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J.B. Wood
President & CEO
Technology Services Industry Association (TSIA)
Growing Customers Successfully
A New Operational Focus for Tech Companies
J.B. Wood
President and CEO
TSIA
3
TSIA is the world’s
biggest vault of…data, insight & best practices
on Technology Services
Everything you need to optimize
your service organization in one place.
IT
In 4 Industries…
4
Information Technology Software-as-a-Service Industrial Equipment Healthcare Technology
SaaS IE HHIT
A Peer Network Like No Other
5
Plus hundreds more...
2013 2011 2009
“We have
a problem…”
“A new purchasing
model is coming”
“Industry
transformation”
“Profitable XaaS”
Chronicling An Industry-Wide Journey
6
2016
Combined Revenue of the TS50* Index
7
2008 4, $246,6382012 1, $243,796
2016 2, $203,030
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
$260,000
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
2008 2009 2010 2011 2012 2013 2014 2015 2016
US
D M
illio
ns
Total Tech Revenues
*Technology and Services 50 Index
A Product Problem…
8
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
2008 2009 2010 2011 2012 2013 2014 2015 2016
US
D M
illio
ns
Total Service & Product Revenues
Sum of Product Revenue Sum of Service Revenue
Of the T&S50 companies experienced
flat or declining product revenues
9
72%
Experienced growth in services
revenues64%
Shifting Customer Landscape
10
Software Eating Hardware.
Cloud Eating On-Prem.
Services Eating Products.
Business Buyers Eating IT Budget.
Sell Complex Products
To the IT Department
Sell Outcome Services
To the Business Users
Complexity
Price
Per
Unit
Commodities
Radical
Change
11
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Industry Maturity
Disruption
Two Tracks
Radical
Change
12
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
13
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
14
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
15
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
16
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
17
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
18
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
Radical
Change
19
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
20
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
21
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
22
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
23
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
Radical
Change
24
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Vertical
Industry
Focus
Disruptive
New
Entrants
Suppliers
Lagging
Customers
Two Tracks
Industry Maturity
Disruption
So Much
Change!
25
Onslaught
Of Commod-
itization
Shrinking
IT
Budgets
Business
Buyers Taking
ControlEverything
As a
Service
Cloud
Eating On-Site
Everything
Every Deal
Requires An
Ecosystem
Value Prop
Shifting to
Outcomes
Growth
Shifts to
IoT
Deal Profits
Shifting to
Year 2+
Micro-
Transactions,
Not Mega
Deals
Suppliers
Lagging
Customers
Vertical
Industry
Focus
Disruptive
New
Entrants
Two Tracks
Industry Maturity
Disruption
For 50 Years,
We Just Needed Two Models
26
Basic Offer: Complex Offer:
LEVEL 1
SUPPLIER
LEVEL 2
SUPPLIER
Supplier Operating Model
Product
Focused
Outcome
Focused
STOP
Complexity.
Friction.
Cost.
Time.
=
Not
Scalable
Make.
Sell.
Ship.
Make.
Sell.
Ship.
Service.
27
We Are Only 10-25% Through
The Largest Transformation In the History
of the Enterprise Tech Industry.
Large Enterprise Tech Companies in the
Technology & Services 50 Index
28
The Great Revenue Flip Flop
29
S50 Services Revenue Q1 2011 – Q1 2015S50 Product Revenue Q1 2011 – Q1 2015
2011=$517B 2014=$399B 2011=$388B 2014=$421B
Services Are Now the Majority of Revenue
30
62%
38%
Q1 2011
Total Product Revenue Total Service Revenue
48%52%
Q4 2014
Total Product Revenue Total Service Revenue
Source: TSIA Service 50
TSIA Technology and Services 50 Index
It’s Not Enough.
Large Companies Struggle to Find Growth
31
S50 Product Rev Q1 2011 – Q1 2015 S50 Services Rev Q1 2011 – Q1 2015 Total S50 Product and Service
T&S 50 vs. Cloud 20 (Q2 2014 to Q2 2015)
32
TSIA
T&S 50
TSIA
Cloud 20
T&S 50: Shrunk $17B in revenue
Cloud 20: Gained $2.7B in revenue
Tech Spending Is On the Move
33
Revenue Growth Is Happening
On the Business Side,
Not the IT Side.
Business Buyers Have a Different Perspective
and Cloud/SaaS Companies Get It!
34
Revenue Growth Is Happening
On the Business Side,
Not the IT Side.
Business Execs Don’t Care
About Features, They Care
About Outcomes.
The Next Decade Will Be Focused on New Strategies to
Grow Customers Successfully!
35
PROFITABLYSYSTEMATICALLY
A Black Hole Just a Few Years Ago
36
Land Adopt Expand Renew
We Learned a New Trick
37
Land Adopt Expand Renew
Customer
Success
38
Growing Customers Successfully
Is About a LOT MORE Than Just Adding a
Customer Success Function!
Land Adopt Expand Renew
Customer
Success
39
Growing Customers Successfully
Is About a LOT MORE Than Just Adding a
Customer Success Function!
And It’s Not Just a Problem for Sales.
40
Growing Customers Successfully
Is About a LOT MORE Than Just Adding a
Customer Success Function!
And It’s Not Just a Problem for Sales.
And It’s Not Just an Attitude.
41
Growing Customers Successfully
Is About a LOT MORE Than Just Adding a
Customer Success Function!
And It’s Not Just a Problem for Sales.
And It’s Not Just an Attitude.
It’s a PROCESS and It Involves EVERY ORGANIZATION!
The Process of Growing Customers Successfully Is
Complex. There Are Two Sides of The Coin
42
Supplier
Success
Customer
Outcomes
How Much
Revenue Can I
Get From Each
Customer?
How Much
Business Value
Can I Generate For
Each Customer?
43
Roadmap: LAER Capabilities Heatmap
Lifecycle Construct: LAER
Roadmap: PIMO Lifecycle Service Offers
Separate, Complimentary Perspectives
Supplier
PerspectiveCustomer
Perspective
Land Adopt RenewExpand Plan Implement OptimizeMonitor
Lifecycle Construct: PIMO Outcomes
GOAL:
Maximum SpendingGOAL:
Business Outcomes
THE INTERNAL PERSPECTIVE:
TSIA LĀER - An Operating Framework
44
Effectiveness
Efficiency
Data Quality
Stickiness
Quantity
Who
Data-driven
and
CGT-driven
Lead Gen
Descriptive
Analytics
Predictive
Analytics
Outcome
AnalyticsConsumption
Analytics
Platform
Land New Customer
X-Sell
Sellers
Renewal
Sellers
Upsell
Sellers
Large Upsell
Sellers
Cost-
Effective
Selling
Channels
LAND ADOPT EXPAND RENEW
Customer Success Team
Customer Service Teams
Supplier
Success
Customer
Outcomes
OutcomeEngineering
Customer
Growth
Teams
GOAL:
Maximum Customer Spending
Growing Customers Successfully
THE CUSTOMER PERSPECTIVE
Customer’s Can’t Act on LAER.
They Can Act on PIMO.
45
Roadmap: PIMO Lifecycle Service Offers
Customer
Perspective
Plan Implement OptimizeMonitor
Lifecycle Construct: PIMO Outcomes
GOAL:
Improved Business Outcomes
Supplier
Success
Customer
Outcomes
Growing Customers Successfully
WHAT
WHY
THE CUSTOMER PERSPECTIVE
PIMO - An End-to-End Engagement Model
46
Plan Implement OptimizeMonitor
Supplier
Success
Customer
Outcomes
Sales
Team
Business
Buyer
Solution
Engineers
IT
Team
PS
Education
Consumption
Analytics
Support Customer
Success
Expand
Sales
End
Users
Business
Managers
IT
OpsCustomer
Supplier
Business
Buyers
Deal
Close
Growing Customers Successfully
47
Growing Customers Successfully
Will Touch Every Part of Your Company
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
Success
Science
COE
Outcome
Engineering
COE
Supplier
Success
Customer
Outcomes
Growing Customers Successfully
48
TSIA Has Identified Over 200 Corporate Capabilities
Classified As “Emerging”
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
21 32
25
38
5113 66
70
62
72
74109
77
Success
Science
COE
Outcome
Engineering
COE
49
It Starts With a Better Understanding
of How Customers Succeed and Grow
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
Success
Science
COE
Outcome
Engineering
COE
50
R&D 25 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• Consumption Analytics
• Usage Monitoring and Tools
• Real Time Intervention Capability
• 22 More…
Success
Science
COE
Outcome
Engineering
COE
51
IT and Finance – 43 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• Secure Customer Data
• Process Micro-transactions
• Take Credit Cards
• 42 More…
Success
Science
COE
Outcome
Engineering
COE
52
Marketing –38 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• In-Product Feature Marketing
• Add Business User Segments
• Vertical Campaigns
• 35 More…
Success
Science
COE
Outcome
Engineering
COE
53
Sales – 64 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business OutcomesSuccess
Science
COE
Outcome
Engineering
COE
• Understand Customer Business Outcomes
• Sell in the Language of Business Buyers
• Develop Vertical Industry Expertise
• 54 More…
54
Professional Services – 66 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• Customer Adoption Playbooks
• Vertical Industry Skills
• Develop New Non-Attached
Offers
• 63 More
Success
Science
COE
Outcome
Engineering
COE
55
Education Services – 70 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• In Product Use Education
• Social/Community Learning Platform
• Business Process Content
• 67 More
Success
Science
COE
Outcome
Engineering
COE
56
Customer Success – 62 Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• User Adoption Benchmarking
• Execute on Outcome Plans
• End User Intervention
• 59 More
Success
Science
COE
Outcome
Engineering
COE
57
Support Services – 72 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• Support Cloud/Saas Offers
• Integrate/Extend Customer Success
Adoption Activities
• Support Pilot/Trial Engagements
• 69 more
Success
Science
COE
Outcome
Engineering
COE
58
Field Services – 74 New Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Manage
d
Services
Customer Business Outcomes
• Detect/Correct Customer Business
Processes Problems
• Detect/Correct Site Adoption Problems
• Collect Data For Customer Growth Model
• 71 More
Success
Science
COE
Outcome
Engineering
COE
59
Managed Services – 109 Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business Outcomes
• MS Go-to-Market Model
• Risk Management
• Ideal Customer Profiling
• 106 More
Success
Science
COE
Outcome
Engineering
COE
60
All of This Gets You to the First Milestone
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business OutcomesSuccess
Science
COE
Outcome
Engineering
COE
61
Renew and Expand – 33 Capabilities
R&D
IT Finance
Marketing
Land Sales
Sales
Engineering
Professional
ServicesEducation
Services
Customer
Success
Support Services
Field
Services
Customer
Growth
CUSTOMER GROWTH AT SCALE
Renew & Expand Sales
Managed
Services
Customer Business OutcomesSuccess
Science
COE
Outcome
COEOutcome
Engineering
• Leverage Existing Touch
Points to Sell
• Link Services to Outcomes
• Sell Non-Attached Services
• 30 More
Growing Customers Successfully Is…
62
An End to End Process
Growing Customers Successfully Is…
63
An End to End Process
To Collect and Refresh a Customer Data Model
Growing Customers Successfully Is…
64
An End to End Process
To Collect and Refresh a Customer Data Model
Which Trigger Activities Across the Organization
of Both the Supplier and Customer
Growing Customers Successfully Is…
65
An End to End Process
To Collect and Refresh a Customer Data Model
Which Trigger Activities Across the Organization
of Both the Supplier and Customer
That Leads to the Customer Achieving
Their Business Outcomes
Growing Customers Successfully Is…
66
An End to End Process
To Collect and Refresh a Customer Data Model
Which Trigger Activities Across the Organization
of Both the Supplier and Customer
That Leads to the Customer Achieving
Their Business Outcomes
And Results In Them Spending More
Money with The Supplier.
Thank You!
