Customer Success Post COVID

What the future might hold

This article was inspired by and leans heavily on an excellent report from the McKinsey Global Institute (MGI) entitled “The Future of Work After Covid-19”. MGI takes a novel approach to thinking about how work is shaped, focusing on physical proximity to others and the ability to work remotely — a shift that happened almost overnight for this of us working in Customer Success.

The research examined how changes driven, or more typically accelerated, by COVID-19, are likely to affect long term employment trends, in the period up to 2030. The three major drivers of change explored are:

• Remote work and virtual interactions
• E-commerce and digital transactions
• Automation and artificial intelligence

In their macro-economic assessment, MGI estimated the impact of changes on a range of broad employment sectors in major economies over the next 20 years. This set me thinking: how do these ideas affect how B2B SaaS companies deliver value to customers? Here’s my thoughts, which I hope will spur a wider conversation and help shape useful strategies and tools.

Let’s begin with a brief look at the three major drivers of change identified by the research after which I will explore what this means for CS in the future.

Remote work and virtual interactions

The pandemic has shown the possibilities of remote working and tele-based relationships with both colleagues and customers. Almost overnight, companies were forced to rethink how to build and maintain relationships without direct personal contact. The response of most companies was to shift existing processes to tele-channels. Platforms like Zoom and MS Teams became the primary vehicle for conversations, supplemented by virtual tools like Lucidspark, Miro and Mural.

The shift to remote work was, in most cases, a cut and paste of existing methods and approaches. There was little rethinking of how interactions could be improved using these technologies. This is entirely understandable; there wasn’t the time to go back to first principles and design better processes. Companies just had to get through a major shock to their businesses, whether that was surviving or, in some cases, coping with massive growth.

Colleagues are, on the whole, expressing a strong desire to continue with some element of remote working; it is an increasing consideration for job-seekers. Whilst a few companies anticipate a return the office, most recognise that remote work will continue to be an important strategy to attract and retain talent. That said, some aspects of work benefit hugely from true face-to-face interactions. Compared with the water cooler or coffee machine, virtual interactions are largely ineffective in sparking serendipitous connections and learning or in building bonds that colleagues can call on.

E-commerce and digital interactions

Online shopping was a massive beneficiary of the pandemic. The growth of tele-medicine shows that people will consider digital interactions in areas which prior to the pandemic would not have contemplated. Our personal acceptance and comfort with these digital interactions will shape our attitudes to B2B digital interactions. We will see an acceleration of digital, and particularly self-service CS capabilities, especially in companies struggling to address CS at scale.

The shift to digital should not mask the continuing need for true, personal contact and relationships. These will continue to play an important role in customer success. CS will have to understand better the tasks (not jobs) that lend themselves to digital versus personal delivery. Again, this is a continuation of an existing trend. Companies that are already adopting a ‘digital first, human overlay’ approach to designing interactions will have an advantage.

Automation & AI

Investment in automation & AI fell during the early months of the pandemic as uncertainty and the pressures of adapting drove companies cut back on any non-essential spend. Other McKinsey research suggests this is very much a blip and the recognition of AI enhanced digital processes will accelerate. 67% of senior executives globally have accelerated adoption of automation & AI. In the US, this figure rises to 87%.

CS is already adopting automation and AI: for example chatbots and predictive health scores are increasingly employed. More digital interactions will create more data to which machine learning and AI can be harnessed to identify drivers of value and enable smart interactions at scale: scale which cannot be matched by people at the same cost. Even where automation does not replace people completely, it can be used to increase the productivity and quality of interventions.

Change in all three of these areas has created another factor which will shape the future: the changed thinking of CFOs. All three factors have had an impact on costs for companies with a high percentage of knowledge workers. Business travel and the demand for office space has shrunk considerably and whilst some will recover, it is unlikely to rise to pre-pandemic levels.

What this means for CS

Individually, each of the three drivers highlight a need for change but the real impact comes by examining the three together. There are also factors not addressed by the McKinsey research that I believe will play a part, notably new ideas on the role of customer success and approaches to thinking about organisations, leadership and management.

I will summarise my thoughts on the future of CS for both customers and colleagues.

The pandemic forced companies to stop almost all face-to-face customer contact. Meetings, training, workshops, events and social activity either stopped or, more typically went online. In many cases, virtual interactions worked albeit some aspects of relationship building and work effectiveness were lost.

There are significant benefits to virtual interactions. Travel soaks up time, increases costs and impacts the families of those having to travel. Virtual interactions allow time to be spent with more customers. The report foresees a return to travel but at a lower level than pore-pandemic. Customers are also colleagues in the companies we serve. They have become used to virtual working and, in many cases, want to see it continue in some way. It’s difficult to visit a customer who is not in the office. The opportunity for physical meetings with customers will shrink, further driving the continuation of virtual interactions.

One area of travel involves events. Virtual events became the answer to pandemic restrictions but these will be replaced with hybrid events; a physical event with both on-site and virtual attendees. Event companies are already building out the capabilities and software platforms to blend the best of both. Strategies for networking, interactions and even something as simple as Q&A sessions will need to adapt to ensure both physical and virtual attendees have the opportunity for equivalence in their experience. Hybrid events will enable more people to attend overall even though physical attendees may be fewer. Suppliers putting together hybrid events will need to rethink pricing and packaging strategies for both customers and sponsors.

Training is an area that is less likely to return to anywhere near pre-pandemic levels. Digitalisation of content will accelerate as more learning moves from the classroom to online platforms. Suppliers will need to up their game: recordings of trainer-led sessions won’t cut it. Content will become much more granular with on-demand delivery driven by a combination of rich data informing context, choice by individuals and more in-app presentation. Skills in instructional design will become key to delivering customer success.

In-app, on-demand training is one manifestation of another trend that is accelerated by the pandemic: self-service. Much of the work of customer success, whilst important, is repetitive and simple. This lends itself to automation. I have long contended that communicating and delivering value to customers, aka customer success, is the core purpose of a B2B SaaS company. The pandemic has reinforced a trend that was already in existence: the desire for a good self-service option. Customers have been forced into digital transactions and, in many cases, recognised the convenience and ease of a good self-service option. The pandemic has highlighted not just the benefits of self-service but for customers, the difference between good and bad self-service capabilities. Self-service will grow but poor implementations will not be tolerated and become a more significant driver of churn. The increased demand for self-service will drive more companies to embed the value enablement process into the product. I believe more startups will build their applications not around features but around the value-enablement process.

Customer success has long recognised the importance of data; another trend that will accelerate as the need to build contextually rich, automated interactions increases to address the need for self-service. Data integration, machine learning and artificial intelligence go hand-in-hand and the need to master these capabilities will increase.

Whilst customer success is not identified specifically, customer service and sales was one segment in the study. CS is currently a hot market with demand outstripping the supply of qualified candidates pushing up salaries. If CS follows the trend for the broader customer service and sales segment, and I see no reason to think it won’t, we are in for a significant change in employment trends. This raises two questions: will it follow a similar trend and, if so, what does that mean for those in the profession and for employers?

Between 2018 and 2030, MGI believe the number of jobs in “Customer Service and Sales” will change: Here’s the percentage change in job demand they foresee in the following countries:

France, -11%: Germany, -25%: Japan, -3%: Spain, -7%; UK, -7%; USA, -8%: China’ +6%; India, +8%.

The figures are shaped by the service and sales maturity of the different economies, notably the proportion of the existing workforce in these roles. Markets that already have a large service vs manufacturing workforce are also typically at the forefront of adopting automation so will see the biggest impact.

Whilst the sector goes far beyond customer success to think this profession is immune from these changes is wrong. Indeed, the report states “Following the pandemic, net labor demand will decline most in the customer interaction and office work arenas.”

Even if the number of CS jobs do not fall, they nature of what they do will not be immune from the changes. Automation always begins with the simpler tasks and that is underway now. AI and ML are still in their infancy but already making inroads into simple, knowledge-based tasks. As data sets, integration capability and AI /ML increase in sophistication, the threshold of what can and will be be automated will rise. The tasks that remain will be those that require higher order skills, putting a premium on both cognitive skills and emotional intelligence.

If remote working has proved anything, it is that the vast majority of people do not need to be watched over to do a good job. A survey of 2,000 US professionals reports 54% believed they are more productive working remotely with the main reasons cited as not having to commute, fewer meetings and fewer distractions from co-workers. Research by Bain & Co show that companies that excelled at managing time, talent collaboration and energy before the pandemic increased productivity by 5% to 8% during the pandemic. Contrast that with most organisations, which have “experienced a net reduction in productivity of 3% to 6% (or more) due to inefficient collaboration, wasteful ways of working, and an overall decline in employee engagement.” Given that these companies were already 40% more productive, the gap has widened.

It is clear that remote work is here to stay but it is not suited for all people or work. In the search for new normal, many CS leaders are looking at hybrid work models, blending office and remote sessions. Much of this is being done in response to demand from colleagues for a significant continuation of remote work. A spike in turnover in CS roles is, in part, driven by people wanting to retain a significant element of remote working, which more enlightened employers are responding to positively. Strategies for blocks of office and remote work time are however being done with little thought to the work itself. Some tasks lend themselves to remote work whereas other need the spark of face-to-face interaction. The pandemic has called into question many management practices: activity monitoring, performance management, development, motivation. Carrying over existing work practices to a hybrid location model misses the opportunity to rethink not just where but how things are done.

For me, this points to another change, not one referenced in the report, that is nibbling at the edge of the work of CS: new approaches to organisation and management. There is a growing body of practice led by pioneers like Haier, Spotify and Valve developing organisations that cut back radically on management and bureaucracy. Delivering high levels of productivity, customer satisfaction and people engagement, these new organisation models reduce significantly the number of management and administrative roles by developing self-managed teams with significantly more autonomy.

11 things CS leaders should do

As we experience a slow return to a steady state, the opportunity to rethink work is now with us. History of change following other economic shocks suggest those that rethink work win out. The more enlightened CS leaders will develop new ways to measure, enable and engage their people and customers. Here’s a few ideas of where to start.

Short term

• Identify interventions where a lack of personal contact has negatively impacted customer engagement and retention. Address them up quickly.
• Review budgets and allocate lower spend (eg travel) to engaging and developing colleagues.
• Review tasks (not jobs) and determine which lend themselves best to remote and in-person work. Use this to guide your approach to remote/hybrid work.
• Rethink your governance systems to better support hybrid working.
• Review customer interactions to identify low-hanging fruit for automation.
• Re-factor office space to better meet the needs of your hybrid work model.
• Review home office/working arrangements to ensure colleagues who will be working at home long term have suitable facilities and protections in place.
• Ask your people what aspects of management they missed working remotely and strip out any they didn’t value. Be prepared to be shocked as much of which is done in the name of management is not valued by those being managed!

Long term

• Build a vision for a the CS of tomorrow, including a radical expansion of self-service and automation.
• Rethink your benchmarks and aim for order of magnitude improvements in customer engagement and productivity.
• Study new approaches to organisation and develop an agenda for minimal bureaucracy, self managed teams and greater transparency across CS.
• Rethink your staffing models and identify the skills profiles you will need for the future.