My quick LinkedIn post on Customer Success vs. Customer Support drew thousands of views within a matter of couple days. The subject of blending Sales and Services is indeed fascinating, so I decided to expand on it a bit further.
Many argue that the concept of Sales & Services in modern technology was pioneered by IBM in the 1960s when they came up with the first enterprise-grade computers. And from the 1960s all the way to 1990s Service was typically part of a Sales organization, ran by regional managers. In the 1990s we went through a process of separating Services from Sales; Support became a global function, Professional Services became a global function, and it lasted all the way to 2017. And now we are looking to bring Sales and Services back together again – build a United customer growth engine.
My career in IT started in the late 1990s. As a result, I experienced services being regionally managed. At the time services were unprofitable, of low quality, inconsistent and post-sale resources were pulled continuously to pre-sale activities. The model was unsustainable and drove poor Customer Experience. As a result, most companies started segregating service resources into stand-alone independent functional units, pulling them from the regions. The process of globalization and centralization of services has begun in the early 2000s.
I spent many years helping technology companies to centralize and globalize their service organizations. Some great things have been achieved in the process of services being separated from sales – services became more profitable, globally consistent and of much higher quality. The only problem we were not able to address was an extremely disjointed Customer Experience (CX). Sales would take the clients up to a certain point, handoff to Professional Services, handoff to Education Services, handoff to Support Services, etc. The clients felt like they were dealing with multiple different companies. And don’t forget about the “turf wars” between Sales and Services that made Customer Experience (CX) even worst.
And now in 2018 we came a full circle with most companies out there already working on bringing Sales and Services back together, but on what terms? And why they are doing that, you might ask? The economics of our business models are changing. The ability of a company to drive Adoption, Expansion, Renewal is essential to business success.
In the context of Cloud Service Providers (CSPs), I can see the traditionally stand-alone service organizations introducing Adoption Charters of Customer Success and developing a robust Adoption framework as the very first step growing closer together with Sales. If Adoption is done, right Renewal responsibilities will come naturally.
As per TSIA research, Sales and Services organizations in the future will still run as two separate entities, but they will come together near the top rolling up to a Chief Revenue Officer or a Chief Customer Officer. Sales will continue being regionally managed, while Services and Success will be highly converged. Services, including Success, will be monetized. Clients will be requesting to talk to people that are responsible for delivering the outcomes before they sign the contracts. As a result, we will see more services experts involved in pre-sale environments. Services will begin to be rewarded and measured on the ability making the company LAER-efficient (Land-Adopt-Expand-Renew), including improving the Land function. Everyone in the company is going to come together in their compensation around a unified set of Customer Health and Growth metrics.
I must say I’m super excited about the next stage of service evolution, and seeing Sales and Services working together as real partners.