The Prescription for Success in Cloud Services

So far in this blog series we have focused on “big picture” market trends and customer behavior patterns. But to understand our customers’ true purchase decision drivers, we went straight to the source.

We recently asked more than 750 SMB customers to rank the following eight cloud service solution provider attributes (listed in alphabetical order):

  • Discounts on bundles
  • Free trials
  • Local presence
  • Onboarding help and legacy migrations
  • Reputation and accountability of service provider
  • Single bill
  • Support options
  • Variety of support services

Before I reveal the results of the survey, I encourage you to play along:

  1. Imagine you are your 'typical' customer
  2. Give yourself $100 and then assign a dollar value to each of the attributes in the list above (for example, if you think all 10 attributes are equal in importance, you would assign $10 to each equally. If you feel that one attribute is more important than another, you would assign a greater dollar amount to the one, and less to the other)
  3. The goal is to end up spending the $100 completely on the attributes you consider most important to this typical customer

Done?

Good. Now that you have a dollar value list of your own, let’s compare it to the customer survey data.

Here’s how customers responded:

As you can see, customers are BY FAR the most motivated by a partner’s ability to 1) provide onboarding assistance and migration from previous systems, 2) offer the variety of services customers perceive they will need, and 3) deliver support across a variety of systems.

In fact, if you were to apply the hypothetical $100 scale to customers’ answers, you would apply $75 to just those three categories.

At the other end of the graph, we see that free trials, a single bill, and local presence only accounted for $10 of the available $100 pile.

Surprised? Your next question is probably, “So, what do I do about this?”

Here is my prescription for aligning your efforts to meet these customer needs:

  1. Leverage pre-activation and activation assistance as a differentiator. More often than not, your prospective customer already has an IT solution that is not working well enough (which is why they are knocking at your door) but they just cannot walk away from it. There is critical data (like contacts or archived email) that needs to be migrated. In fact, we have seen customers sign up for a service but never activate it for a variety of reasons, i.e., they don’t have the time or it’s technically complicated. Not surprisingly, failure to activate within 90 days of purchasing a new service is HIGHLY correlated with churn rates. The key is to get your customer rapidly migrated over to the new solution with minimal pain on their part and USING the service regularly. For example, make an activation appointment and get on the phone with every new customer. Then, schedule a two-week follow-up, monitor their usage, and have a post-activation call. If they are using the service, great, it’s an opportunity to connect with a new customer regardless. If they are not using the service, however, alarm bells should be ringing and you need to find out what is blocking them and remove the obstacle.
  2. Provide a variety of support services, with the goal being to drive activation and usage. Here are three examples: 1) Offer free guided assistance or support to new customers. This can come in many forms. The most cost effective for you is an online FAQ dedicated to new customers' migration problems and challenges. You may also want to expedite new customer trouble tickets and advertise this as something you offer. 2) Offer premium assistance, or in other words, "for-a-fee" services to customers wanting a full turnkey, hands-off approach to activation and migration. Our friends at Mural call this “facilitated adoption” and they have some very useful additional data on this front if you want more information on how to do this right as well as what pitfalls to avoid during activation. 3) Provide educational assistance in the form of online training, courses, and even certifications if applicable.
  3. Deliver support through a variety of channels. First off, many customers are fine with serving themselves and are not necessarily asking for telephone support. In fact, some customers report being “aversion therapied” off of telephone support, and would much rather be able to multitask their way through a support issue versus sitting on telephone hold. By offering a single contact for support issues across multiple products, you occupy the valued “IT Guy in the Sky” position and give your customers a distinct advantage over the “pick and choose” method of cobbling together a variety of vendors. And, by offering online 24x7 support with disaster recovery services, you will be able to answer your customers’ needs, no matter when they need you.

One final point we uncovered in our research: most customers report that they communicate with their provider only once or twice a year.

Clearly, your ability to gather and track intelligence each time you talk to your customers is vital to your ability to deliver the right messages at the right time. It’s vital for you to give your support technicians the tools and training they need to ask important questions about what customers really need, and to use that information to develop targeted cross-sell and upsell communications.

 

Posted on August 27, 2014 and filed under Cloud Service Delivery.