How to manage Customer Expectations

Hi, Markus here. Welcome to a new episode of the Customer-Value-Led-Growth Newsletter.

I share strategies and guides to help you become a proactive CSM delivering more value for your customers and revenue for your company every week.

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Customer Success does not start after the purchase. It starts with setting (the right) customer expectations.

Because your customers will evaluate their success by comparing expected with actual outcomes. And ultimately, make up their mind whether to renew or leave.

Customer expectations are often referred to as part of evaluating the customer-product fit but there’s a major difference.

You can change your customers' expectations, but you can’t change their mindset, for example, if they don’t have the right mindset to become successful with your product.

Not everybody needs your product and not everybody who needs it will become successful. Customer expectations are set as soon as they are exposed to your company through content, ads, etc.

As a CSM, you could certainly say that it’s a marketing and sales responsibility. However, you are working with the customer and if their expectations are off, you are fighting an uphill battle right from the beginning.

In today’s episode, you’ll learn how to make sure that customer expectations match reality.

Overselling

There are still too many SaaS companies trying to acquire as many customers as possible. Consequently, marketers and sales reps are under pressure to bring in tons of leads and convert them into paying customers.

So they are tempted to oversell the product’s capabilities to seal the deal. They are making promises that do not match reality.

When customers realize it they are pulling the plug. It’s almost impossible for CSMs to fix it after the purchase because it requires customers to settle for less.

And that’s the best-case scenario. What happens if customers feel like they’ve been tricked into buying (which they technically were)? Let’s say it’s not positive for your reputation.

But overpromising does not only happen on purpose. On many occasions, it simply happens because marketing and sales don’t have accurate insights into what’s possible with the product and what is not.

Underpromising

You’ve certainly heard the advice to “underpromise and overdeliver”. I believe it can do more harm than good. Think about it. If you are laying the bar low, why would customers choose your product?

A healthier approach is to promise as much as you can deliver with high probability. Technically, missing sales opportunities does not negatively affect your work as a CSM. But it’s bad for your company and therefore, at the end of the day, it’s bad for you too.

Keeping things vague

This is likely the most common type of misguided customer expectations. Many founders and execs believe keeping things vague is the winning formula because you are not excluding anyone.

In reality, what they are doing is overselling and underpromising at the same time because they leave expectations completely to their prospects’ imagination. Some think the product is the answer to all their prayers while others could not be less bothered to give it a further look.

Downplaying effort

Customers do not only want to see tremendous success. They want to see it fast and easy. What better promise could you make than telling customers they can accomplish something in days instead of weeks or months?

Of course, there are products with a non-existent learning curve that deliver instant results. But that’s certainly not true for all of them. Some require weeks or even months of dedication and discipline.

Even more, if they are starting at a lower level in terms of skills and knowledge. Painting a realistic picture of how much time and effort is required is not negotiable.

Here’s how you can play a pivotal role in setting accurate expectations to help your company and make your life easier

1. Understand your customers' outcomes

Your customers buy your product because they want to

• grow their revenue

• reduce some of their costs

• improve their productivity

• hire new employees faster

• eliminate dreadful risks

• …

they don’t want a “smart solution” or “all-in-one platform”. The easiest way to set customer accurate customer expectations about the outcomes is to look at the ones your existing customers are already getting - all of them. I’m talking about reverse engineering.

It’s important to not only look at your highest performers as they might be outliers. Capture the outcomes a significant portion of your customers has accomplished (e.g. 75% of customers have seen a 20% improvement).

2. Dissect the customer journey

Similarly, determine the time and effort it takes your customers to get there. If you are conducting QBRs regularly you have an effective way to understand the results your customers got and the journey they have behind.

However, ideally, your customers’ journey follows a dedicated success plan you’ve built in the beginning. If you don’t have such in place, you can again reverse-engineer them from your existing customers.

That includes how they are using the product, the content and services they consume, and, if possible, their underlying processes.

Avoid looking only at the outliers. If you have a customer who is an agency using your product for a living, they will most likely be much more efficient than the rest.

3. Communicate your insights

Maybe you have already all this information in place. Before ever reading this episode of my newsletter. Either way, these insights are useless if they are not shared across your company to get everybody on the same page.

You have accomplished your goal when all teams are telling the same story. I’m talking about positioning and messaging. Often misunderstood as a “marketing strategy” its purpose is to align all teams on a single mission and goal.

Invite your colleagues from marketing, sales, product, and support to (monthly) roundtables and your company leadership to share your insights. Work out your company’s positioning and messaging together.

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