Customer success involves a variety of activities aimed at delivering value to customers and ensuring optimal product usage to make the derived value ongoing. Customer success is top of mind for many businesses, with 72% reporting that improved customer success is a priority. For those looking for some proof of the effectiveness of customer success initiatives, here are some additional customer success statistics that hammer down the need and impact of the CSM role.
57% respondents from the customer success and product management teams felt most aligned in the customer outcomes area, with 49% aligned to user feedback and 29% respondents felt least aligned to customer health, with 24% voting for Onboarding processes.
Customer success connects with customers and maximizes the value
For every complaining customer, there are 26 who remain silent when they have a problem with a product or service. While your business might be able to resolve the vocal customer’s issue, you have no idea of the numerous other dissatisfied customers. This silent group simply cancels without you having an opportunity to fix the situation.
And, through customer success efforts, businesses can reap greater revenues, as it is up to 14 times easier to sell to an existing customer than a new one.
The investment needed to land new customers is between five and 25 times more expensive than retaining new ones.
Among all the customer success statistics, an interesting one that came out was that by improving customer retention by just 5%, your company’s profits can increase by as much as 95%.
Churn is on the rise, but alignment may be the key to lower customer attrition
Churn — the rate at which customers cancel — is on the rise, with 30% of SaaS companies reporting increased churn rates over the past year.
The average SaaS industry churn rate is 5.33%
But the median annual churn rate for SaaS businesses with sales under $10 million is 20%.
Customer success combats the rise of churn through such efforts as customer engagement. Fully engaged customers represent a 23% premium in wallet share, profitability, revenue, and relationship growth.
And, organizations with aligned customer success and product management teams experience less churn, reporting rates lower than 1%. The key to tapping into low churn rates may lie in coordination among management, customer success, and product management, as 77% of businesses surveyed noted leadership was key to successful alignment.
The CSM job is on the rise as well
SaaS companies can also gain great insights into the value of customer success through employment trends. Research from LinkedIn notes that the Customer Success Specialist job title is 6th among the 15 fastest-growing white-collar jobs in the U.S.
Compensation for customer success professionals has increased, according to 61% of respondents in a HubSpot report.
Some companies, such as Chick-fil-A, have effectively mastered the economics of loyalty, making customer success an organization-wide endeavor. The popular fast-food chain pays store operators double or triple industry average compensation while continuing to give 10% of profits to charity.
SaaS companies that are looking to maximize customer retention are also learning the importance of digital transformation. 83% of surveyed businesses indicated a desire to digitally transform customer success
But only 25% of customer success teams use a single consolidated tool and 64% have plans to simplify their technology stack.
Customer success teams spend 61% of their time on post-sales phases against 39% on pre-sales activities.
Nearly 50 percent of the CS leaders surveyed report that funding models in their companies are based upon bottom-up estimation methodologies and are not linked to any business metric such as ARR or annual revenues.
In 2020, 86% of buyers will pay for a better Customer Experience and it will overtake price and product as the key brand differentiator.
In customer success, there are nearly an equal number of women (47 percent) and Men (48 percent) working in the profession globally.
SmartKarrot’s platform helps businesses operationalize customer success, align teams, and attain goals of consolidating customer support initiatives.
Learn more about:
- The alignment between customer success and product management teams
- The activities that customer success teams spend most of their time on
- How customer success functions are funded
- The role of customer success in reducing churn rates
- How highly engaged customers and loyal customers impact the profitability of any business
- Customer success manager’s compensation
…….. and a lot more in this collection of top customer success statistics.