Managed Services and the Customer Journey

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Managed services and the customer journey.pngAt their core, all managed services have at least two things in common: first, they are subscription-based services rather than transactional services. Second, they focus on providing a business outcome to customers through the management of technology. This is often with measurable service-level objectives, rather than providing customers with a discrete product or service that would then become the customer’s responsibility to use to reach their outcome.

This is both true of standalone managed services (which can be sold after, or in conjunction with, a product sale) and subscription-based managed XaaS (in which product is included/embedded within the managed services contract, whether that’s an embedded product sale or a cloud-delivered model).

Unlike any other service in a company’s catalog, managed services can represent the full breadth and scope of everything a company has to offer. It doesn’t have a choice. Managed services essentially takes over all the operations, and the risk, of running some or all of a company’s infrastructure and/or applications. This can leverage every single instrument in a company’s orchestra in order to be effective: from Sales, Solution Architecture, the product itself, Support Services, Professional Services, Customer Success, and every back-office function as well. 

With all of the complexities inherent to managed services offers, and all the players involved on both sides of the table, how does a managed services provider (MSP) understand their many customers’ journeys and help guide them, individually and collectively, to the success and business outcomes they seek?

The Role of Managed Services in Both the Supplier and Customer Journeys

Let’s start with focusing on the subscription aspect of this customer/vendor interaction. From a recent TSIA blog, “Achieve Subscription Success Through Customer Journey Mapping,” we can see the unique impact that subscription services have on the customer journey:

Subscription businesses at their core are built around fostering a continuous, long-term relationship with customers. The longer customers keep their subscriptions, the more profitable they become for the provider. As a result, ensuring the customer experience remains remarkable throughout the entire lifecycle is a priority-one mission.

Simply put, the subscription-based customer experience is a different, complex, more intimate interaction and customer journey than many MSPs are used to.

“OK, got it,” I hear you saying. “It’s different, it’s complex and it’s intimate. So, what do we do about it now that we’re all on the same page?”

As recapped in TSIA’s Technology-as-a-Service Playbook, the customer interaction can be viewed through two perspectives: the supplier’s and the customer’s, which are reflected in the LAER and PIMO models below:

LAER and PIMO.png

(Click image to enlarge).
Source: Technology-as-a-Service Playbook (p.197)

The LAER (Land, Adopt, Expand, and Renew) model is a supplier’s journey through a customer interaction, while the PIMO (Plan, Implement, Monitor, Optimize) model is a customer’s journey through the supplier interaction. These are two different models, with two different languages, which is explained in this excerpt from the book:

"[…] you can’t walk into a customer and say you want to land and expand them. You can’t walk in and talk about your success metrics. You need to talk to them in a language that they recognize and appreciate. They need to hear about their customer journey to the outcome, not your journey to deal profits. That storyline must be recognizable and, even more importantly, it must be executable by them […] the customer perspective requires its own language. We introduced PIMO in B4B and many companies have adopted this or a similar taxonomy. It is not intellectually groundbreaking. But like LAER, we find that most traditional tech companies limited their conversation mostly to the plan and implement phases. They were light on the monitor and optimize phases. In XaaS, that just doesn’t work. You need to have serious customer attention to all four phases if you are going to optimize your internal adopt, expand, and renewal metrics as well as the business outcome metrics you promised to your customer." (Emphasis added).

Let’s take a closer look at the customer’s perspective in the PIMO model to get an understanding of the users involved on their side of the relationship:

PIMO Plan.png

 

(Click image to enlarge).
Source: Technology-as-a-Service Playbook (p. 234)

"What is most interesting about [this figure] is the huge number of players in the ecosystem of engagement across both the provider and the customer. It gives you a basic idea of how many individual players and organizations may be needed to achieve success. This is the orchestra. Each team needs to play their parts in concert with one another. Although your LAER strategy will guide most of your standard, repeatable activities in the customer engagement model, specific actions will also be needed for specific customers."

Subscription-based services then, including all the variations of managed XaaS, require the supplier to have an intimate, lifetime mapping of the customer journey through a large number of unique user perspectives, unlike any other offering.

2 Golden Rules of Subscription Customer Engagement

I will not repeat the process of customer journey mapping here, and the previously referenced blog is a good start, but the customer engagement takeaway referenced there for subscription services, specifically, can be summarized as follows:

  1. Maintain empathetic and cohesive engagement with the customer across all functional areas and touchpoints, including sales, day-to-day account management, training, support, etc.
  2. Leverage your domain expertise and service capabilities to enable your customer’s business success instead of simply teaching them how to use your product.

So, let’s recap:

  • The customer journey in managed services can be characterized as different, complex and intimate.
  • The supplier journey and the customer journey should not be confused with one another.
  • The multiple customer journeys in this relationship should be mapped to individual customer roles with continued nurturing across all touchpoints, in concert, which can include:
    • Business buyers
    • IT team
    • End users
    • Business managers
    • IT OPS
  • When in doubt, focus on the customer’s definition of success and use your expertise to tie your actions to their business outcomes—and that can be different for every different customer role.

5 Key Considerations for MSPs When Working Through Your Customer Journey

Lastly, in case you have not already committed this to memory, here is also a recap of some sage advice from the Technology-as-a-Service Playbook:

  1. Every deal should include a PIMO road map. It is central to a successful LAER strategy.
  2. Your goal should be a highly automated road-map creation process. Ultimately, the success science team will probably own the road map templates and the tools to create them.
  3. There should be two levels of PIMO: Free, automated PIMO road maps for SMB, which are automatically applied to deals.
    • Fee-based, consultative PIMO engagements for large enterprises.
      • They should want your consultative expertise.
      • They should be willing to pay for your experience and your success science. They should be willing to put real skin into the creation and execution of the plan. If they aren’t willing to pay, then sales and services marketing have not done their jobs correctly.
  4. These paid engagements need cross-functional involvement:
    • Provider side: Sales engineering who knows what the customer is trying to accomplish, professional services who will oversee the implementation, customer success who will own the monitor and optimize phases.
    • Customer side: Technical owners, business owners.
  5. We think customer success should own the road map ultimately because they will be held accountable for the eventual renewal and expansion performance of the customer. We think they will often leverage the PS organization that has the field resources, tools, and techniques to be able to deliver project-based work that involves on-site activity. If there is no on-site activity, perhaps customer success could own both the creation and delivery.

Learn More at TSW

We’ll be going into more detail on where managed services fits into the customer journey at our upcoming conference, TSW Las Vegas 2017. If you haven’t already registered, there’s still time! You can check out all of the great sessions and keynotes we have lined up from leading companies in tech, which are sure to give you some great takeaways you can apply to your current operation. Check out the schedule online here to browse through our lineup of speakers and sessions.

In the meantime, be sure to check out more posts in our “Art and Science of the Customer Journey” blog series that I and the rest of the TSIA research team have contributed to in order to facilitate this ongoing conversation about the importance of the customer journey. Hope to see you in Vegas!

Read more posts in the "Art and Science of the Customer Journey" blog series:

About the Author

jeff-connolly80x100.pngJeff Connolly is the senior director of managed services research for TSIA. He is a video and telecommunications industry veteran, with over 20 years of experience in managed services and Cloud delivery models. In his role at TSIA, Jeff provides members with fact-based education and insight into the performance and operations of managed services providers of all sizes. 

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Topics: managed services, Art and Science of the Customer Journey

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