A customer in hand is worth two in the bush!
Many entrepreneurs and decision makers are realizing how important this is in the current economic landscape. Statistics show that it’s generally anywhere between 5 to 30 times more expensive to attract a new customer than retain an existing one.
Customer Success therefore is a crucial concept when building a sustainable and profitable business in order to avoid the exorbitant costs of having to constantly acquire new clients. Companies are slowly realizing they need to keep in mind the lifetime value of their customers and maximize that value by ensuring their customers are satisfied, active and regular users of their product or service. This in turn incentivizes future selling to these existing clients, whether in the form of service renewals or new product lines.
The adoption of client success has been particularly prevalent among software as a service (SaaS) and cloud-based companies. Opinions differ on its terminology, reporting structures and metrics of as the concept is still being developed.
However, there is agreement that it always refers to managing relations with the customer post sale and empowering them with an aim towards improving their lifetime value.
If satisfied by the customer experience, 73% of consumers will recommend a brand to others, and 46% say they will trust that brand’s products and services above all others. – SDL Global CX Wakeup Call Report
Defining Customer Success
The process of anticipating customer challenges or questions and proactively providing solutions prior to them arising and adding value to their experience on the journey to success. Customer success helps boost customer happiness and retention, increasing a company's revenue and customer loyalty.
Who needs a customer success game plan?
You do! To put it in layman terms, anyone who has customers should invest in customer success.
The most cost efficient way to run a business is by establishing a customer's happiness and success, which are both by products of Customer Success Management.
Key Functions Client Success Entails
> Customer On-Boarding
Almost every software or service requires initial implementation, engagement or installation. The level of setup may vary but regardless of how much effort is involved, the key deliverables, time frame and structure for on-boarding should be clearly defined. This is also called ‘technical enablement’ and the internal team in charge of this is usually called ‘professional services’.
> Continued Support
Client satisfaction requires ongoing maintenance and support. In the case of “as-a-service companies”, technical support in the form of application performance monitoring is necessary to ensure the best possible customer experience. The most successful companies proactively reach out to their clients as support should not only deal with client pain points when they arise but rather constantly train and nurture their customers.
> Knowledge Transfer
Sometimes also referred to as ‘knowledge enablement’, this entails equipping the customer with all the necessary knowledge to make the best use of the solution, service or software provided. While it can be rolled into either technical enablement or support, it’s best provided as a niche, separate team for more complex product offerings.
> Relationship Management
Client relations need to be nurtured and managed so that companies build good rapport with their customers on a human level parallel to all efforts made on the technical side. The customer relations team often acts as an advocate for clients to other internal teams, with the aim of increasing adoption of the solution, renewals and repurchases, which subsequently also increases revenue.
The probability of selling to an existing customer is up to 14 x higher than the probability of selling to a new customer. – Marketing Metrics: The Definitive Guide to Measuring Marketing Performance
What It’s NOT
While the specifics of Client Success are still being debated as the term continues to evolve there are some misconceptions about what exactly it entails. It is:
Not Customer Service version 2.0
Is Customer Success just a new label that replaces an existing role? Is it just a fancier version of customer service or support? It may seem that way at first but regardless of the label, the function has evolved in the pursuit of better customer relationships, retention and optimization. The most effective way to retain existing clients has always been by enabling them to get the most out of what you have to offer - to guarantee their success with you.
Once a customer leaves, 4 in 5 say they will never come back, and if they do, 59% say they will be less loyal. – SDL The Global CX Wakeup Call Report
Not Another Form of Account Management
Customer Success Management is not just another name for Account Management.
The client success role may share many traits with traditional account or project management but with one crucial difference - it has a laser sharp focus on the long-term value of each customer. It’s about reducing churn and in stimulating higher lifetime returns per acquired customer.
Traditional account management tends to treat its customers like its accounts, a number. The focus would be on renewal and expansion (upselling and cross-selling) from the company's perspective only. Whereas with Customer Success Management their main concern is that the customer themselves are successful.
Of course driving the growth of the company is behind this idea but how can a Company claim to be successful if it’s customers are not? Perhaps the role of Account Manager should sit within the role of Customer Success Management to help drive Growth within a business.
The cost of acquiring a new customer costs 5 to 10 x more than retaining an existing one. Not only that, but repeat customers spend, on average, 67% more - Bain and Company
Customer success is Not just ‘Checking in’ with Customers
Just ‘checking in’ with a customer could be considered an insult in terms of Customer Success Management.
We should only be calling or making contact with a customer when we have value to add, to improve their experience. Let's find out where they are on their path towards success and offer them a reason to stay on it. Find out where the customer is and exactly where they need to go, always be armed with a plan and resources to back it up.
Why is not just ‘checking in’ important? Because if you continue interacting with customers and providing no value, it will teach them that interacting with you is pointless and they will start to ignore you.
Time to Thrive
The manner in which entire industries have evolved is such that recurring income streams from existing customers is a necessity rather than just a ‘nice to have’. If businesses want to survive and thrive in the long run they cannot leave customer success to chance but need to manage it as the strategic asset it is. While it may be an integration of several functions, from professional services to training and support, it is also more than just a sum of these parts - it is the key to long term profitability and growth. Making sure your customers are successful is the secret to your corporate success as well.