Companies that embrace Customer Success early on can achieve massive results by focusing on:

Growth: Facing fewer headwinds in the form of churn and more tailwinds in the form of up sell and cross-sell, businesses that focus on Customer Success simply grow faster.  Plus successful customers become advocates and references to drive more new clients.  In the long run, the “leaky bucket” effect of churn can’t be counteracted by new business alone.

Valuation: According to an Altimeter Capital report, Valuation of Subscription Businesses (October 2014), public subscription business multiples are directly correlated to Customer Success and retention: “Dollar renewal rate (DRR) is the most important metric for valuing subscription businesses.”  In short, Wall Street notices Customer Success.

Differentiation: Finally, because not every company in every category is focused on customer success, Customer Success Management can become a meaningful differentiator.  Customers know that products and services become commoditized over time. The business process and team a company uses to drive success for its clients is really what matters in the long run.  The sales messaging of best-in-class companies talks about the Customer Success process in a meaningful way.

Let’s Take a Look at Where to Start

Embrace Customer Success

If you’re buying-in to this, you’re probably thinking, “How the heck do I implement a ‘top-down, company-wide commitment’?  Where do I start?” Embrace customer success. Here are a few ideas:

Embrace Customer Success: One of the biggest steps you can take to create a Customer Success–centric culture is to articulate what success means for your customers.  Many companies sell horizontal products that can be used in a variety of use cases.  If you’re a CEO or senior executive, you should kick off a cross-functional process to canonize the common use cases for your offering and define what success would mean to the customer in each of those use cases.  A simple way to think about this: If you asked customers, “What does ultimate success with our company mean to you?”  What would they say?  Without defining the goal, it’s hard to get the company rallied around it.

Align Around Success: Next, review your organization and make sure that each functional area knows what it must do to support Customer Success.  Your Customer Success team can be the quarterback of the initiative, but it needs buy-in from each department.  This could mean:

  • Reviewing Customer Success feedback each month with the product team
  • Defining and refining sales qualification criteria
  • Reviewing messaging regularly with the marketing and Customer Success teams

Listen to Your Customer Success Team: If you’re a senior executive or CEO, you are likely flooded with signals about your business—from customers, partners, investors, and employees.  You need to make sure a key part of that signal comes from the Customer Success team, since they are the eyes and ears of your customer base.  Establish a regular review of Customer Success issues.  Include a Customer Success executive in every executive meeting, every board meeting, and every key strategic decision.  And take his or her opinions as seriously as you take those of your sales leader.

Prioritize Customer Success: This is where the rubber meets the road.  Every business has limited resources and must make tradeoffs.  Is the feature to delight clients always getting deprecated for the feature to drive demos?  Is the project to implement self-service getting pushed behind the channel partner rollout?  Is the training for Customer Success Managers (CSMs) being postponed for the sales training?  If you want to drive Customer Success, prioritize it.

Empower the Customer Success Team: In the same vein, if you’ve created a team to drive success with your customers, take measures to support it. Some things you should consider:

  • Make sure the title for the Customer Success executive is on par with the sales leader.
  • Keep your CSM in the loop when a customer escalates to the management team.
  • Let the CSM be the hero with customers if possible (e.g., ideally the CSM will tell the customer that you agreed to their contract change or road map request).
  • Make it clear to the rest of the organization that the CSM represents the client’s views.

Embrace Customer Success: Customer Success will never be taken seriously if there aren’t agreed upon metrics to apply.  Embrace customer success. Define metrics for your bottom-line results, including gross churn, net retention, and other measures.  Make sure everyone is clear on what the metrics mean.  And create some early warning metrics such as health score, adoption score, and Net Promoter Score (NPS) to track where Customer Success is going.

  • Incentivize Toward Customer Success: Companies set compensation plans to drive behavior.  So if you want to drive Customer Success, pay people for it.  Consider adding Customer Success metrics (e.g., net retention, NPS, or health score) to your company bonus plan.
  • Challenge the Company: Just as you push the company to grow sales and hit quarterly targets, expend as much effort pushing the company to hit Customer Success targets, such as retention, go-lives, satisfaction metrics, or adoption goals.
  • Celebrate Success: Customer Success isn’t easy.  It’s not always in your control, and customers can be challenging.  Most companies have great traditions for cheering sales on—gongs, champagne, trips, fun bets.  Do the same for Customer Success.  Get yourself a CSM gong and send the signal that Customer Success is a top-down, company-wide commitment. Embrace Customer Success as early as possible.

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