customer journey in b2b saas business models1118949/fulltext01.pdfthe purpose of customer journey...
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IN DEGREE PROJECT MEDIA TECHNOLOGY,SECOND CYCLE, 30 CREDITS
, STOCKHOLM SWEDEN 2017
Customer journey in B2B SaaS business models
MARIIA OPANASENKO
KTH ROYAL INSTITUTE OF TECHNOLOGYSCHOOL OF COMPUTER SCIENCE AND COMMUNICATION
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Customer journey in B2B SaaS business models
Kundresa i B2B SaaS affärsmodeller
Mariia Opanasenko [email protected]
Master of Science in Media Technology
Supervisor: Christopher Rosenqvist
Examiner: Haibo Li
Principal: CSV Rating AB
26/06/2017
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Sammanfattning
I den här rapporten analyserades kundresan för B2B SaaS affärsmodeller för att studera kundupplevelsen, "customer success" och dess viktigaste resultatindikatorer. Forskningsmetoden är fallstudien för Supplier Relationship Management SaaS lösning. Under de senaste åren har forskningen inom kundresa identifierat tendensen att erkänna kundresan som en differentiering och en konkurrensfördel. Kundresan är en komplex process som innebär ett strukturerat kundupplevelse- och framgångsmätningssystem. Det finns ingen standardmetod eller metod som ger standardiserade uppsättningar av mätvärden som ska tillämpas för varje resa. För SaaS-lösningen är termen "customer success" relevant för kundupplevelsen med lösningen som en indikator på kundlojalitet. Syftet med forskningen är att utreda B2B SaaS affärsmodell och definition av viktiga resultatindikatorer för "customer success". Fallstudien syftar till att öppna en ram för diskussion vad är "customer success" i B2B SaaS-lösningar, när det verkar och hur ett företag påverkar och säkerställer "customer success".
Summary
In this paper customer journey for B2B SaaS business models was analyzed to study customer
experience, customer success and its key performance indicators. The research method is the case study
of Supplier Relationship Management SaaS solution provider.
In recent years, the research in customer journey management identified the tendency of acknowledge
customer journey as a differentiator and a competitive advantage. Customer journey is a complex
process that entails structured customer experience/success measurement system. There is no standard
approach or method that provides standardized set of metrics to be applied for every journey. For SaaS
solutions term “customer success” is relevant to customer experience with the solution and an indicator
of customer loyalty.
The purpose of the research is investigation of B2B SaaS business model and definition of key
performance indicators of customer success. The case study aims to open a framework for discussion
what is customer success in B2B SaaS solutions, when does it appear, and how a company influences
and ensures customer success.
Keywords
Customer journey, customer experience, customer success, SaaS, B2B.
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Table of content
1. Introduction…………………………………………………………………………… 5
1.1 Background……………………………………………………………………………………… 5
1.2 Research question……………………………………………………………………………… 6
1.3 Purpose and objectives……………………………………………………………………....... 6
1.4 Delimitations…………………………………………………………………………………….. 6
1.5 About Kodiak Rating…………………………………………………………………………… 6
2. Theory………………………………………………………………………………….. 7
2.1 Customer-centric marketing and co-creation……………………………............................ 7
2.2 Customer journey………………………………………………………………………………. 8
2.3 Customer journey map…………………………………………………………………………. 9
2.4 Customer interactions……………….…………………………………………………………. 10
2.5 Customer experience for B2B………………………………………………………………… 11
2.6 Multichannel approach ………………………………………………………………………… 12
2.7 SaaS enterprise solution …..………………………………………………………………….. 13
2.8 SaaS customer success ………………………………………………………………………. 14
2.9 UX role in customer experience………………………………………………………………. 14
2.10 Customer experience measurement…………………………………………………………. 14
2.11 Customer experience management………………………………………………………….. 16
3. Methodology………………………………………………………………………….. 17
3.1 Thesis research and methodology…………………………………………………………… 17
3.2 Data collection…………………………………………………………………………………... 17
4 Result and analysis…………………………………………………………………. 20
4.1 Kodiak Rating price model…………………………………………………………………….. 20
4.2 Kodiak Rating operations……………………………………………………………………… 21
4.3 Value delivered…………………………………………………………………………………. 22
4.4 Customer mapping…………………………………………………………............................ 23
4.5 Decision making process………………………………………………………………………. 24
4.6 Kodiak Rating customer journey…………………………………………............................. 25
5. Discussion……………………………………………………………………………. 31
6 Conclusions………………………………………………………………………….. 35
References………………………………………………………………………………... 37
Appendix: Interview questions………………………………………………………… 41
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Abbreviations
SaaS – Software as a service
B2B – Business to Business
B2C – Business to Customers
KPI – Key performance indicators
UX – User experience
MRR – monthly recurring revenue
ARR – annual recurring revenue
NPS – Net Promoter Scores
CLV – customer lifetime value
CSAT – customer satisfaction score
CES – customer efforts score
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1 Introduction
This chapter covers the background of the research, premises to study customer journey and customer
experience, as well the main definitions. Additionally, the research questions, limitations, and
research background are described in this chapter.
1.1 Background
Digitalization of business processes changes business models and causes new revenue channels, hence it
requires new methods and approaches to current sales and marketing strategies. Today customer
customers tend to take informed purchase decision and being experts in their use of products (Edelman
et al. 2015). Thus, customer acquisition process has been shifted from classic funnel “awareness –
familiarity – consideration – purchase – loyalty” to customer journey loop “initial consideration –
active evaluation – purchase – post-purchase experience – loyalty” (Court et al.). Therefore, creation of
efficient customer journey has become a strong competitive advantage (Edelman et al. 2015). Customer
experience is a part of customer journey and an element of value delivering that causes a need of
ensuring quality of customer experience that in its term depends not only on product or service quality,
but implies interactions with a company and usage of a service or a product (Lingqvist et al.); it
encompasses “the total experience, including the search, purchase, consumption, and after-sale phases
of the experience” (Verhoef et al. 2009, p. 32). Quality of customer experience is an individual metric
stipulated by different levels of customer involvement – rational, emotional, sensorial, physical, and
spiritual (Gentile et al. 2007, p. 397). The subject of the research is customer journey in B2B SaaS
business models. For B2B models customer decision is collective and influenced by lots of factors, hence
customer experience cannot be an individual metric. Furthermore, customer experience in B2B is
described by numerous interactions with a company and implies wide range of touch points. To the
contrary, SaaS business models are defined by customer-centric approach where customers are
subscribers and service is self-using (Solomon, 2015). The role of customers in SaaS business models is
turning from a buyer to business director (Burrell, C, 2009). Moreover, customer role is shifting over
the life cycle of the service (Moore, G. A., 2002). Consequently, for SaaS business models active
interactions with customers are prioritized, standardized, (Solomon, 2015) and had direct impact on
SaaS key performance indicators – churn rate and monthly recurring revenue (Tyrväinen, P., & Selin, J,
2011).
The purpose of customer journey whether B2B or B2C is learning customer behavior to ensure
customer success in order to shorten loyalty loop and create a source of competitive advantage.
1.2 Research question
The main research question is: what are the key performance indicators of customer success in B2B
SaaS business models.
With additional questions:
How to shorten customer journey?
What are the main touch points?
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1.3 Purpose and objectives
The purpose of the research is to increase understanding of customer journey in B2B SaaS business
models, to study the difference of customer journey is for SaaS solutions, examine the role of main
touch points and quality of interactions with customers in customer journey. The intention is to clarify
and find out key performance indicators of customer success. The goal is to be able to outline the
direction for B2B SaaS industry players of monitoring and measurement customer success in order to
shorten customer journey and optimize long sale cycle solutions.
1.4 Delimitations
The aim of the research is to define customer success key performance indicators on example of Kodiak
Rating company. The focus is on studying business customer behavior and definition crucial touch
points. The research will emphasize importance of understanding of customer journey, and its role in
optimization long sale cycle B2B SaaS solutions.
Kodiak rating is tech startup, hence business operation processes, budget allocation, and sales processes
are different from the established companies. Besides, small number of existing customers impacts on
research methodology that was chosen as semi-structures qualitative interviews with further analysis of
qualitative data.
1.5 About Kodiak Rating
Kodiak Rating is a part of CSV Rating AB, tech startup that provides solution within supplier
relationship management both product and consulting.
Kodiak Rating is a supplier relationship management (SRM) system with complementary applications.
The software-as-a-service (SaaS) solution is designed to manage supplier data and assess the suppliers.
Supplier evaluation is implemented through the set of the assessment modules: supplier self-
assessment, supplier performance assessment, on-site assessment, financial assessment, and safe-
source assessment. Result is presented through various ratings calculated based on appropriate risk
areas. Additionally, third party software are integrated in the solution, such as monitoring media
exposure and creditworthiness estimation.
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2 Theory The theory chapter elaborates on background of customer journey, service dominant and customer
centric logic, meaning of value-creation in customer journey. Further, the difference of customer
journey for business-to-business is examined and introduced the concept and features of Software-as-
a-Service solutions. The chapter is completed by overview of customer experience metrics and
customer experience management practices.
2.1 Customer-centric marketing and co-creation
I consider value co-creation process and value-in-use as the starting points towards understanding
customer journey.
Service-dominant logic entails focusing on experiences rather than products or offers. It means
implementation of value co-creation, service orientation, and dialog with customers as a marketing
method (Lusch and Vargo, 2004). Distinctive point of service-dominant logic is acknowledging
customers as resource integrators and components of value creation (Wouters, 2004). Customer-centric
marketing that follows from service dominant-logic implies understanding needs and challenges of
individual customers rather than customer segments. Starting point is focusing on needs, wants, and
resources. However, customer-centric marketing approach entails high level of service customization
and delivering rather semi customized then completely standardized solution. Moreover, it contributes
to companies and clients co-creating products, prices, ad distribution (Sheth, Sisodia and Sharma,
2000). Hence, if a customer is recognized as a co-creator, then the role of the service/solution supplier
is to provide customers with necessary resources for value-generation (Grönroos, 2008). Therefore,
customer-centric approach becomes an important precondition to ensure successful customer journey,
which understanding by a company lead to sales growth (Lingqvist, Plotkin and Stanley, 2013).
Value-in-use is a customer’s functional and/or hedonic outcome provided through product or service
usage (Woodruff and Gardial, 2008) and a result of customer engagement with service provider (Vargo
and Lusch, 2004). However, value-in-use can vary on different stages of customer journey since it is
conditioned by customer goals, interaction with company, and product or service usage (Lemke, Clark
and Wilson, 2010).
In order to understand value co-creation and value-in-use in Business-to-Businees model, I follow the
definition of B2B offering proposed by Lusch, as a number of different services incorporated into
customer value chain and devises non-dissociable entity (Lusch et al. 2006).Stremersch defines
solutions as a particular sequence of various components that commits to value creation to the
customer (Stremersch, Wuyts, and Frambach, 2001). Comet brings co-creation aspect into the
definition of B2B solution “solutions are co-created by a customer and a supplier and cover all aspects
of the relationship: commercial, operational, and financial) (Comet, 2000). Thus, the focus is moving
from selling systems to solution strategies that aim to help customers to develop their business rather
than satisfy operation needs (Azimont, Cova and Sale, 1998). B. Cova and R. Salle emphasize in their
case study importance of value co-creation, customer network and supplier network in delivering B2B
solutions. Following Oliva and Kallenberg, business-to-business (B2B) offering strategy has been
changed “from the product efficacy to product efficiency and effectiveness within end-users’ processes”
(Oliva and Kallenberg, 2003). Hence, value-in-use and value co-creation are preconditions to grasp
customer journey and customer experience.
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2.2 Customer journey
“Journeys are thus becoming central to the customer’s experience of a brand—and as important as the
products themselves in providing competitive advantage.” (Edelman et. al).
“If customer experience is today the key business differentiator in many sectors then sustainable
advantage will only come from connecting the operational layers that define and enable that
experience.” (Chief Experience Officer. DCX Practice Capgemini)
“Identifying the journeys that matter most can be beneficial even when companies don’t have a
nagging customer service problem—the effort can help them find a competitive differentiator.”
(Rawson, Duncan and Jones, 2013)
Digital disruptive technologies influence marketplace by cheap and effortless technology adaptation,
low entry barriers for new online players, business models, therefore, expanded customer bargaining
power lead to rising competition. These changes affect customer behavior that is forming under the
conditions of limited time, wide range of services, and availability of e-commerce, hence that directly
affect brand loyalty (Deloitte Touche Tohmatsu Limited, 2013). These changes brought new conditions
and requirements for market competition. One of them is customer journey as a business differentiator
and a competitive advantage (Edelman et al.).
According to Edelman, customer journey is a path of customers through service forming and leading by
the companies. Since service-dominant logic includes company engagement in customers’ value
generating and value consumption (Grönroos, 2008), customer journey can be considered as part of
these processes. Hence, customer journey management has become as important as product or service
management. Edelman emphasizes that the aim of customer journey is to shorten the loyalty loop and
lock-in customers. The crucial components of customer journey are automation, personalization,
contextual interaction and journey innovation. Managing and improving these components creates
competitive advantage and impact on customer loyalty. Therefore, customer journey approach creates
need of new roles and functions in the companies, such as customer experience managers or scrum
teams. The activity of scrum teams is outlined as execution-oriented, fast, agile, constantly testing and
iterating improvements (Edelmal et al.). Overall scrum team duties are to design and conceptualize
customer journey through user interface, to develop apps and integrate third-party software to atomize
customer journey, track and analyze customer interactions, measure journey variables to reach higher
level of customization, consider the whole picture of customer journey from back-end development to
marketing campaigns, ensure that marketing activities support and conducted in accordance with
customer journey. Kilian stresses importance of using the agile methodology for delivering customer
experience and creation customer journey (Kilian, Sarrazin and Yeon, 2015).
M. Taylor (Chief Experience Officer. DCX Practice Capgemini) depicts customer journey as a pyramid
with several layers.
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Figure 2.1 Customer journey pyramid
Each level requires understanding of key processes.
Level 0 – The journey. What is customer journey how does it look like?
Level 1 – Opportunities and expectations. Which needs and challenges are addressed to different
customer segments?
Level 2 – Data. What data do the company provide? How is the data used to extend the value and
personalize interactions?
Level 3 – Technology. Customer journey automation – all digital tools and applications that are used in
the company to optimize operations and effect customer journey.
Level 4 – Enabling process. Usage tools and data to deliver customer experience.
Level 5 – Organization. Mapping customer journey through the organizational structure.
2.3 Customer journey map
The research conducted by B. Temkin at Forrester Research, Inc. indicates five steps to outline
customer journey. Which are the following:
- Collection internal insights
- Initial hypothesis development
- Customer process, needs and perception research
- Customer research analysis
- Customer journey mapping (Temkin, 2010)
Customer journey map reflects customer processes, needs and perceptions though their interaction with
the company. The output of customer journey map is definition problem areas that affect customer
experience. Customer journey and customer experience are related concepts that reflects company
engagement in customer value co-creation and value-in-use. One of the first study of customer
experience was conducted by Abbot, he states that “what people really desire are not products, but
Organization
Enabling procces
Technology
Data
Opportunities and expectations
Journey itself
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satisfying experiences” (Abbot 1955, p. 40). Later studies in customer experience area affirm that every
service transfer leads to a customer experience (Brakus, Schmitt and Zarantonello, 2009). Chandler and
Lusch define customer experience as an output of interactions with different actors within the whole
ecosystem. Customer experience can be conceptualized through a customer journey as customer
interactions with the company through different touch points within a purchase cycle (Lemon and
Verhoef, 2016).
Berry, Carbone and Haeckel determine two components of customer experience functional and
emotional, where the first one is related to the functionality and quality of product or service, and the
last one is related to emotions, feeling, atmosphere and the environment of delivered product or service
(Berry, Carbone and Haeckel, 2002). Lemke, Clark, and Wilson, and Verhoef suggest broader definition
of customer experience that includes customer’s cognitive, emotional, sensory, social, and spiritual
responses to all interactions with a company (Lemke, Clark and Wilson, 2010). Therefore, customer
experience is multidimension concept that is deemed from different points of view: from the customer’s
perspective (Schmitt, 2010); from the company’s; from company’s perspective in terms of delivery
experience (Berry, Carbone, and Haeckel 2002).
2.4 Customer interactions
“One key element of understanding and managing customer experience is the ability to measure and
monitor customer reactions to firm offerings, especially customer attitudes and perceptions” - (Lemon
and Verhoef, 2016).
Due to development of digital technologies number of interactions with customers has increased, and it
affects the complexity of customer journey (Lemon and Verhoef, 2016). Determining key customer
journey map indicators (Temkin, 2010) allows to measure customer experience.
Lemon and Verhoef suggest the following stages of customer journey map: pre-purchase, purchase and
post-purchase. Each step includes different type of customer interactions.
Figure 2.2 Customer journey flow by Lemon and Verhoef
The four types of customer interaction are proposed: brand-owned, partner-owned, customer-owned,
and social/external/independent. Brand-owned touch points include branded media, sales, price and
all other interactions that controlled and initiated by company. Partner-owned touch points are
designed and controlled by both company and partners. Customer-owned touch points related to
customer experience with the product and not influenced by the company or partners (Lemon and
Verhoef, 2016). Therefore, interaction with customer through various touchpoints occurs during the
whole customer journey including visiting website, communication through marketing activities,
customer support and so on (Richardson, 2010).
Pre-purchase
The purchase
Post-
purchase
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Richardson suggests to use the extended framework for customer journey map that, however,
corresponds with the model suggested by Lemon and Verhoef.
Figure 2.3 Customer journey flow by Richardson
Appropriation of measurable variables for each step targets to monitoring and control how a customer
journey will be accomplished – continuing the journey with the same service/product, upgrading, or
switching to competitor’s proposal.
Apart from measurable variables, A. Richardson proposes to use the framework that describes each
stage of customer journey through actions, motivations, questions, and barriers.
Rawson points that customer experience has cumulative effect. Consequently, separate measurement of
key performance indicators (KPI) of every touch point does not provide a complete customer experience
measurement. Even though each customer interaction was successful, overall perception and
experience of the service or product can still be negative. In that case, the whole journey needs to be
reconsidered. Therefore, the focus is changed to key touch points measurement and comprehensive
customer journey analysis by introducing customer surveys and raise customer engagement (Rawson,
2013).
2.5 Customer experience for B2B
According to Macdonald and Tuli business clients tend to perceive value through direct delivery of
product or service, while for customers, customer journey itself is more important in terms of
conceiving value (Macdonald et al. 2009; Tuli et al.2007). The study conducted by Lemke, Clark and
Wilson, 2010, showed that both B2B and B2C clients estimate customer experience by evaluation and
judgement of the company interactions, although business clients focus on transparent, cooperative and
follow-up relationship with the company (Dorsch et al. 1998) and improvement through innovations
(Walter et al. 2003). The difference between customer journey for B2B and B2C is the character or
interactions and the key touchpoints that the company focuses on.
“In B2B contexts, customer experience quality is enhanced by supplier practices which focus on
understanding, co-creating and monitoring the achievement of value-in-use.” (Lemke, Clark and
Wilson, 2010)
Hence, it can be concluded that for business client functional components of customer experience and
achieved results are the main criteria of customer experience, and ensuring the expected results is a
target of the customer journey strategy for B2B.
Edelman depicts customer decision journey as a loop. What is more, a new customer journey implies
eliminating of considering and evaluation process, bringing a customer instead direct to the loyalty loop
(Edelman et.al, 2015).
Engage Buy Use Share Finish
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Figure 2.4 Customer journey loop by Edelman
For B2B business models considering and evaluation stages take longer time since decision making is a
collective process conditioned by high volume of transaction and corporate structure (Sandhusen,
2008). Purchase and implementation of the product or service affects established operations and
requires transformations and changes. Hence, B2B customer decision journey is an important part of
customer journey. Therefore, marketing and sales activities are targeted to influencers and decision
makers in B2B customer decision journey process. McKinsey researches emphasize importance of post-
sales service for B2B segment. Using digital technologies allows to measure and define a bottle neck in
customer decision journey to find an effective interaction channel with high conversion rate. (Lingqvist,
Plotkin and Stanley, 2013).
2.6 Multichannel approach
Multichannel approach plays key role in the customer journey. Conforming to Lemon and Verhoef,
different marketing channels performs different roles on purchase phase of customer journey. Customer
groups are different in their channel preferences; hence, the same channel is effective for one customer
group, and useless for another. Channel choices are influenced by each other by reason of lock-in
effects, channel inertia, and cross-channel synergies.
Payne and Frow define several marketing and sales multichannel strategies. The most effective is
integrated multichannel strategy that implies continuous processing and analyzing customer data;
using the whole capacity to interact with customers via different channels to provide comprehensive
customer experience. Channel migration strategy is a transformation way to integrated multichannel
strategy. Customer experience measurement within the channel contributes to customer experience
improvement across other channels. The goal of integrated multichannel strategy is to reach brand
consistency, customer experience consistency, ensuring consistent communication and customer
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service across different channels, optimizing return of investments in various channels (Payne and
Frow, 2004).
Researchers from Deloitte Consulting state that omni channel approach drives different touch point
work together. Along with customer segmentation leverage using different channels facilitates to ensure
personalized customer experience (Deloitte, 2013).
2.7 SaaS enterprise solution
SaaS – Software as a Service – is a cloud based information technology solution. SaaS consists of
applications, or sets of applications, that resides in a cloud, bringing the benefit of accessibility from all
computers with Internet connection. Similarities between SaaS offerings are that they are rented, not
bought, that providers are responsible to “keep it up and running” and that it’s usually flexible, i.e.
simple to incrementally purchase extra capacity or functions. (McAfee 2011:128-129)
This report is focusing on study customer experience particularly in SaaS solutions. Following
Zainuddin and Gonzalez, SaaS solutions are:
- aimed to provide customers with tools that will meet their requirements, in other words, customers
create value for themselves using the SaaS solution;
- intuitive and easy to use to encourage customers for co-creation;
- improved and continuously developed based on customer feedback (Zainuddin and Gonzalez, 2011).
The difference between imbedded software sales and SaaS is high level of customization and high
development costs for the first one in the same time high revenue, while standardized SaaS solutions
are applicable in a large scale and sold on relatively low price. (Hoch, 2000).
Following Tyrväinen and Selin, personal sales, seminars, workshops focusing on customer relationship
management are traditional selling practices for software companies. Tyrväinen and Selin suggest four
dimension SaaS selling and marketing model that includes the following:
1. Business growth determined by implementation model and size of solution provider.
2. Customer relationship including new sales and post-sales experience.
3. Sales process defined by sales and marketing communication channels.
4. Target customers identified by customer segments and buyer position.
Metrics of proposed marketing and sales model are: revenue, headcount grow, cash flow, contracted
monthly recurring revenue for business growth dimension; churn rate and customer lifetime value for
customer relationship dimension; transaction size and customer acquisition costs for sales process
dimension; number of users and number of potential customers for target customers dimension
(Tyrväinen and Selin, 2011). Proposed metric model provides a background for further customer
success measurement.
2.8 SaaS customer success
The term customer success is used in context of customer experience for SaaS solutions.
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Since SaaS models implies self-service, customer success is a result of using the tool and a part of
customer experience. According to Customer Success Guide released by Process.st, customer success in
SaaS solutions is a process leading and forming by the company, involves marketing and sales activities,
onboarding process, customer support, and post-sales service. Thus, it can be assumed that customer
success is an achieved customer goal in SaaS customer journey. Customer success key metrics using
nowadays are: upsell, churn rate, monthly recurring revenue (MRR), and customer lifetime value
(Kissmetrics, 2015).
2.9 UX role in customer experience
“The user experience (UX) defines a customer’s perception of human-computer interaction through a
specific channel or device. It includes the customer’s experience of using a device, based not only on its
‘look and feel’ but also on its practical aspects such as usability and efficiency.” (Deloitte, 2013)
For SaaS solutions UX is a key factor that defines overall perception of brand. Moreover, UX aims to
match user motivation and goals on different stages of customer journey. Consistent UX forms right
experience across different touchpoint. Besides, both visual and functional consistency directly impacts
on customer loyalty. (Borowski, 2015).
McKinsey researchers highlight increasing need of design driven culture that implies focusing on
consistent design and customer empathy. Apart from design focus, it means to engage customers to
service development process. Delivering a minimally viable product to the market intending to get a
customer feedback to build the next version based on actual use of the product and customer
impressions of it. This strategy allows to concentrate on customer experience and customer success in
the same time reduces development costs (Kilian, Sarrazin and Yeon, 2015).
2.10 Customer experience measurement
Customer experience measurement connotes several variables calculation depending on customer
journey phase. Although, earlier conducted studies proposed number of customer experience
measurement methods. The background of customer experience measurement is customer satisfaction
evaluation trough customer surveys.
Customer Satisfaction Score (CSAT) is calculated based on customer answers to the question: “How
would you rate your experience with your … (e.g. recent support requirement)?” The answer scale is
Very unsatisfied / Unsatisfied / Neutral / Satisfied / Very satisfied. CSAT score allows to estimate
quality of interaction with the company, performance of customer support center. On contrary, it does
not give the insights about overall relationship with the company or brand perception (CheckMarket,
2016).
Customer Effort Score (CES) proposed by Dixon, Freeman, and Toman, reflects mainly quality of
customer support and help center in terms of reducing customer efforts and solving customer problems
fast (Dixon, Freeman and Toman, 2010).The survey statement is “The organization made it easy for me
to handle my issue”; answer scale is Strongly disagree/ Disagree/ Somewhat disagree/ Neutral/
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Somewhat agree/ Agree/ Strongly agree. The limitation of CES is application to customer service and
addressing service issues (CheckMarket, 2016).
Net Promoter Scores (NPS) proposed by Reichheld (2003) illustrates probability of customer loyalty.
Customers are branched into three categories promoters, passives, and detractors. The method allows
to find the number of satisfied/unsatisfied customers, and provide a background for further
investigation the reasons of low customer loyalty. According to Bain & Company, “analysis shows that
sustained value creators – companies that achieve long-term profitable growth – have Net Promoter
Scores two times higher than the average company. And Net Promoter System leaders on average grow
at more than twice the rate of competitors.” (Bain & Company, n.d.). The NPS survey question is: “How
likely is it that you would recommend [your company] to a friend or colleague?” with additional
questions to receive a detailed feedback.
The survey methods are not sufficient to assess and understand the whole customer experience within
the all phases of customer journey. Nevertheless, using the mentioned scores in customer journey
strategy allows to identify the issues in customer communication and support, estimate customer
satisfaction, and predict customer loyalty. One of the way to increase customer satisfaction is, instead of
concentration on solving an actual customer problem, anticipate coming issues by sending follow-up
emails, manuals, etc. Enhancing quality of customer service affects emotional component of customer
experience (Dixon, Freeman and Toman, 2010). However, the level of customer satisfaction does not
directly correlate with the level of customer loyalty, but influences it. (e.g., Colgate & Lang, 2001; Jones
et al.,2002; Lee & Cunningham, 2001). Switching barrier conditioned by switching costs, available
alternatives, and personal relationship with the company is another factor cognate with customer
loyalty (Kima, Parkb and Jeonga, 2004; Jones, Mothersbaugh, and Betty, 2002).
For SaaS customer success, specific metrics are coherent conditioned by nature of SaaS models.
Customer churn rate and customer lifetime value (CLV) are related terms used in telecom industry and
subscription business models (Berson et al. (2000). Hung, Yen and Wang define churn rate as a number
of customers that have switched to another service provider (Hung, Yen and Wang, 2006). CLV means
customer value to the company during usage of the service. The company can impact on churn rate by
prediction of customer churn and prevention it (Neslin et al., 2006). Customer churn rate demonstrates
customer loyalty and customer satisfaction. Hence, monitoring customer churn rate and customer
lifetime value targets to establishment certain strategic and operational measures to reduce retention
(Lariviere & Van den Poel, 2004). SaaS company practices show that churn rate and correspondent
revenue churn rate are one of the key performance indicators of SaaS business models linked to
customer success (Rogers, 2014).
Customer Churn Rate = (Customers beginning of month – Customers end of month) / Customers
beginning of month
Revenue Churn Rate =
[(MRR beginning of month – MRR end of month) – MRR in upgrades during month] / MRR
beginning of month
Upsell and subscription renewal are the indicators of customer loyalty in SaaS business models.
Understanding customer journey and developing customer experience lead to loyalty and increasing
customer lifetime value.
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2.11 Customer experience management
Customer experience management aims on ensuring outstanding customer experiences that, in its term,
has long-lasting effects (Arnould and Price 1993). Mascarenhas, Kesavan and Bernacchi suggest to use
the term total customer experience that covers the experience before, during and long after product use,
as a multidimension term, related to emotional and subjective components. Application of total
customer experience principles and tools facilitates to generation, strengthening, and sustainable long
lasting customer loyalty. Customer experience strategy targets to long lasting customer loyalty by
delivering physical, emotional and value elements of customer experience (Mascarenhas, Kesavan and
Bernacchi, 2006). Mudambi et al. state that prior customer experience is a decisive factor. The product
with outstanding customer experience is rated higher than identical product with the same performance
(Mudambi, 2002).
Specialists from Bain & Co suggests to use episode management to achieve customer loyalty. Episode
managements is similar to agile software development methodology.
Figure 2.5 Episode management by Bain & Co
Generally, episodes can be divided into three groups:
1. Exploration and purchase
2. Usage
3. Service
Episodes management allow to create and view the whole customer journey process (du Toit et al.,
2017). Each episode can be divided into several sub-episodes to reach high level of standardization of
17
interactions with customers on each level of customer journey. Furthermore, standardized operations
are easier to measure and evaluate operation performance of each episode and continuously improve
the whole journey. For big organizations, it also helps to optimize and reduce costs of support centers
and measure performance of each support agent (du Toit et al., 2017).
Example of standardized operations that stipulates information consistency, social interactions, and
connected experiences are: e-mails, phone calls, website, information systems. From strategic level
creation of nurturing communities, brand advocates, and manage customer journey are determined by
operational efficiency aiming on resolving issues on each phase of customer journey (Deloitte, 2013).
3 Methodology
The research method and data collection is described in this chapter.
3.1 Thesis research and methodology
The distinction of customer experience process in SaaS B2B business model is illustrated by the
example of SaaS startup Kodiak Rating.
Present research is a case study based on Kodiak Rating company analysis. Both primary and secondary
data was collected and analyzed. Primary data was collected by semi-structured interviews with
marketing and sales specialists at Kodiak Rating, and during the customer workshops and semi-
structured customer interviews. Gathered data is analyzed to examine customer journey, identify main
touch points, and study sales process for SaaS B2B solutions. Interview data is used to outline the
customer journey from the company and customer perspectives. Customer journey is analyzed from
operation, marketing, sales, and customer angles. Secondary data was collected by study of relevant
academic literature and best consulting practices.
Qualitative research method is suitable for present research as it allows to conduct deep analysis and
understand the distinctive features of customer interactions, marketing and sales practices for complex
SaaS B2B solutions. Although, collected insights form a framework for the future discussion.
My current position of product owner/customer experience manager allowed to access both sales and
marketing materials, and user data. Additionally, I take part in holding customer workshops – the
sources of customer insights.
3.2 Data collection
The data was collected by semi-structured interviews with Kodiak Rating colleagues, quotes are used in
the analysis. Observations made during the workshops and unstructured interviews with customers
were the other data collection methods.
Respondents at Kodiak Rating:
Samuel Jenks – Marketing lead at Kodiak Rating, interview 05-04-2017
18
Daniel Hunt – Sales lead at Kodiak Rating, interview 05-04-2017
Companies:
Company 1
Operations: Metal industry
Turnover: 7 602 000 000 SEK
Number of employees: 1 878
Supply from: India, Korea, Sweden
Supplier business areas: organics, metals, graphites, production consumables, packaging, energy,
service providers, transporters.
Organization structure: holding with number of subsidiaries.
Purchased modules: 3
Workshop: 31-01-2015
Company 2
Operations: Clothes & Shoes, Wholesale.
Turnover: 1 070 431 000 SEK
Number of employees: 76
Supply from: Bangladesh, Poland, Vietnam.
Supplier business areas: workwear, hand tools, electronic tools.
Organization structure: operates under several brands
Purchased modules: 1
Workshop: 15-03-2017
Company 3
Operations: Property Management
Turnover: 1 810 248 000 SEK
Number of employees: 90
Supply from: Sweden
Supplier business areas: Operations, maintenance, data/telecom, security, administrative services,
construction materials.
Organization structure: Cooperative association, member on regional levels are independent equities.
Purchased modules: 1
Workshop: 21-03-2017
19
Company 4
Operations: Property Management
Supply from: Sweden
Supplier business areas: Operations, maintenance, data/telecom, security, administrative services,
construction materials.
Organization structure: Cooperative association, member on regional levels are independent equities.
Purchased modules: 1
Meeting: 26-04-2017
Company 5
Operations: Municipality and city management
Turnover: 5 409 151 000 SEK
Number of employees: 749
Supply from: Sweden
Supplier business areas: Workplace services, care services, HR, marketing services, consulting services,
IT, construction, real estate management, vehicles and machinery, electricity, heating, and water,
materials and tool.
Organization structure: owned by the Municipality of Södertälje along with number of subsidiaries.
Purchased modules: 1
Workshop: 30-03-2017
Source Allabolag.se. The company names are not revealed for confidentiality reasons.
The set of interview questions is available in Appendix A.
20
4 Results and analysis
This chapter is a detailed analysis of processes and operations at Kodiak Rating. Customer journey,
customer decision process, customer journey map and main metrics of each step of customer journey
are investigated. Collected customer insights are included in the analysis.
4.1 Kodiak Rating price model
Kodiak Rating is an enterprise solution that encompasses high level of customization and the price
model dependent on number of purchased modules and number of users. The price components are the
assessment modules, number of users, and number of nodes or independent business areas within the
company. The discount system is not standardized and conditioned by client relationship, usually based
on number of users and purchased modules. Discounts are not applied for the third party integrated
software.
Kodiak Rating is a customized solution with long implementation cycle stipulated by required
transformation of customer operations, rather than technical implementation. Thus, the significant
cashflow channels are consulting service, educational trainings, workshops, tailored software
development.
Figure 4.1 Kodiak Rating price model
Source: Acando consulting
21
Price model based on number of users is ambiguous for enterprise solutions since it limits customer
experience in a company. Furthermore, it obstructs decision making process as the solution is supposed
to be used by limited number of users, hence, it’s difficult to estimate how the company benefits using
the solution.
4.2 Kodiak Rating operations
Customer experience and, consequently, customer success is described through specificity of operations
within the company as output of transformation process (Slack, 2015).
Figure 4.2 Kodiak Rating operations
According to Four V-models of operation processes, Kodiak Rating operations are described as low
volume which means high value of each customer, high level of solution customization and individual
approach to each customer case. However, this statement is applicable to the content of the solution
rather than on technical part. Hence, depending on industry, size, and specificity on customer operation
number of consulting hours increases. This aspect will be elaborated further in this chapter.
Consequently, the variation is medium-to-high. Each customer got a unique output depends on needs
and challenges. From a variety dimension the services can be characterized as medium-to-high also
because the development process in continuing, and the company strategy aims to cover the full circle
of supplier relationship management and provide complete data and comprehensive solution for
intelligent procurement. The value-added services are continuously added; complex and detailed
customer segmentation empower unique solution delivered to each customer. The operation processes
are defined as high visible since the solution delivery process implies a lot of interaction with customers
on all stages of customer journey.
Kodiak Rating is a tailored service that entails high delivering/implementation costs. The issue is to
control the point where the costs grows faster than revenue is generated (Lakenan, Oliver and Moeller,
2004). This situation is more challenging for startup level company and might lead to “startup
graveyard” (Chaotic Flow, n.d.).
Input transforming resources:
Human capital
Software
Input transformed resources:
Knowledge base
Output: Customer Success
22
Figure 4.3 Startup graveyard model
4.3 Value Delivered
Based on competitor analysis, Supplier Relationship Management (SRM) research 2016-2017 published
by Capgemini consulting, customer interviews, and user data analysis the delivered value is defined as
management of transparent supply chain, corporate social responsibility (CSR) practice, and strategic
sourcing.
Figure 4.4 Kodiak Rating value delivered
TRANSACTIONAL
GRAVEYARD SELF-SERVICE
ENTERPRICE
SOLUTION
Incr
ease
val
ue
Increase
velocity
COMPLEXITY
PR
ICE
Transparent
Supply
Chain
Corporate
Social
Responsibility
Strategic
Sourcing
23
4.4 Kodiak Rating customers mapping
In order to define Kodiak Rating value-in-use, the customers were mapped according to different
categories. Relying on marketing materials and current customer base, the customer segments were
suggested based on the following:
- Industry
- Size
- Modules in use
- Service output
- Organization structure
Crucial criteria that defines value-in-use and, therefore, customer experience is industry of customer
operations. It affects complexity of the solution both content and technical part. Industry determines
the required level of CSR and complication of the supplier chain. The content of the solution should
meet stakeholder requirements. Complicated content encompasses more consulting hours and more
interactions with a client. Besides education takes significant part in customer onboarding and post-
sales process.
Size of company influences on governance structure, content, number of users, number of modules,
frequency and quality of using the tool. Thus, customer journey is shorter for small size companies:
decision-making process is faster and limited by fewer number of influencer, 1-2 users requires less
training hours during on boarding process.
Number of modules that are used affects consulting hours and amount of interaction with customers as
well.
Organization structure directly impacts on value-in-use and customer goals. Below the customer
interview citations are given:
“We want to keep all supplier data in a one place” – Company 1.
“We want to see the current rating of the supplier […] we are not interested in supplier rating
development” – Company 4.
“Each supplier manager will evaluate and collaborate with own suppliers” – Company 5.
Usually purchasing managers are responsible for supplier assessments within their purchasing
area/supplier category. Thus, the value is delivered to several end-users; each has own value-in-use.
Another type of supplier assessment process is appointment one person responsible for execution of the
assessment process and reporting the results to category managers. So, the value is delivering to one
end-user and value-in-use is created/consumed by different positions within the company that have
own customer experiences as well, even though they don’t use the tool themselves. In this case, the goal
is to educate customers and increase number of users within the company by increasing value-in-use.
24
4.5 Decision making process
In case of enterprise solution, purchasing decision is a complicated process that involves several
participants. Analysis of sales process in the company showed the following sales cycle.
Figure 4.5 Kodiak Rating Sales Cycle
Time between first phone meeting and actual deal is up to 2 years. Besides, during that time several
additional interactions occur such as call-reminders and invitation to the events and seminars. To
understand the reasons of long sale cycle, the customers were asked about the obstacles and concerns
during the decision-making process. Below are given quotes from the customer interviews:
“It was very difficult to convince other in necessity of purchasing solution. It’s easier to allocate budget
on marketing activities than on supplier relationship management [...] The negotiation started a bit
for early in terms of operation management […] Another issue is to appoint responsible person and
find time for these activities.” Company 2.
“We want to involve also new young employees in decision making process, not just those who work in
a company 15-20 years”. Company 3.
“Hard time to plan how to work with supplier afterwards and appoint responsible persons. Difficult
to agree on how to start with supplier assessment. Different procurement groups have different
requirements, hard time to combine everything in a one system” Company 5.
Unlike B2C, B2B customers tend to make already informed decision, and need generation is not crucial
phase of customer journey for business clients. According to observations made during the customer
Lead analysis
Cold calls
Phone/skype meeting
Send marketing/edu
cational materials
Meeting
Sending proposal
Purchase
25
workshops, need of supplier assessment and supplier evaluation is recognized by companies. The
supplier evaluation process itself requires time and set up in several steps. Moreover, historic data is the
most valuable output of using the Kodiak Rating solution. Therefore, the subscription license is sold for
3 years, paid yearly.
4.6 Kodiak Rating customer journey
Kodiak Rating customer journey structure is developed based on interview data analysis and study of
sales and marketing materials. Customer journey is standardized for all customers, but vary depending
on customer needs.
Figure 4.6 Kodiak Rating Customer Journey
Kodiak Rating customer journey is divided into six phases, each includes certain activities that lead to
the next phase and eventually aim to bring the customer to a loyalty loop.
1. Pre-purchase phase targets on wide audience, contains need generation, initial consideration,
engagement, and evaluation stages. Need generation and initial consideration are supported by
following actions:
- Digital marketing activities: social media, traditional media, AdWords, blogging.
- Offline marketing activities: public events, thematic conferences, and seminars; advertising in printed
media.
- Collection contact data.
Need Generation
Initial Consideration
Engagement
Evaluation Purchase
Delivery
Usage
26
- Could and warm calls.
- E- mail marketing.
Engagement and evaluation stages target on narrow audience that already aware of the need to use the
solution, and engaged by attending webinars, seminars, and product demonstration.
2. Purchase phase aims on closing deal and encompasses working with customers individually and
present customized solution.
3. Post-purchase phase includes delivery and usage stages, supported by the following actions:
- Customer onboarding process
- Customer support - Modifying and adjusting solution according to customer needs - Education
- Continuous satisfaction surveys
- Customer requirements session (repeating)
- Modifying and adjusting solution according to customer needs (repeating)
4. Loyalty phase is a final step of customer journey and guaranteed by customer success as one of the
obligatory pre-conditions for customer loyalty.
4.6.1 Marketing
Marketing, sales, and customer success activities are connected and illustrated as a map
Figure 4.7 Kodiak Rating Marketing & Sales Cycle
Non-Responsive
Initial Interaction
Decision Maker
Influencer
Targeted Company
Qualified
Influencer
Nurturing
Usage Customer Success
Qualification (score)
Influencer
Closed Deal
High Interest
Influencer
Upsell
27
Marketing activities are divided into three processes:
Actions Resources
Ou
tbo
un
d m
ar
ke
tin
g Social media
marketing: - Backlinking - Content Sharing - Community building
Content marketing: - Trends and News - Informational &Educational Content
E-mail marketing: - Educational content - Newsletters & event invitations
Online ads: AdWords
- LinkedIn - Twitter, - Facebook - Youtube - blog - mynewsdesk - third part resources - MailChimp - AdWords
Ev
en
t m
ar
ke
tin
g
- Seminars - “Afterwork” mingling
- Social media - MailChimp - Office facilities
Ma
rk
eti
ng
n
ur
tur
ing
- E-book publishing - Newsletters - Event Invite - Webinar invites - Sales Blend - Customer Success Stories
- Social media - MailChimp - Zendesk
Table 4.1 Kodiak Rating Marketing KPIs
Analysis of marketing activities has revealed lack of traditional marketing methods and absence of
interactions with potential customers outside digital media. During the interview marketing lead
Samuel Jenks emphasized importance and effectiveness event marketing activities for lead generation.
“Event marketing because it’s a complex product and it’s important to talk to people personally what
is it about.” – Samuel Jenks, Marketing Lead at Kodiak Rating
Samuel Jenks also points out the necessity of transformation into account management way of
operations that will contribute to ensuring customer success. However, Kodiak Rating customer success
is associated with personal relationship and performance of support, sales, and customer experience
managers.
Marketing KPIs are webtraffic, demo bookings, opened e-mails.
28
4.6.2 Sales
Kodiak Rating sales process characteristics:
- Long sales cycle
- Personal relationship
- Phone calls are main sales channel
- Referring to common contacts, previous colleagues, etc.
The key challenges:
- to contact the right person who makes or influences on a decision about the purchase
- to book the first personal meeting
Sales lead Daniel Hunt stresses importance of previous contact before the first call and references from
the colleagues or other companies. Additionally, the crucial touchpoint is contact with a person
responsible or influencing the purchasing decision. Consequently, several positions within the company
are contacted before the first meeting.
“At least 3 contacts, the more contacts the better. For companies with more than 500 employees 5
contacts at least I would say.” – Daniel Hunt, Sales Lead at Kodiak Rating.
Usually, the main influencers are purchasing or sustainability managers.
Standard Kodiak Rating sales procedure includes 5-6 interactions before the actual first meeting; the
whole negotiation process takes from 6 to 8 months. The most effective touch point is a personal
meeting.
“Face to face meeting because you can show the product, get more personal, build relationship with
companies.” – Daniel Hunt, Sales Lead at Kodiak Rating.
Daniel highlights limited resources to leverage customer segmentation. At the moment, potential
customers are filtered just on industry and size level. Also, Daniel stressed absence of sales process
standardization, “it’s a wild west”. The main obstacles to accelerate sales process, according to Daniel, is
poor self-service capacity of the tool.
The following marketing and sales KPI are measured:
Marketing Sales/deals Financial
Number of outgoing emails Calls New sales
Traffic Sales emails Upsell
Blog traffic Meetings, conducted Sales (upsell, renewals) New Leads Leads Assigned Gross profit
New Qualified Leads Leads in progress Net revenue
New client signups Leads lost Clients account
Blog sign-ups Deals open Value proposals
New company signups (unique) Deals won Value of accepted proposals
Deals lost
Disqualified
Table 4.2 Kodiak Rating Sales & Marketing KPIs
29
4.6.3 Customer onboarding process
Customer success begins with onboarding process. Onboarding process is partly standardized and
implemented through Zendesk customer support solution. Zendesk is a customer relationship
automation software (zendesk.com), is mainly used by and for new customers as on-boarding tool, help
center and customer support. The process is realized through the set of consequent e-mails, workshops
and trainings. The last steps are customer satisfaction survey and customer requirement analysis aimed
on further development of the tool. The purpose of on-boarding process is to lock-in the users by
training and teaching how the usage of the solution leads to reaching customer goals.
The onboarding process:
Figure 4.8 Kodiak Rating Onboarding process
4.6.4 Customer support
Customer support is performed continuously at each step of customer journey after signing a contract.
It includes consultation through e-mails, phone, tickets system realized through a Zendesk automotive
customer support software.
4.6.5 Customer journey map
Based on collected data and proposed by Richardsson framework of customer journey, I outlined
extended version of Kodiak Rating customer journey to understand main weaknesses and space for
improvement.
Customer satisfaction survey
Instructions and manuals
Workshop preparation
Workshop feedback
Workshop exercise
Training preparation Training exercise Training feedback
Customer engagement survey
Pilot assessment Result analysis
30
Ne
ed
ge
ne
ra
tio
n
Init
ial
co
ns
ide
ra
tio
n
En
ga
ge
me
nt
Ev
alu
ati
on
Pu
rc
ha
se
De
liv
er
y
Us
ag
e
Ac
tio
ns
Internal discussion about supplier evaluation
First contact with sales person
Attending organized by Kodiak Rating seminars, booking demo
Attending seminars, sales meetings
Signing a contract
On boarding process
Tool usage
Mo
tiv
ati
on
s
To develop sustainable supplier relationship
To find an optimal solution that meet company needs
To start using the solution that meets the company needs
Negotiate the price for the solution that helps to reach the company goals
To get a good deal
To get the results
To achieve the goals toward sustainable supplier relationship
Qu
es
tio
ns
How to start? What do we need?
What solutions are on the market now?
How to manage the governance process, whom to appoint as a responsible person? Who will benefit of using the tool?
How much will it cost? How to allocate the budget?
How fast we will get the results? How to start to use the solution?
What to start with? How to organize the data?
What do the results mean? How to understand the results?
Ba
rr
ier
s
Previous practices, stickiness to other software
Switching costs
Governance process, time to start re-considering supplier relationship, other company needs that are prioritized
Cost, other company needs that are prioritized, assigning the responsible roles
Price, governance process, lack of time to start to implement the solution
Execution process, internal data structure.
Limited number of users, lack of skills, using limited tool capacity
Table 4.3 Kodiak Rating Customer journey
31
4.6.6 Customer experience on operational level
Customer experience management is realized through cross functional team of UX designer, customer
experience manager, and project manager. Each position contributes to customer success. The product
development process targets on usability and design. The current strategical objective is transformation
into full self-service software to be able to apply the solution on a large scale and enter the new markets.
Getting customer insights and customer support are shared between customer experience and project
managers. The function of technical customer support is mainly performed by customer experience
manager.
5 Discussion
The discussion questions are: customer experience for B2B SaaS solutions, when does the customer
experience and customer success appear, what is the difference between these two concepts. The
chapter is completed with the list of customer success KPIs.
Customer journey
Customer journey issue is studied by example of Kodiak Rating B2B SaaS solution. Customer journey is
a complex process that includes numerous interactions with customers, begins with assigned leads and
accomplishes with upsell.
Customer experience takes place during the first interaction with the company. Customer perception of
the company and attitude to the brand are formed by consistency of interactions and design of the tool,
usability and functionality of the tool, and achieved customer goals. For business clients, the first phase
of customer journey – need generation – can be omitted since in case of Kodiak Rating, the evaluation
process is already part of customer business operations, and the solution just optimizes and brings it to
the advanced level. The next step of customer journey is initial consideration which is more important
as it entails the first direct contact with the company. At this step, consistent design of brand materials
and efficient communication is one of the factors contributing on customer experience. The metrics for
monitoring experience at this step are amount of assigned leads, opened e-mail, sign-ups for events.
Customer journey for B2B clients implies personal relationship and on the next steps of customer
journey individual approach is required. Literature study and interview data revealed that personal
meeting is a key touch point for selling B2B solutions. Personal meetings take place during the
engagement stage of customer journey and implies certain concernment from customer side. From
marketing perspective, the purpose of event marketing is opportunity to meet potential customers
personally. From sales perspective, personal meeting is chance to contact a decision maker.
Analysis of customer journey map demonstrates that the barriers on evaluation and purchasing phases
of B2B customer journey are budget allocation and organizational issues. Corporate structure and
internal hierarchy impacts of customer decision journey and requires participation of several positions
within the company. This leads to other questions and barriers on the delivery and usage stages of
customer journey. Limited number of users within the company impedes lock-in effect, and is a possible
obstacle for further subscription renewal. Hence, user-based price model is inefficient for B2B SaaS
services, since the companies are interested to reduce number of users to get a lower price. Instead of
locking in as much as possible users within the one company, the solution loses its value, if the price is
not value-based.
32
Customer journey automation
Even though the onboarding service Zendesk is introduced, existing customers prefer usual way of
communication via phone and e-mails. Benefits of Zendesk is opportunity to use metrics to measure
and evaluate support performance, customer activity, customer satisfaction, and customer engagement.
Using Zendesk is a method of customer journey automation because it allows to atomize and
standardize communication with the customers on delivery and usage step of the customer journey,
moreover, to evaluate customer engagement and activity, and, therefore, predicts and influence on
customer success. Integration with other software services such as MailChimp (e-mail marketing
automation software) and Jira (project management software) allows to create customer experience
flow and include marketing and product development teams in customer experience management.
Where and when does the customer success appear
B2B customer experience is defined by value co-creation, value-in-use, and achieved customer gals.
Analysis of Kodiak Rating customer journey revealed that the customer success happens when the first
result is achieved. The result can be interpreted differently depending on customer goals.
Understanding of customer goals leads to ensuring customer success. Generally, goals are classified
conforming to company size that correlates with scope and frequency of the solution usage. Level of
analysis and number of users are decided by the company structure and their internal goals. In this
case, a need generation phase of customer journey is anticipated, but it instead of first step of customer
journey it’s become a last step to get customer in loyalty loop and ensure customer success. In order to
increase scope of using the tool and lock-in more users within the company, e-mail notification system
is used: a user gets a notification when one of the “goals” is achieved, in this case – supplier response.
Figure 5.1 Kodiak Rating Customer journey nurturing purpose
Need Generation
Initial Consideration
Engagement
Evaluation
Purchase
Delivery
Usage
Need Genaration
2.0
Education:
- Trainings - Consulting - Customized
content
33
Apart from the end-result that is corresponded with company goals and approached by company as an
achievement, there are interim results. These temporary results arise at delivery and usage phases and
related to solution usability and customer support performance. Interim results depend on design,
onboarding and usability flow. Customer success on these steps is reflected in the solutions usage log
and customer support requests. Besides, it’s stipulated by emotional perception of end user and
characterized rather as personal experience than company experience.
Thus, customer experience for B2B SaaS solutions can be divided into two different types: customer
success as an achieved company goal and as a personal end user experience of using the tool.
Customer engagement and value co-creation
According to Zainuddin & Gonzalez, definition of SaaS solutions implies customer encouragement for
co-creation and developed based on customer feedback. In case of Kodiak Rating, minimally valuable
product is delivered to market to get customer insights and implement them into the next version.
Collecting customer insights is conducted during personal meetings with clients both new and existing
ones. This encourages customer to co-creation and stimulates to continue using the tool.
Implementation of customer requirements affects reaching of customer goals, and contributes to
customer loyalty. Consequently, monitoring company achievements becomes a responsibility of the
solution provider, hence, an extra phase appears in the customer journey.
Figure 5.2 Kodiak Rating Customer journey
Main KPI that measure customer success
Conforming to conducted research and Kodiak Rating customer journey analysis, the following metrics
are applicable for each step of customer journey.
Need Generation
Initial Consideration
Engagement
Evaluation
PurchaseDelivery
Usage
Monitoring results
Need Genaration
2.0
Monitoring results:
- Frequency of usage the tool
- Scope of usage
- Number of users
Education:
- Trainings - Consulting - Customized
content
34
NEED GENERATION Website traffic Social media activity AdWords conversion rate Number of webinars/seminars participants
INITIAL CONSIDERATION Number of opened sales emails Number of first contacts Number of leads in progress
ENGAGEMENT Number of demo requests Number of second/third contacts with the customers Number of assigned leads Number of lost leads
EVALUATION Number of contacts/feedbacks after demo request Number of webinars/seminars participants Number of assigned leads Number of lost leads
PURCHASE Revenue Customer acquisition costs Number of sent value proposals Number of accepted value proposals
DELIVERY Number of users using the solution Number of opened email within onboarding process Number of successfully solved issues by customer support Number of negative feedbacks from the customers
USAGE Frequency of usage the tool Number of users using the tool (dereasing/increasing/stable) Customer satisfaction score Number of customer engagement session Number of successfully solved issues by customer support Number of negative feedbacks from the customers
MONITORING RESULTS Frequency of usage the tool Number of users using the tool (dereasing/increasing/stable) Scope of using the tool Number of achieved results*
NEED GENERATION 2.0 Number of trainings and workshops for “immature” customers
LOYALTY Upsell Sales (subscription renewals) Churn rate ARR rate
Table 5.1 Customer Success KPIs
*Number of achieved results is individual customer metrics, in general, reflects delivered value, for
example, number of generated reports.
35
Ethics and sustainability
The subject of present case study is the cloud software aimed to help to establish sustainable
relationship within a supplier chain. Nowadays companies focus on social corporate responsibility and
ethics questions and require compliance with their code of conduct standards. Kodiak Rating solution
target to evaluate and ensure sustainable business practices in the supplier chain and reach sustainable
business goals. The research results are applicable for reconsidering business strategy, growth and
sustainable business development.
The paper focuses on customer experience questions, and, therefore, doesn’t cover any environment
related aspects.
6 Conclusions
The initial goal of this report was to study customer journey for B2B SaaS business models in order to
identify key performance indicators of customer success. The research is based on case study of Kodiak
Rating Supplier Relationship Management SaaS solution.
The main research question is: what are the key performance indicators of customer success in B2B
SaaS business models. The following KPI’s were defined:
- Frequency of usage the tool
- Scope of usage the tool
- Churn rate
- ARR
- Upsell
- CSAT, CES, NSP*
* these metrics are assumed to use when sample of customers are reasonable to analyze statistic results.
Following conducted research, customer experience and customer success are divided into two
connected concepts. Customer experience is related to the whole customer journey starting from need
generation phase, on a contrary, customer success is relevant to achieved the company goals and
interim results gotten using the service. Customer success can be divided into two categories: company
success and personal end-user success.
The solution provider influences on customer success by ensuring consistent user experience, customer
support, and continuous monitoring usage and achieved result to react in time with appropriate
trainings, workshops, and educational materials. The goal is to focus on customer business grow and
creation new opportunities rather than on solving a particular problem. Customer success happens on
Delivery and Usage phases of customer journey, however, following and supervising achieved results
and consulting aiming to improving suggested results leads to creation need to continue using the tool
and, thus, customers are locked in a loyalty loop.
Ensuring business customer success requires engagement and involvement of different positions within
the company. Therefore, user-based price model is inefficient since it limits number of users and
doesn’t correlate with obtained value. Thus, it obstructs measuring customer success during the Usage
phase of customer journey.
36
Business customer success is a complex goal that requires operational and strategical changes.
Customer success plan includes collaboration within cross functional teams focusing on consistent
customer experience. Leverage customer segmentation allows to adjust customer journey depending on
customer type. In this paper, two types of customer segmentation were proposed: 1. according to scope
of usage of the tool; 2. industry based. Depending on scope of usage of the tool customer success
strategy is focusing on either upsell (for experienced “mature” customers), or nurturing process (for
“immature” customers) that includes focusing on growing number of users and expanding scope of
usage the tool. Industry segmentation allows to provide semi-standardized solution based on industry
specific requirements and reduce cost and time of evaluation process and onboarding process.
Automation of customer journey is crucial in order to introduce metrics of customer success.
The additional questions considered in this research are:
How to shorten customer journey?
For B2B SaaS solution on a startup stage offering outstanding customer journey is one of the
differentiators and the main strategic focus. Keeping balance between customized solution and easily
implemented standard functions allows to grow and apply the solution in a large scale. Leverage
customer segmentation and standardized customer interaction process facilitates to shorten customer
journey and reducing costs and time of customer interaction on all phases of customer journey.
Continuous customer education and trainings within usage process aim to lock-in more roles within the
company and lead to bringing the customer to the loyalty loop.
What are the main touch points?
B2B SaaS sales process implies personal relationship with the customers. Main touch points during the
B2B customer journey are the first phone contact, the first meeting and the solution presentation,
onboarding process, customer trainings, and customer engagement survey/session. The last one leads
to implementation of customer feedback into the next version, increase customer satisfaction, and bring
customers to the loyalty loop.
Sales process of B2B solutions has a long cycle and involves contacts with different positions in the
company. Standardized sales operations, industry specific standardized solutions, and self-service
possibilities tend to shorten long sales cycle.
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Appendix A: Interview questions
Interview with Marketing Manager
1. Which marketing automation tools do you use?
2. How has marketing automation influenced on lead generation?
3. How has targeted e-mail content influenced on lead generation?
4. If to compare first touch point digital marketing activities and offline marketing activities which
are the most effective both in terms of lead quality and lead quantity?
5. What are the most effective touch points?
6. What are the KPIs?
Interview with Sales Manager
1. How does the sales procedure/cycle look like?
2. How do you see customer segmentation? Should we leverage it today? What are the current
customer segments?
3. What are the most effective touch points?
4. Did you try/plan to try/see any reason to contact different positions within the company?
5. What do you think will make sales easier? Advanced product? Strong brand? Absence of
competitors?
6. How do you think the difference is between sales cycle for startup and established company?
7. What are the KPIs?
8. How long is the negotiation process?
9. Why does it take too long?
10. Who does usually take a purchasing decision in a company?
11. Why do you think some customers such as Designtorget didn’t extend the contract?
12. What are the sales goals?
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