Forrester Wave Report
Leslie Stretch, Medallia CEO, and Borge Hald, Medallia Founder, Reflect on Being Named A Leader by Forrester in The Forrester Wave™ Customer Feedback Management Platforms, Q4 2018 Elena:...
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Earlier this year, to remind our teams at RingCentral to keep their meetings completely focused on customer needs – not internal goals – we launched a Customer First Ultimatum. It was a rule encouraging people to walk out of a meeting if a customer was not mentioned in the first 10 minutes. While the practice was dramatic and got people thinking about our customers more intently, the ultimatum was ultimately short-lived. In the end, as you can imagine, challenging people to walk out of a conference room is a great way to get everyone’s attention, but not exactly a practical way to run a company.
An even better way to get everyone focused on customers over the long term: build customer needs and concerns into our organization and strategy from the ground up.
Integrating customer perspectives and feedback to everything you do is critical for any company. But for a software-as-a-service company like RingCentral, it’s life or death. Our core value proposition is replacing antiquated on-premise communications infrastructure (known in the industry as PBX) with a mobile, cloud-based solution that is easy to set up and inexpensive to maintain. We’re seeing uptake by some 300,000 customers that recognize there’s a better way. It’s a huge market that’s ripe for disruption – one of the last big categories to move to the cloud.
While the upside of being customer-centric as a SaaS-based business is huge, the reverse scenario can be devastating. The recurring revenue business model means that it’s much harder and more costly to win new customers than to simply keep your current customers happy.
Given that stark reality, we have adopted three basic organizing principles to bake the customer into every thing we do.
Principle #1: Invite your customers in for a conversation.
Last year, we convened our first annual Customer Advisory Board to talk to our largest customers in a relaxed setting in California’s wine country. Over meals, walks and focus groups, we get to know their needs, frustrations and challenges more deeply than ever before. The feedback is incredibly valuable and helps us prioritize our long list of product features in the pipeline. In the year since our first Board meeting, we’ve launched more than three big features that were prioritized as a result of these conversations.
In addition to the board, we continually invite customers to our San Mateo, California, headquarters and collect broad customer feedback in a semi-annual survey. We also give our sales and support people ample opportunities to bubble up the feedback they’re collecting.
The commentary is a critical complement to the data we collect, analyze and track every day – from customer satisfaction to net promoter score to top call drivers.
Principle #2: Make sure the whole company knows customers are central.
Getting people thinking more about customers does not always come naturally. At RingCentral, the company was very product-focused from the beginning. Our founder and CEO, Vlad Shmunis, was committed to creating a system that would be very simple, easy and inexpensive for anyone to use, and that’s why many of our customers check us out the first time.
But making products that we think people will find useful is not the same as integrating customer focus into everything we do. As we’ve continued to grow after going public last year, our new hires become more specialized. Many of their daily tasks now focus on a narrower part of the customer journey. To give everyone perspective on the big picture, we knew we needed to establish strong unifying principles.
One of my responsibilities as RingCentral President has been to lead efforts to build a shared understanding of our mission, vision and values. Leading on culture is a role I know well from my years building up the worldwide sales team at WebEx, from startup through to its acquisition by Cisco. We knew we needed a statement that tied our commitment to customers to our main value proposition. After a process that included several committee meetings and intense discussion, we landed on our agreed common mission: Empowering Customers to Communicate Effectively in the New World of Work.
Principle #3: Cross-functional teams are better than silos.
We’ve set up three cross-functional task forces to break down silos and get everyone working together toward the common cause of customer happiness. During our quarterly offsites, leaders from each team identify key customer experience improvement opportunities. We put together action plans to deliver on them. We then follow up with bi-weekly sessions where we update and track initiatives to improve the experience. These groups have delivered amazing initiatives — things that would otherwise be very hard to get right in the functional areas alone.
Our “Voice of the Customer” task force includes top performers from sales, marketing, support, operations and product. They meet regularly to drive the top three initiatives to help customers. One of the big questions they’ve tackled so far is identifying and categorizing the top reasons that customers call us (this is often the equivalent of low-hanging fruit we can fix). Another line of inquiry was into the quality of service, and how to ensure our voice quality is the highest in the industry.
We also formed a cross-functional team targeted on enterprise customers, which is a very strategic sector for us. It’s helped us drive much tighter integration between sales, marketing, product and implementation.
We‘ve worked hard to highlight the great work these teams are doing. We give out President’s awards for our team members that have the greatest impact for the customer. Our top performers for the customer are identified, and we celebrate their efforts at our annual President’s Club incentive trip.
In my career, I’ve seen many principles for how to organize and run a company. Given my experience at RingCentral, where we have decided to focus so explicitly on the customer, I can’t imagine doing it any other way.