Companies use a staggering array of metrics to define success: leads generated, customer conversion rate, cost per acquisition (CPA), net profit/loss… the list could go on and on. In the context of customer service, managers and analysts may look at CSAT scores, NPS, retention, and churn rate, just to name a few data sets. While all of the metrics mentioned above certainly have their place, it’s important for corporate leaders to never ignore the vital concept of customer success. In fact, organizations should work hard to quantify and improve this absolutely essential driver for customer retention, satisfaction, and loyalty.
What is Customer Success?
According to the Customer Success Association, customer success is:
“A long-term, scientifically engineered, and professionally directed strategy for maximizing customer and company sustainable proven profitability.”
Put simply, the term “customer success” encompasses and informs the relationship between the vendor and customer; the more successful the customer is, the greater the customer’s lifetime value will be for the company.
Customer Success vs. Customer Service
At first glance, it may seem that customer success (CS) is basically interchangeable with customer service. However, nothing could be further from the truth. While there is quite a bit of overlap between the two concepts, there are also key differences. For example:
- Customer service is a reactive concept. In other words, customer service representatives are focused on fixing problems that have arisen. In contrast, CS strategies are designed to proactively help customers achieve their business goals.
- Customer service is a transactional process, which has a clearly defined beginning and end point. CS is an ongoing journey, and a mindset; the company is always looking for ways to improve the customer experience, and maximize the positive impact of their product in terms of performance for the customer.
- Customer service metrics are generally focused on the quality and speed of the assistance customers receive. CS metrics are geared towards the downstream business impact of retaining customers.
- Customer service is a well-established industry, with relatively standardized processes. CS is a nascent sector, and boasts unique challenges as well as massive potential.
Why Customer Success is So Important
Business leaders may wonder why they should invest time, energy, and resources into CS. The answer, simply put, is that CS almost always equals customer retention, as well as customer satisfaction. Of course, retention and satisfaction are powerful drivers for sustainable growth.
Take customer experience (which we could classify as a subset of CS) as an example. Research indicates that 86% of buyers are willing to pay more for a great customer experience. Moreover, 72% of satisfied customers will share their positive experience with six or more people.
On the other hand, unhappy customers may not complain to the company in question, but they may vent their negative feelings to their friends, family members, and colleagues. In fact, they may complain about the brand to 15 people or more.
This creates a dilemma for many companies. The majority of unhappy customers won’t provide negative feedback to the organization’s customer service department; and yet, most of them will still leave for a competitor at the first opportunity. What can a company in such a situation do? The answer: invest in customer success.
When organizations have a dedicated CS team (or at least incorporate CS methodologies into their customer service department) then they can prevent many dissatisfied customers from leaving. By proactively improving their service process, their product/service, and other aspects of the customer experience, these companies will in many cases eliminate the root cause of customer dissatisfaction — without needing specific feedback in order to take action.
How to Implement a Winning Customer Success Strategy
While each business has unique needs and opportunities, there are certain principles that can help any organization to develop and implement an effective customer success plan. Five fundamental elements of a winning strategy include:
As with so many things, a clearly defined process should be the foundation for any customer success strategy. You must articulate your company’s customer success goals, map out tools and tactics to achieve those goals, and delineate each internal role, along with its corresponding responsibilities, that feeds into the overall mission.
Let’s use the example of an SaaS vendor. The SaaS company wants to contribute to customer success by continually refining its software product. In order to effectively refine the product, they need relevant user feedback. Company leaders decide to send out periodic emails (tools) to solicit feedback from selected users (tactics). They differentiate the role of customer success representatives (who will field the feedback calls/emails) from that of customer success managers (who will analyze the feedback and make their recommendations to senior management).
Once the process is in place, it’s important to fill the relevant positions with the right people. Customer success representatives must be friendly and outgoing, and dedicated to providing the best possible experience for the end user. They need to be coachable, and empathetic to the needs, concerns, and frustrations of the customer. In an SaaS context, representatives will also need basic troubleshooting skills.
Customer success management should start at the very top of the organization. Executives must develop and promote the company vision so that middle management can follow their lead. Lower level managers should ensure that their team members are providing the best possible service to end users, and proactively contributing to customer success per established protocols.
There are two basic categories of data that feed into the overall customer success strategy: customer satisfaction and employee productivity. For instance, a manager at our SaaS company mentioned above may look at metrics such as Net Promoter Score (NPS), First Contact Resolution (FCR), and CSAT to get a feel for the team’s impact on the consumer base. Then the manager can combine those data points with productivity metrics like the number of support tickets closed, Average Handle Time (AHT), etc., in order to determine the team’s level of effectiveness on the “front lines.”
Since CS is an ongoing journey rather than a destination, it only makes sense that companies would invest in regular training initiatives to enhance the effectiveness of their representatives. For instance, our SaaS company may periodically pull CS representatives off the floor in order to train them on the product’s latest updates — with the intention of helping them explain any changes to the end user, and thereby enhance his or her experience with the software.
Customer Success Means Business Success
In summary, customer success is not something to take lightly, or to ignore. It is a key driver for customer retention, sustainable growth, and profitability. If you’d like to learn more about why customer success is so important, and how you can implement it within your own business, contact us today.