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What CLV Means to Your Business

On the latest episode of the Microsoft Partner Network podcast, we hear from QUADROtech’s Director of Enterprise Migrations, Mike Weaver, about how customers love their commitment to delivering that long-term customer value, but that it was a challenge to change their strategy when it came to how they perceived the needs of customers and how their solutions met those needs.

As most businesses have experienced within the tech industry, a life-long customer is of far greater value than any one-off transaction. That’s essentially the strategy behind the “as a service” business model. It’s no longer enough for companies to invest their time and resources into the generation of single purchases. Especially in the cloud world, it is critical for businesses to develop the relationships and develop the solutions that engage a customer for life.

But it’s one thing to say you are committed to increasing CLV, and it’s another to generate steady revenue based on it. Here is a little extra insight into what customer lifetime value looks like from the partner perspective.

“We used to be really project based where we did a lot of migration projects. We would come into a project and go away. We had very satisfied customers but once the project was done, we really didn’t have a lot of value to provide after that. But really the challenge in the last few years has been moving into other aspects of our business to be able to provide long-term relationships and build on the relationships that we have.”
– Mike Weaver, Director of Enterprise Migrations, QUADROtech

Mike shared that inevitably QUADROtech had to learn the CLV lesson the hard way. Their acquisition of Cogmotive and the addition of the reporting tools helps QUADROtech better track and communicate that value to stakeholders at every level. He said that it’s no longer about hunting down the short term profits, but about building the long-term relationships that customers need and building on that skill set over a variety of projects.

CLV is so important because it allows businesses to step back and look at not just one sale, not just one customer, but the customer base as a whole. It’s about defining the economic value of each customer within that base and using that metric to make data-based decisions. If you don’t know what a client is worth, you don’t know what you should spend to get or keep one. If you need a place to start in modeling customer lifetime value as it relates to your business, take some time to explore the CLV modeling tool available on the MPN portal.

Building Revenue on Relationships

While it’s important to define and track your metrics when it comes to CLV, there are some simple things you can do to increase your customer lifetime value. Your customer strategy must be built on a culture of customer success and tracking customer satisfaction.

Mike said that the key takeaways when it came to his team’s experience with customer lifetime value were these:

    • Being sensitive to customers’ emotions
    • Maintaining good communication
    • Listening to customer pain points
    • Understanding that there are multiple layers to any one concern
    • Doing business with an understanding and empathy for where your customer is coming from

Particularly in the mergers and acquisitions space, Mike says it’s critical for partners to understand complexities of the situation and be sensitive to the emotions of the client. They are going through an incredible change in their work lives, so when things don’t work it can be a downright traumatic experience.

“Ensuring that you’re sensitive to the emotions of the project is important so that when people are upset you can put it in context, internalize it, and give the urgency that these projects need. I think that builds success. Partner with human resources. Partner with the communications teams. Do what you can to improve communication, but in the end, it all comes down to bringing the emotional intelligence to a stressful project.”
– Mike Weaver, Director of Enterprise Migrations, QUADROtech

Learn from the Experts

To hear more from Mike Weaver on how QUADROtech is leveraging CLV and how they are addressing some of the big challenges in the mergers and acquisitions space from a SaaS perspective, tune into the latest episode of the Microsoft Partner Network podcast. Subscribe to the podcast for weekly episodes where we speak with industry experts and thought leaders on the cutting edge of business and technology. Past episodes are available for download on iTunesSoundCloudiHeartRadioGoogle Play Music, and YouTube.

How have you incorporated strong customer lifetime value strategies into your business model? Share your thoughts in the comments below.

Rachel Braunstein: Welcome to the Microsoft Partner Network Podcast. Every week, we bring in industry leaders and Microsoft partners to talk about the big ideas shaping business and technology today.

In today’s episode, we speak with Mike Weaver, Director of Enterprise Migrations and Product Manager at QUADROtech Solutions about the importance of customer lifetime value and how they’ve been addressing some of the biggest migration challenges in the SaaS space today. Hey, Mike. Thanks for joining us. We are using Skype for Business. He’s in Connecticut and I’m here in Seattle so it’s our first podcast via Skype. Very exciting for us to try out. How you doing, Mike?

Mike Weaver: Good. Thanks for having me here virtually here today.

Braunstein: I see your face at least, so that’s good. Mike, tell me a little bit about yourself and QUADROtech.

Weaver: Sure. So, I joined QUADROtech industry just over two years from a Fortune 50 enterprise insurance company doing merger acquisition, vesture work inside of the mail space. And moved over to QUADROtech. QUADROtech was founded in 2012. It’s been around—the technology’s been around since 2005. It was, the technology was sold to a company and then the founders rebought it out after they wanted the software to go in a different direction than how the consulting firm was taking it. That’s what created the monster of QUADROtech that we have today.

Braunstein: How big is the company? Where is it located?

Weaver: So, the company is based in Zug, Switzerland. We have about 120 employees across the globe and gosh, I think we’re up to 16 or 17 countries now. So, very highly remote workforce. We’ve got offices in the U.K., Slovakia, and the States.

Braunstein: Very cool. Tell me a little bit. I’m sure since you started in 2008, or 2005.

Weaver: The company has been around since—the original technology has been around since 2005 but the company started in 2012.

Braunstein: So, you’ve gone through some transformation and your customers have been changing as well. Can you talk about what’s been the biggest challenge for QAUDROtech over the past few years?

Weaver: Yeah, I think that the biggest challenge has been we used to be really project based where you do a lot of migration projects, archive migrations, PST migrations, things like that. We would come into a project and go away and that was really—we had very satisfied customers but once the project was done, we really didn’t have a lot of value to provide after that. And really the change in the last few years has been moving into other aspects of our business to be able to provide long term relationships and build on the relationships that we have. So, that’s where our acquisition of CogMotive and these reporting tools and this other value that we’re providing. So, it’s not really short term relationships as much but really the trying to build that long term customer value that our customers need and building on the skill set that we bring to the projects.

Braunstein: What have you had to do to move from project services to a managed service? You talked about reporting a little bit but can you go a little deeper on that operationally and also about what kind of payoff you’ve been seeing by doing that?

Weaver: Yeah, I think what’s different for us is we started more as a software company and now we do software and delivery of our own solutions and that’s allowed us to, even with partners and working with partners, a lot of times we’ll still be involved and deliver some of our software solutions in that network so that we’re able to really provide that value and that expertise. So, you know, it’s not just hey, we’re going to buy 10,000 seats of a piece of software and call us if you need anything. Instead, we’re really getting heavily involved and really providing in depth consulting so that the customer is having a better outcome of the project. It brings up more discussion and more needs of other things that they’re going through. It brings us more into the problems that they have so that we can continue to build that relationship and just keep things moving.

Braunstein: What are some of the biggest pain points or problems that you’re seeing with your customers?

Weaver: I think one of the biggest challenges that we have today is in the mergers and acquisition space. That’s just been a real big challenge in the Office 365 world. We’ve seen with the huge increase in use of Office 365, we’re seeing the companies having to combine tenants or split tenants up and that’s really causing a lot of challenges.

Braunstein: How are you starting to solve that?

Weaver: So, it’s interesting. With the partner network, we’re seeing a lot of the partners really step up and provide services where they’re able to pull a bunch of solutions together from either software or custom coding or consulting and things like that. So, the partner community is really stepping up to fill that gap. The problem really stems back to the original days of Office 365 where when we talk about security and wanting to ensure that a company keeps their data separate from all the other customers in Office 365, those walls were very important. However, for the—and it’s really a minority number-wise of Office 365 tenants that need to do these mergers, acquisitions, and divestures, that’s becoming a really big challenge because it’s working against that security story that really was a big concern at the beginning. So, we see the partner community with the amount of customers that they touch really driving the solutions and helping drive what they need out of us as a primarily software company and engaging us at that level.

Braunstein: Can you talk a little bit about what it’s like with these M&A situations and bringing that to life a little bit?

Weaver: Yeah. So, I think as a similar story, when people talk about Office 365 adoption, it starts with just email. But Office 365 always goes well beyond email and has OneDrive files, SharePoint, CRM—all these other technologies that are there. So, what the partners are doing is they’re able to find the best solution to each one of those categories and bring together a total solution. There’s a real demand from the partner network to resolve the entire problem and I think you’re going to see in the next few months a real focus from us in the software community trying to resolve those problems. But the partner community is what’s pushing that because they can take all the—they can pick and choose their solutions from four different other partners to give that total experience. That’s really the major problem now is you’ve got to deal with each one separately.

Braunstein: Deal with each problem separately versus one.

Weaver: Each strain. Right. Instead of just picking up a tenant and moving it, you have to do a CRM migration. You have to do a SharePoint migration, a OneDrive migration, an email migration. There’s not a total product set out there today.

Braunstein: So, you’re finding that actually partners working together and with each other is helping in some of that—build out some of the solutions?

Weaver: In two ways. So, I think the main thing is they’re able to take their expertise and actually solve the mutual customer’s total problem. But also, they’re sitting there banging on the door of the other partners demanding improvements and changes and using their expertise to say what they need and partners are more than willing to pilot these solutions because there’s such a need to really try and improve the space which there’s multiple aspects to that. If they can get it improved they can streamline these projects and solve these solutions. Even the solutions they provide right now with the limitations and the technology, they take a very long time. So, anything they can do to increase the amount of data throughput or reduce the number of hours that they’re spending on it allows to create these projects and allows them to be more successful.

Braunstein: One thing that is a huge focus for Microsoft is security and with what you’re talking about with M&A and files and really protected information, can you talk about what you’ve been seeing and what kind of customer needs are?

Weaver: Yeah, I think one of the largest aspects is as Office 365 is expanded into new ID management solutions, multifactor authentication, all these aspects—when you’re combining the two, you have to deal with that issue as well. Users are used to having a single sign on. When you talk to help desk professionals, even today in all of our password reset functions and everything else, the number one helpdesk call is still a password reset. So, dealing with ID matching and even just training—I had multifactor auth in my old company and I have a different multifactor auth solution in the new company. If the project isn’t being done all at once I have to go back to this tenant to get this information and get my files but I have to log in to my Exchange Online piece in this other tenant. So, the security firms are really trying to, and our mutual customers, are trying to streamline that and deal with that user piece and again, because of the way the tenants have been designed to not comingle, it’s been the focus is you don’t want the two tenants communicating. That’s the whole point. It’s really created challenges in that regard.

Braunstein: What I’m hearing is—and we talk about this a lot—is really transforming your business. I mean, you’re talking about digital transformation. You’re breaking up how things used to be to create something that’s a much better experience for customers and that’s much more seamless. What do you think going into the future, what are you preparing for or expecting or doing as a company to keep moving through this transformation process?

Weaver: I think in the merger acquisition world the projects are really too large for firms to completely take on their own. So, that’s where I think you’re going to see although we talk about the partner community trying to put all these different solutions together, you’re going to see the software partners really trying to build the software solutions but really heavily relying on other partners in the space for the services for the total bringing that project together. I think you’re going to see some of the software houses trying to do it in house. I’m not sure how successful that’s going to be when a lot of the software partners out there don’t have as deep of a reach as the partner network that we have today. So, I think that’s primarily where we’re going to see a shift is the partner network is going to have less software vendors to work with to create their solutions but they’re still going to be providing all of that—we’ll call it the magic sauce of a total project and total solution in the space.

Braunstein: In your experience, how have you worked with partners the best?

Weaver: I think we’re most successful with the partners where they’re the ones that pick up the phone and call us directly. As a product manager, the deep and—sometimes product feedback takes a while to get to the organization through a webpage, through a service ticket. Instead we’re changing where us as product managers are directly doing post calls with these partners to really try and solicit feedback. As a scrum shop, we can very quickly make changes to our tools but you’ve got to know the priority and working with the partners and the communication, removing layers for these partners to get to someone like a product manager has been essential. So, we’ve kind of changed where our channel manager has direct lines to every single person in the company and their role is to really ensure that that feedback or these calls and collaboration gets to us as soon as possible so we can react as quickly as we can to the market.

Braunstein: So, just listening. A lot of listening.

Weaver: It’s amazing, it’s a classic. And being agile. And it always comes down to communication. But I think a lot of firms get stuck where they put all these processes and procedures in but this is one that you need to streamline really as much as possible where someone like a product manager can directly talk to a technician or a consultant that’s doing the on the ground work. Otherwise, everything gets lost in translation and anything that slows down an M&A project affects the bottom line of the organization involved because they just made this massive investment. They want to integrate as soon as possible. So, extra hours or extra days or extra weeks on a project is very impactful.

Braunstein: Do you have any tips? Like if somebody is going to walk away and they’re thinking about their customer’s partner’s M&A, what would you suggest? What would be your tip?

Weaver: I think in the merger acquisition space, it’s a classic piece of advice but you have to understand the emotions that are involved here in a merger acquisition project. You’re taking two firms, particularly in a merger, that has operated separately for years. The users involved are going through incredible change in their work lives. We spend more time at work than we do with anything else in our lives. And suddenly, when that user comes in Monday morning, they’re integrated into their new company. So, when things don’t work, it can be a very even more traumatic experience on top of an already emotional piece. Your partners, your consultants that are there, too, they may feel they’re in a highly competitive space because things are getting combined together and there may only be one on the other side of that project. This might be the last project that they do. So, I think, we talk about streamlining and communication, but ensuring that you’re sensitive to the emotions of the project in this so that when people are upset you can kind of put it in context better, internalize it better, and give the urgency that these projects need and I think that builds success. Partnering with human resources. Partnering with communication teams. All those classic things to improve communication but it still comes down to being the emotional intelligence of a stressful project.

Braunstein: What do you do in those situations, Mike?

Weaver: I think it’s the being calm. Understanding it’s not personal.

Braunstein: Keep calm and carry on?

Weaver: Yeah, keep calm and carry on. It’s understanding that when someone is really upset about their files not being there, it’s not really why their files aren’t there. It’s because they’re in a new office. They have a new boss. They have a new—someone took early retirement who they really liked. There’s 17 things going on and this might have just been the thing that pushed it over the edge.

Braunstein: Yeah, so some understanding, empathy. Awesome. Well, thank you so much, Mike, we really appreciate you.

Weaver: Thank you for having me.

Braunstein: Thanks for listening today and check out the podcast description for show notes. Be sure to subscribe and keep in touch with us on LinkedIn, Facebook, and Twitter at MS Partner.