In today’s “subscription economy,” consumers want more than a month-to-month delivery of a product. Technology and services available for companies to do their work have advanced so much that the switching costs are no longer a deterrent. An 18-month go-live timeline can leave teams with a bad taste in their mouth and more susceptible to competitor encroachment. The B2B SaaS world has responded appropriately through the mass adoption of Customer Success–a discipline, a function and a title all in two words. But what truly is Customer Success today? Here we’ve tried to break it down simply, touching on what we believe makes us and our customers mutually successful.
Why do I need Customer Success? What’s the big deal?
For high-value SaaS companies, account management is a dead art. It’s not efficient or cost-saving to fight every customer fire. Customer Success is a response to traditional Account Management due to an influx of access to numerous and essential software options, demanding competition and simplified implementation processes. Today customers demand to know they can get quality help and knowledgeable partners to meet regular business goals. A Customer Success Manager’s job includes setting mutual expectations with the customer throughout the relationship but also being there when the customer needs it most. We think it means the perfect balance of service, without losing your shirt or creating a hand-held customer.
What can help your SaaS company are the benefits Customer Success can provide including (but not limited to): improved increased revenues (LTV), customer retention & growth, expansion, and an overall goal towards Customer Success as a company discipline. In a previous infographic, we outlined that a 5% increase in customer retention can result in an increase of total ARR by 25 – 125% over the course of 10 years. Simply making sure you always know what your customers’ expectations are and surpassing them year after year can help. Know their internal problems like you know yours. More suggestions as you keep reading!
Additionally, you want to grow your business with your customers as they continue to develop and grow. The probability of converting a current customer has a 60%-70% chance than converting a new prospect (see the previous infographic). Compare the revenue benefits of upsells and renewals with the cost to maintain a lifetime customer, and the decision is simple. And while departmental Customer Success is positive, we encourage a company-wide adoption of the discipline to create positive, loyalty-building relationships with any potential and actual customer regardless of the function. Customer Success helps create advocates out of your loyal customers, which in turn increases expansion of their direct references and referrals. Customer Success can create customers so ecstatic that they don’t stop talking about you–we’ve witnessed it!
Which companies use Customer Success?
In order to implement the discipline of Customer Success to its full potential, the current “power users” tend to be high value, B2B SaaS companies. While many companies develop both high-touch and low-touch customer bases, the most value of customer success comes to companies who have regular touchpoints with customers. Regular (but not abrasive) contact with your customers allows the opportunity to get ahead of their problems with proactive management. Customer Success also pairs quite nicely with companies that have implemented Expert/Assurance/Managed Services that customers need to be successful. When the services are created and implemented correctly, it turns into a win-win-win for the customer, company, and CSM. Listen to From Expert Services to Mutual Advocacy: It’s a win-win-win story to hear an expert services success story.
What are 4 things I have to get right in Customer Success?
Implementing Customer Success principles in your company doesn’t have to be painful, we’re here to help! We chose four pillars you can think about and bring up at your next meeting. See below for more detail.
- Focus on customer’s successful attainment of their outcomes using your solution/services
It’s imperative to track, not only before the relationship starts but throughout, the customers expected outcomes, value points and wins to continue forward movement. Establish a verbal or written routine that clarifies what progress has been made, and what is next. Display achievements and future projects for each QBR/Retrospective. Celebrate small and big wins together–offer words of encouragement and play to positive reinforcement!
- Use a proactive approach to account management
Proactive management is characteristic of established Customer Success teams. Tracking time against work to analyze effort, creating customer-focused processes, and making sure you know your customer satisfaction levels — these are what allow you to get ahead of problems for your customers. Tweaking your delivery and communication becomes simpler and less time-consuming with this information.
- Implement agile work and relationship management
As in proactive management, the first step to agile work and relationship management is understanding why your customer purchased your product or services. Know what they hope to accomplish and track the metrics it takes to succeed. Listen to the customer and how they respond to the process and adjust your management, suggestions, and support accordingly. We also have an entire eBook about this topic–check it out here!
- Create a strategic plan to build a culture of mutual advocacy and partnership
We can’t say it enough: Customer Success as a company-wide discipline will lead to Customer Advocacy — you can support your customers as much as they can support you. Mutual advocacy and a true partnership (above the standard exchange of product/service with cash) is the key to revenue generation. For example, by truly understanding what your customer does, you can spread the word to friendlies about your customers’ product or services. A customer will do the same for you if the relationship is a partnership and not simply transactional.
Where does Customer Success start?
Customer Success begins in a prospect’s first interactions with you. Is your website easy to use, intuitive and informative? Does it collect their information at the appropriate times and send them the right information at the right times so they keep remembering you? Maybe a prospect heard about your company from one of their partners? Every single touch a person makes with your company can help to push them in the right direction. They’re all important and worthy of analysis.
By the time a customer makes it through the sales process, Customer Success teams are best to pay attention to the interactions on the sidelines. Proper communication between Sales and CS close to a contract signature can minimize handoff risks and fumbles that can set the relationship up for failure. A formal handoff meeting between the customer, Sales and Customer Success is key to creating a positive first impression. At this point, the Sales team is not the owner of the holy grail of customer information–both CS and Sales have equal information, and CS is now equipped with the strategy to grow the customer year after year.
Customer Success, Sales, Marketing and R&D all touch and influence the customer throughout a partnership. The below infographic shows the flow of information and ways teams can work together to achieve a customer’s goals.
What makes a good CSM?
A good Customer Success Manager keeps customers at the forefront of every decision and action. They’re efficient communicators, know when to push a bit, but also when to hold off. They make a customer feel supported and in the loop when there might be some upcoming uncertainty. They’re striving for mutual advocacy. Above all, a good CSM knows their customers. They know which lifecycle is best suited for one’s needs and how to present their solution/services for maximum value gained. Do you know the kind of CSM you are? Compare your day-to-day with this infographic.
Be on the lookout for the rest of our Definition blogs. Find part 1 of “The Definition of Customer Loyalty” here!