The Consumption Gap

At a recent Customer Success event, I was introduced to a concept called the “Consumption Gap” during a presentation by Dan Steinman from Gainsight.  Although it was a term that I had not come across before, it’s not new; in fact, it was first coined by J.B. Wood in his book “Complexity Avalanche” back in 2009.  The term perfectly describes the gap between what your product is capable of verses what your customers are using.

In other words, it’s all well and good having a truly innovative product with regularly scheduled product releases that add a tonne of new enhancements but can your users keep up?  Do they have the knowledge, skills and most of all, time to take advantage of these new features or are they destined to gather “digital dust” forever more? 

This gap is not just a business issue – it happens all around us in our professional and personal lives.  One of the best personal illustrations that I can provide is the 65-inch Samsung TV which I purchased around 18 months ago and takes pride of place in my living room.

This television was a purely luxury purchase however after extensive research, much deliberation and negotiating a good deal with the retailer, I decided to treat myself.  Given the amount of time, effort and hard earned cash that I spent on this purchase you would think that I would be using the TV to its maximum capability?  Absolutely not - in reality, I probably am only using about a quarter of what the TV is capable of.  When I look at the remote control (which is about the length of my forearm), I have absolutely no idea about what half the buttons actually do.  I just use my TV for the key tasks that I need and after using it for 18 months, I have no immediate desire to explore further.  In this example, my “Consumption Gap” is around 75%.

​Following Dan’s excellent presentation on this subject, I was left with some fundamental questions about why the "Consumption Gap” exists that I wanted to expand on in this blog.  Depending on the type of business and products that you provide there could be several reasons why the gap exists, however here are some keys ones:

• Ineffective On-boarding:
  • Getting your customers off to the best possible start is fundamental in helping them realise the full potential of your product (read my "Customer Lift-Off" blog for more details on this) from the get-go.  On-boarding (whether in-person or remote) should never be just a walk-through of the User Interface and a listing of the available functionality, but tailored around what the customer bought your product for in the first place.  Failure to do this correctly from the outset will mean that there is a considerable "Consumption Gap" from the very beginning of your relationship which becomes even harder to bridge as new enhancements are released.
• Siloed Product Team: 
  • If your Product Team is working in isolation (either wholly or in part) and not getting the inputs that they need from customer-facing teams (e.g. Customer Success/Sales) it is highly likely that the roadmap they are working to will be out of line with what your users actually want.  Although future product enhancements may rank highly for “coolness”, unless they meet an actual customer need then much of their hard work will be largely wasted and the “Consumption Gap” will continue to increase.  It is also essential that the feedback from customer-facing groups into the Product Team is as structured as possible (i.e. prioritised, list of customers affected, £/$ value, etc) to ensure that they are clear on what their priority list should be.
• Poor Marketing/Communication Strategy: 
  • It is vital that you have an effective communication plan in place to let your customers know about an enhancement and most importantly, why they should care.  Customer Success can reach out to their customer base and create tailored messaging on this topic and Marketing should manage communications in bulk (ideally verticalised) to those accounts without a CSM.  Failure to get your message across to your customers about why an enhancement is going to make them more productive and successful will lead to poor adoption and a higher “Consumption Gap”. It should also be noted that your communication strategy should include executive sponsorship from your customer to help reinforce why this is important to the user-base.
• Customer Behaviour / Apathy:
  • We are all, to a degree, creatures of habit.  Whether it’s an exercise regime or using software, it’s hard to break out of a cycle of something that you have repetitively done day-after-day.  On average, it takes more than 2 months before a new behaviour becomes automatic (66 days to be exact).  Trying to convince your customers to do something different/new takes persuasion, persistence and most of all, clearly defined benefits (in language that makes sense to the customer) to establish long-term user adoption of new enhancements.
• Product Bugs:
  • Customers who have been convinced to try a new feature but been greeted with a fatal flaw (e.g. the “spinning wheel of death”, being stuck in a perpetual loop, slow performance, etc) will show their displeasure by going back to their old ways of getting the job done.  It is vital that an aggressive roll-out of new feature development is not at the expense of a rigorous quality assurance programme. 

• Poor User Experience:
  • User experience has never been so important.  Customers rightly expect in the age of Facebook, LinkedIn and Twitter that they can start using products and easily access newly released enhancements without investing a huge amount of time reading lengthy user guides or attending training classes.  If your product (or elements of it) are difficult and confusing to use, users will not stick around for long before giving up and never coming back.
• You’re an Innovate Company!
  • Having a "Consumption Gap" is actually a good thing!  If your customers are using every single aspect of your solution, then there is a significant competitive risk from others who will offer the “next big thing” and your organisation will be viewed as stale and lacking innovation.  Based on my experience, you should aim for the "Consumption Gap" to be no larger than 20% (i.e. your customers should be fully utilising at least 80% of what your solution can do).  Any less will leave your business wide-open to cheaper alternatives becoming a viable option.  It doesn’t matter if a competitor can only offer half (or less) of what your solution can do if your user-base is using your product in it’s very basic form.

When you consider that in the future, it is possible (and some might argue - probable) that today’s typical annual subscription model in the SaaS (Software as a Service) world will give way to an outcome based model where a provider only gets paid when the customer achieves their desired outcomes, the "Consumption Gap” will become even more important.  Organisations who get complacent about their customers adopting as much of their products as possible will get replaced by nimbler competitors who have a strong Customer Success ethos and provide innovative, relevant, intuitive and feature-rich products that customers actually want and regularly use.  ​

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Author Bio: Adam Joseph
Founder of CSM Insight who had previously spent 15 years managing Customer Success organisations for leading businesses.  Passionate about all things Customer Success and recently voted as a member of the "Top 100 Customer Success Strategists" in 2018.

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