How to put Customer Success at the heart of your business
19 May 2017
The concept of Customer Success was first born in the SaaS (Software as a Service) arena, where companies focus on supplying software subscriptions or licenses rather than selling their products outright. This service-oriented approach makes customer retention the core focus – and when managed well, this business model allows firms to create more reliable revenue streams due to repeat purchases, up- and cross-selling. However, because renewals can be cancelled easily, the supplier’s financial performance is wholly dependent on the customer’s success in using their solutions.
Customer Success as a business strategy is extending beyond information technology companies into a range of industries including mobile communications, broadcasting and the automotive sectors, to name but a few. It does not only benefit firms that focus on professional services or those that have gone beyond selling products to offering services based on their products. Fundamentally, Customer Success should be an objective for any company, in either the B2C or B2B environments, that aims to do business with its customers more than once.
The core goals of Customer Success include:
- Maximising the value that your customers generate from your solutions;
- Boosting customer retention and loyalty;
- Encouraging successful customers to refer new business; and
- Ultimately increasing the value that you can derive from your customers, fuelling profitability and growth.
What does ‘Success’ look like for your customers?
The very first step in any Customer Success strategy is to define ‘Success’. This definition is not focused on your products, services or solutions. It’s also not centred on your goals as an organisation. Rather, it’s all about your customers. What does ‘Success’ mean in their world, business or industry? What are the unique challenges that they’re looking to solve – and why? What are they hoping to achieve by investing in your product or doing business with you?
It’s important to note that this definition is not a static one. It evolves over time, as customers move through the sales pipeline; and as their businesses grow, industries evolve and circumstances change. Once you have made the sale, signed the contract or won the account, your customers will continue to realign their goals and adjust their expectations accordingly. It’s important that you maintain a current understanding of your customers’ goals and expectations, so that you can continue delivering them the value that underpins their success.
Managing your Customer Success business model
Whilst closely aligned to the well-established concept of customer-centricity, which places the customer at the centre of an organisational approach, Customer Success is a relatively new concept in the corporate world; and best practice in this area is still emerging. Organisations are approaching this model from many different angles, in terms of accountability, systems and structures, terminology and metrics.
One thing that has become clear, however, is the fact that Customer Success is more of an enterprise-wide strategy and culture than the notion of giving one team of customer service or retention specialists the task of keeping customers happy. Customer Success is a way of thinking that influences all actions, decisions and goals in every area of the business.
Measuring ‘Customer Success’
In a previous article, we looked at measuring customer satisfaction and customer experience, highlighting that customer satisfaction is understood to be passive and an unreliable indication of future behaviour.
A focus on customer satisfaction generally goes hand-in-hand with traditional customer service (or customer support), which is approached as a separate function within a company and not a strategy that underpins every action and decision. A business may be very good at handling customer queries and complaints, but it’s still taking a reactive approach to managing the customer relationship.
Customer Success is very different. It is a proactive strategy that focuses on customers’ broader business needs and long-term goals – rather than only tackling issues as they arise. Soothing pain points is important, but it is only one step towards earning your customer’s trust and loyalty. Loyalty requires a holistic understanding of customer needs and proactive action to positively influence Customer Success. (For more detail on the difference between customer service and customer satisfaction, we found this table to be very useful.)
When evaluating the health of a client relationship, Customer Success is evolving as the gold standard; and a whole raft of new metrics are emerging to measure Customer Success. For example, the Customer Success Magic Number measures the revenue generated by renewals and up-sells during a specific period divided by the cost of the Customer Success and customer support team. If the number is 5.0 or more, then your Customer Success efforts are having a positive impact on revenue. A more straightforward metric is the Customer Success Batting Average, which divides the number of customers renewed in a period by the number of customers eligible for renewal in that period. These are just two of many new metrics that are emerging. How your organisation measures Customer Success depends entirely on your solutions and your market.
Key ways to influence Customer Success
While every organisation, industry and economy is different, here are some building blocks for Customer Success that span company size, sector and geographical location.
• Value-based selling:
Sometimes, customers are aware of their pain points, but do not fully understand the value of overcoming these obstacles. Perhaps they view their challenges as unsurmountable or feel that they have managed to live with them for so long that there is no need to change. In this context, your prospects may not recognise the value of your offering – even if it is the ideal solution to their problem. They must first acknowledge the benefits of solving their problems.
“Otherwise,” as Value Selling Specialist Bob Apollo explains, “the most likely outcome is that they will simply decide to stick with the status quo. In fact, that’s exactly what happens in over 60% of apparently well-qualified sales opportunities today: after months – sometimes years – of consideration and the application of large amounts of sales energy and resource, the prospect simply decides to ‘do nothing’ – at least for the moment.”
To overcome the inertia, you need to develop a strong value-based proposition that clearly explains how your product or service can enable your customer’s success. For example, the cost savings they will achieve or the additional revenue they can generate. This value needs to be tangible and closely aligned with your customer’s actual business objectives. This is particularly important if your product or service is more expensive than competitive offerings. You need your customer to understand the unique value that only your solution can offer them.
• Think beyond the solution, focus on the outcome:
‘Solution Selling’ is a sales methodology that pre-dates Customer Success, yet shares some of the same attributes. With Solution Selling, the salesperson focuses on leveraging products, services and organisational knowledge to provide a solution to a customer problem. The solution is tailored to suit the client’s unique challenges and thus more value is provided than just selling a product or service.
The Customer Success approach goes a step beyond this by asking what the customer hopes to achieve by overcoming each challenge. Instead of focusing on the solution, the sales and marketing team – and everyone else in the business – concentrates on the desired outcomes of solving customer challenges. It’s not about how you can help them or what you can provide them, but rather what they hope to gain by investing in your solution. This is where the value that you can offer them truly lies.
• Establish an onboarding framework:
Within your organisation, it is important to establish a clear framework around Customer Success. This approach should cut across teams and departments; and everyone involved needs to understand their role, remit and responsibilities. Once the customer has purchased, with a clear idea of their expected and desired outcomes, your team and processes can be aligned and can take proactive action to achieve these goals.
Establishing KPIs, milestones and an onboarding timeframe makes sure that everyone, including the client, knows what to expect and is focused on what needs to happen. It also ensures that the right support can be made available at the right time. As discussed earlier, the appropriate measurement at the most relevant stage in the customer journey ensures progress is trackable and success quantifiable, be it rate of adoption, customer health score or churn rates.
• Every interaction counts:
Whilst processes and resources should be formalised, Customer Success needs to be a company-wide philosophy, a mind-set that is lived and breathed in every corner of your business. Because Customer Success focuses on the outcome of your relationship from the client’s point of view, every time anyone in your organisation interacts with your client – be sure to make it well worth your client’s while. This means that you need to respond to their comments and questions quickly and thoughtfully; meet their deadlines on time; stick to their budgets; take complaints seriously; deliver on your promises; and listen to everything that they tell you so that all your actions are relevant, personal and geared toward Customer Success.
• Regular Engagement:
It’s important to engage regularly with your customers, from the moment they’re identified as valuable prospects throughout the whole customer journey, as your relationship matures. Ideally, this involves connecting with your clients across a wide range of communication platforms in a way that is relevant to them. This allows you to keep your finger on the pulse and keep track of any new challenges or successes that they’re experiencing, as well as gain insight into how their goals are changing and why they are evolving.
You – and your colleagues – can then use this knowledge to offer more meaningful advice, support and solutions. You can also re-calibrate your definition of ‘Success’ for each customer, based on the conditions of their business environment, the unique way they use your product or service, and their plans for the future.
• Create a human connection:
Most importantly, the effectiveness of your Customer Success strategy lies in your ability to nurture strong relationships with your customers. Because trust plays such a crucial role in customer loyalty, it is important to build a human connection with your customers through personal conversations – as part of your engagement plan.
Real, one-to-one dialogue with your clients allows you to gain insight into the emotions behind their decisions at every stage of the customer journey. It also reveals the human side of your organisation – and reassures them that you care deeply about their success.
“Trust doesn’t come with the purchase order, it needs to be constantly earned.”
We’re focused on your success
As discussed, ‘Success’ looks different for every customer. Perhaps they’re looking to future-proof their organisation, explore a new business model or expand into a new market. Whatever their ultimate vision is, you need to be sure that you understand it. Don’t make assumptions. You’ll only end up falling short of customer expectations. Rather invest the time and dig deep to understand their definition of success properly. For some customers, this may not be related to revenue or profit, but rather about maintaining the culture of the business, achieving long-term security or meeting altruistic goals.
The valuable knowledge you gain will guide every action, from product and service development, to customer support, to sales and marketing efforts.
The best way to understand the emotional motivating factors behind your clients’ goals is to ensure that you engage with them on a personal level throughout the customer lifecycle. As one of the UK's leading telemarketing, lead generation and market research companies – the Telemarketing Company can help you to build a Customer Success strategy that is based on real, meaningful, emotional connections with your customers.
For more information on how to set your clients and your business up for success, call us on 01273 765 000 or email us at firstname.lastname@example.org.