Why Investing In Customer Success Will Boost Your Bottom Line

by Richard

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In the last few years, “customer success” has been a term often discussed in relation to SaaS. With so much competition in the SaaS space, the idea is that if your customers aren’t successful, your SaaS is at risk of not lasting long…

So what is customer success and what can your SaaS be doing about it? Let’s take a look…

What Is Customer Success?

“The foundation of Customer Success is based on increasing customer adoption of your product, driving retention and mitigating churn. Said another way, Customer Success is about getting customers to use your product with a smile on their faces.” Bluenose

Lincoln Murphy has described customer success as something that should be the driving purpose behind your SaaS. If not, what is the point really? That second ‘s’ in the term SaaS implies that service is a given—customer success is an important piece of that service.

Put simply, customer success happens when your customers achieve the outcomes they were looking for through their interactions with your SaaS. This means that customer success is not “one size fits all”; it will very much depend on the goals of the individual client.

The Difference Between Customer Success & Customer Happiness

Customer happiness is more about sentiment than success. It is definitely possible to have a customer who is happy overall, but is not achieving success with their own desired outcomes. As Lincoln Murphy further points out, sometimes your most successful customers are in fact your most demanding, and these ones never seem to be happy.

[tweetthis]Customer happiness measures are more about sentiment than customer success.[/tweetthis]

The Difference Between Customer Success & Customer Support

Many SaaS are implementing teams for customer success, but what is the difference between this and customer support? The answer lies in the timing of the interaction with the customer; customer support exists in reactive mode where they are taking action because the customer has contacted them with a problem. Their job is to resolve these problems as quickly as possible.

Customer success teams have a more proactive role. Their role is about fostering engagement between themselves and the client, and the client and the product. They want to ensure that the customer derives meaningful value from the product. This means there is more longevity in the relationship between customer success and the customers.

Why Is Customer Success Important?

In short, without customer success, you are very unlikely to have a successful SaaS. The goals of the customer will vary, but your SaaS is always selling something predicated on the idea that your service will somehow make something that they do easier, more complete or more something.

At a base level, the customer should be achieving those “more somethings,” but there are other things that affect overall success too. Each interaction the customer has with your SaaS needs to add to the equation that results in their desired outcomes. So if they can achieve some outcome, but the interface on the software was difficult or they had an unpleasant customer service experience, then their outcome will be less than what they desired.

Do you want to encourage upsells or cross-sells in your SaaS? As Bluenose states, customer success is often at the tip of the spear when looking to land that vital business and grow your revenue per customer. If you can’t meet their desired outcomes at the entry level, why would they feel encouraged to upgrade?

So, customer success is important because it is about not only decreasing churn, but creating an environment which increases your revenue per customer.

How do you measure customer success strategies? Grab our free tips here.

Customer Success Strategy

Customer success strategy always needs to start with a clear view of your customer personas. Who are your target customers? What do they do? What are their challenges? What are their goals?

When you have built a clear picture of who your customers are, you will have a better idea of their desired outcomes for using your SaaS. (If you want to really learn more about their desired outcomes, just ask them. Most will be happy to tell you what they’re looking for).

Customer Success Milestones

Customer success milestones are about the steps involved for the customer to achieve their desired outcome/s from using your product. If you know what those outcomes are, you are able to map out a journey in terms of success milestones the customer must reach to get there.

As Lincoln Murphy says, success milestones can be both product- and customer-centric, and it’s important to understand the difference between the two.

Product or functional milestones tend to be centered around the desires of your business, and occur inside the product. These could be things like signing up for a free trial, using certain features of the product, and signing up for the first tier paid option.

Customer-centric milestones may include some of those product milestones where they make use of the features, but they also include events that lead to the customer achieving their desired outcomes. For example, if you sell software to set up an ecommerce store, “make first sale” could be a customer-centric milestone which happens after they have been through the steps, using your features to set up their store.

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Source: Sixteen Ventures

Gaps

Can you identify any gaps that potentially exist between the customer achieving their desired outcome and the milestones they need to hit to get there? How you overcome these gaps can be a key point of difference between you and your competitors.

In short, if a customer has used features of your product (for example, they have initiated a cart abandonment email sequence using your software), what happens if they don’t see a result from doing so? Could the gap lie in the content of the emails they are sending out?

Education is often the best way to mitigate any gaps in the customer success journey. So a big part of your customer success strategy should lie in not only helping the client to use your product, but to understand any best practices for doing so.

If we follow on with the cart abandonment email sequence example, you should then be putting out content that clearly explains how to create an email sequence that will get opened and get results. What types of subject lines should people use? What should they include in the email? Is timing an issue?

Besides putting out content, part of assisting customers to reach their goals could be in getting on the phone to check in on them and just ask if there’s anything they need help with. It may not be doable to call every customer, but if you can at least talk to a fair sample, you should be able to get good feedback which you can use to improve the content you put out and improve the customer journey.

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Source: Sixteen Ventures

Your Bottom Line

Every SaaS is concerned about churn. Most also want ways of increasing the revenue per customer that comes into the business, so that churn can be mitigated in ways other than achieving higher growth.

It costs money to obtain a new customer so it’s simply not sustainable to rely on bringing in new customers as your only strategy. Customer success helps by engaging the customer long before leaving may have crossed their mind. It promotes their good feelings and good will towards your company and encourages them to make the logical step to upgrade.

Besides keeping your current customers, investing in customer success can help your growth because those successful customers then refer their friends. Many big players online will say they get 80% of their new customers from their old ones.

It will take some investment on your part. You need to either add customer success to the duties of current team members or hire on people with the express duties of a customer success team. You may also need to invest in content creation that helps to bridge any gaps between your product and the success of the customer.

In the end though, you need your customers to be successful if your SaaS is also to succeed, so an investment in customer success can be an invaluable boost to your bottom line.

How do you measure customer success strategies? Grab our free tips here.

Final Thoughts

Customer success is about ensuring that your SaaS customers achieve their desired outcomes from your SaaS, and understanding that these will be as different as the differing personas of your clients.

To put a successful strategy in place, you need to clearly know who your customers are, know their goals and help them to get past any gaps that exist between implementing your product and achieving their goals.

With customer success at the heart of your business, you can reduce churn, increase the uptake of upgrades and boost your bottom line.

Kill your churn. Keep more of your customers. Get an invite to Retained.

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