Do Finance and Accounting Help Your Customer's Experience?

In the traditional business model, finance and accounting are administrative functions responsible for producing accurate financial documentation that analyzes past performance, identifies potential financial issues, and helps leaders avoid or mitigate risks in the future. Most of the emphasis is on reporting and control, compliance, and fiscal management. These are all necessary business functions essential to successful operation. Most business leaders don't consider these back-office functions when they think about creating superior customer experiences and building better customer relationships.

Inbound organizations ask billing, accounting, and finance to solve for the customer and assist in the buyer and customer success journey. In addition to the basic administrative functions, the back office provides a deep level of decision support for customer-facing teams. Finance and accounting must help the company surface the value that is invisible to standard financial practices, value that is a critical component of an inbound organization's strategy and success.

Customer interaction with finance and accounting is rare, but these episodes can make or break relationships. Have you ever had a positive interaction with a financial or accounting department? One where they knew your name, recognized your status, had easy access to your customer records, listened to your inquiry, and settled the issue with one email or phone call? You felt special, empowered, and happy.

Now consider how many negative experiences you have had in the last year paying bills, stopping a service, reversing a charge, or disputing an entry. Some companies make it hard to pay a bill, or they supply confusing, conflicting, or misleading billing statements. Some companies surprise you with unauthorized charges. Some companies provide email as the only recourse for resolving an issue. A customer interaction with billing or finance is often the least considered step in the process, from the seller's point of view, but is critically important in the customer success journey.

Traditional finance departments focus on processing a transaction rather than helping the customer navigate the buying process in a way that adds to the customer experience. Inbound organizations make the finance department accountable for the customer success journey. Does your billing or accounting department ever consider the customer experience in their day-to-day activities?

Accounting, billing, and legal teams are in a tough spot. If they are too rigid and internally focused, they can make good customers immediately regret their purchasing decision. Have you ever had seven pages of 8-point-type terms and conditions text jammed down your throat right at the point of purchase? Inbound billing, accounting, and legal departments are very aware of the impact that they have on customer satisfaction and experience and recognize the impact they have from the customer's perspective.

A few years ago, as HubSpot was growing quickly, they realized they were losing customers at the first annual contract renewal. Because some customers received a promotional offer or discount for the first year of using the HubSpot platform, the yearly renewal at full price came as a bit of a surprise. This was not a good way to introduce the fact that the price was going up to standard levels. Customers perceived it as an immediate price increase.

HubSpot decided to implement a contract renewal process led by a dedicated customer renewal success team. This team holed up at HubSpot offices in Cambridge, Massachusetts, for over a month to study the data, review customer behavior, and model a better process. The team invested time in understanding the ideal buyer persona at the renewal stage of the customer success journey, and to examine how customers want to be treated and served at this critical point in the relationship.

The customer renewal team worked with the finance team to develop a renewal model where customers would be able to choose their price. HubSpot didn't want to have conversations with loyal customers and haggle over a new discount for extending a subscription. The team came up with a self-service option that provided the customer the renewal process they wanted.

HubSpot would sometimes exchange a longer contract period from the customer in return for discounted fees. Customers could essentially pick their pricing. The lower the price, the longer the commitment that was required. This resulted in a classic win-win between HubSpot and the customer.

Mike Ewing, HubSpot customer renewal manager, says:

Raising prices after extending a discount to get the relationship started makes sense in a competitive environment. But when it comes time for renewal, we can't say, “Here's your bill. Pay it.” That sets us up for confrontation and a negative customer experience. By conducting health checks, starting the renewal process well before the contract due date, and allowing customers to pick their ongoing price, we build on our relationship and let our customers get even more value from HubSpot when we have renewal discussions. Our finance team gave us the tools to be able to have the renewal conversations in the right context and tone, one of helpfulness and partnership.²

Most finance and accounting departments are not connected to the customer acquisition and relationship building process like this. They are unaware and unconcerned about their impact on the customer experience. They are set up to efficiently process orders regardless of the impact on the customer success journey.

An inbound organization leverages billing, accounting, and finance as an opportunity to enhance the customer success journey.

Finance's Role Moving Forward

Inbound organizations embrace the role of the finance, billing, and accounting departments in the customer success journey. They create positive customer experiences by designing effective payment terms, transaction and billing methods, and financing options designed to make it easy for prospects to buy. They design the details of the financial process with the input of marketing, sales, and service teams and then they make sure that the processes are successful via quick surveys and customer check-ins. Inbound finance teams work with marketing, sales, and service to develop the right metrics and key performance indicators to measure and then report regularly on their progress.

An inbound finance team should create models and profiles for identifying good fit customers regarding the cost of customer acquisition, lifetime value of a customer, annual contract value, monthly recurring revenue, gross margin percent, support costs, customer churn, and other critical finance milestones in the customer success journey.

Inbound finance leaders understand that responsiveness and follow-through is crucial, and that modern buyers expect help along the way. Financial interactions that remain honest, engaging, and buyer focused help retain good fit customers.

Inbound Value on the Balance Sheet

Todd tells this story of inbound value:

A client once asked us to help grow the value of their business because he wanted either to sell it or pass it along to his son. They chose an inbound strategy to grow awareness, drive targeted leads, and expand into a new market. The company was a regional manufacturer located in Texas, in the oil and gas industry. Over a four-year period, we helped them grow the business while expanding into new geographies because the improved performance of the website allowed them to connect with potential dealers around the world.

When the business eventually sold, we asked the owner how his company was valued by the acquiring firm.

His answer was “Three.”

I said, “Three? Three what?”

He replied, “Three times what the company was worth before we started implementing inbound.”

Breaking down the cost justification of the purchase was fascinating. The acquiring company used a standard valuation approach to measure the revenue and cash flow increases resulting from more leads and sales. They also placed a premium value on the global brand recognition and a series of marketing assets that didn't exist before the move to inbound. They put a premium valuation on these inbound assets, like high-ranking organic keywords and the expanded contact list, including detailed lead intelligence about each contact and their engagement activity. They put an additional value on the process for communicating with and converting contacts from casual prospects into active buyers.

The buyer was willing to pay a premium for the company because they were an inbound organization. This inbound equity was a direct result of inbound activities, processes, and resources that built the value of the organization.

In this case, inbound assets valued by the acquiring company justified a premium price.

A company in our industry went out of business. The creditors held an auction to sell off the assets. There were millions of dollars' worth of capital equipment for sale, along with the standard office equipment like desks, chairs, and telephones. The company failed due to a combination of unethical business practices and poor customer retention, but they did a good job with content creation and SEO. When the company assets went to auction, everything sold for pennies on the dollar, except for one item. Their central web server.

This server held all the website assets, all site content, and contact data from the company CRM. The server was the most sought-after item for sale because of the inbound assets that it contained. The educational content, inbound links, landing pages, calls to action, and the inherent keyword ranking was way more valuable to the buyers than any other physical asset. The book value of the server was a few thousand dollars; the assets contained on the server sold for more than $500,000 at auction.

Inbound Legal

A legal department can contribute to building enterprise value while solving for the customer as part of an inbound back office.

Radical transparency, an essential part of an inbound culture, works the same way with legal terms and conditions. Transparency applied to the customer success journey means clearly stating legal information on your website for everyone to view. This includes information like data usage parameters, privacy policies, definitive terms of use, and conditions of service. Inbound legal teams have to maintain a delicate balance: they have to protect the legitimate interests of the organization while protecting the rights of their customer without impacting the buyer experience. Inbound legal teams find the balance between transparency, liability, and regulatory compliance.

John Kelleher, HubSpot chief legal counsel, describes his team this way: “We are looking at ways to stay ahead of the curve and provide conscious customer engagement at points in the journey like payment and renewals. The key is to develop trust in the relationship.”³

Most modern buyers don't consider terms and conditions an important component of a great customer experience, but inbound legal departments make sure the information is accessible on the website, available in multiple languages, and states points clearly.

Buying HubSpot software is pretty simple from a final transaction perspective. The buyer completes a short form, enters their credit card number, and hits the complete the transaction button. But what if you are in Japan and the only binding legal terms are written in English and must be approved in English?

At the point of completing the transaction, a buyer is faced with the prospect of reading 18 pages of legal jargon that may or may not be understandable to the buyer. Throw in the possibility that you are not a native English speaker, and you now have a touch point in the process that is less than helpful from the buyer's perspective.

Frank Auger, HubSpot CIO, explains HubSpot's response:

We translated the terms and conditions into Japanese, and some other languages, even though the buyer must agree to the terms in English. At least now they can see in their native language and understand what it is they agree to. We will continue to build more and more transparency into the legal details of the process, so we do not detract from the experience of our buyers at the point they are deciding to finalize the agreement and move ahead with HubSpot.⁴

During the transactional steps in customer onboarding, HubSpot creates a very user-friendly terms of service document and outlines the details for each buyer. The nonlegalese content is designed to provide a quick reference point, educate new users on the basics, and state the commitments from both parties.

With these steps, the HubSpot legal team meets the velocity of the buyer journey and does not slow it down. This education process solves for customers first, reduces customer churn, and eliminates many potential issues for the sales and service teams down the road.

John Kelleher further states:

We see legal as being a supporter of the inbound culture by helping employees prepare for and manage the responsibilities of transparency. Transparency also imposes a burden on legal. We cannot only say no but must explain our decisions regarding the culture code and the business objectives. We must be transparent with our team, including partners and vendors because we know this process builds trust.⁵

An inbound legal team routinely works with customer-facing teams and trains them on legal issues like terms and conditions and cancellation policies. The principles of inbound apply to the legal department as well. Legal should train, educate, and share content with employees about the legal policies and decisions that impact them and their ability to deliver an inbound customer experience.

Inbound IT

Inbound organizations run on data. An inbound IT department provides the core systems and data to make decisions closest to the customer. Inbound IT teams provide the tools that allow your business to get that data, organize it, and share it. The organization then develops insights and actions improving the customer experience, using a centralized view of the customer. An inbound IT organization supports a People First inbound culture, creates a departmental MSPOT, and is in alignment with the mission of the company.

An inbound IT team is focused on building the infrastructure needed to support the customer success journey. This process includes a modern CRM, marketing automation system, and the office automation applications to fill in the gaps. IT must stop turning their backs on customers to protect the walls they have built around their department. We have seen too many examples of IT people putting self and department over the best interests of the company and the best interests of their customers.

We know of numerous examples of IT departments hobbling marketing and sales teams with obsolete systems for managing websites, tracking customer data, and communicating with customers. In the name of protecting their turf, IT prevents the organization from adapting to the changes in buyer behavior.

IT should develop the inbound customer technology stack and collaborate with the customer team to create digital insights for leaders to track the buyer journey and monitor the customer experience. The technical tools exist to do this. What is lacking is the vision, motivation, and accountability for IT to make it happen. Connecting IT to the culture and using tools like an MSPOT will align IT with the mission of the company.

IT is important in the transition to inbound because they can be either a huge bottleneck or a huge benefit. Transparency, autonomy, frequent communication, using data to make decisions closest to the customer, and building trust all require technology to master. Becoming an inbound organization requires IT to lead the charge to facilitate communication internally and externally using appropriate tools.

Bringing the inbound organization and inbound beliefs to the back office will be the true test of whether leaders completely buy into these ideas.