- On this blog post, you'll learn:
- What is Customer Success;
- How to manage your customer success team;
- How to transform a reactive strategy into a proactive one.
Have you heard of the expression "put out a fire"? I'm sure you did. And if this is a common practice within your customer success department, well, something isn't quite right. It might be the case that you are mistaken customer service and customer success.
Customer Service is a reactive tactic that focuses on fixing problems in order to keep customers satisfied. Customer Success, on the other hand, is a proactive strategy for understanding and supporting your customers’ desired business outcomes.
Or it might be the case that you know you should be proactive but somehow you're not managing to achieve these results. A recent survey from User IQ showed that most CS teams struggle with developing proactive processes and that being better at it is a top priority for 2017.
So how can you build a good customer success management strategy and actually put it in action?
To start, you need to understand the importance of proactivity. Know that it's vital to deliver value at each stage of the customer journey in order to prevent churn and eventually reach the advocacy stage to grow revenue. In other words, help your customers meet their goals with every interaction. Each conversation you have is aimed to help them to get one step closer to success.
But how customer success became so essential to a company and why should you care about having a well-designed strategy? That's next!
What is Customer Success, really?
Customer success is a relatively new concept. It actually emerged out of necessity. In the end of the 2000s, the new labeled SaaS companies were facing problems with retention.
The subscription payment model had enabled customers to switch companies as they wished and they needed a way to make them want to stay. The solution they found? Engage their customers by making sure their software stayed relevant to their business.
By managing their relationship with each individual customer in order to give each one the most success possible with a product, SaaS companies were able to retain clients, and so Customer Success was born.
Of course customer success is not only a SaaS privilege. Many other industries have benefited from focusing on the success of individual customers. And of course that, as the strategies and tactics continue to adapt and change, what we are noticing is that customer success is not just a department, it’s a culture.
Customer success is where 90% of the revenue is.
This culture preaches that you have to ensure that your customers are successfully adopting the product, reaching milestones, expanding their accounts and becoming advocates.
Customer success has everything to do with customer experience and building meaningful, long-term relationships. But you need to bear in mind that these relationships need to evolve over time. If you don’t acknowledge that the customer’s desired outcome is important and changes over time, that’s going to be a problem. The consequence? They might take their business elsewhere.
So focus on offering solutions from the very beginning. Customer success starts the moment your customer enters the buyer journey. The old "put out a fire" philosophy no longer works. You need to prevent pitfalls, predict problems and minimize churn ahead of time. Once again, proactivity. But to do that you need a proper customer success management strategy.
Managing your customer success team
As you might know by now, the whole point of customer success management is to manage customer relationships to guarantee that they are realizing the economic value of their investments. Other benefits include reducing churn, increasing existing revenue via upsell and influencing new sales.
To be able to ensure that your customers will see the value of your product as soon as possible, you need to determine what is success for them and then figure out what they need to do to achieve it. Usually this means user adoption and business results. This is where many of your customers are struggling.
Once you understand most of your clients' issues, possible problems and bottlenecks, it becomes easier to create actions to prevent them, and therefore begin to manage your customer success strategy. Identifying areas of potential churn before they’re on the horizon is a critical action that differentiates a proactive CS team from a reactive one.
Speaking of which, remember that a good way to be proactive is to have help from your sales and marketing teams to ensure that you keep bad-fit customers away from your company.
And if you think that an effective customer success is only good for increasing retention and reducing churn, you should know that it also helps with acquisition and upselling. Great experiences impacts customer acquisition because your clients who have become evangelists will refer new customers.
When you’re effective at customer success, you have happy customers who refer other customers. Those referrals are your best leads.
Client satisfaction and loyalty will show up on your MRR (monthly recurring revenue) not only because you continue to receive your customer's payment but also because you boost your upsells.
From reactive to proactive
Let's go straight to the point: a proactive team learns from every customer journey, creates an open conversation with customers about areas of misunderstanding, and with this is able to spot areas of potential churn long before they occur.
Merely apologising when necessary is not an option as this won't give you enough opportunities to demonstrate the potential value of the service they need. A solution that doesn’t attend the client's demands or a poorly executed service that leaves customers angry or upset and looking elsewhere, will affect your overall revenue.
To avoid that, here are some things you can do to turn your customer success team into a proactive trusted advisor:
- Show your product's or service's value: it's very important that your client understands that an investment now equals increased value for the future. For that, the team needs to broadcast incentives and make sure that everything runs smoothly. This needs to be part of every conversation, email, blog, social media post and so on.
- Communication is the key: so not only everyone in the department should "speak the same language", but the whole company should be aligned so that the messages have the same tone. Not to mention that messages should be passed on. For instance, you have a direct line with customers, and therefore will be the first to hear of any new queries. And if you do hear anything new (like a bug, for example), it cannot end there! Everyone must know about it and improve things accordingly.
- Be customer-centric: customer experience should be your number one priority and this means putting your customer in the first place. Remember that your clients are responsible for YOUR success.
- Beware of the bugs: as we mentioned before the communication between teams should be a two lanes road. So not only you should let the other teams know about problems that have to be fixed but also the other teams must let you know of possible bugs and other issues that may interfere in the customer experience.
- Align processes: it's very important to keep track of your team's activities and strategies, and the best way to do that is by registering everything. The Kanban method is extremely helpful on this subject. With it, you can visualize the progress of the whole process.
- Follow up on the customer journey: how well are your customers using your product/service? Can you analyze their behavior to predict future actions? If you aren't still tracking events or measuring customer data, I strongly advise you to start as soon as possible. The right customer journey automation tool can you help visualize the entire journey, collect the appropriate info and analyze your results.
Deloitte and Touche found that customer-centric companies were 60% more profitable compared to companies that were not focused on the customer.
If your follow these simple steps, chances are that you'll start to predict problems way before they happen. No more rushing to put out the fire.
Get to know your customers, offer a great experience, create long-term and meaningful relationships and listen to what they have to say. It's simple as that. Just change your focus. The product is not the most important thing on your company. The customers are.
Don't forget to keep a good communication within your whole company so that everybody knows what is working and what needs to be changed, whether is in the sales or dev department.
Once you adjust your strategy and is already predicting issues, it will be time to move on the next step: automatize the customer success management. We'll teach how on the the next blog post.