What Is Customer Success?

Philip Cleave
October 24, 2023
Man shows his satisfaction after interacting with a customer success team

With more options available to customers than ever before, the need to stand out from competitors has become increasingly important. Consequently, those organisations that consider the question “what is customer success? - and can foresee and solve customer issues, will be in the best position to rise above the rest.

Effective customer success management can also help to cut churn, lower customer acquisition costs and boost revenue. And when you also consider that the cost of attracting and acquiring a new customer can be up to 6-7 times more expensive than keeping an existing one, it makes sense to get some solid customer success processes in place.

In this blog post we’ll provide more detail about what customer success is, why it’s important, how it differs from customer support and customer experience, and some tips to help you develop an effective customer success program.

Customer success defined

When we refer to customer success, we’re essentially talking about the effort a business undertakes to help its customers be as successful as they can be with their product and its use in their own business operations. This also involves proactively solving customer problems before they arise and answering customer questions before they’re asked.

The thinking behind having a customer success team is that it helps increase the likelihood that users will stick around by maximising their mastery of the product. This is even more important for subscription-based businesses, as it’s a vital component to help grow monthly recurring revenue (MRR).

However, it’s important to be aware that customer success experiences overlap with other customer-facing functions, such as customer support, customer experience, and even account management. So, while it’s relatively simple to say what customer success is, it's equally important to distinguish what it isn’t.

Customer success vs customer support

Although many customer success teams report under the same departmental structure as support and service teams and exhibit the same customer focus, there is at least one key difference.

While customer service and support teams are primarily reactive, either responding immediately or just after a customer or user has reported an issue, customer success teams are proactive, trying to anticipate and address needs before a customer even reaches out.

To help keep ahead of what a customer needs, customer success teams consider customer goals at the start of the relationship and look to advise ways of achieving those objectives with their product or service offerings. Customer success teams are then able to stay ahead of churn through the use of regular check-in meetings, asking for feedback across the customer journey, and taking actions based on that feedback to improve customer relationships.

Customer success vs account management

In similar fashion to customer support teams, account managers typically manage customer problems as they arise, but rather than every customer, they will manage a dedicated pool of customers.

These customers are often considered VIPs, because they are high-value accounts that have the potential to bring in a lot of new revenue.

While both account managers and customer success teams focus on customers’ overall health, account managers do so with the mindset of growing the business and bringing in more revenue.

Customer success vs customer experience

While customer experience (CX) overlaps with both customer success and customer support there are some distinct differences.

Firstly, customer experience is focused on delivering a seamless experience for all customers that engage with your brand, whether that’s through interactions, user-friendly help centre solutions or product usability.

It’s also worth noting that organisations regularly use CX metrics to better understand how their brand is perceived and experienced by customers, in order to make large-scale decisions based on these insights.

By contrast, customer success is focussed on individual customers and whether they’re getting value from that product. It’s about ensuring your product is meeting their needs and aligning with the promises your product promised them. In addition, customer success looks to try and unlock additional capabilities within the product that will meet the deeper needs of that customer.

Why is customer success important?

To answer this, you need to think about how the modern customer differs to customers from previous generations.

For instance, traditionally, products and services were sold to customers as a significant one-off, long-term deal. However, with the growth of technology and the emergence of the SaaS subscription-based business model in particular, this relationship has become much more fluid.

Consequently, those companies selling under the subscription-based model are continually having to think about how they can innovate and improve their products and services, with the need to prove their value becoming even more pressing around contract renewal time. The reason why it’s important for customers to recognise the value of what you’re offering them is that there's almost always another competitor or a similar version of your product that customers could choose. This is where the efforts of your customer success team can be particularly beneficial.

However, customer success is also valuable for those businesses without a subscription-based model, as it helps you to reach out to unhappy customers that you may not otherwise know about. This is because according to research for every single customer who contacts your customer support, 26 customers with a problem don’t reach out with those 26 likely to churn instead.

Subsequently, by proactively working to eliminate potential customer problems and better recognise customer needs, your customer success team can improve your chances of retaining those 26 customers.

When it’s done well, customer success can help reduce churn, improve retention and renewals and drive revenue. This is because customer success helps drive a more intimate knowledge of your customers, which ultimately creates a healthier, more risk-resistant customer lifecycle.

How to create a strong customer success program

For those of you who don’t already have a customer success team, having read about why it’s important and how it can benefit you, we’re sure many of you will be keen to start creating a customer success program.

Here’s some useful pointers to help get you started:

Make customer success a company-wide priority

From your sales and marketing to your customer support, product teams and more. Customer success should be a goal and a priority for every member of your extended team. This is because you’re more likely to achieve the best results when everyone has a role in ensuring your customers accomplish their goals.

One of the most effective ways to ensure that customer success is a priority is to educate your company on what customer success does and where its value lies. Different teams are likely to interpret the data differently, so to ensure that you’re conveying your message in the most viable way, you also need to speak the language of the team you're talking to.

For instance, while your product team may care about your customer health score and ongoing expansion of product usage, sales may care more about the number of customers you’re retaining and how much they’re worth. Choose the most appropriate metrics, based on who you’re talking to.

Emphasise the importance of customer success early on

Besides being an organisation-wide effort, prioritisation of your customers and their needs should be baked into your company's culture. And the simplest way to make this happen is to start early, from the very outset of your business.

For instance, consider encouraging everyone in your company to sit in on kick-off calls or have your engineering and product teams conduct conversations with customers about any new/beta products that they might be interested in.

When you have these types of employees on calls, it helps give them a better experience and cultivates a culture of customer success. It also helps the customer feel more important and valuable. And your efforts don't need to be huge to be meaningful. Simply providing an additional meeting with a member from a team who customers normally assume as "super busy" can go a long way.

Identify what success means to your customers

So, what do we mean by success?

Well, the most effective teams let their customers tell them what they think success looks like. This is because success with regards to your product or service will look different to different customers, so it's essential to let their comments and feedback guide you.

To best understand what success means to your customers, it's important to have ears on the ground, listening to and studying what your customers are doing within your product. It can also help to frequently send them a customer satisfaction feedback survey. This is a crucial task of your customer success teams.

Ultimately, if you’re to succeed, your company’s success should be led by your customer’s definition of it, not success based on what you assume or expect it to be.

Set customers up for success with proactive onboarding

The job of your customer success team should start the moment someone becomes a customer of yours.

Proactive customer onboarding is all about setting up a product to best suit your customer’s needs, quickly enabling them to get comfortable with it and helping them to learn to use the features they need.

While a little extra handholding during the onboarding process can make a huge difference, it may not be practical for you to offer every customer such a high-touch service from the start. Therefore, you need to focus on how to give every new user and customer the same information in a more consumable way.

If you don't have sufficient staff or resources to offer that level of service to every person using your product, you need to think about ways of tiering the service you provide. Maybe that could mean offering in-app, checklist-style onboarding for free trial users and full, webinar kick-off calls for paying customers.

One of the most common ways to tier customer success is based on the amount of money that customers are paying. It makes sense that paying customers would get a more personalised experience than those using your free trial.

Track key customer metrics and share your data across teams

Using and tracking customer success metrics can help keep you accountable and aware of how effectively you’re helping your customers to achieve their desired results.

To help you, we’ve outlined below some examples of customer success metrics you can use for your own tracking purposes:

Net Promoter Score (NPS)®

One of the most popular customer success metrics is the Net Promoter Score, which provides a quantitative measurement of how likely customers will be to recommend your brand to someone they know. Monitoring NPS is an excellent customer success metric to track, as it helps you to identify promoters of your brand who will encourage referrals.

Customer Satisfaction Score (CSAT)

Another popular measurement is the Customer Satisfaction Score metric, which is used to gauge how satisfied your customers are with the experiences you’re delivering for them. This typically includes their satisfaction with your product, service or support.

Measuring and tracking your CSAT score is an actionable way to identify whether your current processes help your customers succeed and any areas which processes may need improvement.

Customer Effort Score (CES)

The Customer Effort Score metric is also extremely valuable.

This metric looks to measures how much effort a customer has to make to complete an action, whether that’s from purchasing a product to getting the answers they need on a customer support call.

CES is a great metric to track if you feel success is determined by creating a product or service that is simple to use.

Customer lifetime value (CLV)

The customer lifetime value metric useful in terms of calculating how much a customer is worth to your business in revenue throughout their customer lifespan.

You can track this metric to earn more revenue from loyal customers over time.

Customer retention rate

When customers are happy, they’re more likely to stay with you and make repeat purchases.

Subsequently, the ability to keep track of your customer retention rate (CRR) can be extremely helpful, as retaining existing customers is more cost-effective than acquiring new ones.

Customer success teams can use the CRR metric to monitor their customer retention rate and take any necessary actions to retain customers.

Customer churn rate

Customer churn refers to customers who stop using your product or service and are no longer customers. It differs from customer retention, which is focused on how well you retain customers.

Customer churn measures how often you lose a customer by calculating your customer churn rate. With knowledge of your churn rate, you can take steps to retain customers and prevent them from churning.

Revenue churn rate or MRR churn

Closely related to customer churn, revenue churn, also known as monthly recurring revenue (MRR) churn, is focused on the amount of revenue that is lost when a customer churns.

Revenue churn rate is an important metric to use in order to measure revenue loss from one month to the next. If you see an increase in your revenue churn rate, you’ll need to take the necessary steps to decrease customer churn.

Product adoption rate

Product adoption is all about when customers become aware of your product and consistently engage with it. It’s measured using the product adoption rate or your number of new, active customers.

Most companies use the breadth of adoption to measure how engaged customers are, which also measures how much of the product the customer uses. However, the issue with this is that the breadth of adoption metric varies from company to company based on their product or service.

In contrast, customer success teams can use the product adoption rate to assess account health and identify customers who are either not using the product frequently or only using some product features.

Develop a customer feedback program

A further way to measure customer success is to ask customers directly for their feedback through a customer feedback program.

Get your customers to tell you whether or not they’re achieving their desired results. This can help you to keep a pulse on customer sentiment across the partnership and uncover areas where you can improve your customer success program.

If you can establish a feedback listening program, it will allow you to act more quickly on insights, build customer trust, stay ahead of potentially difficult conversations, and prevent churn.

Close the loop on customer feedback

Having collected feedback from your customers, it’s important to close the loop on their feedback with a timely response.

If you receive positive feedback, encourage your customers to share their experience by leaving a review or referring a colleague. If their feedback is negative, direct them to the appropriate team, depending on their feedback, to resolve the issue and prevent it from reoccurring.

Taking the appropriate action after receiving feedback shows your customers you’re dedicated to their success.

Helping customers achieve greater success

Having read through this blog, we hope you have found some advice and tips that you can incorporate in your business.

The most important take away from all this is that any business can benefit from implementing a customer success program, particularly those that operate under a subscription-based business model.

Given that today’s customer standards are higher than ever, and most customers would be willing to pay for a better experience, any strategies and processes you can implement to achieve this are invaluable.

Fortunately, if you can implement a customer success program, it offers an excellent way to boost your customers' experiences with your product, offer critical insights back to your internal teams, and further streamline existing processes or features to make them more efficient. All of this will help to further improve your customer retention, loyalty, revenue and more. There’s never a better time to get started.

Get the tools to deliver better experiences

Getting the right customer success team and strategy in place is crucial to helping your customers achieve greater success with your products and services, but you should also look to improve all the other experiences you deliver for them. However, you’ll only be able to achieve the best results with this if you’re using the right survey tools.

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