Customer Success is an increasingly popular business buzzword. But, it’s much more than just a more creative way to say, “customer satisfaction” or “customer service“. Customer Success incorporates customer and user experience, but it goes far beyond making a product or service easy to use. It’s a powerful concept that can transform every aspect of your business because it focuses on results. Customer success is rooted in a relatively universal and straightforward goal: to earn repeat business from customers. It can form a strong foundation for new customer outreach since referrals earned from success stories lead to higher close and retention rates, and it’s not a flimsy concept – it can deliver an immediate impact on cash flow.
Looking for some proof that Customer Success initiatives work?
• Existing customers that are happy with results are 14 times more likely to buy than a new customer
• 80% of customers say customer experience is as essential as the quality of products and services provided
• Nearly 85% of buyers will pay more for a great customer experience that delivers results
• By the end of 2020, customer success initiatives will become more crucial than price and product features
Understanding Customer Success Basics
So then, what exactly is Customer Success? While it can be a complicated concept with many factors considered, Customer Success at its most basic is a system of practices and steps that aim to ensure that consumers of a company’s products or services get what they want from those products or services. It’s all about goals and results, and because those can change over time, Customer Success also requires strong relationship building between vendor and customer.
The Origins of Customer Success
Initially, Customer Success methodologies arose to support the Software as a Service (SaaS) model. With SaaS, instead of buying a software license and hosting an application on-premises, a software customer subscribes to a cloud-based service. SaaS vendors rely on continued business from subscribers. Customer Success programs for these businesses aim to reduce customer churn, the rate at which customers cancel.
Think of an Office 365 subscription. Microsoft wants its subscribers to continue paying monthly, but if users do not experience value from Office 365, they will likely not renew. So, Microsoft uses a variety of means to measure and communicate Customer Success to avoid churn.
But, churn is not limited to software users, and Customer Success activities are valuable for any business that hopes to engage in repeat business with customers, which includes almost every business imaginable.
Customer Success is not Customer Satisfaction
At first, it may seem like we are just talking about a system of making sure customers are happy, but there is a big difference between satisfaction and success.
First, just because a customer is happy, it doesn’t necessarily follow that they are experiencing success. Or, they may be happy, love the experience of working with your product or service, but still not achieving optimal success. Others may seem happy and content, but may not know if they are reaching their goals.
Also, just because a customer is unhappy, it doesn’t mean that they are necessarily unsuccessful. Customer Success initiatives provide data to show precisely where a customer is on their journey towards their goals. The customer may have unreasonable expectations beyond identified success goals; Customer Success metrics can ground expectations in reality and alert a vendor to their products’ or services’ limitations. For example, a customer may cancel their service agreement simply because they’ve achieved success with the product and no longer need to use it.
Getting Direct Results from Customer Success
Customer Success is more than a “feel-good, sound-good” concept that is difficult to pinpoint – it directly impacts your bottom line. Contrast this with the vague idea of “customer satisfaction” – can a happy customer achieve more with the product, and is an unhappy customer actually experiencing great success? Customer Success goes beyond sentiment to take the customer’s pulse based on results, value, and goal achievement. And, Customer Success can provide that value – to both the customer and the vendor – much more quickly than you might expect.
5 Ways to immediately tap into the value of Customer Success
Customer Success Leads to Customer Retention
Customer Success programs’ most direct impact is to mitigate churn and keep your customers paying for your product or services. Whether you are a SaaS provider, or your business simply provides any product or service that can invite repeat business, Customer Success can help sustain your active customers and improve cash flow.
Customer Success helps businesses identify customer goals and show results. It begins before a customer signs up by identifying pain points and developing a plan to address those concerns. It powers efficient and effective onboarding so customers can easily use your product or service and start getting the most out of it. Then, once these initial goals are set into place, Customer Success keeps customers engaged and invested in leveraging your business for their success.
Referrals – the Cheapest and Easiest Business Source
Customers that experience real and measurable value are more likely to recommend your product or service. Referral business is the best type of business because it’s earned on the merits. Delivering a compelling marketing message is relatively easy. Demonstrating results is more challenging, but when a prospect gets referred to a business by a successful customer, the line from qualified leads to paying customers is shortened.
Customer Success initiatives can help identify if your customers would refer to others. It’s an essential aspect of Customer Success and is measured by Net Promoter Score (NPS). NPS is a satisfaction benchmark that doesn’t focus on satisfaction but rather directly asks about the likelihood of referring to other customers, and provides valuable insight into the reasons behind this likelihood. Businesses collect NPS through simple surveys folded into customer experience and can be part of operationalizing customer success.
Effective Employees are Happy Employees
While NPS is usually focused on customers, the same underlying concept can gauge employee satisfaction. But, more importantly, Customer Success initiatives can make an employee’s job easier. When employees can see whether or not their customers are achieving success, employees feel success themselves. This leads to happier employees that are more productive and less likely to want to work elsewhere.
Measurable goals motivate and visibility can help engage employees along the customer journey. The result is a stronger relationship between workers and customers and between employees and managers.
Customer Success Builds Efficient Systems
The metrics that power Customer Success can also help your business achieve success. Instead of being reactive to customer cancellations, you can learn what components of your product or service are working and which ones need tweaking. An agile and proactive approach where you are always seeking to optimize customer success will lead to a progressive improvement of products and services.
Through these metrics, you can identify “quick wins” that show value to the customer shortly after earning their business. And, as customer needs evolve, Customer Success metrics can change too, resulting in other efficiencies that can be passed on to the customer.
Better Collections Practices
Customer Success grew out of necessity for SaaS sellers, and in that application, accounts receivables and collections aren’t much of a concern. If a customer cancels their subscription, there’s no balance to chase after. Other business models can benefit from Customer Success initiatives, and some of these models may involve collecting amounts due.
Customer Success can bolster collections in two ways. First, customers who achieve measurable success meet their goals and may be less likely to experience financial struggles. When a business focuses on delivering customer success, the collections dynamic can change, so the focus is on hitting goals that lead to success. Customer Success requires a strong relationship between the customer and seller, so many of the typical reasons for past due amounts can be avoided.
And while there are key differences between Customer Success and customer experience, businesses should ensure that customers receive a consistent experience, from sales to collections. Customer Success also does not need to be constrained to your direct team. If you use any service providers yourself, they should follow your customer-centric approach. Even if you outsource your accounts receivable to a collection agency, they should remember to treat your customers with dignity and respect. Your collection agency must ensure that their resolution strategies preserve your relationship with your customers. A business collection agency can incorporate your Customer Success program into their practices, ensuring consistent, proactive, and goal-oriented resolution.
Customer Success is not only for software companies. It is not only valuable for businesses selling under a subscription model. It is a proven method of increasing customer retention by identifying goals, pursuing results, and delivering value. It builds strong customer relationships, cultivates engaging customer experiences, and keeps customers and sellers on the same page – success.