Oh, how the buzzwords swarm around us. Like unidentified insects from an unknown part of the globe, they descend. We don’t know why there are so many of them, and we don’t know what, if any, impact they’ll have; but we do know that we’re scared of them.
These buzzwords (and the concepts behind them) ultimately mean change is, as always, on the horizon. We’re not sure if they’ll be here one day and gone the next, or if they are the new apex predator that will redefine the ecosystem.
To date, few buzzwords have remained scary for
quite as long as “Customer Success”
The concept itself has been around for decades -- emerging throughout various levels of business. However, not until it hit Silicon Valley did it become a truly zeitgeist-y nuisance. But does it have to be?
Customer Success: A Case Study
Let me share a story I read a few years ago. In 2005, Salesforce was flying. During a company-wide meeting that year it was reported that they had just hit 20,000 customers, and were looking at a market cap of $500 million. The room was electric. Salesforce was a fully operational rocket whose crew had finished its pre-flight check, and the countdown clock for lift-off was down to the single digits.
But then, the SVP of Customer Retention David Dempsey appeared on-stage - to tell his constituents the truth that had been overlooked: Salesforce had a churn problem. This is to say it was leaking fuel faster then it could pump it back into the tanks. Churn was at 8% per month. Sure they were breaking sales records regularly, but at this rate, sales could not possibly make up for the number of customers walking away. They needed a solution for churn and they needed it fast. Enter Customer Success.
There really isn’t much to the argument for Customer Success; the math is so basic that even I can understand it. It costs on average 5 times more to land a new customer than to keep one. If that weren’t enough, let’s consider upsell/cross sell opportunities. Selling to a net new contact has between a 5% and 20% hit rate.
Selling to an existing customer hits at somewhere between 60 and 70%. However, the most significant statistic is that increasing retention (or decreasing churn) by only 5% can increase profits anywhere between 25% and 95% on average.
How the Hell Are We Going to Pull This Off?
So that all sounds great, right? We should embrace the buzzword. We should be doing Customer Success. But what the hell is it, and how do you do it? Well let’s start by looking at the old way, aka “the funnel”.
Attract them, convince them, hook them, profit. Once they’re your customer, the funnel ends.
That’s the whole problem.
The reality is: the relationship doesn’t end at the sale. In order to avoid churn, this is the point at which Customer Success programs have to kick in at full force.
But, the issue with the old playbook is that anything dealing with keeping the customer means building a Reactive Cost Center a la “Customer Support.” Support is fine and necessary, but it won’t turn detractors into promoters, and it isn’t a guarantee against churn. It’s great for finding and solving problems, but it isn’t great when looking out for the long term success of the customer, which is the most obvious recipe for secret sauce there has ever been.
Enter the new playbook. Instead of being a reactive cost center, Customer Success is actually a Proactive Revenue Center (remember all those super convincing numbers from before?)
Let’s break it down.
Listen to your customers, relay information accordingly.
The more your clients interact with your product and/or service the more likely they are to keep using it. When communicating with the product team, the Customer Success Manager/Team needs to be in line with, and serve as the voice of, the customer. Create a system through which CS representatives are regularly cataloguing commonly asked questions, or points of confusion for users.
Respond more efficiently, provide more extensive support.
Customers communicate through more channels than ever. Are you listening on all fronts? Do you have a tool that can pull them into a single inbox? Consider investing in social listening tools, enabling feedback options for support articles and videos, and research the use of chatbots to help users find information through simple commands.
Spend your CS time on personalized assistance.
Many interactions do not require a personalized touch. Are you automating these in order to free up your employees to spend the most time on complicated and personal interactions? Take a look at your support article or video inventory and try to find areas where knowledge gaps may create confusion.
Help customers help themselves.
Customers don’t want to talk to someone every time they need an answer. Are you providing an easily accessible system for searching FAQs by setting up a public facing Knowledge Base?
Create brand advocates and champion promoters.
In order to create promoters, you must know what your customers need in order to become successful. Are you regularly reaching out and asking for feedback, or areas which could use improvement? How are you rewarding loyal clients? Do you send out a Net Promotor Survey (or, NPS) to gather a baseline?
Leverage your existing relationships, upsell and cross sell.
If you’re doing all the above and you’re not seeing a boost in the bottom line, you’re missing the whole point. Customer Success is about creating and maintaining a mutually beneficial system. You set up a great experience for your customers and they, in turn, ask you for more, more, more. Is your customer success manager/ team closing the communication loop with the sales team?
If you want to delve deeper into any of these topics, HubSpot offers a fantastic Academy lesson on the Inbound Service Framework.
A Love Story
If you still need convincing of the power of Customer Success, let’s revisit Salesforce. When we left off, the team had just discovered the success they thought they were having was being rapidly eroded by churn. Salesforce was a few bad sales months away from complete collapse.
Having realized their oversight, they built out one of the biggest and most successful Customer Success programs in the world, and turned that near collapse into a monster success.
As of 2017, their revenue was up to $8.39 billion and their market cap was $93.67 billion. Not bad. In the end, this big scary buzzword was actually "pollinating" their communication and growth efforts - turning existing clients into advocates and revenue boosters.
Hopefully, it’s become clear that this particular trend in marketing and business development — one that improves customer interactions, promises greater retention, and inspires evangelization — is one we cannot afford to overlook.
As it turns out, Customer Success is truly no "buzzword" at all.
Want Salted Stone to audit your top customer support articles or processes? Mention this article when you reach out to us and let us optimize your materials for effectiveness, and user empathy.