As a CRO, you want to grow revenue and dominate the market. You’ve got a great sales team, a brilliant marketing strategy, and a product that’s the envy of your competitors. Still, something is missing … . You know that every customer, regardless of how great your product is, will need some assistance along their journey. What role should professional services (PS) play here?
After 30 years in the industry, I remain baffled by how many companies still struggle with defining the right role for PS in their GTM strategy. I summarised my experience into a simple five-step programme to make your PS great (again).
Step 1: Take a hard look at your product
The first step is the hardest. You need to take a long, hard look in the mirror and be brutally honest about your product’s maturity, complexity, and quality.
- What kind of product are you selling? Does it offer out-of-the-box functionality (a vertical solution) that just requires some back-end integration? Or are we talking about a product that, in essence does nothing out of the box (a horizontal technology)? It needs little argumentation that the closer you are to out-of-the box vertical solution, the less services you’ll probably need. You might want to think that your horizontal solution is easy to use, but if it does nothing of business value after you installed it, the chances are it requires services.
- Second, how mature is your product? Is it a polished, mature offering, or an innovative but immature solution with gaps that need to be filled? Be honest about your product roadmap and admit how much help customers need. If your product is still young it is likely you’ll need services to work around some of the missing features.
- Thirdly, how easy to use is your product, honestly? You might have a pretty mature product, but because of historical reasons, it might not be as easy to use as you wanted.
This step is the hardest one. Nobody wants to admit their baby is ugly! And you’ll get a different view from your product manager than from customer success. Talk to many people – especially customers – get an unbiassed view on the matter and decide if it takes a lot of services to make your customers successful or not.
Step 2: Know when your Customers will need help
Professional services aren’t just for implementation. They can be strategically deployed at various points in the customer journey to drive value. While the most obvious need for PS is at the start of a customer’s journey, that’s not the only place they can add value: PS can play a role in the sales cycle by offering strategy and innovation workshops, PS can play a role in setting your company up as a though leader, PS can play a role in churn prevention (by offering smooth upgrades). And if you are the PS trade, you can probably come up with some more options.
Whilst you don’t want to turn your PS team into the “team that can do it all”, it is important to acknowledge that PS can play many roles. Pick the role(s) that make sense for your product. Don’t default to “onboarding” and implementation (even if those are the most obvious choices).
Step 3: Define Your Service Offerings
Leaving your sales team to figure out which services to offer, is a recipe for chaos. You need a scalable and predictable approach to packaging your services. Being prescriptive about how customers will become successful with your product is a strength, not a lack of customer focus.
A few common offering types to consider:
- Productised or Packaged Offerings: A standard scope, at a standard price, for scaleable delivery. Typically a great fit for repeatable scenario’s that every customer needs to go through.
- Custom statement of work / projects: The opposite of the above. Custom scope at a custom price. A great fit for enterprise customers with unique requirements.
- Time and material or fractional consulting: Unclear scope and flexible pricing. Useful when there is an established relationship to support ongoing development/support.
- Ad-hoc consulting sessions
- Resident resources: A stable long term staffing model allowing pro-active engagement typically for enterprise customers.
- Value based consulting: In these engagements pricing is tied to a specific business outcome requiring a mix of technical and business skills
Each of these methods has its pros and cons, and you can use various at the same time depending on different scenarios. But more is not necessary better. A prescriptive and clear approach towards success is a strong selling point and scales better.
Step 4: Staff for Success
Defining your offerings does not help you deliver them. You also need the right people with the right skills to deliver them. The types of roles you need will directly correlate with the kind of service offerings you’ve defined.
For example, a vertical product might require people with some business and process expertise, whereas horizontal technology probably needs more technical assistance. Similarly, bundled or packaged services likely require a more consultative approach, whereas larger pieces of project work might require you to hire project managers and diversify your delivery team into architects, senior consultants, and junior consultants.
A strong PS organisation is built on the right talent, but you can’t hire the right talent unless you know exactly what they need to do for you. (And if you try to do everything, you might end up with a set of unwanted skills.)
Step 5: Figure Out Your Financial Model
Finally, professional services can’t be successful without a clear financial model. Do you expect them to be a:
The answer to this question will set different expectations as to what “success” looks like. If you don’t have a clear financial model, you can’t expect the team to be successful. This topic warrants a separate blog post, but to keep it simple, here are some basic strategies:
- PS as a profit center: Try to run a healthy profit margin and try to maximise that.
- PS as margin neutral: Use PS to drive ARR bookings but keep PS cost conscious
- PS as loss-leader: Consciously decide to loose money on PS to accelerate ARR.
Any of these strategies can work for you, but you better have clarity on how you will run your department’s P&L before you have your first business review with your CFO.
Conclusion
A professional services organisation that truly adds value is a powerful thing. It’s a force multiplier that not only drives revenue but also informs your product and sales strategies. When your PS team is a strategic asset rather than an afterthought, they bridge the gap between promises and reality. They ensure your customers are not just successful but are truly loyal. By honestly asking the above five questions, you can turn your professional services organisation into the strategic asset your business needs to win.
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