Deliver value by taking a fresh look at customer success
- Mohit Malhotra
- Apr 22, 2024
- 4 min read
With the evolution of digital transformation and innovation across industries, customer success seems to be the ultimate goal for every organisation. Customer-success functions is no longer confined to just adding new accounts or churn reduction.
Customers expect software firms to do more to help deliver outcomes. Software vendors must therefore evolve their professional-service capabilities to meet the new needs.
Research shows, the SaaS vendors with top quartile revenues achieved their strong showing by investing more in customer-success initiatives aimed at churn reduction. Several trends indicate that by artfully drawing on a Customer Success Manager (CSM’s) intimate customer knowledge, companies can surface opportunities to provide relevant solutions and expand customer value.
Research suggests existing customers account for between a third to half of total revenue growth, even at start-ups. Costs for revenue expansion from existing customers are also a fraction of those for acquiring new business.
Big SaaS vendors have already begun placing more emphasis on customer success, since the growth of subscription models has forced them to move from a “land and refresh” mind-set to life-cycle selling.
The transition to this model is tricky. It can easily undermine customer’s trust if not executed well with proper strategy and create a sense that they are simply interested in increasing profits. The model for customer success may vary from one vendor to other.
“Customer for Life should be the philosophy across the entire organisation”
For companies, fundamental focus on key elements include:
Identify skills essential to customer success
Level of technical, functional, industry knowledge and relationship-management skills for CSM’s is debatable. However, companies could evaluate CSM data, including survey information gathered on their skills and capabilities, and then determining how these are linked to customer-success outcomes, such as adoption, satisfaction, or growth. The correlations that emerge will reveal both the behaviors and intrinsic capabilities of the highest performing CSM's. These insights can then be directly embedded in a company’s hiring and talent attraction processes.
A unified go-to-market (GTM) strategy
Growth-oriented charter for customer success. Integration of customer success into sales activities, roles, incentives, and organizational approach. Designate specific responsibilities for marketing, sales, services and customer success throughout customer lifecycle. Increase collaboration having sales, customer success, and services report to the same business unit leader to increase collaboration among groups. Have shared accountability for both revenue and customer adoption, which is reinforced by team incentives and operating processes, including those related to account planning.
Funding models for customer-success services
How should they fund customer-success activities, and where can premium services subsidize their investment?
Funding models that reflect intrinsic value of customer success activities. One way is to map out customers’ pain points, prioritize different customer needs (both in size and urgency), and then determine which customer success activities deliver the strongest returns. This may be one way to allow companies to develop a full spectrum of offerings, from free to premium, that directly relate to customer success, support, and professional services. With data-driven approach companies can design and price new offerings to maximise customer value across all accounts while optimizing company revenues and building the investment case for customer success—a win-win situation.
Talent Engine
Link customer outcomes to capabilities and intrinsic characteristics of customer success managers. Embed data-based view of desired skills into recruitment process. A comprehensive learning journey that builds internal capabilities. Create certification programs that reflect skill levels and create paths to progress. Career paths that offer growth and advancement (meaningful rewards and progression for mastering skills). Use data to identify and support talent at risk of leaving.
Advanced analytics
Leverage analytics to identify and predict customer behavior including risks and opportunities, combined with activities proved to deliver customer success. In addition to predicting churn, companies could use advanced analytics to identify products and services that might accelerate value capture. Determine which teams should undertake specific activities at different points along the customer journey. Use data-based triggers to determine when to engage with customers by offering helpful services, such as a custom training program or diagnostics. Change management to promote use of analytical insights in daily work processes.
Adopt customer-success software tools that give CSMs and sales representatives a comprehensive view of their accounts and directly facilitate the desired work flow.
Targeted initiatives can show the impact of advanced analytics and serve as stepping stones to more advanced and expansive analytics initiatives.
Customer-success philosophy
“Companies increasingly view customer success as a cross-functional imperative for all functions”
With changing demand and pace, companies should adopt cross-functional, comprehensive approach to delivering optimal customer experience. A customer focused culture across the organization are likely to excel. Take a journey-based approach to products and services—one that maps out the desired customer experience and outcomes for the entire life cycle. Consider early decisions about product management, marketing, sales, and services delivery can have lasting implications on the customer experiences.
To implement new philosophy, companies must undertake several critical tasks:
Create clear accountability and customer-success metrics for teams at each stage of the journey.
Define the desired customer-success outcomes and showing how they are linked to value.
Implement processes that support cross-functional collaboration and learning, which will ensure that insights gathered by customer-success teams are shared with other teams in the organization.
Empower a leader with oversight across the end-to-end customer experience.
Ensure that the company culture and all operations and processes focus on delivering value to customers
By identifying opportunities to deliver more value to customers, companies derive more value in return. And having all functions put the customer first, companies can generate real impact.
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