Customer success has evolved over the past decade. Most successful SaaS companies now have a dedicated customer success function, a trend that’s expanding into manufacturing and other industries. Rightfully so! Businesses now understand that customers who continue finding value tend to become product experts and loyal brand advocates. Hold the phones, though:
What is customer success?
Consider this an introductory guide to customer success, broken down into five sections. Aside from resources, graphics, and links, you’ll notice quotes from Mikael Blaisdell. Baisdell is a leading voice in the SaaS/Cloud sector on customer retention strategies. In 2014, we interviewed Blaisdell about the origins and arguments for a customer success program. Many of his ideas are still relevant to customer success as we know it today.
Table of Contents
- What is Customer Success, Explained
- How to Measure Customer Success
- Essential Customer Success KPIs
- Types of Customer Success Software
- The Ongoing Customer Relationship
What is Customer Success, Explained
Customer success encompasses the ongoing efforts of an organization to continue delivering value to its customers. A good customer success program aims to deliver value throughout every step of the customer journey, from pre-purchase to post-sale and beyond. This can include (but isn’t limited to) onboarding, product training, customer service and support. A comprehensive customer success strategy requires both a clearly defined owner, as well as awareness and buy-in from stakeholders across the organization.
You can’t abandon the customer after the sale and leave them solely responsible for getting value out of their investment. Both parties have to win in terms of measurable profitability and productivity, and to continue winning, or the relationship ends and the money stops. –Mikael Blaisdell
How Do You Measure Customer Success?
A well-run customer success program involves many parts of an organization. As such, there is a variety of data that can help organizations measure the value of their customer success intitiatives.
The starting point ought to be the measurement value gained by the customer. A customer that knows how much they are profiting from their usage of your technology is very unlikely to want to leave, and keeping customers moving up the value path is the CSM’s basic purpose. At the same time, you need to measure the profitability increase you are delivering to your own company. –Blaisdell
3 Essential Customer Success KPIs
Indeed, there are a number of ways to measure the success or failure of a customer success program. Whichever KPIs an organization uses, it’s important to keep in mind the importance of measuring value delivered to both customer and organization. Here are three customer success KPIs that capture internal and external value well. For an expanded list, see our list of six customer success KPIs you should care about.
Customers come, customers go—it’s an unfortunate but necessary part of business. As a performance metric, though, customer churn can be highly useful in understanding the reasons why customers churn. With this information, customer success managers can help organization improve problematic customer touchpoints and churn smarter.
Churn is a cumulative beast … if you were willing to spend X in customer acquisition cost, then you need to seriously consider spending Y in customer retention costs to defend that revenue stream. You can’t just take it for granted that it will somehow automatically continue on forever. –Blaisdell
Net Promoter Score (NPS)
For any organization, the extent to which its customesr would recommend their product or services is an important metric. Net Promoter Score measures this sentiment and offers an aggregate score for companies to keep an eye on. Question is, what part of the customer experience is creating neutral or negative NPS scores? For more tips, read our guide to what Knowledge Managers get wrong about NPS score.
Customer Effort Score (CES)
CES is one way organizations can measure a customer’s perceived level of ease at various points throughout the customer journey. In terms of understanding and fostering customer loyalty, CES has proven particularly useful. According to Gartner, CES is “25% more predictive of customer loyalty than the next best metric.” Loyal customers become brand advocates, product experts, and—most importantly—they renew. These are all aspects of business that customer success professionals are particularly interested in. Read more about customer effort score.
Types of Customer Success Software
There are a number of vendors in the space, and more are coming, driven by a clear need for customer retention tools. We’ve got a full range of marketing technology, sales force automation, customer support tools—what we need are resources specifically designed and built for customer retention and relationship expansion. –Blaisdell
If the rapid proliferation of vendors is any indicator, the demand for customer success software and tools is clear. According to Blaidsell, customer success solutions come in a couple categories:
- Usage monitors
- Account management technology
- Customer interaction management
- CSM response automation
- Customer success team management tools
The Ongoing Customer Relationship
Good or bad, a company’s customer journey is one that potential, new, and existing customers are continuously entering, passing through, and—sometimes—exiting.
Understood this way, customer success represents the authentic ownership of the ongoing customer relationship, and that’s still the key issue today as the new profession of Customer Success Management is evolving. –Blaidsell
Most companies now have a dedicated customer success function. Considering the demonstrable value of customer success to both customer and company, it’s not if today’s businesses will build a customer success team, but when.
For an in-depth discussion on implementing customer success, see our webinar: How To Make Your Company Customer-Obsessed.