FEATURE

Customer-centric digital transformation

Making customer success integral to the new organization
Deepak Sharma, Jagjeet Gill, and Anne Kwan

PART OF A DELOITTE SERIES ON DIGITAL INDUSTRIAL TRANSFORMATION

Customer-centric digital transformation: Making customer success integral to the new organization

How can an organization keep customers—rather than technology—at the

center of a transformation effort? This article, fifth in a series, explores the
benefits of developing a proactive customer success capability.

The customer success function engagement model to leverage disruptive technolo-

and mindset gies, and redesign employees’ roles to form
customer success (CS) capability that maximizes
Yes, technological advances are driving fundamen- value for customers and enables an enhanced expe-
tal market shifts and a new wave of digital-driven rience for them.
disruption. But customers—increasingly seeking
1

always-on, performance-based, and integrated

solutions—may be an even greater catalyst.2
Customer success is the
proactive orchestration of
Indeed, customer expectations and demands are
creating critical challenges—as well as opportuni- a customer’s journey that
ties—for employees across sales, services, support,
and product functions. To successfully ride this
maximizes the value for
wave of change, companies need to continuously the end customer across
evaluate how digital disruption is changing cus-
tomer behavior, rethink their customer
the life cycle.
FIGURE 1

Customer success

C
LUE OU USTO
VA TC
O
M ES
ER
M

Customer
success
PRODUCT

virtuous cycle
S
IN ES
IC K
ST

HI
LOYG H E R
ALTY

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

2
 Customer-centric digital transformation: Making customer success integral to the new organization

FIGURE 2

Building a customer-centric organization

DIGITAL
ADOPTION

Business Operating
model model

Strategy Capabilities People, process,

and technology
AGILE CUSTOMER
MINDSET SUCCESS

1. How to establish a customer success

mindset?

Customer success 2. How to prioritize and scale capabilities

needed to activate customer success?
3. How to define and establish the
required cross-functional (e.g., sales,
product, support) engagement models
for customer success?

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights
In short, we believe that organizations must make higher willingness to spend, increased loyalty, and
customers central to digital transformation and brand advocacy. Unsurprisingly, good customer suc-
activate the virtuous cycle. Figure 2 illustrates how cess capability execution brings tangible benefits:
building a customer-centric organization ties into
our overall digital transformation framework. • Spend. Sixty-two percent of B2B customers
have purchased more from a company after a
good customer service experience.4
From churn reduction to value
generation • Tenure. After building a relationship, cus-
tomer spend grows alongside trust. Eventually,
The ever-changing technology landscape— loyal customers spend 67 percent more than
currently shaped by technologies such as cloud new ones.5 Over the course of a year, experi-
computing, anything-as-a-service (XaaS), and the ence-driven businesses grew revenue 1.4 times
Internet of Things (including industrial IoT)—has faster and increased customer lifetime value 1.6
solidified the need for businesses to adopt a cus- times more than other companies.6
tomer-in mindset, shifting focus from selling a
product to nourishing a customer relationship: • Cost of service. Maximizing satisfaction with
understanding expectations and maximizing cus- customer journeys has the potential of lowering
tomer value from offerings.3 the cost of serving B2B customers by as much
as 20 percent.7
B2B companies that invest in a CS function are look-
ing for a range of gains, including lower cost to serve,

3
Customer-centric digital transformation: Making customer success integral to the new organization

• Referrals. After a positive experience, 83 per- on helping customers recognize and maximize the
cent of customers would be happy to provide a value of their purchased products and services.
referral if asked.8 Questions such as, “How
likely are you to refer a friend or colleague?”
can help customer service managers identify Approach to customer-centric
which customers to ask for referrals. transformation
BEYOND SELLING As per our analysis, the companies leading in cus-
In the cloud era, the CS function has evolved along- tomer success11 have common elements in their
side B2B business models (figure 3), originating approach. Their leaders usually design an end-to-
with the industry’s movement from businesses end CS capability and discipline that drives toward
dependent on reducing churn to XaaS companies customer-centricity.
with delivery and monetization models that focus
on customer retention and value creation.9 The transformation begins with defining the north
star or the organization’s CS vision.12 Based on
The proliferation of enterprise IoT, XaaS solutions, this vision, leaders define the capabilities and
and data-generating connected devices makes out- operating model required to deliver the CS targets
come-focused CS management a realistic envisioned.13 These capabilities are usually defined
opportunity for B2B companies—especially those at three levels: core (foundational capabilities
pursuing a customer-centric digital transformation owned and managed solely by the CS function),
to help increase “stickiness” and customer loyalty. shared (capabilities shared between CS team and
internal business functions), and enterprise
Going forward, B2B customers will increasingly (capabilities owned and managed at an enterprise
expect companies to deliver a seamless experience level, prerequisites for the CS team to function
with both human and digital touchpoints. While successfully). Additionally, leaders often aim to
human interactions largely drive current touch- design the organization’s governance operating
points, future touchpoints will increasingly skew model to enable collaboration between CS and
toward digital and provide a real-time customer internal functions such as product engineering,
experience that is contextualized, personalized, sales, marketing, and support.
and data- and usage-driven. Human interactions,
meanwhile, will likely focus on orchestrating the Following the capability and operating model
ecosystem, co-creating value with the customer, establishment, the organization employs strong
and helping the customer versus selling.10 KPIs, metrics, and systems to ensure successful
transformation. A key step is driving a CS mindset
To create a truly differentiated CS function, there- across the enterprise, often requiring a definitive
fore, B2B companies should look to develop a change in culture in alignment with the enterprise’s
human-plus-digital engagement model that focuses specific situational factors. This can be the most dif-
ficult—and most rewarding—part of the journey.

The conversation can shift from, “What are our profit and
revenue this quarter?” to, “How are we providing value to
customers? What experiences are they enjoying with us?
Are they getting value from our products/offerings?”

4
 Customer-centric digital transformation: Making customer success integral to the new organization

Companies able to focus and execute on this can Figure 5 illustrates the perspective a company can
move to having customer-centric C-suite conversa- take to measure the value generated (qualitative
tions, making it part of the organizational DNA. and quantitative) by CS transformation in real

FIGURE 3

Evolution of the customer success function

FOCUS ON REDUCING CHURN

“I sold a subscripion. How do I reduce churn and drive adoption?”

2000
Customer success in
cloud businesses Launches
software-as-a-service
cloud industry

Moved all offerings

to as-a-service

2012
Customer success in
Introduced integrated
subscription models customer support platform

Enables access to data on

any device, anywhere

Launched IoE as part of

Cisco Consulting Services*

2017+
Customer success in Enables XaaS business
IoT and XaaS model

FOCUS ON PRODUCING OUTCOMES

“I have a customer. How do I maximize value for them from my offerings?”

*Reorganized as IoT product business unit in 2017.

Source: Deloitte analysis.
Deloitte Insights | deloitte.com/insights

5
Customer-centric digital transformation: Making customer success integral to the new organization

FIGURE 4

The market now demands an always-on mindset that customer success

helps deliver
Key changes in the market

Outcome-based Real-time Increased Remote

services data access complexity delivery
Leading to Allowing As a result of Services, support,
accountability on customers to connected devices, provisioning
value creation track outcomes multiple vendors remotely

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

time—and to understand the expected outcomes. For most organizations that have undergone trans-
Creating and delivering business value starts by formational CS journeys, leaders have carried out a
clearly articulating performance measures that program across three key levels (figure 6). At level
reflect the customer’s outside-in view of value and one, a strong CS function is established that owns
the company’s inside-out product view of value and and maintains ongoing customer value realization
bridging the gap between product performance and and is accountable for driving adoption, retention,
usage experience. Measures of customer value and expansion.
(business value, experience value, and performance
value) combined with traditional business out- At level two, a cross-functional engagement model
comes-focused metrics (for example, increasing is built in which customer success delivers insights
revenue, increasing tenure, lowering costs, and upon which other functions act, aligning their CS
increasing advocacy) can help B2B companies pro- outlook with the company’s overall vision.
duce a comprehensive value scorecard that
identifies both customer and company benefits. Finally, at level three, a customer-first mindset is
inculcated, making CS a part of the organizational
An account health scorecard (based on the mea- DNA. At this level, CS is considered imperative
surement framework in figure 5) can offer visibility enough to be given a C-suite seat and be a part of the
to enterprise-level performance and alert the regular board agenda. The value generated during
respective business function before a customer CS transformation is for not only the customer
identifies a problem. This scorecard should: (value creation) but the company (value capture).

• Accurately capture the customer’s target objec- Typically, organizations expend maximum effort
tives, target outcomes, and progress along the to achieve level one maturity but lose focus while
value realization plan driving toward level two. Follow-through is key,
since the end goal is a strong customer-centric
• Provide advanced visualization dashboards for transformation, and that demands commitment
users to understand product performance to realize level three maturity. In a recent cus-
based on usage and business value created tomer success survey,14 just one-third of
respondents said their CS function is led by a
• Track potential/emerging areas of concern and C-suite executive, a mere 30 percent report that
red-flag issues as they emerge customer success is considered a strategic priority

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 Customer-centric digital transformation: Making customer success integral to the new organization

FIGURE 5

Measuring the value created

Business value
Is the customer realizing business value?
Outside-in
Customer Experience value

success Is the customer experience positive?

Performance value
Inside-out Are the products performing?

Internal Business
Increasing revenue Lowering costs

success outcomes
Increasing tenure Increasing advocacy

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

by the board of directors, and only 26 percent say ensure lasting impact, managers designed cus-
that official business communications regularly tomer health scorecards and deployed a CS
mention customer success. platform. The company has now included customer
success as part of the C-suite agenda and has estab-
lished the function under the chief customer officer,
Successful CS transformation reporting to the president.
journeys
The company realized multiple outstanding out-
The following examples showcase successful cus- comes from this multiyear transformation: Stock
tomer-centric digital transformation and the level price more than doubled, revenues increased by
of CS maturity attained by multiple companies. 20 percent, NPS and customer satisfaction CSAT
scores increased by 7–12 points, and new product
A leading software company—a long-term client— development improved by 20–30 percent. The
faced challenges with customer services and found company also noticed a change in customer experi-
multiple red flags and isolated efforts, leading to a ence, as the number of direct customer interactions
low net promoter score (NPS). Also, with busi-
15
shrunk and became more focused. With informa-
ness models shifting to as-a-service, competitors tion flowing faster and more accurately, customer
were strengthening their market position and interaction speed and friction also increased. The
building scale.16 CS group shared educational material with custom-
ers, describing potential usages of software features,
To regain lost ground, company leaders began a and the company assigned each customer an advo-
transformation journey by defining a vision around cate to help them realize more business value from
proactiveness, distinctive experience, and maxi- products. Customers saw a dramatic shift in time
mizing value realization. The company developed to value from their purchased solutions.
capabilities such as investment in product feedback
loop, health monitoring, and defined new roles As the plan matured and CS function expanded,
such as CS manager and solution adviser. To leaders recognized the need for other companywide

7
Customer-centric digital transformation: Making customer success integral to the new organization

changes to be more efficient and effective (figure 7). develop best practices for the company’s CSMs, and
They aimed to inculcate a CS mindset in the teams, create an initial iteration of its CS platform with a
greatly affecting interactions with customers and subset of accounts. In the long term, leaders aim to
partners. Core functions became more collabora- grow customer success beyond the handful of initial
tive and passed on customer insights to each other, accounts into a full-fledged organization responsi-
enabling the company to build a better cloud-based ble for driving churn rate down and renewal rates
go-to-market program. up and optimizing the business to enable customers
to achieve their business goals and derive maximum
Another company in the hardware and storage value from products and services.
space, moving into IoT space, is undergoing a
transformation from a legacy hardware storage ser- The CS group has been able to bring in new multi-
vices company to an XaaS provider. Leaders here million global orders, close new contracts, and
see a strong need for a CS model that better ampli- handle problem-solving with quicker turnarounds.
fies and communicates their products’ true value. Some end customers and account teams are
The executive committee appointed a CS leader- acknowledging their CSMs’ value—for instance, one
ship team to identify the path forward.17 account team member volunteered, “The CSM is an
integral part of our team, and it would significantly
Following a similar framework, the team set its hurt our professional-services revenue if we did not
north star on establishing customer success as an have him.” A recent customer success study18 sug-
organization and adopting a customer-centric gested that other companies have seen similar
mindset. The company planned its transformation results: Half of the respondents reported 10 percent
into two phases, beginning with a pilot/short-term higher upsell and cross-sell revenues; one-third
plan to test customer success manager (CSM) cov- reported greater than 20 percent uptick in annual
erage ratios and industry vertical and product mixes, recurring revenue after enabling their CS strategy.

FIGURE 6

CS maturity map
Value generated*

LEVEL ONE LEVEL TWO LEVEL THREE

CS function CS enterprise CS mindset
establishment muscle

CS maturity
* Value generated = value created for customer + value captured by company.
Source: Deloitte analysis.
Deloitte Insights | deloitte.com/insights

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 Customer-centric digital transformation: Making customer success integral to the new organization

FIGURE 7

Companywide X-functional transformation

Cloud GTM and

business operations
• From products to
cloud services
• Any cloud, any app,
any device
Marketing shifts • SaaS operating Support
from “push” to “pull” model transformation
• Digital marketing (seamless hybrid)
technologies • Proactive support
• Customer experience lens

Customer
• Segmented model
• Customer engagement • Intelligent “swarms”
model and architecture

success
Services Sales and
strategy and process partners focus on
transformation customer outcomes
• New controls • Revamp idea to cash
• Reimagine process processes
• Balance global vs. • Partner strategy
regional and shifts
• Sales compensation

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

Next steps: Function to 2. How can we capitalize on the value realized by

enterprise muscle to mindset our customers?

Undergoing a CS transformation generally requires 3. What can we enhance to be in line with a cus-
a B2B company to add differentiated capabilities tomer-centric digital transformation journey?
and processes across the customer life cycle jour-
ney—all of which support the goals of maximizing To embrace customer-centricity, B2B organizations
product and service business value, improving sat- should ensure that customer success becomes a
isfaction, and increasing retention. Leaders should part of the enterprise muscle. One way to achieve a
begin by reflecting on the importance of customer CS mindset is by putting customer success at the
success as a foundational element in an organiza- CEO table and on the board agenda. CS teams
tion’s journey to customer-centric digital essentially work cross-functionally, and the organi-
transformation. Three questions to consider: zational capabilities should enable the CS function
to have enterprisewide impact. By placing custom-
1. How do we ensure that our customers are able ers at the center of an organization’s strategy,
to achieve maximum value from the offering leaders can focus and give direction to an overall
they have bought from us? digital transformation.

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Customer-centric digital transformation: Making customer success integral to the new organization

Endnotes
1. Anne Kwan, Maximilian Schroeck, and Jon Kawamura, Architecting an operating model: A platform for accelerating
digital transformation, Deloitte Insights, August 5, 2019.

2. Jeff Hood, Alan Brady, and Raj Dhanasri, Industry 4.0 engages customers: The digital manufacturing enterprise
powers the customer life cycle, Deloitte University Press, December 15, 2016.

3. John Lucker, Susan K. Hogan, and Brenna Sniderman, “Fooled by the hype: Is it the next big thing or merely a
shiny new object?,” Deloitte Review 23, July 30, 2018.

4. Zendesk, “Quantifying the business impact of customer service,” accessed August 12, 2019.

5. Giselle Abramovich, “15 mind-blowing stats about loyalty,” CMO.com, March 10, 2017.

6. Forrester Consulting, The business impact of investing in experience, commissioned by Adobe, April 2018.

7. Steve Offsey, “What is customer journey analytics?,” Pointillist, accessed August 12, 2019.

8. Jasmin Al-Hawi, “How to build a referral program to encourage word of mouth marketing,” Medium, July 16,
2017.

9. David Saabye, “Out of the box, into the cloud: Adobe’s transformation…,” dPrism Advisors, November 22, 2017;
Matt Given, “The 1 word that saved Salesforce from certain doom,” Inc., August 15, 2017.

10. Zoovu, “Helping is the new selling—with buyers in control, the definition of selling needs an update,” November
28, 2017.

11. Saabye, “Out of the box, into the cloud.”

12. Maximilian Schroeck, Jon Kawamura, and Anne Kwan, Setting the north star: Staying focused and on track,
Deloitte Insights, July 2, 2019.

13. Kwan, Schroeck, and Kawamura, Architecting an operating model.

14. Gopal Srinivasan et al., 2019 enterprise customer success (CS) study and outlook, Deloitte, accessed August 12,
2019.

15. Susan K. Hogan and Timothy Murphy, Breaking up is hard to do: How behavioral factors affect consumer decisions
to stay in business relationships, Deloitte University Press, June 26, 2015.

16. Art Mazor et al., Measuring human relationships and experiences: Blurring lines and shifting sands, Deloitte
Insights, June 20, 2019.

17. Schroeck, Kawamura, and Kwan, Setting the north star.

18. Srinivasan et al., 2019 enterprise customer success (CS) study and outlook.

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 Customer-centric digital transformation: Making customer success integral to the new organization

Acknowledgments

The authors would like to thank Anjali Tanwar for her tireless efforts to bring this article to life. The
authors would also like to recognize Maximilian Schroeck, Jon Kawamura, Aftab Khanna,
Aishwarya Sharan, Ashish Tiwari, Cristina Stefanita, Molly Campbell, Divya Dewan, and Ayush
Sinha of Deloitte Consulting LLP for their contributions to the digital transformation practice.

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Customer-centric digital transformation: Making customer success integral to the new organization

About the authors

Deepak Sharma | deepaksharma8@deloitte.com

Deepak Sharma is a leader in Deloitte’s Customer and Marketing Strategy practice. He is focused on
customer-centric digital transformations. Sharma works with and advises chief customer officers,
heads of customer success, and support executives in defining and executing innovative strategies to
maximize value creation for their customers. Sharma is based in San Francisco and is on LinkedIn at
www.linkedin.com/in/deepaksharma/.

Jagjeet Gill | jagjgill@deloitte.com

Jagjeet Gill is a principal in Deloitte’s Strategy practice, with more than 15 years of global consulting
experience advising technology-sector clients on large-scale IT-enabled business transformation and
restructuring efforts. He has significant experience in advising clients on XaaS business model transfor-
mation, IT strategy and transformation, enterprise architecture, IT cost effectiveness, agile
transformation, and transformation program management. Gill is based in San Jose and is on LinkedIn
at www.linkedin.com/in/jagjeetgill/.

Anne Kwan | annkwan@deloitte.com

Anne Kwan is a leader in Deloitte’s Technology, Media & Telecommunications practice. She advises cli-
ents evolving their growth strategies with new flexible consumption/as-a-service business models;
recent engagements include the design and launch of new IoT businesses. Kwan has more than 18
years of technology industry and management consulting experience. She is based in San Francisco
and is on LinkedIn at www.linkedin.com/in/annekwan/.

12
 Customer-centric digital transformation: Making customer success integral to the new organization

Contact us
Our insights can help you take advantage of change. If you’re looking for fresh ideas to address your
challenges, we should talk.

Practice leadership

Deepak Sharma
Managing director | Deloitte Consulting LLP
+1 408 666 6723 | deepaksharma8@deloitte.com

Deepak Sharma is a leader in Deloitte’s Customer and Marketing Strategy practice.

Jagjeet Gill
Principal | Deloitte Consulting LLP
+1 408 704 4148 | jagjgill@deloitte.com

Jagjeet Gill is a principal in Deloitte’s Strategy practice, with more than 15 years of global consulting
experience advising technology sector clients on large-scale IT-enabled business transformation and
restructuring efforts.

Anne Kwan
Managing director | Deloitte Consulting LLP
+1 415 783 6379 | annkwan@deloitte.com

Anne Kwan is a leader in Deloitte’s Technology, Media & Telecommunications practice.

Deloitte Consulting LLP’s digital transformation practice has advised clients in the technology
sector (e.g., hardware and software) as well as those in the industrial sector (e.g., manufacturing,
construction, and energy) enter and compete in new growth areas. Our work includes defining
customer-first strategies, building new business and operating models, and launching the critical
capabilities required to swiftly drive scale—all to achieve optimal results from limited resource
pools. Contact the authors for more information.

13
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