How to convince customers to initiate stalled services projects

Srujan PathakamuriSrujan Pathakamuri Senior ConsultantMember
edited October 21 in Service & Delivery

I am a Senior consultant working for a product company and I work for PSO(Professional services organisation). We sell services as part of license deals or upsell services individually to existing customers to implement the product / enable teams / deliver automation assets. These services are not paid for upfront and the customers are billed only on consumption of these services.

Challenge we are facing is that we have a stalled backlog that is growing becasue of few resons:

  • Customers not using services they signed up for feeling they are enabled and are confident to run with the tool(This is good because it shows we have done a good job) but as a PSO department we have stalled bookings.
  • Customers cite that their teams are busy due to project deadlilnes and cannot afford trainings or cannot allocate time for automation.
  • Management changes and they loose focus on automation
  • Though most customers are opening up for remote delivery some customers are still not comfortable for remote delivery.
  • Some customers say that they want to reserve the services for a rainy day(In case they run into problems in future they will engage us)

Due to the above reasons we are ending up having huge services backlogs. It is challenging to forecast revenues and also makes it diffucult for planning resources.

  1. Please suggest how to restart stalled projects?
  2. How to initiate conversations with clients to consume services?
  3. How to show value to customers when PSO is engaged?


Comments

  • Doug CavinessDoug Caviness VP, B2B Strategy & Partnerships Member | Scholar ✭✭
    edited October 21

    Hi @Srujan Pathakamuri. I think you've described a situation that perhaps many companies in our community are facing, and there's a number of challenges you've described. Without fully knowing the total context you're confronting, I guess I'd focus on:

    Review with senior execs of your client their corporate strategy and priorities and determine if your services can be repositioned to serve immediate needs / priorities. I assume that any contracted services for which the client has already committed will be forfeited if not consumed within a give period of time. Perhaps you can explain the challenge for both of your companies that will result from not being able to predictably schedule resources and the resulting backlog that will develop. Further, competitors or disruptors are likely continuing with automation investments now and perhaps the TSIA has benchmark data that you can share with your client to help them understand better the consequences of not investing now.

    Thanks,

    Doug

  • Patrick CarmitchelPatrick Carmitchel VP Product Management TSIA Administrator | admin

    @Srujan Pathakamuri thanks for sharing the details of your current challenges with addressing your PS backlog of stalled customer service projects. I'm sure @Bo DiMuccio or @Dave Young will have something to add here, but I'm also interested in thoughts from Professional Services leaders @Sarah Lowney and @Cindy Young.

  • Cindy YoungCindy Young Senior Manager Founding Member | Scholar ✭✭
    edited October 21

    Hi @Srujan Pathakamuri -

    Yes, many components to this indeed! Not knowing all the context, one suggestion to get stalled services moving would be to offer clients a discount on the rate if they move forward by X date, in conjunction with offering customers the ability to speak with some referrals who have taken advantage of remote services.

    In terms of showing value, when customers agree to re-engage, it might help to collaborate with them to gather measurable goals they want from the engagement, agree to those goals your team can deliver and the measure, then work to exceed the measure. You would want to have some suggested goals for them to consider.

    Hope this helps!

    Cindy

  • Srujan PathakamuriSrujan Pathakamuri Senior Consultant Member

    Thank You @Cindy Young for these suggestions. I like the idea of giving discounts. I will give that a shot.

    Yes we are doing a lot of community practinioner sessions where existing clients share their experiences and highlight the savings they have achieved and a lot of customers are engaging in these sessions as they find these sessions interesting.

    Thanks @Doug Caviness , Totally agree with your comments. I would love to see some benchmark data from TSIA. Can you please point me in right direction? I am new to this platform.

  • Doug CavinessDoug Caviness VP, B2B Strategy & Partnerships Member | Scholar ✭✭

    @Srujan Pathakamuri, your very welcome. This is where I'd suggest you connect with your TSIA client success manager / account manager to help orient you to the most relevant benchmarking data or other insights for the automation services you're providing at Tricentis.

  • Steven ForthSteven Forth Managing Partner Founding Partner | Expert ✭✭✭

    A few thoughts.

    This speaks to the trade off triangle in customer success. I am currently seeing this as a trade off between what gets baked into the software, what services are part of the standard customer success program and what are professional services that get charged for.

    One can build strategies around different ways of balancing these trade offs.

    In your case it sounds like professional services is a critical part of your strategy, as it is for many of us. This could even be called service led growth as opposed to product led growth.

    Many of us with service led growth strategies that have a strong professional services component have seen the same issues as you. In our case things improved notably from late August but this could just be a blip.

    Things we have done -

    • Provided a series of decision making tools that help our customer make decisions and frame trade offs
    • Provide them with templates that allow them to do part of the work themselves (the template also structure information that we can later on upload into our platform)
    • We have broken projects up into phases so that it is easier to get started
    • We have doubled down on explaining, calculating and in some cases guaranteeing value

    We have also introduced a new approach to scenario planning called agile scenario planning. There has been uptake on this offer. If you are familiar with classic scenario planning as Shell or GBN formalized, think of this as a blend of classic scenario planning with agile methods. The focus is shifted from a small number of well developed scenarios to the critical uncertainties and dynamic generation of scenarios to enable more rapid response to changing circumstances. We are formalizing this approach with a few of our key customers and are thinking about if and how we should offer this more widely.

  • Srujan PathakamuriSrujan Pathakamuri Senior Consultant Member
    edited October 26

    Thank You @Steven Forth for sharing relevant information. I couldn't agree more.

    We too have seen an uptake on services from August but things have gone quiet now.

    What kind of decision making tools were shared with customers to make decisions and what was the outcome? Can you shed more light on this please?

  • Steven ForthSteven Forth Managing Partner Founding Partner | Expert ✭✭✭

    @Srujan Pathakamuri I think this is very dependent on the business so you will want to translate the below into your own context. At Ibbaka we have two connected offers, one that integrates market segmentation, customer targeting and pricing with strategy and the other that makes sure that, given your strategy, you have the skills needed to execute.

    What you want to do is two things:

    1. Make sure that the customer understands and can communicate internally the value of your offer
    2. Help the customer collect and organize data that will be used in doing the work.

    In both cases, use of the tool should provide value to the customer regardless of whether they are able to proceed. The goal is to seed in value.

    Talent Tools (these are all downloadable as spreadsheets or templated Powerpoints)

    We would prefer to have them as part of our software platform in many cases, but many people are more comfortable with the downloadable approach.

    • Strategic Choice Cascade for Talent (a specialization of Roger Martin's Strategic Choice Cascade)
    • Job Architecture and Competency Model Planning Template (helps one plan a large job architecture and/or competency modeling project)
    • Design a Competency Model - Simple Version (let's you design a simple competency model and later, if you like, upload it to our platform)
    • Design a Competency Model - Full Version (let's you design a complete competency model and later, if you like, upload it to our platform)

    Market Tools

    • Strategic Choice Cascade for Pricing (a specialization of Roger Martin's Strategic Choice Cascade)
    • Diagnose a Pricing Issue (not yet released)

    The strategic choice cascade is one good tool to help people put their decisions in context.

    Another very useful tool is a value calculator of some form.

    Hope this helps.

  • Steve TennantSteve Tennant Managing Director Member | Enthusiast ✭
    edited October 28

    @Srujan Pathakamuri One person’s “stalled project” is another person’s “deal sold without establishing value”.  To me, it appears your clients are not yet perceiving the value of your services, and perhaps the value of your solution (software + services).

    I would start by looking at what % of new customers (say, during the last year, or during COVID over the last 6-8 months) have achieved their desired business outcomes using your product WITH and WITHOUT your services.  If 80-85% of customers are getting to their desired outcomes, in their desired timeframe, without Services then maybe there's no problem here and the services are unnecessary.  Professional Services may be resigned to more of an "account recovery" role just for a small subset of customers that get stuck, or integration services for customers with more complex needs.

    On the other hand, if customers are not achieving their desired outcomes in the desired timeframe - for example, 15-25% get to their outcomes on their own (maybe they have prior experience using your product) but 75-85% do not, then the role of Professional Services is clear - predictably get customers to their business outcomes faster.  Your sales team would explain to customers the timelines customers get to value, with and without services, and sell the services to customers ready to consume.

    I question selling services where:

    • The value has not been established
    • Remote delivery has not been established as the delivery means
    • There's no start date, and
    • There's no commitment (sponsor, project team) to getting started.

    To @Cindy Young 's point above, I am not very keen to discount where the value may never have been established, this is a race to the bottom. However, if customers were sold "onsite services" and you can deliver "remote services" more cost-effectively, perhaps a discount for the customer making the switch to remote services makes sense, when the customer commits in a certain timeframe (e.g., by end of the year to start in Q1).

    Depending on the results of your research and the value ProServices can add, I would clarify with the sales team what to sell. Only sell the services customers value and will consume. Sales should definitely not be getting compensated on services that are sold and not consumed.

    To address the stalled backlog, I would have sales go back through and re-sell the value and get customers started within 2-3 months, or the customer forfeits the service (and maybe claw back any sales commission because these were never sold properly).

    Curious to hear your thoughts.

Sign In or Register to comment.

Hello there

It looks like you're new here. If you want to get involved, click one of these buttons!