Amidst the fast-paced changes and fierce competition in today’s business environment, the impact of the subscription economy (subscribing to the outcomes rather than purchasing a product with the burden of ownership) on the SaaS business has been significant, disrupting the traditional approaches to customer management and work processes.
According to a report by Gainsight, “The State of the Customer Success Profession 2021,” organizations with a dedicated customer success function saw a higher net revenue retention rate (91%) compared to those without one (82%).
These findings emphasize the vital role of customer success in driving business growth in a rapidly SaaS-evolving industry, with new players constantly entering the market, making it difficult for businesses to differentiate themselves and maintain their customer base.
Customer Success (CS) has evolved from a singular focus to a dedicated business function. It has become a well-thought-out engagement strategy that helps customers achieve their desired outcomes and realize the full potential of their investment in a product or service.
One caveat: The extent organizations engage in these practices may vary depending on the maturity level and complexity of their product and internal processes. Some organizations may implement most or all of these practices, while others may only employ a few.
In this article — we will examine how businesses can leverage customer success teams to remain relevant and sustain growth in the highly competitive market.
Account Health Score
A program or account health score is a metric that measures the overall health of a customer’s engagement with a product or service. It consists of (various factors such as) adoption, usage, and customer satisfaction.
By tracking account health scores, customer success teams can identify early warning signs of customer churn and take proactive steps to address the underlying issues.
Here are some ways in which businesses can partner with CSMs to develop a program or account health score:
- Identify key performance indicators (KPIs): Determine the most critical KPIs for your SaaS business that align with your customers’ success metrics. It includes metrics like product adoption, feature usage, churn rate, and customer satisfaction.
- Assign weights to each KPI: Assign a weight or value to each KPI based on its importance to your business and customers. It helps prioritize the most critical metrics in your health score.
- Set threshold values: Set threshold values or targets for each KPI based on industry benchmarks, historical data, or customer goals. It will help you to identify when a customer is at risk of churn or is not achieving their desired outcomes.
- Analyze data and adjust scoring: Regularly analyze the data and adjust your scoring methodology based on customer feedback, industry trends, and changes in your product or services.
- Integrate with customer success workflows: Integrate the health score into customer success workflows, such as customer onboarding, training, and support. It will enable you to proactively identify and address customer issues before they become a problem.
- Communicate health score to customers: Communicate the current health score to customers to help them understand their progress toward achieving their desired outcomes. It can also serve as a motivator for customers to continue using the product or service.
Customer success is outcome-focused. Their primary objective is to assist customers in achieving their desired outcomes. By understanding a customer’s goals and objectives, customer success teams can tailor their efforts to help customers realize the full potential of their investment in a product or service.
To achieve this, leverage CSMs to:
- Outcome mapping: Customer Success teams should invest time and work with customers to map out their desired outcomes and develop a plan for achieving them. It involves understanding the customer’s business goals, identifying the key metrics that define success, and creating a roadmap for achieving those outcomes.
- Regular touch-base: Have ongoing or regular check-ins with customers to monitor progress towards their desired outcomes. It allows them to identify any roadblocks or challenges hindering progress and take corrective action as needed.
- Conducive training: Provide customer success managers with conducive product training to aid customers in optimizing the use of the product or service to attain their desired outcomes. This training should include practical advice, valuable tips, and supplementary resources to help customers achieve maximum return on investment.
Voice of the Customer
Within an organization, customer success teams serve as the customers’ representatives. They can offer valuable input into product development, customer support, and training.
Here are some ways in which businesses can partner with CSMs to develop a VOC program:
- Define your goals: Determine the specific goals that align with your growth objectives. It could include identifying opportunities for upselling and cross-sell, reducing churn, or improving customer satisfaction.
- Identify key customer touch points: Identify touchpoints in the customer journey where you can collect valuable feedback. It could include onboarding, product usage, support interactions, or post-purchase surveys.
- Choose the identifiable feedback mechanisms: Select identifiable feedback mechanisms based on your goals and customer touchpoints. It could include in-app feedback, email surveys, phone interviews, or user testing.
- Design feedback surveys: Design feedback surveys focus on growth objectives and are measurable. Use a mix of closed-ended and open-ended questions to gather quantitative and qualitative data.
- Analyze feedback data: Analyze the feedback data to identify key trends, themes, and areas for improvement. Use data visualization tools to communicate insights to stakeholders and to track progress over time.
- Implement changes based on feedback: Use the insights gained from your VOC program to make changes to your product or services that align with your growth objectives. It could include improving user experience, adding new features, or providing additional training or support.
- Measure impact: Measure the impact of your changes by tracking key metrics like customer satisfaction, retention, and revenue growth. Use this data to continuously improve your VOC program and make data-driven decisions for growth.
Customer success teams are often early adopters of new technology and processes. As early adopters, they can provide insight into emerging trends and help businesses to identify new opportunities. By staying up-to-date with the latest trends and best practices, CS teams can help other customers stay ahead of the competition and achieve tremendous success.
Here are some steps businesses can take:
- Develop a culture of innovation: Encourage a culture of innovation within the organization where trying new approaches and testing new ideas are encouraged.
- Promote collaboration: Foster a collaborative environment where cross-functional teams work together to drive innovation and adopt new technologies.
- Provide training: Ensure that CSMs are well-trained on the latest technologies and tools [that can help them] to become early adopters.
- Encourage experimentation: Give CSMs the freedom to experiment with new technologies and processes to see what works best for the organization.
- Provide feedback: Promote transparency and honesty [in providing feedback] on the technologies and processes under evaluation.
- Recognize and reward: Acknowledge and incentivize customer success managers who are among the first to embrace and implement new technologies and processes.
Situational intelligence refers to the capacity to comprehend and adapt to the distinctive circumstances of a customer. Customer success teams can offer personalized solutions that satisfy each customer’s specific requirements by considering elements such as industry, company size, and business objectives. This skill enables them to create customized solutions that tackle the underlying causes of issues and provide more efficient support.
Below are some measures to foster this inherent capability of customer success managers.
- Provide training: Offer training programs that focus on developing situational intelligence, including topics such as active listening, empathy, critical thinking, and problem-solving.
- Foster collaboration: Encourage CSMs to collaborate with other teams, such as sales and product development, to gain a deeper understanding of customer needs and challenges, and to develop solutions that address them.
- Measure and evaluate: Develop metrics to assess the effectiveness of the training programs and the situational intelligence of CSMs. Utilize this data to facilitate sharing and continually improve their current skills and processes.
Customer success teams are often the best storytellers in an organization. By sharing success stories and case studies, they demonstrate the value of a product or service and inspire other customers to achieve similar results.
As such, the customer success function has evolved as an internal consulting arm. It involves offering planning and consulting services, providing ongoing advice, and sharing best practices with every customer at every stage of the product life cycle.
Here are some key ways in which storytelling can harness CSMs’ ability to drive business growth and success:
- Building Emotional Connections: Stories can help to create emotional connections between businesses and their customers. Businesses cultivate empathy and trust with their customers by narrating how their products or services have positively impacted people’s lives.
- Enhancing Customer Engagement: Stories can also use to enrich customer engagement. By creating compelling narratives around their products or services, businesses can capture their customers’ attention and keep them engaged over time.
- Communicating Value Proposition: Stories communicate the business’s value proposition more compellingly. By showing customers how their products or services can solve real-world problems, they can make a stronger case for why customers should choose them over their competitors.
- Inspiring Action: Stories can inspire customers to take action. It can motivate them to take similar steps and attain their own goals.
- Creating Differentiation: By sharing unique and compelling stories about their products or services, they can stand out in a crowded market and create a distinct brand identity.
Product or Process Innovation
Customer success teams provide valuable input into product innovation and development. By understanding customer needs and pain points, they can provide feedback that helps drive product improvements and new features or qualities.
Innovation can take many forms, from incremental improvements to existing products to radical new offerings that disrupt entire industries. Whatever its form or shape, innovation is important because it helps businesses differentiate themselves in the market and create more value for their customers.
Renewal and Customer Retention
By showcasing the value of a product or service, customer success teams can enhance customer loyalty and retention, which is crucial for renewing customer contracts and subscriptions.
To integrate renewal and retention as a means of driving growth, you may want CS teams to follow these steps:
- Understand the customer’s journey: Analyze the customer’s journey from the initial point of contact through becoming a loyal customer. Identify the touchpoints where changes are needed to incorporate to enhance the customer experience.
- Develop customer personas: Create detailed customer personas based on demographics, psychographics, behavior, and needs. It will help in creating targeted marketing campaigns that resonate with the customer.
- Leverage customer feedback: Use this feedback to tailor marketing campaigns that align with the customer’s expectations, pain points, needs, and preferences.
- Use customer data: Leverage customer data to gain insights into customer behavior, purchase patterns, and preferences.
- Collaborate with sales and marketing teams: Work closely with marketing and sales teams to develop marketing campaigns that align with the overall customer success strategy. This collaboration will ensure that marketing and sales campaigns are relevant, timely, and effective.
Customer success teams can aid in customer marketing by identifying satisfied customers and transforming them into brand advocates, which can help generate new business through referrals and word-of-mouth.
One of the key benefits of customer marketing is that it can help businesses deepen their relationship with existing customers and keep them engaged and informed about new products, services, or promotions that might interest them.
Another benefit of customer marketing is that it can help businesses identify areas to improve their product or service offerings.
The function of customer success is of utmost importance as it can play a significant role in propelling business growth. By leveraging these ten tenets, companies can ensure that they are providing the best possible venture for their CSMs and realizing the full potential of their core capability and success.
Failure to prioritize team enablement and empowerment can put businesses at risk of lagging behind competitors and losing their market share. However, by investing in customer success and enabling CSMs to reach their full potential, companies can help to cultivate stronger relationships with their customers, enhance customer loyalty, and generate new business through referrals and positive word-of-mouth.