Customer Success: How Innovative Companies are Reducing Churn and Growing Recurring Revenue
🔗Chapter 2: The Customer Success Strategy
Three basic benefits that come from executing customer success well:
- reduce/manage churn
- drive increased contract revenue for existing customers
- improve customer experience and satisfaction
if your product is not good enough or your implementation processes do not meet customer requirements or your sales team is continually setting proper expectations, you will fail
Customer success means selling more stuff to your existing customers
Success vs support:
|Customer Success||Customer Support|
|Financial||Revenue Driver||Cost center|
too often, because of the similarities, customer success is initially formed inside the support organizaiton
this does not typically lead to success. What usually happens is that customer success becomes a type of premium support offering. examples:
- improved SLAs
- extended hours of support,
- multigeography support
- designated points of contact
- direct access to level 2 support
these are all good things that people should and will pay extra for, but they are not Customer Success
They are primarily reactive to incoming customer support problems and will ultimately be driven by efficiency
In contrast, customer success uses data to proactively predict and avoid customers challenges and will usually be measured by retention rates
Customer success drives revenue
Customer success is an organization that drives revenue in two ways:
- renewals (avoidance of churn)
successful customers do two things: remain customers and buy more stuff from you
🔗Customer success is:
CS teams use data and analytics to determine which customers should be acted on, either because they appear to be at risk or because there appears to be an upset opportunity.
🔗is success oriented.
Success metrics drive top-line revenue growth.
for customer success, key #csMetrics are often renewal rates, upsell percentages, overall growth of your customer base
predicting outcomes such as churn or upset
time spent with a struggling customer to ensure retention is more valuable than spending with a happy customer to get a higher satisfaction rating
figuring out who to talk to before they need to call you
🔗Impact of Customer Success
customer success is not a philosophy slated to the organization by the same name it must become an idea that permeates the entire company and culture.
ensure that one person is the owner of the customer success metric, which might be a renewal rate, a net retention rate, or a customer satisfaction score #csLeadership
Assign it to someone and give her the same authority that you give to your sales Vice President to make his number. The authority to shake trees, push on other organizations, fight for resources, make strategic business decisions, or all of the above #csLeadership
the primary job of the leader of your customer success efforts is to ensure that all other organizations are consistently thinking about retention #csLeadership
In a recurring revenue business, CS revenue responsibility will outpace Sales responsibility very quickly 4-5 years.
In a recurring revenue business, there's no such thing as post-sales. Every single activity is a pre-sales activity.
One of the jobs of a great CSM is to always be asking the question, "Why does this customer need my help right now? What could we do or what should we have done differently upstream so I would not be needed for this task?" #csLeadership #csProactive
the job of customer success is to help the customer and then apply pressure in the organization to make sure it doesn't happen again.
the best customer experience is not to have someone who can help when needed but needing that help less and less frequently #cx
So much of what she (VP of CS) does to move your company forward has to do with influencing others who do not work for her. She needs to have the gravitas, incentive, and skills to go toe-to-toe with the VP of Sales or the VP of engineering or the leaders of any of the other organizations. #csLeadership
In many ways, customer success leader will bear a striking resemblance to your VP of sales with a little bit more of a service orientation instead of a closing mentality #csLeadership
🔗Chapter 7: Customer Expect You to Make Them Wildly Successful
Delivering wild success requires you to understand three fundamental things:
- how is your customer measuring success?
- is the customer achieving that value?
- what has the customer's experience been with you along the way
define an initial milestone and track that time to first value
- great content (knowledge base, best practices, how-tos)
- and an efficient means for delivering it
determine what is the key metric or unit of currency that they're using to measure success
A good tool to use to help drive customer direction beyond first value is an effectiveness model demonstrating value and progress
If you've worked through a difficult situation collaboratively with a customer and shown your true colors as a partner or if you've accepted responsibility, identified short-term milestones--then met those milestones--regained trust, and made your customer successful, then you'll understand and empathize with the statement: "the strongest steel is forged by the fires of hell"
build feedback mechanisms into your app: ask the user if something is confusing them when they pause for too long on a certain page in the process #onboarding
if a new user hasn't reached a certain point of value in your application (as defined by you), a triggered email could be the way to stimulate their progress. #onboarding #customerJourney (requires mapping out the ideal customer journey)