How to Nudge Your Way to Customer Success
Richard Thaler and Cass Sunstein’s bestselling book, 'Nudge', is a fascinating introduction to behavioral economics and its lessons are particularly relevant in Customer Success Management.
In it we learn that you can manipulate the choices people make by creatively designing the decision process. You can, in effect, present people with the illusion of choice. The authors called these perceived choices ‘nudges’, where decision makers are nudged to choose a particular option.
Often, however, the nudges we encounter have been badly considered and nudge people to make sub-optimal decisions. I worked at a Fortune 500 company that sent automated alerts to the entire management team each time a deal was closed. The successful seller was then rewarded with public praise and affirmation, what’s not to like?
The problem was, a LOST deal prompted a similar alert!
As you can imagine, nobody wanted that kind of negative exposure. Opportunities that should have classified as 'Lost' were instead left 'Open', artificially bloating the sales pipeline for the following months and quarters. Multiply this behavior by a few thousand sales reps and you can imagine the impact this had on the entire company’s sales pipeline, the accuracy of their forecasting and their operational planning.
When I finally flagged this with sales operations, they were surprised. How could this (seemingly minor) alert have had such a major impact on the behavior of salespeople? Thankfully the alert was revised, the ‘negative nudge’ was removed and forecasting subsequently improved.
Using Nudges in Customer Success
In SaaS and Customer Success, understanding how nudges affect behavior is vital. When we think about the design of our free trials, we understand that one click too many or too few can cause conversion rates to plummet. Each decision we force the prospect to make is a nudge towards success or failure. We think a lot about this at Akita, specifically: can we implement processes that nudge our users to reduce client churn and grow their accounts?
The answer is, of course, yes. But what processes or solutions can we implement to make this a reality?
One solution is to give your business intelligence analysts and data scientists another piece of software to add to their analytics stack. This, however, doesn't fully address the challenge as the data boffins don't deal directly with your clients. We believe the data needs to be placed in the hands of those that can use it to make a real difference.
A full solution should augment the back-end analytics with real-time intelligence that helps ALL users drive customer success with each and every client interaction.
We designed Akita to deliver ‘success nudges’ that modify how your Salespeople, agents, and CSMs behave and ensure they are focused on dealing with Customer Success challenges or opportunities in real time. The nudges are delivered when and where the agents are in communication with their customers, in real time in their email clients and browsers. The alternative to our model is to go searching for this intelligence in yet another application but is that really an alternative?
So how does this look in reality?
Picture an email landing in an account manager's email client (a busy account manager with 500+ accounts, plus new leads being filtered her way). She could quickly respond to the client query and get on with her day. However, Akita pops up with a nudge, alerting her that the account is at risk of churn and shows her the data to back that up, right in her email client. Now she is able to focus on understanding and mitigating the potential churn issue.
Extrapolate this scene across thousands of interactions and your company’s churn rate begins to reduce significantly and your Customer Lifetime Value grows, all as the result of a few little nudges.
Akita is Customer Success Management software that will help your business retain its customers and grow revenue.