Who Are Your Champions?
Climbing the Customer Loyalty Pyramid
Part 1 in a series on Customer Loyalty
All companies know the importance of loyal customers, but few figure out who are their true champions: the select few customers who are not just loyal to their services but are passionate advocates, in public or private, as well.
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In the next few posts, I shall explore the patterns of how customers move from early stages to becoming champions. Unlike consumer companies, B2B tech companies have to deal with champions of different types: buyers, users and now tech builders such as developers, data engineers and IT operators who develop and deploy these solutions.
In this post, I look at patterns that build the different cohorts of loyal buyers and users. In my next post, I shall look at the developers, the tech users who use your tools to build software solutions. Builders have a different loyalty model than buyers and users. I shall cover in this series how companies can engage with these champion cohorts to improve products, acquire customers and improve profitability. This engagement cycle is the customer advocacy flywheel.
Why Champions Matter
Champions - or a cohort of customers who are advocates, ambassadors and evangelists - for your brand are hard to cultivate. But they are the most valuable asset of a business.
Loyal customers are often the most profitable. They have the most credible voice in the market. They can speak to the promise of the brand. With their credibility, they attract other customers, partners and employees to the business. They can be the cradle for testing new products and building new ventures. In the B2B world, they fuel the social capital a company enjoys in the market. During a downturn, they can help a business tide over bad quarters, and give investors confidence.
What’s a Customer Loyalty Pyramid
Customer loyalty pyramid is how a tech business cultivates a cohort of loyal customer champions. A pyramid is an apt metaphor for building loyal customers. Most customers are sporadic users of a company’s product or service, some find enough value to become repeat purchasers, fewer still engage repeatedly in depth to become delighted users or passionate buyers.
Every B2B tech business can build a loyalty pyramid for their customers, and help them climb up the spiral path. To do so, you have to start with three elements of the pyramid.
A bedrock of customer relationships
The promise of your brand
The reality of your tech product or service offering
Let us look at each element and how they interact to build loyalty.
Loyalty Rests on a Bedrock of Relationships
B2B businesses are relationship driven. Your social capital can be seen as a battery with charge that can go up or down based on the type of social exchanges you have with the customer. If you have built a strong foundation of trust and commitment, your customers will share rewards and risks together by deploying your product and generating value from it.
But if there is breach of trust (poor performance, delays etc.) or the risks are not mitigated, then social capital depletes and you have a setback. Even with your most loyal customers, relationship equity can not be taken for granted. A major breach of trust (such as data violation) can destroy all loyalty programs overnight. So, the first step in your loyalty program is to build and sustain social capital.
Mind the Promise_to_Product Gap
On this bedrock of social capital, you can begin to build customer loyalty through two kinds of positive interactions. First are the customer interactions in which you make a brand promise and second are those in which your product - or more precisely, the tech offering - delivers on that promise.
Brand Promise is the core reason for your company’s being, according to the customer. This promise is made by your marketing, sales and support teams through various channels that attract and keep the customer. The promise includes the story, value claims, offers, product demos and trials, SLA, etc. (More on brand promise here).
Your Tech Offering delivers on your promise to the customer through the product experience: from onboarding, capabilities to delivery, deployment to support and pricing.
When your promise and product reinforce each other, you can build a credible set of customers who try, buy and use your product. However, the B2B customer journey can be long and complex, and the customers often forget the connection between your promise and the product.
The buyers may renew your product but may be uncertain of its value, the users may engage with but not love the product. As a result, even when your product is used regularly, most of your customers may not become your champions. So to convert customers into champions, you need to close this promise-to-product gap.
Loyalty Differs by Buyers & Users
How do you close this gap? By understanding what drives a regular customer to become loyal. This may sound simple but customer loyalty varies depending upon the customer subtype: who is the buyer and the user for your product?
Buyers and users are easy to distinguish and are different for app versus infrastructure companies. Most app companies have a Business Buyer or a Business User. Most infrastructure or tools companies have Tech Buyers (such as CIO, CTO, VP Engineering) or Tech Users such as IT system admins, security operators. [More on customer subtypes].
Why do these distinctions matter? A buyer and a user have very different journeys with your company. And, each of their journeys is propelled by different goals.
Therefore, the champions are different for each customer type.
Let us look at these journeys, goals and the factors that result in different types of loyal champions.
Buyer Goal: To Create Economic Value in Account
If you have a top-down, growth strategy, you need to help your buyers achieve their aim which is to create economic value for their company. If the buyer is a Business owner (CFO, CRO, CMO), your tech product delivers value by improving some part of the business value chain (e.g. lower cost of inventory); and if the buyer is a Tech owner (CIO, CTO) by improving some part of the tech value chain (e.g. lower cost of cloud services).
The buyer's aim is account specific. You may target a set of similar accounts and pull the buyers through the stages of the journey with the GTM program across marketing, sales and support.
For Buyer Champions, Build Value Proof of Your Brand Promise
While the stage based journey is helpful, it is important to apply the lens of cohorts: How does each buyer cohort become progressively loyal? What propels a cohort of buyers as they evaluate the offering, begin using it and become regular customers? What is the through line at each stage and across each cohort?
Evaluators: For this cohort, marketing teams make a Brand Promise of the value the buyer will realize through your tech product. And sales makes this promise credible with a Proof of Concept of your product. The tactical focus is to convince buyers to make the purchase based on the promise. And, the critical metric of speed is Time to Purchase.
Beginners: In this cohort, customer success and support teams focus on deploying the product among users and ensure progress towards delivering the economic value proposition. Their tactical aim is to make sure buyers achieve the business value they purchased the product for. And, the critical metric of speed is Time to Go-Live.
Regulars: Now customer success and support teams ensure regular customers see progress, and are satisfied enough by the value of your product to continue renewing. Relationships are stable, but there are still no shared rewards or risks between the company and the customer.
Most companies do not move beyond the cohort of regular customers.
Champions - To convert customers to champions, progress is not enough. You need to prove to buyers that your tech product has delivered the value promised by the brand. Customer success, marketing, product and support teams need to work together to generate proof of value for this cohort. In fact, the critical speed metric is Time to Value Proof. This closes the gap between promise and product and is the long-term driver of loyalty.
This separates fast growing, sales led companies from average ones: a buyer champion cohort that is convinced enough of the business value to become its advocate.
Needless to say, all of these stages are built on the growing strength of account relationships. Any breach in trust can set you back to an earlier stage or worse (details on relationship equity).
User Goal: To Make Progress on the Job To Be Done
Source: Product Led Growth Collective
If you have a product led growth strategy, you need to help your users get their job done or make progress towards it. The user’s aim is job-specific, and may or may not tie closely to the account. For example, a user group may download and use a collaboration or design tool inside a company even if the buyer is not yet ready to purchase the product. Therefore, a tech company’s user journey is market centric - and typically not tied to an account. You target a market segment, based on ideal user persona, and run the GTM plan to pull users through the journey shown above. [More at Product Led Collective Growth]
For User Champions, Build User Delight for Your Tech Offering
Again, the cohort lens is helpful: How do users become loyal? What propels a user cohort through their journey?
Evaluators: For this cohort, marketing teams make a promise to the users of the job they will get done through the use of your product. The focus is to convert users by having them try the product, based on this promise, through freemium, free trials etc. The critical timing metric is Time to Sign Up for the product.
Beginners: Here the product and growth teams help users on-board and have positive experience with the product, with the tactical aim to build usage. The critical metric is Time to First Ah-Ha when a user realizes how the product delivers on the JTBD (job to be done).
Regulars: Among this cohort, product and success teams make sure users achieve the jobs they set out to do through active use of the product. The aim is to sustain this cohort of regular users and reduce churn.
Most companies do not move beyond the cohort of regular users.
Champions - To convert users to champions, usage is not enough. You need to delight a segment of your users who achieve above and beyond the jobs they set out to do with your product. Customer success, marketing, product and support teams need to work together to build delight in select, critical areas of tech offering that matters to them. This may be product user experience, pricing, support or simply terms and conditions. Finding these drivers of delight is different work than simply driving usage. The critical timing metric is Time to User Delight.
Again, this separates great product led companies from average ones: a user champion cohort that is delighted with the product offering and becomes its advocate.
Customer champions are a critical asset to any business. Strong relationships between your company and your customers are the foundation to building champions. To build loyalty, your product needs to fulfill over time the brand promise you make early in the relationship. This promise-to-product gap needs to be addressed differently for buyers and users, since each cohort has different journeys and goals. For buyer champions, proof of value and how quickly you deliver on it is critical to loyalty; whereas for user champions, their delight with your product and how quickly they achieve it is paramount.
There is a third category of champions for B2B software companies: builders (such as developers and data engineers). In my next post I look at how they are different from other tech users and what drives their loyalty.
What is product-led growth? Productled.org
The Product-Led Growth Flywheel ProductLed.Org
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