Customer Success Management is the business imperative to truly, consistently and perpetually know and understand your customers.
It’s what it says – Customer Success aims to make your customers successful.
Customer Success is responsible for Onboarding, Activating and Expanding your customer base. Retention is key to your business? Then you need Customer Success.
In this series of articles, we will walk you through what Customer Success really means, what a Customer Success manager does, and what the core competencies and KPIs in the world of Customer Success are.
Nothing is more important to Salesforce than Customer Success … And that’s why I believe being so committed to the customer is more important than it’s ever been … because it’s really this culture that’s driving us forward. Marc Benioff, CEO, Salesforce
” Customer is King” is not Customer Success
But hasn’t the phrase “Customer is King” been around for forever?
Absolutely. We’ve been saying that the “customer is always right” for a long time, and many businesses call themselves “customer-centric” these days.
But do we really practice what we preach?
In reality, profit margins and cost reduction are always business priorities. Rarely did we prioritize the success of our customers. But then, “Software-as-a-Service” came around.
How SaaS change the way we deal with customers
Salesforce’ “No Software” campaign changed the landscape of technology providers.
Before, businesses were selling long-term, perpetual licenses, often combined with service agreements.
A big upfront investment, often in the millions. And once the software was up and running, businesses needed to rely on technical support staff. They were left alone with their problems.
The result: Unsatisfied customers, lost opportunities, and a customer who’s carrying all the risks.
Why subscription-based business models are buyer-centric
The early software industry was controlled by the vendors. But the bigger the supply became, the more the power has shifted from the vendor to the buyer.
This is the case for Business to Business (B2B) and Business to Consumer (B2C) across all industries.
The time of lifetime tie-ins brought about by hefty cancellation penalties or seriously large upfront capital expenditure is over.
Today, vendor’s can’t simply walk away after the ink on a deal is dry. They have to work on a long-term partnership with their clients, in order to keep and expand the business. And this means making their clients successful.
Now, the risk is shared
With a big upfront investment, the buyer was carrying the entire risk of a transaction. If the solution didn’t pan out, they’d have lost hundreds of thousands of euros – without serious repercussions for the vendor. And ecosystem lock-in often prevented them from leaving.
In a subscription-based business model, this risk is evenly spread between vendor and buyer. The vendor still gets their money – sometimes even more than initially agreed upon, over a period of time – but the buyer doesn’t have to invest everything upfront.
And this is where Customer Success can play a crucial role in creating a successful business relationship.
Customer Service vs. Customer Success: Reactive vs. Proactive
Of course we’ve always had staff dedicated to Customer Service. But Customer Service has little to do with real Customer Success.
While in a traditional commercial team, the Customer Service team would be reacting to service tickets or active inquiries from the customer side, Customer Success is a proactive discipline.
In a traditional commercial team, Sales Representatives and Account Managers would be responsible for up- and cross-selling existing customers.
Often, this would lead to friction, because the customers would get the feeling that “this company only calls me when they want to sell me something”.
Customer Success managers onboard clients into their solution, lead them to the feeling of success, and identify opportunities to provide pro-active help and nudges in the right direction.
They don’t only show up when there’s “something to sell”.
Their job is to be their client’s ambassador within the company.
How Businesses benefit from Customer Success
Having your “client’s ambassador” within your own company sounds expensive. But it isn’t. In fact, it is one of your biggest levers to grow your business. Bain & Company calculated that a 5% increase in your retention rates can increase profits by 25% to 95%. Customer Success can lead to much more than “just” a 5% increase in retention rates.
Customer Success often initially comes to a company’s attention when they are struggling with the overall, gross retention. They’re basically firefighting customers wanting to leave, trying to figure out what the reasons for the churn are, with first proactive steps towards reaching out to customers.
When Gross Retention is improving, and the company has a foundational understanding of the reasons why their customers leave, they start proactively preventing churn. This can happen through a Churn Prevention Plan, or through proactive measures and triggers to check in with their customers. We won’t dive into that much detail at this stage, since we have more in-depth resources on preventing churn.
Becoming a true partner
Customer Success done right turns your company into your customer’s trusted advisor. You’re always top of mind when it comes to solving their problems. This leads to great opportunities for upselling and partnerships.
The role of Customer Success in the commercial team
Customer Success is, at its core, a philosophy. That means that Sales, Marketing, Product and Customer Service professionals will adopt Customer Success frameworks into their day-to-day work, once Customer Success is successfully implemented within a company.
But Customer Success Managers are also a distinct function within a company.
How do they interact with the rest of the commercial team?
Customer Success and Marketing
The most important aspect for any collaboration with Customer Success is the setup of feedback loops through the different functions.
In Marketing, this comes down to two main feedback loops, that any B2B company can benefit from immediately.
Customer Feedback: Informing the Value Proposition
No one knows more about the needs and desires of your customers than your Customer Success department. They can inform the Value Proposition you’re relying on to advertise and sell your products – as well as create valuable content for your campaigns.
Of course, case studies are one of the main domains for Customer Success in a Marketing organization. Your CS team can identify the best success cases, get the right insights from your customers, and create a foundation for great content.
Closing the customer: Sales and CS
Naturally, there are many overlaps between Customer Success and Sales. The Customer Success Philosophy is the antithesis to the “pushy sales rep”.
Customer Success in Sales means focusing on customers that are a good long-term fit for the company, not closing short-term sales for the sake of a closed deal. This is indeed a paradigm shift for many sales-driven organizations.
Handoff and Onboarding
Customer Success and Sales naturally interact after a deal has been closed. Through a handoff, the Sales team informs the CS professional about the pains of the customer, and how they can help them in the best way possible.
Additionally, the Customer Success team is responsible to onboard the customer, and lead them to their first success moments with your solution.
Upselling, Cross-selling and other ways of expansion
Customer Success means knowing how and when you can offer more value to your customers. This means that the Customer Success team is responsible for upselling – because they have a trusted relationship with your clients.
If they see that there’s an opportunity for a win-win situation, they will seize it.
How do I get started with Customer Success?
Customer Success is an upcoming discipline, and it’s the future of any recurring business model. Get started with Customer Success today and sign up for our free video training!
This article was written in collaboration with Kellie Lucas, author of “Customer Success Pioneer”.