022). Though this calculation sounds simple, it is not trivial. Identifying the return for which CSM is responsible—and which CSM can influence—is difficult. Usually, CSM teams are responsible for a renewal rate and upselling and cross-selling results. Consequently, their success is often measured using a gross renewal rate and upselling’s annual recurring revenue (ARR). However, customer retention and the exploitation of upselling and crossselling opportunities are influenced by many factors other than CSM, such as the work of a product management team (i.e., developing new products) or a sales team (i.e., acquiring customers with a suitable profile). At the same time, however, a CSM team also influences such variables as the close rate, for which it is not responsible. For instance, a new customer who signs a contract may have spoken to a reference customer who agreed to serve as a referent because of a CS manager’s good work. Nevertheless, only the sales team is responsible for the close rate (Pickens, n.d.; Wolf, 2021). To really understand a CSM’s ROI, establishing a CSM-particular budget is reasonable. This budget should be independent of the budget for marketing and sales activities (Capote, 2022). To calculate the incurred costs, for example, CS managers’ personnel costs and the costs for necessary tools (e.g., supporting software) should be considered (Wolf, 2021). Another practical approach to assessing CSM’s impact on a firm’s financial performance is based on the so-called customer success maturity model introduced by Gainsight (Golden, n.d.). According to the maturity model, companies that have implemented CSM can be categorized based on the maturity of their respective CSM processes. Four different stages of process maturity have been particularly introduced: reactive, informed, proactive, and predictive. These four stages differ in how well a CSM approach’s principles are implemented, and the predictive stage reflects the most advanced implementation. To define and assess process maturity— that is, how well CSM principles are implemented—Gainsight introduced the following categories: operationalize customer lifecycle, manage customer risk, drive expansion and advocacy, and enable cross-functional visibility (Golden, n. d.). See Table 9.1 for definitions of the four maturity stages. In the next step, the process maturity stage can be linked to a firm’s retention rate—the most important financial metric in the subscription economy—in order to investigate CSM process maturity’s impact on a firm’s financial performance.

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Table 9.1 Stages of the customer success maturity model by Gainsight (Golden, n.d.) Stage Reactive Informed Proactive Predictive

Definition “You treat every customer the same and you reactively address risks and expansion opportunities” “You have organized your customers and data, but have yet to truly operationalize it” “Proactive—you are proactively managing the customer lifecycle and using data to drive a programmatic approach to managing risk and expansion opportunities” “You have optimized the lifecycle across all functions and you are leveraging automation to drive scale and maximize visibility”

Accordingly, Gainsight surveyed 150 participants who represented companies that had implemented CSM (Golden, n.d.). The survey asked about these companies’ CSM process maturity and linked the respective stages to companies’ revenue retention. The results suggest that, indeed, the customer retention rate increases as CSM processes mature. Moreover, the results show that the customer expansion rate is the highest for companies in the predictive stage—that is, the companies with the most advanced CSM processes (Golden, n.d.). Hence, these results prove CSM’s positive impact on a firm’s financial performance. Summary • So far, no academic studies have examined whether CSM really delivers on its promises regarding suppliers’ performance benefits. • In practice, suppliers usually calculate the ROI of implementing CSM based on ARR. • To evaluate the profitability of CSM implementation, establishing a CSM-particular budget that is separate from the marketing and sales budgets is reasonable. • According to Gainsight’s maturity methodology, retention rates increase as CSM processes improve, and expansion rates are highest for companies with the most advanced CSM processes.

References Capote, K. (2022). The customer success index. Gainsight.com. Retrieved September 13, 2022, from https://info.gainsight.com/rs/231-EAT-840/images/CS%20Index_%20March% 202022.pdf. Dwyer, F. R., Schurr, P. H., & Oh, S. (1987). Developing buyer–seller relationships. Journal of Marketing, 51(2), 11–27. Eggert, A., Kleinaltenkamp, M., & Kashyap, V. (2019). Mapping value in business markets: An integrative framework. Industrial Marketing Management, 79, 13–20.

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Eggert, A., Ulaga, W., & Gehring, A. (2020). Managing customer success in business markets: Conceptual foundation and practical application. Journal of Service Management Research, 4, 121–132. Fernando, J. (2022). Return on investment (ROI): How to calculate it and what it means. Investopia. com. Retrieved September 9, 2022, from https://www.investopedia.com/terms/r/ returnoninvestment.asp. Golden, S. (n.d.). What is the ROI of Gainsight? How we use the customer success maturity model to help our customers answer that question. Gainsight.com. Retrieved June 10, 2022, from https://www.gainsight.com/blog/what-is-the-roi-of-gainsight/. Hennig-Thurau, T., Gwinner, K. P., & Gremler, D. D. (2002). Understanding relationship marketing outcomes - an integration of relational benefits and relationship quality. Journal of Service Research, 4(3), 230–247. Hochstein, B., Rangarajan, D., Mehta, N., & Kocher, D. (2020). An industry/academic perspective on CSM. Journal of Service Research, 23(1), 3–7. Huber, M., & Kleinaltenkamp, M. (2022, in press). How perceptions of business usage center members affect value experiences and behaviors in multiactor usage processes. Industrial Marketing Management. Hunt, S. D., & Morgan, R. M. (1995). The comparative advantage theory of competition. Journal of Marketing, 59(2), 1–15. Macdonald, E. K., Kleinaltenkamp, M., & Wilson, H. N. (2016). How business customers judge solutions: Solution quality and value in use. Journal of Marketing, 80(3), 96–120. Mehta, N. (n.d.). The essential guide to customer success. Gainsight.com. Retrieved February 7, 2022, from https://www.gainsight.com/guides/the-essential-guide-to-customer-success/. Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38. Palmatier, R., Dant, R. P., Grewal, D., & Evans, K. R. (2006). Factors influencing the effectiveness of relationship marketing: A meta-analysis. Journal of Marketing, 70(4), 136–153. Pickens, A. (n.d.). The ROI of customer success. Gainsight.com. Retrieved September 8, 2002, from https://www.gainsight.com/blog/the-roi-of-customer-success/. Prohl-Schwenke, K. (2022). Customer success management in business markets—an investigation from different perspectives [Dissertation, Wirtschaftswissenschaft, Freie Universität Berlin]. Prohl-Schwenke, K., & Kleinaltenkamp, M. (2021). How business customers judge customer success management. Industrial Marketing Management, 96, 197–212. Prohl, K., & Kleinaltenkamp, M. (2020). Managing value in use in business markets. Industrial Marketing Management, 91, 563–580. Ulaga, W., & Eggert, A. (2006). Relationship value and relationship quality. Broadening the nomological network of business-to-business relationships. European Journal of Marketing, 40(3/4), 311–327. Vandermerwe, S., & Rada, J. (1988). Servitization of business: Adding value by adding services. European Management Journal, 6, 314–324. Wirtz, J., & Lovelock, C. (2016). Services marketing: People, technology, strategy (9th ed.). Prentice Hall. Wolf, P. (2021). How I solved the challenge of measuring customer success ROI. Custify.com. Retrieved September 13, 2022, from https://www.custify.com/blog/customer-success-roipart-2/.

Customer Success Management Structures

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Customer Success Management in the Interplay Between Customer-Related Management Approaches

Chaps. 3–9 have demonstrated CSM’s pivotal role in satisfying customers by securing and increasing solution offerings’ experienced VIU. Since experienced VIU represents the realization of customers’ goals—not only the promise of goal achievement—CSM is the central business function that enables customer satisfaction in the long term. From a supplier perspective, thus, effectively managing CS offers the strong potential to not only establish but also strengthen strong and sustainable relationships with clients. By focusing on realizing a customer’s perceived value, CSM is centered on the core of B2B marketing—that is, providing value to the customer. In this regard, CSM is one of the most important developments—if not the most important development—in contemporary B2B marketing. Hence, due to its importance for the health and growth of customer relationships, CSM should be implemented at every supplier firm—that is, even beyond the subscription-based businesses where it was originally developed. At the same time, due to its central role in permanently creating value for the customer, CSM must be (better) linked and integrated with other value-based management approaches that have been applied at many B2B firms and that are associated with CSM. These concepts comprise VBS, KAM, and CRM. Among these three value concepts relevant to B2B marketing (see Chap. 2), importantly, VBS and CSM refer to individual transactions, while KAM and CRM relate to a business relationship in its entirety (Prohl-Schwenke & Kleinaltenkamp, 2021). Since VBS is defined “as a sales approach that focuses on implementing a firm’s customer value orientation at sales force level” (Terho et al., 2012, p. 175), it focuses on customers’ expected VIU as it is addressed in customer-facing sales processes. In contrast, CSM is centered on experienced VIU (Eggert et al., 2020) as it is perceived by a BUC’s various members (Huber & Kleinaltenkamp, 2020). However, empirical research has shown that, in practice, suppliers’ business processes in both areas are not very well linked to each other (Prohl & Kleinaltenkamp, 2020). Hence, to # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7_10

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improve their consistency and fully exploit their potential, both approaches should start by identifying relevant customer goals and assessing the extent to which a firm’s offerings may contribute to a customer’s goal achievement—that is, create value for the customer. Such an analysis first requires in-depth knowledge of the customer firm’s business model and business processes. This understanding includes answering such questions as: 1. What are the customer firm’s overarching goals? How do they relate to each other? 2. What are the goals of the customer firm’s important representatives? 3. What are the sub-goals of these superordinate goals that contribute to their achievement that may need to be realized in the short term? 4. Which segments does the customer company serve in its own market? 5. How do the company’s products or services help its customers succeed? 6. What parameters generate a competitive advantage for the customer firm? 7. What are the key drivers of the customer firm’s effectiveness and efficiency? 8. How does the supplier’s offered solution contribute to the customer firm’s effectiveness or efficiency? 9. Which of the customer firm’s other business processes is the offered solution linked to? Do they interdepend? Based on the results of such an analysis, first, a value-based CVP can be designed—or, in the case of later rebuying, adapted—as the cornerstone of the VBS process. This process includes specifying which parameters of the offered solution must be monitored through CSM later. Importantly, this information must be provided to the responsible CS managers so that they can conduct this initial customer-related CSM activity and follow up on its achievements. In contrast to VBS and CSM, CRM and KAM focus on the relationship level. CRM is a strategic approach that aims to develop “appropriate relationships with key customers and customer segments” (Payne & Frow, 2005, p. 168). Similarly, KAM encompasses “all approaches to managing the most important customers” (Homburg et al., 2002, p. 39). Hence, from a goal- and value-oriented perspective, at their core, CRM and KAM should ultimately focus on achieving the highest possible relationship value for a customer. Accordingly, for these approaches, centering a customer’s goals and their achievement is also a useful starting point for all their activities. Consequently, all information that is available and accessible to the supplier firm (see list of questions above) should constitute the starting point for these activities. Since they are based on the same parameters (customers’ goals and their achievement), these measures—that is, CRM and KAM—could be more easily linked to corresponding approaches at the transactional level. In turn, insights gained from CRM or KAM activities may offer important inputs for VBS and CSM on the transactional level. A uniform, goal-focused orientation for all customer-related management approaches could help overcome the tensions, conflicts, frictions, and deficiencies that persist between the respective organizational units and their activities at many supplier firms. Figure 10.1 illustrates how the respective management approaches relate to each other from this goal- and value-oriented perspective.

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Creating Customer Success Management Structures

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Business relationship Transaction # n-1

Expected value in use → Value-based Selling

Transaction # n

Experienced Value in Use → Customer Success Management

Expected value in use → Value-based Selling

Experienced Value in Use → Customer Success Management

Transaction # n+1

Expected value in use → Value-based Selling

Experienced Value in Use → Customer Success Management

Relationship Value → Customer Relationship Management/Key Account Management

Fig. 10.1 The interplay between customer-related management approaches

Summary • CSM is centered on B2B marketing—that is, providing value for a customer. • CSM is the central business function to satisfy customers in the long term. Therefore, it must be linked to the other customer-related management approaches applied at B2B firms—that is, VBS, CRM, and KAM. • VBS and CSM refer to individual transactions, while KAM and CRM relate to a business relationship in its entirety. • A goal- and value-related lens facilitates the integration of all customerrelated management approaches—that is, VBS, CSM, CRM, and KAM.

10.2

Creating Customer Success Management Structures

In describing CSM’s interfaces with other departments in charge of customers and relationships with them, Hochstein et al. (2020) used the metaphors of “hunters” for sales, “builders” for CSM, and “farmers” for account managers. From this perspective, “hunting” for new customers is a typical sales role that should be separated from “building” successful customer–supplier relationships as CS managers’ key task. It should also be separated from account managers’ “farming” relationships through billing and closing deals to expand business and renewals. Relatedly, CSM should support other departments in closing sales, but the CS managers should not be responsible for doing so themselves. Otherwise, CS managers may not take a genuine interest in delivering value to customers; instead, they may be more interested in increasing their own salaries or bonuses, which typically depend on deal sizes or the number of deals that have closed. Additionally, linking CS managers with the customer support, product management, marketing,

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IT, and even finance departments fosters CSM strength by gaining and disseminating customer-related knowledge in a market-oriented manner (Kohli & Jaworski, 1990). This central availability and accessibility of customer knowledge could help a CSM unit practice relevant tasks systematically and in a routine way. Our CSM Wheel (see Fig. 2.2) helps managers prioritize and determine how to start supporting customers’ goal achievement. In some cases, a firm might decide to set up a CS team to reduce churn or raise customer retention. In other cases, a firm may emphasize identifying where and why customers are struggling to use a purchased solution in the best possible way. Moreover, such decisions depend on whether a firm has newly integrated CSM into its structures or whether CSM was already in place at the company. Based on such assessments, a firm must determine CSM’s responsibilities, authority, and obligations. Hence, since decisions about whether and in which form to implement CSM can vary, depending on an organization and its available resources, a clear analysis of a CSM implementation’s goals— as well as the existing and desired structures—is necessary. Accordingly, answering the following questions about the different tasks in the CSM Wheel can help determine which structures are useful when setting up a CSM unit. 1. VBS (a) Which sales approach is used by your organization? (b) What actions must be taken to implement VBS? (c) Does an argument suggest against implementing a VBS approach? 2. Solution realization (a) What problems do your customers experience most often during the onboarding process? (b) What are your most successful customers, and how can you generalize their efforts? (c) How can you help your customers implement and use the sold solution in the best possible way? 3. VIU monitoring and VIU enhancement (a) Which customer-related CSM activities (see Table 6.1) should be conducted? (b) Who should perform these activities? (c) How can these core activities be successfully linked to the adjacent tasks of VBS, renewal, customer advocacy, etc.? (d) Which technological infrastructure is necessary to perform the activities? 4. Customer advocacy (a) How can successful customers serve as a reference—for example, through testimonials, online reviews, or case studies? (b) How can you motivate customers’ advocacy behavior—for example, through participating in advisory boards or customer referral programs?

CSM can be embedded into an organization vertically or horizontally, and both structures have advantages and disadvantages. A vertical or functional organization is centered on certain business functions. Therefore, it focuses on such structural

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dimensions as centralization, formalization, and standardization. Consequently, it offers the possibility of technical work, goal orientation, and efficiency in various units. However, this organizational structure’s disadvantages arise from the necessity of cross-departmental coordination across individual business units. In contrast, a horizontal organization is objective-related; the organizational units are structured based on certain work procedures (Day, 1997). While its advantages are high process orientation and employee authority, the loss of synergies due to business functions’ division into several processes is disadvantageous. Unsurprisingly, though, hybrid organizational structures that combine the vertical and horizontal forms are often seen as a solution in praxis. Such organizational forms are thus frequently found in firms since centers of expertise can be established that are both effectively and efficiently integrated into an organization (Day, 1997). Accordingly, CSM must also be effectively and efficiently embedded in an organization, particularly by clarifying CSM’s interfaces with customer support, sales, product management, KAM, and CRM. However, this CSM networking position gives rise to special challenges for CS managers, who must act like “a spider in a web.” Besides being “networkers,” they must simultaneously be “figureheads” (e.g., in the case of complaints from customers), “radar screens” (e.g., for information from customers or regarding important market or environmental developments), “transmitters” (to other functional areas and superiors), “speakers” (in conversations with customer representatives), “innovators” (e.g., for new solution concepts), “problem-solvers” (e.g., in the case of a lack in solution usage), “resource allocators” (in terms of the budget of manpower used), and “negotiators” (e.g., in supporting upcoming contract renewals or expansions). These requirements must be reflected in the appropriate recruitment, selection, and training of CS managers. Summary • CSM is not a stand-alone department. • CS structures should be established based on a firm’s goals and priorities. • A common understanding of CS and CSM is necessary at an organization, and CSM’s interfaces with other departments must be clarified. • CS managers face multiple challenges and requirements in their networking position that must be reflected in their appropriate recruitment, selection, and training.

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Case Study “Camunda”: How to Ramp Up Customer Success Management (in Cooperation with Leon Strauch, Senior Customer Success Manager at Camunda)

10.3.1 Company Background Camunda started as a process automation consulting company, and it is now a global leader in process orchestration software. The Camunda platform is an open-source software stack that helps organizations orchestrate and automate complex business processes spanning people, systems, and devices. Using the ISO (International Organization for Standardization) standard business process model and notation (BPMN), Camunda allows business users and developers to collaboratively model and automate end-to-end processes with the speed, scale, and resiliency required to compete in today’s digital-first world. Hundreds of enterprises—such as Allianz, ING, and Vodafone—design, automate, and improve mission-critical business processes with Camunda to drive their digital transformation. As Camunda Co-Founder Bernd Rücker has explained, Camunda provides software to build software. Atypically in today’s startup ecosystem, Camunda did not initially require any venture capital to scale up its operations. How was that achievement possible? With its open-source software, Camunda takes a bottom-up, go-to-market approach. A bottom-up strategy, used typically in SaaS and occasionally in enterprise software, is characterized by offering free product usage—usually with a limited feature set that excludes certain functionalities, as well as support guarantees and professional services. Thus, organizations can use software to test and implement initial use cases, creating business value without having to engage directly with a vendor to buy the product. The bottom-up strategy relies on the fact that more and more employees and business units will organically adopt the software to leverage its advantages. When adoption reaches a certain tipping point that requires more in-depth usage and support, organizations can purchase an enterprise version of the software from the vendor for a fee. This approach creates bottom-up demand through which users internally advocate for purchasing the software solution. At the same time, this approach allows for capital-efficient vendor growth, allowing vendors to reduce customer acquisition costs and invest more in their products.

10.3.2 Camunda’s Software Product Since 2012, the open-source software of the Camunda platform has been available as a “community edition” (CE) that is free of charge, as well as an “enterprise edition” (EE) that requires a fee. The EE offers more functionality than the CE, such as additional features, professional services, private training and technical support, and service-level agreements (SLAs). The Camunda platform was initially distributed as on-premise software—that is, hosted by the customer in its technical environments, such as servers or cloud services. Since 2020, the platform has also been offered through a SaaS delivery model in which Camunda takes over hosting responsibilities

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for the customer. This approach allows customers to choose an operating model that suits their IT strategy. Customers sign a license agreement with Camunda for at least 1 year, and this agreement is usually automatically renewed yearly.

10.3.3 Customer Base Camunda’s customer base has grown quickly, and it ranges from small and medium enterprises (SMEs) to globally operating enterprises, such as banks, insurance companies, and online retailers. Goldman Sachs, for example, has developed an internal workflow platform for more than 4000 individual business processes and decisions with about 60,000 users (100% of the total firm). This platform is programmed and maintained by about 1500 developers using Camunda’s software as a core element. Offering another example, Zalando is Europe’s largest online fashion platform. It uses Camunda to process customer orders. The Camunda platform replaces Zalando’s self-developed “process framework” for handling customer orders to execute a strategically important core process.

10.3.4 Customer Success Management Camunda offers process orchestration software to help companies increase their operative efficiency, create superior digital customer experiences, and improve their business agility. Thus, the firm supports companies during their digital transformations. The Camunda management team’s primary goal is building an amazing product. While the company has grown rapidly, this team has found that missing customer usage data constitutes a blind spot in this effort. Because its product is hosted on-premise and orchestrates mission-critical business processes, Camunda cannot obtain automatically generated usage data. Therefore, the firm lacks any indicators of whether a customer is actually using its software and, if so, which parts are used. Given that Camunda’s success was possible without access to any indicators of how a customer uses its software, which measures might help maintain this success was difficult to determine. Hence, Camunda’s management team decided to implement CSM without rigidly predefining the kinds of activities or measures it would include. The team’s goal was to explore how customers were adopting Camunda’s product in order to understand their needs and help them succeed even more. The management team hired Andreas Tollschein, who became responsible for this CSM implementation. To learn more about this implementation, see the following excerpt from an interview with Tollschein, who is now the Director of CSM EMEA (Europe (E), Middle East (ME), Africa (A) and leads a team of 13 people. Camunda’s global CSM team has grown to 28 employees. Interviewer: Hi, Andreas. Can you please share with us how you became interested in customer success?

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Andreas: Coming from what I call the “traditional manufacturing industry,” Camunda has been a great step, which I have not regretted a day! While working for a global measuring device manufacturer, I had my responsibilities in service and support, helping to start up new subsidiaries or acting to improve the processes of the existing ones, but my main focus has always been helping customers and, if possible, already before they even knew they needed help. The job has even triggered my interest to go back to university while also working to gain more knowledge around business and numbers to make my next career step. It was around this time, in 2017, when I came across a new terminology called “customer success,” which was already a big trend and a wellestablished field in the US, while Europe was only starting to get familiar with the concept and getting ready to jump on the CSM wave. Searching LinkedIn and other resources, I quickly learned that customer success is mostly implemented in software or tech companies. I figured it would be hard to establish something like this in a traditional company without the managers realizing the need for it or even knowing what CSM is about, how it differs from support, what kind of new things it brings to the game, and—in the end—what changes it can mean to a company. Reading one of the many LinkedIn newsletters, a job opening at Camunda caught my attention. They were looking for a Head of Customer Success, and I applied. Up to today, I am not sure what got me the position. But, as I remember, I had asked so many questions that our first call, which was planned for 30 min, took over 1.5 h. I didn’t know exactly what Camunda’s product was and why anyone would buy it or, even more absurd, why would anyone pay for it when there is an open version of the product available to the public? You see, I was a complete greenhorn when it came to the IT sector but have been really impressed by the explanation of why Camunda sees the need for a CSM team to be implemented. The simple reason has been the fast growth of the customer base and that Camunda wanted to get insights on their customers—if they already are successful with the software or if there is room to help them be. This really sounds like support, but the past 3 years have shown me that it is so much more! The big advantage I had, jumping on the CSM wave, has been the company and the managers. Robert Gimbel (CRO) and Jakob Freund (CEO) both had a clear vision of CSM at Camunda and supported this 100%. With ARR growth as the key success metric for our company (and the CRO), we created a healthy balance between the sales and CSM teams, ensuring that neither function is prioritized over the other. By doing so, we have enabled rapid yet sustainable growth while putting our customer’s success at the heart of what we do. Also, CSM has been implemented not because of a bad churn rate, like in many other companies, but really with the goal to understand customer needs and to partner with them so they can get the most out of the product and [take] their project live as fast as possible. Sure, this all helps with keeping the retention rate high (> 95% for Camunda in the last years), which is key if you are running a subscription business. But the commercial goals have never been a limiting factor with respect to CSM. And here, I experienced the main difference between a traditional company and a company which kept the spirit of a startup—or at least the good parts of it.

Tollschein further explained his CSM approach: The focus, in the beginning, has been to discover what interactions are valuable for our customers. At the same time, due to the limited resources, it was also essential to decide what customers to focus on. The answer was not that easy as, most of the time, it is not the customers who pay you most but the ones who just started using your product, or are struggling on their way to go live. For this reason, as a first step, we started to structure our onboarding process for the new customers. This was followed by the CSM team taking over the responsibility of the yearly subscription renewals. We have implemented recurring meetings with our customers to become their trusted advisors. In the first year, I hired two

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more [CS managers], and we focused mainly on the customers in our core region—which, back then, was the DACH market (Germany (D), Austria (A), Switzerland (CH). 2019, our customer base outside Europe started to grow rapidly, and this brought the need to hire more [CS managers]. At the same time, we hired our first VP of customer success in the US, as we needed someone with more experience in the CSM field while building up a US-based team. In making all these decisions, I have been closely involved and have been able to share my thoughts, ideas, and concerns associated with these changes.

Established as a key team at Camunda, the CSM team is planning to continuously evolve in order to enable Camunda’s customers to succeed at scale. One key goal is keeping the gross retention rate (GRR) above 90%, which is well ahead of industry benchmarks, while further improving the overall net revenue retention (NRR) rate to significantly improve Camunda’s overall ARR growth. These goals will be achieved through a continued focus on helping customers’ own goal achievement and product adoption—for example, through extended cross-functional collaboration with sales, marketing, and consulting representatives or external Camunda partners. Additionally, improved data-focused approaches—such as CHS—will further help the CSM team better identify at-risk customers and take proactive measures to prevent churn. Improved customer segmentation will, furthermore, provide guidance on the appropriate engagement for each customer group—including an individualized, white glove approach (providing first-class service with great attention to detail) for key accounts, as well as potentially fully automated onboarding and engagement models. A fundamental element of these efforts is a comprehensive understanding of customers’ journeys with the respective segments that the CSM team continues working on. Thus, the CSM team not only aims to provide a great experience for each customer but also keeps providing valuable insights to internal teams at Camunda, including insights on the go-to-market and product management functions. Summary To reflect on how Camunda established and implemented its CSM structures, answer the following questions: • Task 1: How would you summarize Camunda’s customer value promise? • Task 2: When Tollschein was hired as the Head of CSM at Camunda and first met with the company’s founders, they wanted to know how he would implement CSM at the firm. What were his ideas about the first steps? • Task 3: How would you assess Tollschein’s decision to prioritize and optimize the onboarding process as a starting point for CSM implementation? • Task 4: To what extent is CSM more compatible with a product-led growth strategy or a top-down sales strategy? • Task 5: Which further actions would you recommend to Camunda’s CSM team?

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Customer Success Management Structures

References Day, G. S. (1997). Aligning the organization to the marketing. In D. R. Lehmann & K. E. Jocz (Eds.), Reflections on the futures of marketing (pp. 67–96). Cambridge University Press. Eggert, A., Ulaga, W., & Gehring, A. (2020). Managing customer success in business markets: Conceptual foundation and practical application. Journal of Service Management Research, 4(2/3), 121–132. Hochstein, B., Rangarajan, D., Meta, N., & Kocher, D. (2020). An industry/academic perspective on customer engagement marketing. Journal of the Academy of Marketing Science, 45(3), 312–335. Homburg, C., Workman, J. P., & Jensen, O. (2002). A configurational perspective on key account management. Journal of Marketing, 66(2), 38–60. Huber, M., & Kleinaltenkamp, M. (2020). A typology of business usage center members. Industrial Marketing Management, 85, 21–31. Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions and managerial implications. Journal of Marketing, 54, 1–18. Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, 69, 167–176. Prohl, K., & Kleinaltenkamp, M. (2020). Managing value in use in business markets. Industrial Marketing Management, 91, 563–580. Prohl-Schwenke, K., & Kleinaltenkamp, M. (2021). How business customers judge customer success management. Industrial Marketing Management, 96, 197–212. Terho, H., Haas, A., Eggert, A., & Ulaga, W. (2012). It’s almost like taking the sales out of selling—towards a conceptualization of value-based selling in business markets. Industrial Marketing Management, 41, 174–185.

Index

A Annual recurring revenue (ARR), 88, 89, 98, 99 B Behavioral theory of the firm, 7 Bottom-up strategy, 96 C Collective goals, 8, 12 Collective value in use, 34 CS managers, 1, 2, 4, 8, 29, 32, 35, 40–42, 48, 65, 66, 73, 86, 88, 92, 93, 95, 99 Customer advisory board (CAB), 73, 74 Customer advocacy, 17, 19, 21, 69–74, 94 Customer handoff, 40, 42 Customer health score (CHS), 63, 64, 87, 99 Customer reference, 35, 72 Customer-related CSM drivers, 21, 25 Customer relationship management (CRM), 1, 4, 34, 40, 64, 65, 91–93, 95 Customer solutions, 2, 25, 53, 62, 71 Customer success (CS), vii, viii, 1–4, 7–9, 16–19, 21, 35, 36, 39–42, 65, 66, 88, 89, 91, 94–99 Customer success management (CSM), vii, viii, 1–4, 7, 16–21, 25–33, 35, 40, 45–47, 51, 52, 55, 56, 63, 65, 66, 70, 75–89, 91–95, 97–99 activities, vii, 4, 16, 17, 19, 21, 25–33, 45, 55, 63, 66, 75–80, 83–87, 92, 94 capabilities, 26, 27, 29, 30, 32 drivers, 26, 29, 30, 32 Wheel, vii, 18, 19, 34, 45, 70, 94 Customer value proposition (CVP), vii, 1, 10, 15–17, 19, 25, 34–36, 42, 45, 46, 55, 61–66, 69, 70, 92 CVP adaptation, 16, 17, 19, 21, 64

E Expected VIU, 10–16, 26–28, 34–36, 91 Experienced VIU, 12–17, 19, 21, 26, 28–30, 45, 46, 53–55, 62, 79, 80, 85, 86, 91 G Goal theory, 7, 8 Gross retention rate (GRR), 99

I Individual VIU, 79, 80, 83, 85 Internal handoff, 40, 41, 43

K Key account management (KAM), 1, 4, 91–93, 95

L Land-and-expand approach, 64

N Net revenue retention (NRR), 99 O Onboarding, vii, 17, 18, 40–43, 52, 71, 72, 94, 98, 99 P Playbooks, 42 Preboarding, 40

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. Kleinaltenkamp et al., Customer Success Management, Management for Professionals, https://doi.org/10.1007/978-3-031-26178-7

101

102 R Referrals, 17, 70–74, 94 Relationship value, 9, 14–16, 26, 85–87, 92 Renewal, 16, 17, 19, 21, 61, 63–65, 88, 93–95, 98 Resource integration process, 13, 76, 78–80 S Solution implementation, vii, 17, 19 Solution realization, vii, 17–19, 21, 39, 40, 43, 94 Subscriptions, 3, 10, 25, 61, 64, 65, 88, 98 Success plans, 42, 66 Supplier-related CSM drivers, 21, 25 Supplier resources, 13, 76, 78, 79

Index V Value-based selling (VBS), vii, 1, 4, 11, 16–19, 21, 33–36, 55, 76, 81, 91–94 Value-in-use (VIU) enhancement, 17, 19, 21, 30, 31, 46, 51–55, 76, 81–83, 85, 86, 94 identification, 46, 48 monitoring, 17, 19, 21, 28, 45–51, 55, 70, 76, 82–85, 94 reporting, 26, 46, 49, 50, 84 W Word-of-mouth (WOM), 70, 72