Many of us are spending our time thinking about (and writing about) how to get through the current Coronavirus-driven situation. For those who have had to endure headcount reductions, your energy and focus is probably on just getting through the day-to-day workload.
But it’s important to think about what will happen when the current crisis is over, especially as it relates to hiring. So, when management is telling you to cut back on headcount, how do you make the case to start hiring again?
The answer is simple – data.
When you are asking for additional headcount, make sure that you have the data to back up your request. It is likely that every department will be requesting headcount, and the executive team will not approve everyone’s request. Those with a solid business case backed up with data will win, compared to those who have generic requests based upon intuition. More simply said:
Make sure you bring a gun to the knife fight
What data should you bring? The simplest, most compelling data is comparing the work that needs to be done versus the current capacity of the team:
I’ve prepared a simple template you can use to build your business case (based upon Sales but easily manipulated for Demand Gen or Customer Support). You can make the analysis as simple or as complicated as you feel is necessary to make your point. (If you’d like help with your analysis, or need help building a model, please contact me at email@example.com and I’d be happy to help free of charge).
For many people, the data may not exist which makes it challenging. But look at the data you do have, even if it is qualitative or anecdotal or directional. If you put pen to paper, you might surprise yourself about how much data you have, even if it is not being formally captured within a system or platform.
Even if you think that your executive team will be lukewarm on additional headcount, all might not be lost. Instead of showcasing what will happen with additional headcount, show them what might happen without the headcount e.g. by how much will revenue targets be missed, what will happen to support SLAs, what will happen to customer satisfaction and retention rates. Giving them this information will help them make an informed decision, as well as help set their expectations regarding you and your team’s performance in the upcoming month or quarter.
In the words of many, #wewillgetthroughthis. So, while you stay focused on the present, give some thought to what the future might hold because NOW is the right time to lay the foundations for that future.
Intuition tells us that Customer Satisfaction (CSAT) is important. But when it comes to retaining and growing your customers, it may not be as important as you think. What is important is usage – if your customer is using your product, they are more likely to renew, even if they are not totally happy. And vice-versa. If they are not getting value from your product, no amount of great customer service will result in a renewal.
Many of you have probably experienced this situation – “I’m really happy with you, and the customer service I get from your company. But I don’t see the value in the product so I’m not going to renew”. This happens more often than we would like and demonstrates that customer satisfaction is not the only thing that customers care about.
With that said, keeping customers happy is still important because (a) it does increase the likelihood that they will renew and (b) they can act as brand advocates for you with other actual or potential customers.
The most commonly used measure of CSAT is Net Promoter Score (NPS). Introduced by Bain & Company in 2011, it asks customers 1 single question:
“How likely are you to recommend our product/service to a colleague”
For more information on NPS, how to calculate and how to benchmark, please visit https://www.bain.com/insights/introducing-the-net-promoter-system-loyalty-insights/
And there are lots of tools available to help deploy NPS – a quick search on google reveals at least half a dozen options, and that’s just on the first page of the search results.
The bigger question is what do you do about it. The answer is easy – communicate with your customer. If they are a Promoter, maybe they can turn into a customer reference, or a case study or a brand advocate. If they are Passive, find out the 2-3 simple things that need to be addressed to turn them into Promoters. And if they are a Detractor, someone needs to immediately reach out to the customer to find out what’s going on. In any of these instances, a simple phone call and/or email can be extremely powerful.
Again, a happy customer is not guaranteed to renew. Likewise, an unhappy customer is not guaranteed to not renew. But understanding a customer’s state of satisfaction is a critical component to make sure you’re maximizing the chance that the customer will stick with you.
We have 20+ years of experiencing in implementing, and acting upon, Customer Satisfaction programs. If you would like help in implementing a Customer Satisfaction program, please contact us at firstname.lastname@example.org.
Product market fit. Do you have it? It’s a critical question for any company, but especially those early in their development. With it, customers will beat a path to your door. Without it, you’ll spend most of your time convincing customers that they need to buy your product. Think about productivity tools like Slack or Trello. Did anyone have to justify the spend on those tools? The answer is “No” because they have excellent product/market fit. But what about that tool that helps your team choose which place to go for lunch this week? It’s one of the first subscriptions to be cut when trying to manage your cashflow.
So how do you know whether you have product/market fit, because as be seen from the examples above, it can literally be the difference between being classified as “mission-critical” or classified as a “nice-to-have”.
There are lots of high-profile discussions regarding “product/market fit”, including Marc Andreessen defining it as being in a good market with a product that can satisfy that market (which, with all due respect, doesn’t really help a company figure out whether it has it or not). Sean Ellis developed a heuristic that says, “if at least 40% percent of surveyed customers indicate that they would be "very disappointed" if they no longer have access to a particular product or service” or said alternatively “at least 40% of surveyed customers considering the product or service as "must have". This was validated by Rahul Vohra of Superhuman in his survey-based approach.
Surveys can be done qualitatively or quantitatively, with prospective customers or existing customers. And it can be done relatively easily and quickly. Obviously, the more in-depth you go, the more confidence you can have in the data. If you’re looking for quick validation, a quick survey of a sample set of prospect and current customers would be sufficient. But if you need to determine product/market fit to show investors, or to help make large strategic decisions about the direction of the company, a more robust analysis would be recommended. However, the approach, you’ll learn whether your customers will fight to keep your product, or whether you could be collateral damage in the next round of budget cuts.
If you’d like to do a Product/Market fit analysis, but don’t have the resources or expertise, or would like it done by an independent 3rd party, please contact Nagree Consulting. We have 20+ years of helping businesses make sound strategic decisions and executing and scaling against those decisions. To learn more, please visit www.nagreeconsulting.com or email us at email@example.com
Azim Nagree is an ex-Bain consultant with 20+ years in leading strategy, growth and operations transformations.