If you are in the business of keeping customers, in particular, if you’re a SaaS business, you’ve probably got a customer success team. There are some cracking blogs and guides out there – check out articles from Jeanne Bliss for inspiration, Gainsight for the system, Blue Nose for insight and For Entrepreneurs for meaningful metrics. In fact, there’s a HUGE amount of information, and with many managers and leaders being new to customer success, it can feel rather overwhelming. As I’m busy defining my strategy for the next two years, I decided to go back to basics to ensure I was building the right structure for the future. So let’s start at the beginning.
Customer success often starts as a churn avoidance function. Too many customers don’t stay with your business, you may even know why (product or service, or both.) A customer success team have the charm, flexibility and customer focus to stem the tide. Change from reacting to churn (it’s to late when they’ve left), to focusing on retention (proactively managing customers means you re-engage them before they churn.) Your colleagues in finance should be able to help breakdown the overall churn to you can focus on cohorts to target your experiments to fix churn. This first stage is the most painful – you’re facing pressures to justify the headcount, you’ll probably lack systems and data to drive insight into customer behaviours, and your team’s role will constantly be changing. Don’t give up hope – persevere, you’ll get there in the end!
The next stage is adoption. As you are in control of your retentions, you’ll start to understand the significance of adoption. Selling a product is only half the battle – ensuring that the users change their behaviour to adopt the product takes a lot more effort. As I’ve said many time, forming new habits goes against human nature, so customer success becomes the secret weapon in helping users to adopt the product. Take the insight your team gathers and feed it into product – they should be evolving the product so that human intervention is not required! The more the users form a habit around your product, the more reliant they become on your product. It becomes easier to develop a model to demonstrate ROI (return on investment) that shows the decision makers that your product is something they need – and increases your retention levels. Your sales / commercial operations function can help you turn data on your product usage into something that your success team can use to better respond to customers.
Hot on the heels adoption, you should be entering the stage to drive advocacy. This is really variable, depending on your type of business, but it plays to our human emotion to align ourselves with and be vocal about things we love and rely on. An advocacy programme needs resource and budget. It will invariably involve a virtual online community aspect (giving you scale) and potentially a high touch programme bringing together your high value customers. Salesforce pioneered the model of bringing together prospects and customer fans at events – the customer extoll the virtues of your product, get a chance to network, learn new stuff and showcase their own profile, so it’s a real win-win scenario if it’s well structured. It’s a great opportunity to partner with your marketing colleagues to ensure these events are run seamlessly.
Once you’re bringing together your customer fans, online and at events, you are tapping into Richard Branson’s Virgin secret sauce – happy engaged customers are better than any dollar spend on marketing! Now your ready for the final stage of customer success evolution – growth. Whilst some organisations aim to achieve this stage from the outset, without solid renewal performance with customer fans who really see the value of your product, you success function will be doomed to failure. Growth through cross-sell and up-sell is NOT an additional sales function. Sales find new business and are actively involved in selling additional products and services. in the growth stage, customer success drive expansion MRR (monthly recurring revenue) and professional services (monetising the high touch deliverable around deployment, training, customisation.) At this stage, sales and success are joined at the hip, aligned around the goal of keeping a customer, promoting growth and nurturing an ever deeper relationship.
If you’re already in the growth stage, congratulations, you are at the top of the tree! For most, still working toward this goal, is your 2016-2017 strategy defined with clear outcomes to reach the pinnacle?
PS For the more observant amongst you, you’ll notice customer success works best when you engage many different parts of your organisation. It’s not a team that works in isolation, but an ethos that unites the whole business around your customers.