Customer success is a term that has become popular in the technology world in recent years, thanks to social media and customer service firms. Nonetheless, that term is somewhat misleading.
Customer success refers to something much broader than customer service. It is about developing a high-efficiency company culture that can help your business grow through direct sales and support of products or services.
The evolution of customer success has brought a changing curve in the growth of enterprise SaaS companies with a customer-centric approach to delivering an exceptional customer experience and driving long-term company growth.
According to Forbes, 80% of companies that do well in customer experience outperform their competitors, ultimately achieving customer success. Companies need to keep up with the changing customer behaviors; their increasing expectations of value to build long-lasting customer relationships.
Customer success strives to help customers get the most out of a specific product or service. Prioritizing the customers' needs and goals helps increase the chances of your customers revving up the sales graph.
The relationship your team creates with your customers determines the expansion of your relationship with them and the growth of future benefits.
What Is Customer Success?
Customer success is an approach your business uses to derive the most value possible from your products or services to help customers achieve their objectives. It is a client relationship management that aligns your customer with your company's goals, prioritizing your customers' satisfaction and ensuring they are always progressing toward their goals.
SaaS enterprise companies have a recurring revenue model, so they must retain their customers for the long term to grow quickly and sustainably. Effective customer success strategies help lower customer churn and acquisition costs and create more upsell opportunities.
Customer success works hand in hand with customers helping them to get value from your product throughout their contract and retaining them. It needs to meet your customer's individual needs and make them successful with your product.
Customer success focuses on customer satisfaction that encourages customers to refer your product among their networks through word-of-mouth marketing. It also provides successful onboarding and activation of your product, getting your customers to use it consistently to acquire faster value.
Who Is A Customer Success Manager?
Customer success managers guide customers to know and learn the product/ service from the inside out. They act as a bridge between the support and the sales team taking customers through the sales process into the support phase.
Hubspot defines a Customer success manager as:
"A customer success manager guides customers through the sales process into the support phase. Rather than functioning as customer support agents, CSMs form a direct relationship with customers and provide them with timely value propositions. This helps customers grow and achieve goals while simultaneously strengthening their relationship with the business."
According to the LinkedIn 2020 Emerging Jobs Report, there has been a 34% annual growth rate for customer success managers, of which 72% of current CSMs work in the Software & IT industry.
However, CSMs do not provide tech support or sell the product. CSMs form a direct relationship with the customers to ensure they are settled about the product and have everything to get started. This relationship provides customers with value propositions to grow and achieve goals while strengthening their relationship with the business.
What Are Their Responsibilities?
Now, let's discuss the responsibilities of a customer success manager.
Be An Advocate For The Company
CSMs work directly with the customers to develop a professional relationship, guiding them through product, operational services, training, and customer services. It is the role of the CSMs to create an influence and explain the value proposition and why you can meet their needs while maintaining long-lasting and healthy relationships with customers.
Additionally, It is also an opportunity for them to significantly build a reputation in front of your customers and provide them with a good customer experience. It will encourage them to refer your product to their friends.
Onboard New Customers
One of the biggest priorities for customer success managers is onboarding new clients, which defines their success. CSM must educate customers on how to use the products and focus on features they need to learn that help the customer achieve initial value.
CSMs must show customers the shortest path to get a return on investment as soon as possible and help them realize the importance of your product.
Follow-Up Renewals With Existing Customers
CSM is responsible for the follow-up with the existing customers, persuading customers to upgrade to higher plans, or even catalyzing them to consider complementary products offered by the company.
Follow-ups help them avoid the risk of potential churn, which impacts your customer retention rates. An in-depth understanding of customers' needs helps them identify opportunities for the company to provide additional services.
Encouraging Customers For Upselling-Cross-Selling
The main goal for CSM is to increase customers' lifetime value through customer retention. However, there is another way through upselling and cross-selling. CSMs must help customers identify if they are ready to upgrade and why it will be helpful for them to achieve their goals.
Being A Bridge Between the Customer And Support Team
A customer might come across some issues while going through their customer journey. It is the CSM's job to resolve them for the customers.
However, some questions aren't the responsibility of the CSM, such as technical issues, minor product problems, and basic business questions that a CSM needs to coordinate between customers and the customer support team.
Being The Voice For Customers
Customer success managers must have an in-depth knowledge of customer pain points and deliver feedback about your product to the implementation team to consider the changes for further up-gradation and be the voice of customers.
They need to organize, analyze, and share this information with other departments to help your organization make decisions based on customer feedback.
What Is Customer Success Operation?
Customer success operations are the department that takes care of the customer success strategies of a business and executes them. The operations team plays a pivotal role as the core of the business mechanism.
While creating an operations team, all the inter-dependability and resource planning should be well thought out to develop a precise flow that keeps the operations busy and running throughout the company's lifetime.
The customer operation team manages the resource input and production capabilities to meet the business goals and achieves optimum performance. Organizations must be able to provide all the support to regulate speed, dependability, quality, and flexibility.
Why Is Customer Success Important For SaaS Enterprises?
Customer success is the key to building strong customer relationships, which is crucial for the growth of SaaS companies as it brings recurring revenue to the organization. It works to develop an umbrella experience for your customers and nurtures them to retain and refer your business.
Customer success is significant for SaaS companies for three main reasons:
- It reduces customer churn.
- It helps to maximize customer lifetime value.
- It increases the chances of renewals and referrals.
Let's dive deep into each of the reasons above to understand the importance of customer success for Saas enterprises.
Customer Success Reduces Churn
Customer success is a recurring revenue model for your SaaS business to achieve growth through new customer acquisitions. CSMs need to have an in-depth understanding of their customers and users to provide an excellent customer experience to make them stay with your business for the long term.
Customer success managers need to gather as much information about their customer's understanding of your product as well as their pain points and provide them with solutions.
CSMs combine this information with the customer health data and forward it to the implementation team to create proactive enhancements and additions. These enhancements help CSMs resolve customers' problems and reduce customer churn.
Customer Success Maximizes Customer Lifetime Value
The main goal of customer success is to increase the customer lifetime value of the organization. SaaS enterprise companies need their customers to see the value in their product quickly and continue to engage with it consistently to grow.
The customer success team provides all the insights and meaningful resources for productive and successful renewal exchanges. SaaS companies that effectively manage renewal conversions can grow faster.
Customer Success Improves Renewals And Referrals
Customer success not only retains customers for the company; it also provides a mechanism to help generate more revenue at a lower cost. It also helps to bring more revenue from customer referrals. The CSMs help SaaS companies to create more opportunities to upsell and cross-sell.
Customers who are able to achieve all milestones and goals successfully are more likely to recommend your product to their network or continue using it when they move on to new roles.
Differentiation Between Customer Success VS Customer Service, Customer Experience, And Account Management
Customer success is often confused with two separate initiatives: customer support and account management. Here are the differences between customer success, customer support, and account management.
Customer Support
Customer success is a proactive approach that involves utilizing customer data to address potential problems and needs before they arise. However, customer support is reactive and focuses on addressing specific customer problems swiftly and effectively.
A customer success team develops an umbrella onboarding experience for new customers, whereas the customer support team provides solutions to the following onboarding questions and clarifies details about the same.
Account Management
Customer success focuses on retention, while account management focuses on expansion. The primary goal of account management involves reacting to upcoming contract end dates, customer feedback, and account health while focusing more on money coming in rather than meeting customer needs.
However, customer success focuses on forecasting future needs and optimizing customer outcomes.
Customer Experience
Customer experience focuses on specific interactions and revolves around how customer success uses customer experience to make your product easy and enjoyable for customers and drive better outcomes. However, customer success focuses entirely on the customer journey to meet overall needs and business goals.
The 7-Step Proven Customer Success Strategies To Grow Your SaaS Business
Let's dive deep into these 7-step customer success strategies that will help you achieve your objectives and SMART goals to provide an unforgettable experience to your customer.
1. Identify The Customer's End Goal
Customer success needs to know what success looks like to customers to help them achieve it. It is crucial to understand that each customer has their own specific goals and their own definition of success or desired outcomes.
An effective customer success plan aligns with the customer's goals and how they align with your solution. The more you speak with your customer will help you build a solid understanding of your customer's expectations of your product. It will help you to tailor your onboarding process with that in mind.
2. Set Success Goals For Each Stage Of Your Customer Journey Map
Customer journey mapping is crucial for organizations to stay on track with their tasks and responsibilities. It lays out the pathway for your customers' interactions with your company, from the time you acquire them as a lead to the time they either; become loyal customers or decide to leave.
It shows how your customers need to move from one team to another to realize the value of the solution you are providing them. You need to define customer outcomes to establish a standard measure of customer success and ensure that your customers meet their anticipated goals.
The stages in a customer journey map include:
- Lead acquisition
- Lead conversion
- Onboarding
- Escalation
- Renewal
3. Make Onboarding Easy
The focus of Customer success should be on providing the customer with an effortless onboarding process. It will encourage them to consistently use your product and derive value from it more rapidly. However, delays in the onboarding process may generate dissatisfaction and cause the customer to churn in the early stage.
You can build an efficient onboarding experience by automating your onboarding process. It will allow you to track and score customer progress and segment your customers based on where they are in the onboarding process and what support they need to reach the next stage of their journey.
4. Define Customer Success Metrics
Customer's end goals help you optimize the customer journey according to their requirements, but how will you ensure that the plans you have made are successful?
Defining success metrics allows you to quantify customer success. It is crucial to understand that these metrics will help you evaluate the health of each customer account.
Some of these activity-based metrics include daily, weekly, or monthly average usage, depending on the nature of your product. You can also develop custom health metrics that align with the customer goals, customer journey, or other relevant usage metrics.
These metrics will help you automate tracking to see at a glance how individual customers are succeeding at achieving their goals with your organization.
5. Personalize All Customer Interactions
Customer success managers must show customers they recognize and understand each customer's unique goals. The customer success managers must introduce a unique communication channel for each customer to keep track of their activities to guide them or resolve any obstacles they might encounter.
It will also help to update them about the new features that might benefit a customer and explain to them how they will specifically; help their business. You can divide customers into segments to customize your newsletter to each group and keep them in the loop.
6. Incorporate Customer Feedback
After all the planning, Customer success managers need to check and understand what's working and what isn't. CSMs can ultimately measure success when your product has helped your customer achieve their goals.
They can quantify success using feedback mechanisms like NPS, and CSAT can give you a high-level understanding of overall customer satisfaction and happiness.
CSMs can share the survey with customers and ask them to rate their satisfaction score to know if they were happy with Your product and the whole customer experience. CSMs can also automate these procedures and create a standard operating system for the best results.
7. Automate Your Customer Success Strategy With Customer Success Software
A customer success manager must select an ideal tool for customer success to support and automate your customer success strategy for more efficient execution and more consistent results throughout your customer journey. However, current customer success tools make it difficult for customer success managers to share data on customer reports across departments in your organization.
An ideal tool helps companies smoothly onboard customers and must provide the ability to define and track measurable success goals aligned with your customer journey map. It should also help in monitoring real-time customer progress to keep up with the customer journey with your product.
You may be able to automate or track tasks. However, it is difficult to manually share data from one silo to the other, as data is generally present in silos in almost every organization, which may cause delays in task delivery or execution while increasing the chances of data loss while data exchanges.
The most convenient way is to manage all the tracking tasks and data sharing in one single course of truth. It will be helpful for customer success managers to have a tool that is a single source of truth platform and has all the required data in one place for your teams, and have access to configurable best practices, scorecards, and communication templates.
Conclusion
Companies must create strong customer success teams that build a solid customer success foundation for their organization to achieve higher success and growth rates. It is not enough to acquire customers.
You must retain them long-term with the help of the right customer onboarding software for SaaS with features that will provide you with intelligent focus, effortless visibility, and contextual insights. It also helps you minimize revenue risks to achieve higher customer success.
I hope you found this customer success guide helpful and tailored to your needs. If you have any further questions or require assistance, please feel free to contact us.
Our customer success expert will provide your organization with a customized evaluation report, including recommendations to accelerate your time-to-value.
Frequently Asked Questions (FAQs)
What is customer success in SaaS?
Customer success in SaaS is a proactive business strategy that ensures customers achieve their desired outcomes while using your product or service. It focuses on helping customers derive maximum value from your product, leading to increased retention, reduced churn, and sustainable business growth.
How is customer success different from customer service?
Customer success differs from customer service in several key ways:
- Customer success is proactive, while customer service is reactive
- Customer success focuses on long-term value delivery, while customer service addresses immediate issues
- Customer success works on strategic relationship building, while customer service handles tactical problem-solving
- Customer success drives product adoption and growth, while customer service resolves specific challenges
What are the main responsibilities of a customer success manager?
A customer success manager (CSM) has several core responsibilities:
- Onboarding new customers and ensuring smooth product adoption
- Building and maintaining strong customer relationships
- Identifying and pursuing upsell/cross-sell opportunities
- Monitoring customer health and preventing churn
- Acting as the voice of the customer within the organization
- Driving product adoption and value realization
How do you measure customer success?
Customer success can be measured through several key metrics:
- Customer Health Score (CHS)
- Net Revenue Retention (NRR)
- Customer Lifetime Value (CLV)
- Net Promoter Score (NPS)
- Time to Value (TTV)
- Customer Churn Rate
- Product Adoption Rate
What is a good customer success rate?
A good customer success rate varies by industry, but generally:
- Customer retention rate should be above 90%
- Net Promoter Score (NPS) above 50 is considered excellent
- Customer Health Score should be green for at least 80% of customers
- Time to Value should be consistently decreasing
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