What is Customer Success?
Customer Success (CS) is an important function of an organization that is responsible for managing relationships with customers. Customer Success ensures that customers attain their desired outputs while using the product or service. It is a relationship-centric management, that coordinates customer and vendor goals for mutually beneficial outcomes. The goal of Customer Success is to make customers successful and provide them with support by achieving the maximum value of the product or service, which in return, increases the customer lifetime value for the organization. Effective customer success strategies usually result in increased upsell and decreased churn opportunities.
Why is Customer Success Important?
Essentially, CS teams did not exist 10 years ago. Over time, as products and services were developing at phenomenal rates, new processes have emerged to understand the pace and competition. Thus, the emergence of Customer Success came about primarily to reduce churn and increase customer lifetime value.
Customer Success has predominantly become important, especially for Software as a Service (SaaS) companies, for reasons such as:
- Analytics platforms can be complicated to use in the beginning as they can be configured in many ways depending on the user. Customer Success offers the support its users need.
- Often software is complex. A user guide or support ticket system is not always the best customer experience you can offer. No organization would want its customers to struggle to implement its product. Therefore, companies strive to make the process as smooth as possible. Customer Success ensures that it delivers the promise made by the Sales and Marketing team by connecting closely with customers and improving onboarding, offering training sessions and webinars and help them solve any issue.
- Competitors always try to take hold of the customers that you lose. It’s the Customer Success team that has to ensure that customers experience the connection between promises made and reality, by setting up the customers to gain the most value they can from the product.
- Churn rates can hugely affect revenues. As discussed, Customer Success is not just restricted to making customers happy, but also about making money. Successful customers typically increase revenue massively because they encourage their organizations to pay for more users, give referrals and spread the word around.
- CS teams often are the last line of defense for customers that are canceling their accounts. Once these customers do churn, it is the CS teams that conduct exit interviews to learn as much as they can from customers that are on their way out the door. This intelligence can be used to improve the experience of future customers.
Important Customer Success Trends
The responsibilities of the Customer Success team have changed significantly, exposing them to several new opportunities for customer growth, beyond what was traditionally possible from marketing and sales teams alone. The following are some of the emerging Customer Success trends.
1. Cross-Department Alignment
It is beneficial when the Marketing, Sales and Customer Success are closely aligned. Increasing product adoption and improving onboarding is very significant towards a customer’s journey. This would be challenging if handoffs from sales and marketing to customer success are not improved.
Cross-department alignment between sales, marketing and customer success will ease the initial steps when a buyer becomes a customer and will lay the foundation for a good long-term customer experience. Moreover, Customer Success is not the only team that benefits from this alliance. By coordinating with the CS team, marketing and sales teams can gain better insights into their most successful customer base, enabling them to target better-fit customers in the future.
2. Better User Intelligence
Reducing customer churn rate is a high priority for most CS teams since it is revenue-related. CS teams are aiming to minimize churn rates and develop more proactive initiatives by understanding customer health.
In order to lower churn rates, it is essential to have better visibility into customer health and user intelligence data. Although improving intelligence gathering is challenging, as it uses more than one inter-related source, it is highly important to study customer behaviors. One such technique to enhance this phenomenon is ‘Predictive Analytics’ which incorporates machine learning techniques and rule-based alerts.
3. Investing in Better Technologies
Technology is key to scale Customer Success strategies efficiently. Retention and expansion initiatives largely depend on how effectively CS teams can scale using better technologies and developing smarter processes. Most CS teams use multiple technologies such as CRM (Customer Relationship Management), email clients, helpdesk and spreadsheets on a daily and weekly basis.
Despite using these tools, you might still lack actionable user intelligence and encounter shortcomings in the customer journey. This shows that Customer Success needs better tools and dedicated solutions that enable them to work more efficiently. Effective Customer Success technologies allow upsell and cross-sell, renewal management, customer marketing, incident management, analytics and reporting and many more. However, it cannot be denied that maintaining customer relationships is vital. Henceforth, it is the union of customer relationships and better tools that is a winning combination.
4. Client Referrals and Advocacy
Loyal customers are the ultimate measure of Customer Success. This is not just because they don’t churn, but also because they refer the firm’s products and services which help generate new leads.
It is a noted concern that identifying potential promoters is challenging. However, despite this visibility constraint, customer loyalty can be measured through NPS (Net Promoter Score) and CSAT (Customer Satisfaction) surveys. Advocacy has been climbing up the priority ladder for many CS teams, besides the already heavy workload and small team sizes in most companies.
5. Data and Analytics Integrations
Integrating Data and Analytics for Customer Success is proving beneficial. It offers visibility to CS teams, which enables them to be proactive instead of being reactive. Educating the customers is a key driver for being proactive. Customer Success managers (CSMs), when reaching out to these customers in need, should educate them about the benefits of the features that they are unaware of. An analytics tool, such as Chartio, delivers data insights at the user level and helps CSMs identify these customers so that they can reach out to them in an appropriate way.
Customer Success can either make or break your business due to its increasing significance in most businesses. As these trends come into practice, CS teams will be empowered and be able to produce effective and efficient outcomes. Careful planning, designing appropriate strategies and integrating data and analytics to better analyze will not only reduce churn, but boosts customer retention and opens doors for many new customers.