If you have been in operations or leadership in the B2B SaaS space, you will certainly be familiar with difficult customer conversations. Cramming the thought-stuff of developers, designers, architects, past customers and founders into the operating workflow of a new customer is bound to create some friction. What you choose to do in the face of that friction determines whether your firm will develop a new, unique and powerful competitive moat or lose a customer. Dougal Cameron with GSTVC shares his experience in handling enterprise customer relationships that have gone off the rails.
I can still recall the moment I first spoke to Lisa, the internal super user at a client site. It was less than a week into my tenure as CEO during a turnaround period for the inpatient EHR company. Lisa seemed positive and upbeat about an upcoming trip. My predecessor had planned and tracked the trip to see Lisa and her colleagues in the company’s CRM as a sales opportunity to sell an ERP module. Lisa, knowing a regime change had taken place, wanted to ensure I was still coming.
I had way too much to do at the time. We had downsized the company by one third and it seemed that everyone needed my input. However, I also knew that a sales-win would be a great morale boost to the team. So, I reassured Lisa that I would be there.
The trip to the client site involved a four-hour flight followed by a five-hour drive. I made it an overnight trip and arrived early on a Thursday morning. I met Lisa in an external temporary building attached to the hospital.
We exchanged pleasantries and then she said, “Dougal, we have a lot to tell you today and I need you to keep an open mind. The team is in the conference room and is ready to meet you.”
Uh oh… I began to suspect things were not as they seemed. Lisa and her coworkers intended to grill me on a variety of areas in our product and service offerings that frustrated them. The next five hours involved several meetings and a lot of tense conversations. It was not a pleasant experience.
Despite the difficult start, the encounter gave me the opportunity to share our new strategy and company vision. I had spent the prior week meeting with our employees about it. At the end of the day, we parted on good terms with a nice list of action items that would move us closer to success. And in only three months, Lisa had become an advocate for us.
In reflecting on that encounter, there are a few principles we gleaned to better manage future opportunities.
Seek first to understand – but vocalize your intent
The Stephen Covey adage kicked in for me almost immediately. When I walked into the room, there were at least fifteen client employees and managers in the room. All eyes went to me. I took the opportunity to express my desire to hear their issues. After spending a minute or two to set the stage, I turned it over to them and began visually taking notes and nodding affirmations.
The room changed almost instantly. The clients were reading from prepared remarks that had a level of vitriol in the diction that was not mimicked verbally. Some of them consented that the issues they had brought were probably their fault anyway. It was astounding.
Be sure to give customers the space to share their frustrations without interruption. This means hearing some stuff that you know is not correct. Don’t worry, you can address that later. Stepping in to correct that in the moment risks shutting down the conversation all together. The customer will still share their frustration, but next time it wont be with you; it might be with a competitor as they explore a switch.
Be careful with promises
Most people’s default response to hearing about broken things is to start to fix them or commit to a timeline to solve them. If you are looking for it, you can see when the ‘fixers’ in the room dial in. Fortunately for me, I was spared by an early expressed frustration that we had been chronically late in fulfilling past promises. When I heard that, a light went off, I wouldn’t be solving any problems that day. Instead, I would make a list and commit to go over it with my team.
Be careful with promises of resolution timelines given in the moment. It is easy to let the urgency of the complaint cause a hasty promise. But the key to delivering a true resolution to the customer is knowing the context of the issue and what is required to truly resolve it.
Invite the customer into the solution
We encountered a lot of customer issues in our company over the years. Our company provided enterprise electronic health record systems to hospitals and health systems. The system deployments and implementations required nearly two-thousand man-hours. The systems were complex and the operating environments stressful.
The realities of our deployment aren’t dissimilar from most B2B SaaS firms. Successful customer use cases depend upon a partnership between the company and the customer. In more complex deployments, the customer relationship is multifaceted with multiple departments, managers, executives, branches, etc that all have input into ‘how the product is working.’ This means that any successful resolution requires the customer’s active involvement.
On several occasions, our team would heroically solve a hot-button customer issue in rapid speed out of view of the customer. Sounds good right? Wrong! In all of those cases, the customer quickly forgot the issue was a hot-button and a new item became the hot-button. In contrast, however, almost every time we engaged a customer with a comprehensive project to deliver them value with our products and services, the relationship improved. This isn’t due to salesmanship or tricks, but rather to developing mutual empathy.
We found that cultivating shared empathy by inviting them into the solution improved our service offering, gave valuable insight to our development team on the prioritization of new features (much more meaningful in fact than customer panels), inspired customer testimonials, and dramatically improved our customer satisfaction.
Focus on value rather than the issues
Frustrated B2B SaaS customers come at you with issues. These typically are in the form of feature requests or bugs. The customer usually demands immediate satisfaction on these issues. These elements are usually symptoms of the root cause: lack of value.
When the customers were sold the solution, the sales pitch focused on value. It highlights how the capabilities of the system will improve the business performance in a meaningful way. If it was doing that and living up to the value promise, then the issues would be ‘nice to haves’ and not ‘must haves’. The key to engaging on value is remembering this.
Here are a few action steps we used to achieve a value-based approach:
- Spend some time thinking through the value the customer was expecting.
- Then look at whether the main source of the frustration is aware of that value promise.
- Then attempt to quantify the value the customer is getting currently (don’t share that with the customer yet, it will feel like deflection to them).
- Engage the customer in a value conversation and resell the value promise.
- Invite the customer to share with you the current status of the value received.
- Create a framework with the customer to track the value going forward.
After focusing on the value, you can engage the customer on the list of issues. This creates an achievable definition of success.
All B2B applications have deficiencies. People are varied and software, typically, is not. This results in friction where people are pushed to conform to a way of doing things. This friction can result in a laundry list of issues that aren’t accretive to the value of the system. Focusing on value helps the customer acknowledge with you that the system wont be perfect, but it can deliver value.
Follow-up
It is better to ignore a customer completely than engage and fail to follow-up. Most companies fail in this area. And in practice it is easy to fail here. You spend hours with the customer aligning on value, identifying the issue, and then prioritizing the list and then when you get back to you desk there are hundreds of action items that need your attention from other customers, vendors, employees or investors.
It seemed like we needed at least as much time internally to plan proper follow-up, debrief on the customer issues, frame the problem and assign responsibilities as we had spent with the customer. We had to exert restraint from relegating follow-up and the plan to ‘future us’. Sometimes delegating to ‘future you’ is enticing. Future you cant push back, but he can push off. Deal with this immediately after the customer meeting.
Set a cadence on meetings internally and with the client and do not be afraid to engage the customer on a pushed deadline. Priorities are hard to juggle in development where the input from dozens or hundreds of customers collide. That is part of the business. When a customer’s issue is pushed back, hopefully it is because something that will benefit them took precedence. In the rare case that it does not, it is still best to proactively engaged them with the news with no ambiguities.
Check out the GST Labs Customer Centric Issue Tracking Tool
Conclusion
Difficult customer conversations are a part of the journey in scaling a B2B SaaS company. If you don’t have a plan of how to handle them, then they will sap your team of energy and crush you. If you are prepared, however, they can be invaluable sources of insight into how your customers receive value from your products and services. My best insights into our customer’s problems and how we can solve them came from difficult customer conversations. Take advantage of these moments as each one you handle well becomes an element of your defensive moat against your competitors.
