What is Customer Success?

W

What is Customer Success?

Customer success is the new black.

And everyone seems to be jumping on the bandwagon.

That’s great. But what does Customer Success really mean?

As more companies realize the importance of optimizing and nurturing customer relationships, they are starting to invest heavily in the right resources to manage those customers and retain their business.

The importance of Customer Success

Although it got its start in the tech industry, customer success is quickly becoming one of the fastest-growing teams for growing companies in every market, all over the world.

Why?

Because we, as consumers, have more choices for the products and services we purchase than ever before. It’s no secret that sales and marketing teams have their work cut out for them to convince customers to buy in the first place.

But what happens after those buyers become customers?

Great first impression. Or nothing.

One-third of all consumers report that they would switch companies after just one bad service experience. With our customers unwilling to give us a second chance at great customer experience, how do we get it right the first time?

Sure, we have customer service teams and support channels. But is that really enough in today’s consumer-driven world?

Enter customer success.

A team that proactively communicates with customers to nurture relationships. With a focus on enhancing the customer’s overall experience. As well as identifying opportunities to upsell products that lead to better outcomes for customers and more revenue for the company.

When you consider that just a 5% boost in customer retention can lead to a 95% increase in profits, it becomes clear that customer success is well worth the investment.

How is Customer Success different from Customer Support?

Since customer success is still a relatively new concept for most companies, it’s important to understand the key differences between customer success and traditional customer support teams.

What is Customer Support? Reactive.

Customer support (or service) teams are the unsung heroes of most organizations; they are tasked with cheerfully and expediently solving problems for customers.

All day, every day.

Designed to be a reactive team, making themselves available to customers as needed, customer support responds to specific requests at very specific points along the timeline of the customer journey.

What is Customer Success? Proactive.

Customer success, on the other hand, is largely proactive. Teams are monitoring customer health at all points along the customer journey. While they work very closely with customer support, customer success teams also anticipate potential issues and work to prevent them before they become support needs.

A proactive approach is important to customers, with nearly 70% of companies in a recent survey say that their perception of a brand is higher if they receive proactive care and support from that brand.

How to measure your Customer Success team?

Another key difference between customer support and customer success is how each team is measured.

Support metrics tend to be very transactional in nature–think service level metrics, NPS scores, CSAT scores, etc.

Customer success metrics focus on longer-term business impacts–customer retention, renewal rates, and customer lifetime value, for example.

Because their relationship with the customer extends well beyond support, the customer success team must also collaborate with nearly every team in the company to stay abreast of crucial product and business information that could impact the success of their assigned customers.

Why do you need customer success?

While customer support is considered a cost center (albeit a necessary one), customer success is nearly always responsible for contributing to revenue growth.

Companies are starting to recognize this distinction and prioritize hiring and development of customer success teams.

A recent HubSpot study found that 70% of fast-growing companies believe that customer success is “very important.” Compare that to research gathered from slow-growing companies: only 49% believe in the value of customer success.

How do customer success teams contribute to the bottom line?

They are uniquely positioned to identify and communicate the value of upselling and cross-selling opportunities to customers. They are proactively suggesting new products, features, and services that can help their customers reach business goals.

Customer success managers can often convey the value of a product or service better than any sales or marketing pitch.

In addition to closing renewals and add-on sales, customer success is largely responsible for increasing customer retention rates. Retention not only drives profitability (as discussed above) but it also creates brand evangelists and references to help attract new customers. On average, it costs five times more to acquire a new customer than to keep an existing one.

It has never been more important to nurture customer loyalty.

How to build a Customer Success team?

Before you start hiring for your customer success team, think about what you want to accomplish.

  • What is the current state of your customer landscape?
  • Do you have a good understanding of how your customers are using your products or services?
  • How do you support customers once the deal is closed?

Smaller organizations may find it difficult to hire for enough customer success managers to support a 1:1 relationship with customers. It may not even be necessary to extend a proactive layer of support to every customer.

By dissecting and understanding your current customer landscape, you’ll have a better understanding of you want to segment your customer success team and how many managers you’ll need to fully support that segmentation.

When you’re ready to hire your new team, don’t overlook one of the best sources for customer-focused talent.

Your customer support team.

While the skill set for customer success is different in many ways, customer support representatives have many of the necessary skills that translate well into customer success. They are well-educated about your products and services, skilled at solving customer issues, and they have a natural drive to support the success of customers.

Above all, a good customer success manager will be an excellent communicator and a strong team player. They must also advocate for their customers while protecting the interests of the company.

Putting all this Customer Success goodness together.

As you build your team, gain their buy-in on how to measure results.

  • What metrics matter most to your organization?
  • Customer retention?
  • Referenceable customers?

Whatever metrics you choose, socialize them throughout your organization so that everyone understands the role and the business value of the customer success team and will be ready to support their efforts.

About the author

JR Farr

JR Farr is the co-founder and CEO of Weav. Connect with @jrfarr on Twitter.

Previously, VP Product @ $EIGI (Bluehost, HostGator, Constant Contact). CEO & Co-founder one of the largest digital goods marketplaces, MOJO Marketplace which reaches 6 million users globally.

2 comments

By JR Farr