Sixteen years ago, the only streaming service was Youtube. Netflix started to offer its users streaming in 2007.
Now, there are dozens of streaming services, maybe even more.
What I mean is that nowadays the customers have lots of options. Not only for streaming services but for everything, really.
And this affected SaaS companies as well. Especially with the pandemic and all that comes with it, businesses started to adopt customer success strategies as an offensive strategy rather than a defensive act.
Before I explain why you should prioritize customer success, I want to define what customer success is.
What does Customer Success really mean?
Customer Success ensures that your customers get their desired outcome from your product by answering their questions and needs. In addition, customer success finds out the problems customers might have in the short and long term and deal with them accordingly.
Customer success boosts the chances of customers remaining by ensuring consumers are satisfied with a product. That’s an essential part of building monthly recurring income for SaaS and other subscription-based businesses.
Since Customer Success helps you keep your customers happy and satisfied, you can increase customer satisfaction and gain loyal customers.
But you might ask, “Why should I focus on customer success instead of sales and marketing? I can spend money on marketing to get customers instead”.
The answer is easy.
It’s because customer success matters.
Why does Customer Success matter?
In a conference, Jason Lemkin, the managing director of Storm Ventures, stated:
“Customer Success is where 90% of the revenue is.”
And he is right.
Let me give you an example.
If you sell a subscription for $100 a year, you will get $100 revenue when you get a new customer. However, you have to be willing to spend money on sales and marketing to get that new customer.
In the end, your profit would be $100 minus all sales and marketing costs.
However, if you get your existing customer to renew their subscription, you would get $100 minus the customer success cost, which is way less than all the money you’d have to spend on marketing.
Because, of course, offering your customers a better value instead of letting them churn is more profitable.
In addition, according to a research, customer success is 5x more cost-effective than customer acquisition programs in businesses. That means that keeping your current customers satisfied will make you way more profit.
With better custom success practices, you can boost your:
- Customer retention rate
- Customer acquisition
- Churn reduction
- Brand promotion
Let’s get into details.
1. With Customer Success, you can retain customers.
I already talked about how customer retention is more profitable than customer acquisition in the short term.
Customer success is the key to customer retention.
When you understand your users better and offer them what they want out of your product, they will continue purchasing it. It is that simple.
2. With Customer Success, you can get new customers.
Yes, customer retention is more profitable in the long run, but customer success will also increase your customer acquisition.
How, you might ask?
Your loyal customer will help.
As you keep your customers happy and satisfied, they will recommend your product to others as they get the value they expect from your product.
They will leave good reviews on social media. In addition, they will recommend your product to other people on blogs.
So you will have a different marketing team at your service without any extra costs.
3. With Customer Success, you can reduce churn.
Customers have lots of options, and this means that once customers think they are not getting what they should be getting from your product, they could easily switch to another service.
With proper customer success management, you can offer your customers the experience they expect to get. For example, you can design your website according to your customers’ needs and offer them a better user onboarding.
So they could use your product more effectively and continue using it.
This way, you can lower your churn rate.
4. With Customer Success, you can promote your brand
Loyal customers are beneficial for your brand image. So when you start to form an audience for your product, you can take steps to widen your horizons.
And networking plays a huge part in that matter.
Your product can go from being one’s recommendation to someone else’s new favorite in a few days. As your customers increase, the number of customers you can gain through the network will also increase.
You do the math.
5. With Customer Success, you can increase your profitability.
In the long run, all of the elements I’ve listed above would increase your company’s profitability. As you profit, you can expand your company and grow as well.
There is no limit.
But how can you ensure that your company has efficient customer success management?
To answer this question, I prepared an extensive list of the ten best practices for customer success.
So, without further ado, here is the list.
10 Best Practices for Customer Success
- Make Customer success your number one goal
- One for all, All-for-customers
- Understand your customer
- Offer your customer effective user onboarding
- Break down your customers into smaller segments and personalize their experience
- Analyze and share customer metrics
- Think both for the short and long term
- Put more people in your customer teams
- Find out the red flags
- Get feedback from your customers
1. Make Customer Success your number one goal.
It’s vital to set your goals straight. Without a good purpose and plan, you cannot achieve the results you desire.
Do you want to improve your customer management skills?
If you do, then your company needs to focus on that. From the sales to the marketing department, all of your employees should focus on improving customer service and providing customers with a better experience.
To create a better experience for your customers, you can create a customer success program. A customer success program will guide your customer success and other teams and make sure that you meet your customers’ expectations.
Customer success plan checklist:
- Create a proper customer success team
- You can use a customer success tool or software
- Understand why your customers need customer success and their user journey
- List your expectations from the customer success process (both short and long term)
- Share your plan with your team and receive feedback from the team
- Analyze what you’ve found and how helpful it is to customers
- Update and make modifications to your plan when it’s necessary to keep your customer success strategy effective.
Once you decide on your strategy, you can continue with the following steps.
You have a customer success team, but all departments should work harmoniously to ensure customer satisfaction. Communication between the teams plays a critical role here.
Also, the earlier your company focuses on customer success, the better it is for your brand.
You know what they say, the early bird gets the worm.
3. Understand your customer
Think like a customer. What does success look like when you’re the one purchasing your product? What do you want to get out of your service?
If you don’t think that you can put yourself in your customers’ shoes, you can directly ask them.
Voice of the customer (VoC) is a method many companies use to understand their users better. Since you ask your customers directly, you can get a clear answer.
Don’t forget, what your customers expect from your product should be your customer success goal, not the one you see as success.
4. Offer your customers effective onboarding
Guide your customers along the way. Teach them how to get the most out of your product with tools, resources, and training. Customer onboarding is the perfect way to show them your brand’s all about and answer their questions before they even ask.
You can use user onboarding software/tools to offer your customers a better onboarding process. For example, UserGuiding is a user onboarding tool to create quick, hassle-free, and interactive guides for users to discover your product.
Here’s what would happen if Youtube used UserGuiding:
5. Break down your customer base into smaller segments and personalize their experience
If you want to focus on more than one customer success goal, you can segment your customer base to get different definitions of “success” from them. Many companies benefit from customer segmentation; however, you could skip this step if your product has one specific purpose.
When you create segments, each group is going to have its definition of success. And understanding customers’ definitions beforehand is going to make your customer success program much more effective.
Specific customer groups will have specific problems and require different solutions. Therefore, when you offer your customers personalized solutions, they would not feel like they are just numbers for your company.
Personalizing their experience is a great way to build a relationship between you and customers, and it’s also an excellent investment for the brand image in the long term.
6. Analyze and share customer metrics
As I mentioned above, teamwork is crucial when it comes to customer success. All teams in your company must collect customer metrics and share data with other team members regularly.
Communication between different departments is essential to keep everything in place and get the correct data at the right time. It would be best to focus on key customer metrics: customer retention cost, repeat purchase rate, customer retention rate, customer satisfaction score, churn rate, and customer effort score.
Once all teams track these metrics, you can compare collected data with other teams and find solutions accordingly.
7. Find solutions for the short and long term
So, you have data from different teams; what to do next?
First of all, you should find solutions for current problems. For example, maybe your customers have a problem with your website, or they can’t seem to use a helpful feature as often as you’d expected them to do. Whatever it is, you should come up with solutions as quickly as possible.
However, your job is not done yet. With the information you currently have, you should predict the possible future problems of customers and find solutions for those too. If you are prepared for an issue that hasn’t appeared yet, you wouldn’t get surprised and react to it faster.
It’s crucial to use different graphs and analytic methods to make the best predictions and prepare your short and long-term plans according to those predictions and data.
8. Put more people in customer teams.
If you want to master customer success management, you can’t have understaffed customer support teams. When it comes to customer support, the numbers of customer support agents matter a lot.
Not only for your customer but your employees as well.
When you are understaffed, your customer can’t get the help they need as soon as possible. So they would churn.
Since they have to deal with many customers at once, it also tires your employees and affects their performance. So as their performance lowers, more customers would churn.
A quick way to check if you are understaffed or not is using the rule of 40. According to this rule, a SaaS company should not give more than 40 customers to a customer support representative.
If you can’t hire more customer support representatives, try using customer support tools. These tools have various features that can help your customer support representatives and lighten their burden.
9. Find out the red flags.
When you check your customer data, you can detect the early warning signs that demonstrate a customer or segment struggling with your product. The customer success team’s job is to determine the red flags and support struggling customers and guide them back to their intended direction of success.
You need to prepare a system that can help customer success managers address these red flags. Then, they can work with the customer directly to fix any issues and provide any needed education or improvement.
Proactively contacting customers would help with everything I’ve stated above in the previous points. Customer service is usually based on replying to customers’ questions and needs, but you can also take the first step.
Does your product have a new feature? Send e-mails to all of your customers to keep them updated. Maybe share the results of a survey you had on your website or inform them about the training you provide them.
The data you would get from these simple actions would help you track customer success metrics and find out the red flag sooner.
10. Get feedback from your customers.
We are talking about customer success so you must consider their opinions too. After all, customer success is not a task you can finish when you ensure one customer’s success. You need to update and improve your system regularly.
Proactively contacting your customers would help you to build a customer feedback loop. Honest customer feedback is the best way to keep up with your customers and their expectations for the long term.
You should prioritize customer success for the good of your business.
With the new age, your relationship with customers will determine if your business will succeed or not. Therefore, you should help your customers when they need it because:
Your customer’s success means your success.
A customer success team and strategy will benefit your business in the long term and positively impact customer retention, loyalty, and revenue.
Frequently Asked Questions
How do you success at Customer Success?
Your customer success team should prepare a customer success plan for the short and long term and work with other departments to ensure a better customer experience.
What are the pillars of customer success?
Treat your customers right and manage them as assets, deliver what you promised under your brand promise, act on customer feedback, manage customer risk and create a consistent customer journey.
Can I use Hubspot for Customer Success?
Yes, you can. Since their Service Hub offers various customer success tools. Also, customer success platforms like ChurnZero, survey tools such as Feedier, and user adoption tools such as UserGuiding can help you keep in touch with your customers.