MarketStar Blog | Customer Success (4)

Our journey starts in the midst of a company wondering why they can't keep customers using their products. The leaders of the company meet in their boardroom, and everyone has the whole day's schedule dedicated to answering the question... "why aren't our customers renewing with us?"  

Key Insights

• With digitization opening more avenues than ever for customers to make a choice, it’s crucial for businesses to stay on the pulse of customer experience

• Creating a culture and practice of prioritizing customer engagement is easier to brainstorm than execute

• While many business ventures might still be averse to outsourcing this customer-facing function, there are clear benefits to doing so

• These range from a deeper understanding of the customer success space to industry-leading methodologies to execute customer success goals

Customer success may be a relatively new term, but growing customer expectations have solidified its significance to revenue growth and long-term success.

A report by Forrester highlights that customer success is on top of mind for many businesses, with 72% reporting it to be a priority.

In particular, the COVID-19 pandemic drove home its importance in protecting relationships with existing customers.

As the economic fallouts of the pandemic unfolded through constrained budgets, shifting business priorities, and disrupted operations, companies realized that a continuous race for the next sale was not sustainable. More important was nurturing the existing customer base beyond the point of sale.

A visible aspect of this shift is the value of trustworthiness in ensuring customer loyalty.

So, should you outsource customer success? To answer this question, one must look at what customer success does for an organization.

What are the Benefits of Customer Success?

Focusing on customer success involves tracking different kinds of value provided to the customer. A Deloitte research identifies three types of value that constitute customer success: performance value, business value, and experience value.

In the B2B world that we are in, getting the signature on the dotted line is only the beginning of the journey with customers.

• Customer Retention: Renewal decisions are based on perceived value. When you focus on customer success, you help your customers realize more value in your products and services. This leads to increased renewal rates and longer customer tenures, both of which increase a customer’s lifetime value and help you drive growth and profitability.

• Increased upsells and cross-sells: As per a report, vendors are 60-70% more likely to sell to existing customers rather than selling to new customers. Existing customers are also more likely to have undertaken integrations that maximize the value to be drawn from greater engagement with related products and services. It is precisely this advantage that customer success secures by increasing the likelihood of customer satisfaction.

• Operational Improvement: Focusing on customer success increases customer predictability. It provides you detailed insight into developing issues. It will also help you uncover drivers of that outcome, which will help you with recurring revenue predictability and capacity planning.

• Increased Revenue: Customer success is not just about keeping revenue in the business. It also helps generate more revenue at a lower cost. Customer success provides a mechanism for not only creating these chances but also capitalizing on them.

Why Should You Outsource Customer Success?

It might make more sense for you to outsource more transactional engagements such as customer service or customer support rather than outsourcing a long-term, relational role like customer success.

What is important is to acknowledge that outsourcing customer success does come with its fair share of challenges. Despite these challenges, however, outsourcing key customer success activities can contribute in several ways to revenue and growth.

1. Cost Savings

An obvious advantage of outsourcing is cost savings. But this advantage is often misperceived as resulting from hiring low-paid offshore customer success representatives.

Such misperceptions only consider the salaries as part of the costs of building a customer success team. But there are numerous other hard and soft costs such as facility, equipment and technology, travel, recruitment and training, and management costs.

By outsourcing all or part of the customer success function, companies can save on operational costs related to onboarding and training, renting and maintaining office space, management costs, and investing in the latest tools and technology stacks.

2. Skilled Representatives

When you have an in-house team, it can take months or even years to build the kind of high-quality team you have in mind for long-term success. While it might look rewarding, you are putting years of resources and thousands of dollars into building such expertise.

With outsourced customer success, you receive a top-notch crew whose sole responsibility is to provide excellent customer support. Such a team is better equipped to ensure that there is no lag in customer experience.

3. Access to leading technologies

A 2021 report by Talkdesk highlights that while customers want to talk more and for longer, they are not willing to wait on hold for longer than a minute.

Reputable outsourced customer support vendors understand this shift.

An outsourced customer success team will ensure that processes are in place to reduce average wait time (AWT). They have dedicated QA auditors to coach agents on how to minimize “dead time” between calls.

4. Effective Management

An in-house team can cater to high-value customers. However, real growth requires customer success at scale, catering to all segments of customers.

Most companies are likely to have a large segment of long-tail customers who cannot be converted into high-growth customers because of a lack of bandwidth among in-house customer success teams.

Outsourcing the long-tail customers can help organizations move beyond an 80-20 trap in their revenue generation and grow a much larger base of valuable customers.

5. Focus on Core Competencies

Customers are the key to success for any organization. Nevertheless, customer support may not be one of the core competencies of your venture.

Outsourcing customer success can help you focus on what your company does best, without sacrificing customer satisfaction in the process. And this can happen without a huge upfront investment of resources.

Finding the Right Outsourced Customer Success Partner

Pearsons’ Marketing Metrics: The Definitive Guide to Measuring Marketing Performance shows that the probability of selling to an existing customer is up to 14 times higher than the probability of selling it to a new one. 

By bringing an outsourced customer success team, you are better equipped for future growth. The sooner you establish a reliable partnership in this important business segment, the easier it will be for you to master future challenges.

Key Insights

• Over the past few years, industries everywhere have begun using a subscription-based business model

• While convenience and recurring revenue are the top reasons for its popularity, the model does come with its own set of challenges

• Businesses must overcome these roadblocks to cater to the ever-increasing consumer demands

• For the model to be successful, enterprises must have a laser-sharp focus on not just subscription management, but also customer management, financial planning, and performance metrics

It started with magazines and telecom companies and trickled down to the music and video streaming sector.

At present, a wide variety of businesses–from meal boxes to cars to even electronic equipment–have embraced the subscription-based model.

Virtually any product or service can be sold through a subscription-based business model. Sectors that have not jumped on the bandwagon will do so in the future.

The trend to the subscription-based model continues to grow at a CAGR of 17.9% and is forecast to represent 83% of total software revenue by 2025, as per a report by IDC.

Despite its tremendous uptake, the subscription-based business model is not as straightforward as it sounds. There are multiple roadblocks that subscription businesses must be prepared for to provide a stellar experience and a hassle-free customer journey.

But before we jump into the unique challenges of subscription-based businesses, let’s look at what the domain is all about and why the model is growing so fast.

What Are Subscription-based Businesses?

A subscription-based service model is based on the idea of selling a product or service to receive monthly or yearly recurring subscription revenue.

Such a model focuses on customer retention rather than customer acquisition.

Take Spotify or Netflix, for example. Closer to home, we have businesses such as Zomato, MakeMyTrip, and many others where customers can opt for memberships to avail themselves of exclusive deals.

Subscription-based business models benefit both the company and its customers.

As a customer, you can automatically repurchase a product or service. As a business, you retain customers for future sales rather than needing to re-engage with them on a more frequent basis.

Why are Subscription-based Businesses Becoming So Popular?

Subscription-based businesses are popular for one main reason: convenience.

The shift to online shopping and availing of products or services from the comfort of one’s home was rising even before the pandemic. With lockdowns in place and storefronts closed, the need for recurring goods and services rose sharply.

So, even when the pandemic had a negative effect on much of the economy, the subscription-based market grew about 12% at that time, as per the Subscription Economy Index by Zuora.

Digital media, video streaming, and eLearning platforms had subscriptions grow by over 25%, according to the same report.

Several factors are driving the surge. For businesses looking to shift towards a subscription-based service model, three factors reign supreme:

• Predictability

• Recurring revenue

• Customer insight

Additionally, such a model offers more definitive revenue sources that business trailblazers can rely on for planning and investment.

Customer insight is another bonus. When businesses have consistent relationships with their customers, they are better equipped to track and gain deeper insights into how customers interact with their offerings.

Overcoming the 6 Unique Challenges in Subscription-based businesses

Many subscription-based businesses are enjoying unprecedented popularity.

However, plenty can go wrong if there is a gap in alignment between pricing, product, and customer management.

Let’s look at six of the most common challenges plaguing subscription-based businesses.

1. Providing Multiple Subscription Billing Models

Subscription plans are all about flexibility. It should cater to each customer’s unique demands. This means that there is no one-size-fits-all solution to pricing models.

Any subscription-based business must offer multiple categories of billing models so that customers have the choice and freedom to choose what they like.

Taking into consideration that the model you opt for has a direct impact on revenue, there are a few you can make way for:

• Freemium: This type of subscription plan allows customers to get started for free with the option to pay when/if they wish to upgrade

• Fixed Schedule and Pricing: In this type of plan, customers are charged a fixed amount at a time period for a pre-decided quantity of the product

• Tiered/pay-per-unit pricing: In this type of plan, the customer is charged based on the quantity purchased as per the pre-defined tiers

2. Customer Management

Subscription-based businesses tend to have a significant number of users at any given time, making it a tough task for businesses to manage all the customer records.

An inaccurate customer management database can have a damaging effect on the customer relationship if mistakes are made. Mostly, these mistakes often come down to repetitive manual tasks that lead to human error.

Additionally, any gap in customer data would lead to inadequate information flow among the staff. In this case, they would not know if customers were on trial or if their subscription period had ended.

You can avoid this by using an effective subscription management system that categorizes where your customer is in the sales process, giving you relevant data of any previous interactions.

3. Flexibility and Real-Time Modifications

Even when you have a detailed pricing plan, your customer might want to upgrade, downgrade, cancel or change their plan a few days before their billing. You must provide them with the flexibility to change their plan without having to wait for the next billing date.

Real-time modifications are another area to look into.

Additionally, the changes your customers are making to their plans need to be properly accounted for and communicated to the customer. By doing this, you ensure that their experience remains the same, hassle-free, and smooth.

4. Reducing Churn

While subscription-based businesses don’t typically have to worry about their service losing novelty, they do need to ensure that their service is always adding value to their customers’ lives.

Routine surveys are a great way to assess what your customers like and dislike about your product or service. Creating stackable loyalty reward programs is another way to keep your customers delighted.

These tactics can help you keep your customers engaged and prevent them from buying products from a competing business.

You can regularly surprise your customers with reward points so they feel genuinely valued. This goes a long way in decreasing dissatisfaction and, consequently, reducing churn.

5. Go for Automation

Giving your customers flexibility also means more complexity for your business.

As a subscription-based business, your customers have various options for customizations, enhancements, and convenience to pause or resume their plan and to upgrade or downgrade. But this also makes invoice management a challenge.

Manual billing is completely out of the question, considering the massive amount of data you would have to stay up to date with. You must automate your billing system so that invoices are generated and sent to customers without any delay.

6. Tracking the Progress

Rather than measuring success by tracking Monthly Recurring Revenue (MRR), churn, and recurring profit margins individually, combine them.

A combination will allow businesses following a subscription-based business model to have more actionable insights and answer critical questions about the company’s overall financial health. A real-time dashboard can help you visualize the progress better.

Riding the Subscription Wave

At the heart of the subscription-based business model lies customer-centricity. It is all about putting customers at the center and creating personalized experiences, on the strength of technology.

To make it big in the subscription-based business landscape, think of these challenges as tiny roadblocks which you need to overcome.

As long as you focus on delivering a stellar customer experience, you are better positioned to create a niche for yourself in the marketplace.

This is the first installment in our series on Unique Challenges where we deep-dive into hurdles faced by businesses in different industries and their game-changing impact on business growth.

Head over to our blog, Overcoming the 8 Challenges of On-Demand Delivery Services, and explore eight of the most common challenges plaguing on-demand delivery services and how to overcome them to be successful.

Key Insights

• In order to bounce back from the disruptions caused by the pandemic, organizations must work out a plan to ensure that their business model remains flexible and agile

• Remote outsourcing solutions can help accelerate the process 

• A remote outsourced partner can help shape business results and culture 

• Remote outsourcing can provide a more outcome-focused strategy for businesses to scale up and stay relevant in this ever-changing business landscape

Every organization wants to see its business grow. 

While you would want to be hands-on with business operations, the scenario will be different as you grow your customer base. 

By contracting work to other companies, you not only clear your own resource pool from tedious and time-consuming tasks, you also cut, at least, 70% of your labor costs. 

Virtual outsourcing solutions have never been as important as they are now, against the backdrop of multiple lockdowns and a switch to remote work setup. 

In this current socio-economic climate, most teams are looking at virtual outsourcing solutions. The pandemic has opened the eyes of many businesses, helping them to realize that an in-office team is not a criterion for success.

What Does it Mean to Outsource Work?

Outsourcing is when a company is said to have given certain positions or jobs to a third party for completion.

Take, for example, a company that requires assistance with customer service.

It can cut costs and improve process efficiency by contracting third-party workers to help answer calls, send emails, and operate live chat features.

In the current business landscape, work-from-home outsourcing continues to grow. In fact, a survey by Clutch highlights that more than one-third (37%) of small enterprises are already outsourcing a business process. 

How Does Work-From-Home Outsourcing Differ from Remote Staffing?

While both remote outsourcing and remote staffing involve taking jobs that are typically conducted within the office and sending them to a distant location, there is one differentiator.

They differ in the management-worker relationship.

In simple terms, a company that outsources jobs simply sends work to contractors. Remote workers, however, are never actually employees of the company.

What are the Benefits of Remote Outsourcing Solutions?

While the pandemic has become a norm, many companies have long been practicing remote work setup.

With advances in technology, it has become even more popular today.

If you are still not sure about what work-from-home outsourcing can do for your business, check out these benefits!

1. Cost-Savings

One of the most important benefits of WFH outsourcing is the potential savings.

Employing virtual outsourcing solutions can help you eliminate the need to pay the traditional expenses of having an office and other factors such as utilities and rent.

Remote outsourcing can help lower your tax burden as well.

A report by Global Workplace Analytics shows that US businesses compatible with remote work have the potential to save almost $11,000 per employee each year.

2. Scalability

Outsourcing and work-from-home make the perfect combination.

With remote outsourcing, it is easier to add additional team members, when necessary, without worrying about workstations or compensation.

With additional tasks being handled by a third party, your existing team will not feel burdened, giving them the time and space to focus on the larger business goals. 

3. Outsourcing’s Remote Understanding

Whether it be accounting and payroll services or customer support and contact center operations, numerous companies trust remote partners, some onshore and many offshore, to oversee their vital back- and front-office solutions.

The remote outsourcing industry is equipped with deep expertise when it comes to overseeing, motivating, and measuring distributed teams.

From offshore specialists in far-off time zones to onshore yet off-site teams, successful outsourcing programs require balancing knowledge, workloads, and personnel across often-distant locations.

Companies providing work-from-home outsourcing solutions have proven expertise in such matters.

4. Improved Productivity

A study by Airtasker (a gig economy platform) revealed that remote workers put in an additional 1.4 days of work or three extra weeks per year compared to office employees.

In other words, they tend to be more productive.

This might be because remote workers feel more fulfilled owing to better work-life balance. This has a direct impact on revenue generation.   

 5. Global Talent Pool

As the world becomes increasingly interconnected, it is becoming critical for business owners to access talent from around the globe. 

Instead of depending on staff who live within commuting distance, remote outsourcing can help you tap into the abilities of some of the best experts in their fields. And with a wider talent pool to choose from, you can quickly find someone who is truly cut out for the job. 

The Way Ahead

If the pandemic has shown us anything, it is that remote work is a viable option for many companies. Businesses across the globe are allowing employees to work from home with some even letting go of their offices completely, 

With outsourcing remote work being beneficial to both employers and employees, it is time to look into the many returns of remote outsourcing. 

Such a model provides you with opportunities for growth and innovation. Your virtual outsourcing solutions partner will equip you with the right technology and resources to help your team adjust better. At the same time, you enjoy a specialized remote workforce in your most badly hit departments. 

Key Insights

• With consumers spending more time online, we see an increase in expectations for a more personalized and seamless customer experience

• When not managed effectively, online advertising is often viewed as a negative disruption in the consumer’s overall journey. This limits engagement as well as ad performance

• Fortunately, there is a way out of this–Customer Obsession!

• A customer-obsessed business model can help the industry not only create ads that inspire shoppers but also reach them at the right time

• Such an approach will help businesses stay true to their vision while achieving online marketing goals

Everyone in the ad tech industry strives to beat the competition, focusing more on features than anything else. However, it takes more than features to win the hearts and minds of customers.

Your success rests on your complete understanding of your prospects. This is how you will be able to ensure a seamless customer journey while serving your prospects with relevant content at any given time.

In other words, you need to know how to be customer obsessed.

What Do We Mean by Customer Obsession?

Customer obsession is the very core of customer experience.

Customer-obsessed organizations are always thinking of new and unique ways to understand their clients better. Such business ventures apply their knowledge and data to produce products and services that solve their customers’ problems.

Customer-obsessed businesses will focus on adding value to the customer experience.

They collect feedback regularly and ensure that client needs are a priority in every business goal. They’re more concerned with retaining and delighting existing customers than acquiring new ones.

The goal is to increase customer loyalty, leading them to become more reliant on your brand. Your customers may believe that your company is looking out for their best interests, which boosts their chances of making repeat purchases. 

Why is Customer Obsession So Important?

More than anything, customer obsession refers to a type of mindset or business model that focuses on prioritizing customer needs above everything else. Amazon and Alibaba are great examples of this type of approach.

In Amazon, for instance, customer obsession is not a responsibility that falls on any single team, such as customer service. It falls on every team. Every department needs to be customer obsessed. And that ripple effect starts from the top down.

Customer obsessed businesses:

• Prioritize retention over acquisition

• Focus on quality over quantity

• Align every department with customer success

• Analyze customer data frequently

What are the Strategies for Becoming Customer-obsessed in Adtech?

Customer obsession has never been as vital as it is now for AdTech. The industry is in a resurgence. Despite languishing in investors’ bad graces over the past few years, AdTech has suddenly shot up.

Luma’s Q2 2021 Market Report shows how AdTech deals have drastically increased year on year by more than 500%. 

Notable examples include Mediaocean’s acquisition of Flashtalking for a reported $500 million and AdTheorent Inc. combining with a special-purpose acquisition company (SPAC) to go public with a $1 billion-plus valuation.

When it comes to value, the answer is simple: Programmatic advertising or ad tech works. Publishers are in a much better position to incur additional revenue now than what they generated in the pre-programmatic era.

As the industry prepares for the future, key players must shift their focus on becoming a customer-obsessed brand and how this facet will go a long way in improving customer experience.

After all, the ad tech industry is expected to grow tremendously. The backbone of the internet advertising industry is set to grow from $438bn in 2021 to $1 trillion in 2030, as per the forecasts by Global Data.

Let’s explore a few strategies that will help you establish a mindset that is customer-obsessed:

1. Role of Data

Data should be your key pillar behind effective online marketing to provide a seamless customer experience.

With better technology available to assist us in accessing big data, the market is growing at an astronomical rate, reaching a value of $103 billion by 2027 (Statista report).

Real-time insights from this data will help businesses to create meaningful ads.

Start with combining location data with business, consumer, and contextual information to ensure that relevant ad content reaches the right audience at the right time.

2. Focus on Content

Content is equally important.

Marketers must have the ability to determine which ad is the right ad to show to a specific user without overexposing the consumer to their ads.

Predictive bidding, which leverages the power of data, can be of tremendous advantage.

This type of approach develops and implements algorithms to analyze the individual before the ad is displayed. This ensures consumers are being served the ad that is most relevant to them across their devices.

3. Speak Your Purpose

Improving customer experience will be incomplete without brands being true to their purpose. Your customers want to know what your business stands for and its driving mission.

Take Verizon for instance. The company’s vision is to deliver the promise of the digital world by enhancing the ability of humans, businesses, and society to do more and do better. It defines why they are here and who they are here for.

Once these are aligned, customer-obsessed companies must understand their customers’ needs — even before the customer has articulated them. Customer conversations and survey feedback can help you kickstart this process.

4. Being Multichannel

When customer obsession is the foundation of all your customer experience strategies, make use of multi-channel marketing to get the word out about your promotions.

You can utilize email to generate excitement about your promotions early among your current and most loyal customers.

Social media is another powerful tool for you to promote your offerings. This will also enable you to interact with customers and gather information on customer sentiment.

5. Keep Advancing

Technology and media are industries in constant flux.

To stay ahead of the competition, ad-tech ventures must keep abreast of the changes. And while successful startups keep up with changes, the most successful are always two steps ahead.

The key is to be nimble and innovative to turn challenges into golden opportunities. This will not be possible if companies don’t dream big. Allow your teams to contribute to the creative process.

6. Integrating AdTech and MarTech

Adtech and Martech do overlap but have primarily remained distinct from each other with a common goal—to provide better customer experiences.

Such disconnected systems add unnecessary complexities, making it hard for companies to know their customers well. Integrating AdTech and Martech can solve this challenge.

This type of integration helps advertisers by optimizing advertising investments while creating a 360-degree view of the customer. Additionally, companies can make use of Martech data to improve their ad targeting initiatives.

Looking Ahead

There has never been a better time for brands to leverage the new opportunities of digital advertising. And infusing a customer-obsessed mindset can help you take your digital ad campaigns to millions.

From how you handle customer complaints to the details that bring them joy, each step must be focused on how it might be perceived by your buyer.

Finally, a customer obsession focus will help you create a better stream of repeat customers who know they will get a quality product or service with top-notch customer service.

This is the second installment in our series on Customer Obsession where we look into the benefits of having a customer-obsessed mindset and how it will help businesses understand what’s motivating their customers.

Head over to our blog, On-Demand Delivery Services: 6 Key Steps to Customer Obsession and explore the six leading strategies that customer-obsessed companies can employ to recalibrate their model to deliver a smooth last-mile experience.

Do give it a read, if you haven’t, till now!

Key Takeaways:

While it is easy to think that they work in silos, both the customer success and sales teams have quite a few overlaps in their day-to-day activities. What binds them together is their ability to nurture relationships with their customers.

When I first got started in Customer Success (CS), I was over a large US-based organization where we had roughly 60 Fortune 500 companies as customers. These customers represented a large recurring revenue stream for our organization, and it was imperative that we retained more than 95% of our revenue (ARR) and it was more important that we retained logos.   

The overall success of any sales and marketing initiative ultimately hinges on customer success. It’s one thing to complete a sale or close a contract, but the ultimate goal is to ensure that the customer receives maximum value from the sale or engagement. Turning a sale into a successful engagement means happy customers, which translates into additional sales to those customers and reduced customer churn.

Closing the deal is only the first step of a successful sale. Once the contract is signed, you have to ensure a smooth transition from prospect to satisfied customer. That is the essence of solution selling: ensuring customer success.

When you understand that customer success is the end game, you can take steps to guarantee that the customer gets maximum value from the contract, starting with a smooth transition from prospect to customer. When you develop an onboarding strategy that focuses on the customer’s needs and on developing a path to solve their problem, you promote greater customer loyalty and increased renewals.