Customer Success is quickly becoming the Holy Grail for all companies with a subscription-based revenue model. It’s not surprising, since Customer Success done correctly can massively expand conversions and renewals, reduce churn, increase customer satisfaction and advocacy, and greatly increase revenue.
While Customer Success solutions vary based on individual companies’ business models, there are some universal best practices that every company should benchmark.
Picking the Right Customers
The right customers can be a valuable ally in the evolution and expansion of a company’s revenue machine. The wrong customer, on the other hand, can tie critical business processes in knots that could be fatal for your bottom line.
Getting the right Product-Market Fit (PMF) is one of the critical drivers of success¹. While many companies focus on aligning their product with market realities, it’s equally important to evaluate customer profiles against this benchmark. Customer hygiene begins at the initial point of sales. There’s no simple formula for determining this fit—it depends on a combination of use cases, line of business, preferred industry verticals, current and potential customer base, and future vision. However, it’s essential to ensure you only sell to customers who align with your overall vision for your product and brand. Additionally, your sales process must set the right customer expectations.
Beyond sales, customer alignment is critical at every stage of the revenue funnel. Properly targeted customers should receive the best internal customer alignment. A good customer fit requires give-and-take, as both vendor and customer find a balance of business priorities.
Define the Right Milestones
It is now common knowledge that Customer Success is built on helping customers achieve their desired business outcomes. Yet, much of the thinking around mapping the customer journey and its key milestones is still vendor-centric, focusing on trial, sales, onboarding, usage, renewals, and upsells/cross-sells.
An effective Customer Success solution, however, must go beyond these vendor-centric touchpoints to focus on the customer’s desired outcomes².
Desired outcomes ensure that customers achieve what they want by following the most appropriate process. The first step is shifting focus from functional milestones—such as product usage—to customer outcomes, ensuring that customers reach their goals. Between these two exist success gaps, which might require shifts in product development or changes in business processes that may not be visible if the focus remains solely on functional milestones.
The second step is defining the appropriate customer experience, which doesn’t always mean offering the highest-end service. Instead, it means understanding your customer’s needs and optimizing their experience accordingly.
Distinguishing Between Customer Success and Customer Happiness
At first glance, this distinction may seem trivial since we often assume that successful customers are happy customers. However, happiness is a vague and subjective perception, whereas success is a quantifiable, goal-driven process³. In many cases, successful customers might not appear happy because they push the boundaries of your product to achieve better business outcomes. This often results in raising new challenges that require your company and product to evolve.
The key is distinguishing between customers who engage because they see opportunities for growth, those who complain out of frustration, and those who remain silent because they are already considering alternatives.
Focusing on Customer Health and Building Effective Early Warning Systems
Customer Success is all about proactive management. If you wait until customers hit a major roadblock, it may already be too late to prevent churn. The most important aspect of preventing such crises is a relentless focus on customer health.
Several factors contribute to customer health scoring, but some of the foundational metrics include:
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Product usage (key feature adoption, depth of usage, etc.)
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Support reliance (too many or too few support calls)
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Feedback and survey scores
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Engagement with marketing and training content
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Financial interactions (timely invoice payments, etc.)
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Executive relationship and overall customer engagement
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Referenceability and advocacy⁴
Monitoring these and other key metrics—and setting up early warning systems—is crucial for prioritizing Customer Success activities based on customer profiles and potential for churn⁵.
Ensuring Effective Customer Communication
Customer Success is an evolving process, and communication is key to growing strong customer relationships. The core of effective communication follows a four-step approach:
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Regular interactions with customers through multiple channels at each stage of their journey.
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Active listening to customer feedback and online discussions.
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Prompt responses to all customer communications.
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Adaptation to feedback to meet customer needs.
Additionally, knowledge sharing, customer appreciation, and incentive programs can further strengthen customer relationships⁶.
Building a Customer Success Culture
Customer Success isn’t just a single process—it’s a fundamental restructuring of your organization’s approach to customer relationships. This requires both a focused and holistic approach.
On one hand, your organization must build a strong Customer Success team⁷ by:
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Hiring individuals who are responsive to customer needs and can think outside the box.
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Cultivating the right mix of skills, expertise, and goals.
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Clearly defining the team’s vision, objectives, and key performance indicators.
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Empowering team members and clearly defining ownership of key moments in the customer journey.
On the other hand, it is essential to align Customer Success with other departments, ensuring clear hand-offs and building seamless collaboration across teams. Executive buy-in is particularly crucial—without it, your Customer Success team will struggle to drive meaningful impact.
References
[1] http://www.gainsight.com/resource/the-10-laws-of-customer-success/
[2] http://sixteenventures.com/success-milestones
[3] http://www.gainsight.com/customer-success-best-practices/customer-success-not-happy/
[4] http://www.gainsight.com/customer-success-best-practices/relentlessly-monitor-customer-health/
[5] http://www.bluenose.com/blog/customer-success-best-practices/
[6] https://www.entrepreneur.com/article/205184
[7] http://labs.openviewpartners.com/building-a-customer-obsessed-team/#.WAlf0_l97rc
