Customer success is an effective method for evaluating your customers’ journey. It helps ensure that customers derive value from your SaaS solution. It’s a key component for customer retention since people are more likely to be happy with — and remain a subscriber to — solutions that help them reach their goals.
Companies that deliver their solutions through a SaaS format depend on positive customer relationships. When customers achieve success, they not only are more likely to maintain their subscriptions, but they also will have a heightened interest in additional products and services.
Because of the impact of customer success, it is crucial for SaaS companies to operationalize customer success. This means finding a solution that automates and integrates customer success into the customer journey. Here are some considerations for finding the optimal customer success solution for your organization.
Impact of Customer Success Solutions
The impact that customer success solutions have on the profitability of a business is very significant. A business does not exist without its customers. Not only do businesses need customers, they greatly benefit from happy customers. That is how you can ensure your business is sustainable.
There has been a jump in the use of customer success platforms by businesses between 2015 and 2018 by an 18% margin. With two-thirds of customers saying that their standards for what they expect from businesses are at an all-time high, it pays for you to look at what customer success solutions to implement within your company.
While we are not mind readers, we can gleam a significant amount of information about the wants and needs of our target customer. Three-quarters of customers today are expecting companies to know what they are looking for, as well as what they expect. Data mining has allowed for some exceptionally detailed data analytics to be generated, which can help you know exactly what your customers expect from you.
A big part of customer success is providing helpful and quick customer service. The current estimate for the amount of money businesses lose annually in the US because of poor customer service is an eye-popping $1.6 trillion. With such a massive amount of money left on the table, it is critical to implement customer success solutions.
Providing high-quality customer support is no longer an option for businesses. Today, eight out of ten customers believe that their experience with a company is just as important as whatever products and services are being sold by them. This shows you just how significant a shift towards increased customer success sentiment has shifted. Avoid getting left behind in the wake of other companies implementing strong customer success solutions.
A healthy majority of customer success teams have grown in size within the past year. The trends indicate that this will only continue into the foreseeable future. Make sure your company stays competitive by expanding its customer success team as well. Better yet, stay ahead of the pack and grow your customer success team in a strategic way where you are hiring the right people.
Understand your customer success goals
To find the best solution, you need a good handle on the problem. Are you experiencing a high rate of churn — the measure of how many of your existing customers are being lost through attrition? Customer success solutions can help measure customer activity and create workflows that connect with customers and encourage net negative churn.
If your goals are to expand revenue and reach new customers, then you can leverage existing customer success as a sales tool. Solutions can help you communicate with your customers to determine their sentiment about your product and services and determine your Net Promoter Score or NPS.
This metric identifies your existing customers’ opinions on their relationship with you and the effectiveness of your SaaS solution in achieving their goals.
NPS is determined via a survey, where you ask existing customers whether or not they would refer others to your solution. A high NPS means that you have more promoters than detractors. NPS is a good baseline metric for determining your customer success needs because dissatisfied customers won’t recommend your company. And, a large number of detractors or neutral responses may mean that you have deficiencies to be addressed.
Customer success team style
Another consideration when determining the right customer success solution for your organization is how you manage your customer success efforts. Some industries and customers require a more hands-on approach than others. The question boils down to how you engage with your subscription customers, post-acquisition.
If your customer success efforts are mostly internal, with phone calls, video conference meetings, or use of client-facing collaboration and project management tools, then you’ll want a solution that integrates with these systems. Alternately, if your customers expect one-on-one face time, then you’ll want to develop systems that allow for remote employee interface and calendaring to maintain a consistent and accurate process.
Customer success is one area that can become complex and difficult to handle at scale. The differences in approaches between inside and outside customer success efforts are just one example. Also, face time with a customer can be highly effective at maintaining positive customer relationships, but the approach isn’t scalable.
If growth is your goal, finding ways to keep a pulse on your customers without having to pop in their office every month is a priority. Also, as operations and customer bases grow, analytics can become difficult without an automated solution.
A customer success solution should be able to grow with your organization and manage responsiveness to your customers’ growth, too.
There are three major factors you should consider when it comes to scalability and customer success. You need the right people, replicable processes, and leveraged technology.
The Right People
While it is good to have a specific team that is in charge of customer success, everyone in your company should know what the objective is and how they can help actualize it. A high-level executive directly involved with customers, such as a Chief Customer Officer, will be the point person for this task. They will persuade others internally to get on board with a particular customer success solution.
They will put forward information and data on both successes and failures of any given solution being implemented. Finally, they will tether the customer success solutions as much as they can to the metrics used by executives and stakeholders as measurements of the success of the company.
The ideal person to take command of customer success is someone who can generate enthusiasm over increasing the base of satisfied customers. They will be able to keep the momentum going with the strategies they spearhead. There are many pieces to the puzzle of customer success, which means that the entire support team, under the direction and guidance of the leader, is integral in the scalability of customer success.
To effectively scale customer success, you need to centralize and operationalize repeating processes. It is incredibly important, given the direct connection with customers, who we want to see be successful.
Processes for customer success have to be replicable. This will be possible by documenting all interactions that CSMs have with customers. You want to achieve a level of consistency that gets rid of redundancies. It is easy to find out what kind of questions and prodding customers find annoying. Getting rid of the unnecessary bloat and streamlining things will ensure no essential information is lost.
Effective replicable processes are those which get rid of anything that customers find irritating, disruptive, and uncomfortable. Once you get a clean playbook to go by, you can mandate that all CSMs abide by it. This guide should specifically outline exactly what sort of action and reaction to take and have a number of specific situations.
Having all resources geared towards customer success solutions solidifies the ability of CSMs to work with the same type of customer in the exact same manner. This is a process that needs to be done before any sort of true scalability can occur when it comes to customer success.
The latest and most useful technologies should always be leveraged. Technology can make scalability more efficient, given the reduced need to rely on people to accomplish tasks. However, when it comes to customer success solutions, leveraging technology while using people, increases efficiency and effectiveness.
There are very powerful technology solutions available today for helping out with customer success. Complete CSM products like SmartKarrot, along with other standalone tools, can assist with operationalizing and automating various activities involving the success of your customers.
Leveraging technology is sometimes left out of the scalability plans of businesses. Whenever you can automate some process or function, you should do so. Allow people to use their time and energy on what they truly excel in. They should be dedicating themselves to things that technology is unable to properly do. For everything else, automation will help with increasing the scalability of anything that would be done manually.
Technologies like automation do not have to negatively affect the relationship you have with your customers. When used correctly, it can enhance the relationship. When you correctly understand what automation is, especially if you are in SaaS, you will come to realize they you are already in the automation business.
Leveraging technology can assist with customer success at key moments by performing specific functions, which will spur a deeper human connection. When it comes to interacting with customers with a lower level of financial ability, automation is a cost-effective solution that will allow you to scale your customer success.
Know your average revenue per user
A final consideration also looks closely at the types of customers you have from a revenue standpoint. The average revenue per user (ARPU) helps you plan for scalability. Understanding this helps you value the role of each customer and plan resources accordingly.
To put it simply, ARPU divides up your company’s usual revenue, be it in a month or a year, to find out how much revenue each customer is responsible for. Figuring out what the ARPU is can be simple. All you need to do is divide up your recurring revenue within a specific period, by the total amount of customers that have been served within it. The ideal period to choose is the one that makes the most sense for your type of business. If you work with an annual membership model, you would use the annual recurring revenue.
If you have a high ARPU — common with organizations that serve a smaller number of high-ticket customers — then you’ll likely want to focus more resources on delivering a personalized approach. These high revenue customers may want more handholding, and also are the big fish that your competitors will be targeting.
In contrast, lower ARPU customers are ideal accounts for automation. These customers will benefit from customer success solutions that schedule and operationalize customer success efforts. The right customer success solution can enable your organization to efficiently manage lower ARPU customer success, without losing connection.
The thing with ARPU is that customer churn directly impacts it, to a great degree. Additionally, the number of customers being subscribers will significantly affect it as well. Customer churn can become higher for your customers who are SMBs, whereas it stays constant for enterprise customers. This sort of scenario would reduce your ARPU. Reasons for a reduction in subscribers, in this case, could include those SMBs not feeling they are receiving the value of what you are offering them. If you can identify changes in the ARPU like this one, you are able to deal with customer churn quicker and before it becomes difficult for your business to quickly recover from.
Customer success is a crucial component of SaaS success. The right customer success solution provides visibility into customer behavior. It augments the customer lifecycle, so goals are set and monitored, and value is delivered across the board. SmartKarrot is a broad solution to every customer’s success need.
With customizable tools, dashboards, and abilities to run NPS among other factors that influence and illuminate customer success, SmartKarrot helps SaaS companies retain customers.
This blog has been last updated on 26 March 2020 to make it more comprehensive.