So hopefully your customer success strategy for 2016-7 is well underway. In the second of three post, I wanted to share my approach on how I’ve built my customer success strategy for next year. As a reminder, I suggest that a customer strategy can generally be split into three primary activities:
- Acquire: find new customers
- Retain: keep your existing customers
- Monetise: expand revenue from existing customers
Last week’s post focused on Acquire, next week will focus on Monetise, so this week, let’s tackle Retain. This has to be the single biggest focus for any customer success function, as keeping your existing customers happy and engaged will always be substantially cheaper than constantly chasing new business. So how to chunk up this meaty task to define a strategy?
I’ve split Retain into three main activities, to allow the team to have clear focus on how we achieve our lofty goals of retention of 96% and above:
- Retention : engaging, re-engaging and renewing existing customers
- Adoption: helping newly acquired customers to achieve value
- Service: supporting customers when things go wrong
Retention: splitting out the purely administrative task of renewal from the engagement activities required to increase the probability of renewal is a game changer. Many business have a conveyor belt approach to retention, which may well work for the final renewal stage, but without engagement activity that is relevant and meaningful to the customer, will create uncertain renewal performance. Build a process that create numerous engagement touchpoint in your customer journey, with red flags that trigger high nurture / incubation events when the engagement falls.
No matter how time-consuming and frustrating it is to create customer health scoring (qualitative & quantitative data), this is always going to be the best indicator of propensity to renew.
2016 may be a good point to formally review the clunkiness of your renewal process – how much effort does it take for the customer to stay with you? How responsive are other functions involved in the process (finance, billing teams, etc)? How can you shorten the cycle and reduce the touchpoints, whilst still following essential steps in your renewal?
Adoption: It’s difficult, laborious and time-consuming, but the effort your success team makes upfront to help customers see the value of your product or service is the best way to create loyalty and advocacy. Engagement & nurture / triage activities feed a lot into this strand, but innovation is also key. At Workshare, we’re using our ROI (return on investment) model to help customer see proof that the money they spend gives them saving in time or money, or improves their efficiency and process flow. The next step is automating this in the form of self service reporting, but this takes time to agree product & engineering time to build the functionality. Have you built a sufficiently robust business case to convince your colleagues of change you want to make?
We’re all craving better tools to automate process and make insight easier to digest. Why not look beyond your business, making use of LinkedIn connections and colleague introductions to discover tips and tricks from peers in other businesses? This is also very meaningful where you work with partners and resellers, where selling is often more important than driving adoption. Consider introducing parter & reseller training to facilitate adoption. High levels of adoption give you a bigger pool of customers to build your advocacy programme (which we’ll cover in next week’s post on Monetise.)
Service: Even if you’re a pure SaaS business, someone needs to take responsibility when things fail with your product and service. The reactive element of the customer journey is something that is often better managed by more traditional businesses, but how well defined is your service recovery, and who is responsible for it? (Hint: Customer Success!!) For some, a dedicated support team with the right technical skills is the answer. Focusing on dramatic increases in FCR (first contact resolution) and encouraging customers to discover self service also creates opportunities for support to add value by identifying patterns that leads to issue avoidance.
If you don’t have a formal support structure for customer, then simple processes, identifying how reactive process can restore customers to a healthy state, without detracting from your proactive success activity. Ensure the success team understand what to do, and engage the other team required to help (product, development, etc) and reach agreement on a set of SLAs to fix issues first time every time.
I’ve got pretty strong views on the measures and outcomes for the Retain strand. Focus on fact: how many customers, how much revenue did you start the period with, and at the end of that period, how many of those customers, how much of that revenue did you keep? You’ll have many other metrics underneath, but if you deliver exceptional retention, adoption and service, the numbers will speak for themselves!
Next week, in the third and final post on building your customer strategy for 2016, we’ll drill into Monetise and consider success’s role in Advocacy & Growth. Happy strategising!