Many fledgling businesses think of customer success as maybe the fourth or fifth thing they should do.
Their typical thought process goes something like, "I'm going to build a killer product and make people aware of it. Next, I'll try to sell it. If someone buys it, then I'll try selling it to others just like them." Customer success rarely goes into the equation at this point. Because all for-profit businesses are metrics-driven, it's easy to focus solely on the drive to continually add new customers, since customer acquisition correlates to sales and revenue. The problem with this is that it doesn't account for the high cost of replacing dissatisfied customers, the low cost of expanding with existing customers, or the value of partnering with them to navigate the product roadmap.
Sure, making sales is essential to any business — that's common sense. But as soon as a company sells its first product, it should also begin practicing customer success. According to the Customer Success Association, the mission of customer success is to "increase sustainable proven value for both the customers and the company." This means that when a business helps its customers find ongoing value in using its product, the business benefits through customer retention. This also allows the business to grow through positive word of mouth that creates new customers.
Customer success begins with ensuring a smooth implementation and onboarding process and continues through regular interaction to monitor the customer's product usage and satisfaction. It also requires stepping in to resolve any challenges customers are having. But isn't the latter also called customer support? In actuality, there is a nuanced difference. When a customer is frustrated something doesn't work, they call the company for help and customer support assists them.
Customer support is more of a reactive approach to problem resolution. Conversely, customer success is much broader and more proactive. It doesn't wait for someone to contact tech support to say, "Hey, I can't log into the system." Customer success maintains a two-way dialog through the (hopefully long) lifecycle of the relationship. "How's the solution working out for you?" "Are you realizing benefits?" "What can we do to help?" These are common questions that should be asked.
We've talked before in this series about it costing five times more to acquire a new customer than to keep an existing one. Given that, it's somewhat surprising to learn that 44% of companies have a greater focus on customer acquisition while just 18% have a bigger focus on retention. This means a lot of businesses are continually engaging in replacing customers they worked hard to get and spending a lot of money doing it.
But the value of customer success goes beyond basic math. Remember the product roadmap mentioned earlier? Customers are a great resource for helping businesses improve and refine their offering. They'll tell product development what they like about a solution, what they don't, and what else they wish the solution could do. Of course, gathering this type of information requires a rapport with many customers so businesses aren't just building to suit the needs of one constituent.
It's important to get the perspective of customers so product development isn't taking place in a vacuum. Instead of trying to figure out how the product should evolve, ask the actual user. In fact, gathering these insights is a big part of customer success. It makes customers know they're being listened to and valued.
While human communications are a big part of building customer rapport and trust, there are also tools available to help companies keep their fingers on the pulse of their customers in terms of product engagement. This way, businesses don't have to be on the phone or emailing with customers every day but can still have visibility into whether a product is being adopted and used or is simply gathering dust. Some of these solutions go beyond just looking at logins to also determine exactly what features are — or are not — being utilized.
Such knowledge enables businesses to discover if there's a problem so they can open up a dialog to resolve it before customer churn occurs. And again, this information also helps to inform the product roadmap. Numerous such technologies are available and are designed for different types and sizes of businesses. Some of the better-known vendors include Gainsight, Pendo, and UserIQ.*
New companies especially get in such a rush to stockpile wins that they forget about their existing customers until a contract comes up for renewal and — surprise — they don't renew. Nor do they use the customer relationship to its fullest potential by treating it as a valued resource for feedback on the existing product. There's really no "magic threshold" for how many customers a business should have before it takes its sole focus off sales and begins to practice customer success. In fact, customer-success initiatives should begin with the very first contract a company wins. It sets the stage for a customer-centric culture, drives customer loyalty, and helps to ensure the business doesn't fall victim to churn.
Avoid the vicious cycle of "customer wins, customer losses" by adopting customer success now (if you haven't already).
*Disclaimer: UserIQ is part of the BIP Ventures investment portfolio.
The article was originally published in Forbes
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