Historically, most software application vendors shied away from helping their customers define metrics for success. The traditional behind-the-firewall software vendors of the 1980s and 1990s were focused on selling customers on the vision, but had little involvement in helping to implement the vision. Software vendors collected upfront payments from perpetual license fees then moved on to the next account. Achieving outcomes was someone else’s problem. The customer either attempted to realize the benefits from the software investment through their own in-house IT organization or through an outside professional services firm.
However, over the past 10 years the SaaS model has disrupted the role of software vendors in customer success. Failure to meet expectations will result in the customer cancelling the subscription and the end of the lucrative recurring revenue stream. Category leaders in this new era have software have risen to the challenge.
They no longer shy away from conversations about outcomes, KPIs, and metrics. In fact, many category leaders are attempting to help customers redefine their definition of success. These category leaders guide their customers to new behaviors by introducing a set of Key Performance Indicators and metrics to measure progress.
Quantifying Human Resources
Glassdoor, a leader in the talent and recruiting software sector, offers a great example of how category leaders can redefine success for a business function. Glassdoor is trying to change the way human resources functions are goaled and oriented. HR has historically been a function that most executives have viewed as “soft-skill oriented” with lots of “touchy-feely” activities whose impact is difficult to quantify and measure. But Glassdoor is changing that. The company has introduced a set of hard data metrics that is continuously being updated by a crowdsourced community of users.
Defining New Metrics for Success
In effect, the company has introduced an NPS equivalent for employee experience with the potential to revolutionize the way human resources departments measure their employee engagement. Users on the Glassdoor site can rate their employers on culture and values, compensation and benefits, work/life balance, senior management and career development opportunities. The result is a set of quantifiable metrics that job candidates can use to compare different potential employers. Glassdoor also enables companies create KPIs they can use to evaluate their own performance.
Perhaps, the greatest stroke of genius in Glassdoor’s approach has been to push the employer brand metrics and KPIs into the public domain. The Glassdoor rating is effectively a live report card on company culture, compensation and management that is in the public domain. Everyone from prospective employees to prospective investors can check out the CEO approval rating and the company’s attention to work-life balance.
To draw even further attention to its ratings, Glassdoor publishes regular rankings of companies based upon its data. Examples include:
Getting listed in these rankings has become a badge of honor for human resources organizations who are all aspiring to strengthen their employer brand. These rankings drive competition between companies that encourages the behavior changes sought by the category leader.