What if we told you your company’s success depends on someone else’s success? Well ... it does.
Your business’ success largely depends on whether or not your customers find success using your products or services. In today’s customer-centric market, the companies that excel prioritize customer success more than their competitors do.
Customer success is the best way to ensure customers’ long-term happiness. Happy customers, in turn, ensure your company’s longevity.
In this guide to customer success, you’ll learn:
What is customer success?
Customer success is a company initiative or department focused on making customers love your business so much that they want to continue buying your products or services. It centers on building strong relationships and understanding customers’ goals.
“We put fancy words around it, but it’s just building relationships. That's all it is.”Sam Chandler, Senior manager of customer success at Zendesk
Just like a good friend or mentor who builds you up and offers support when needed, a customer success manager (CSM) is a cheerleader and support system for customers. Success teams help customers become confident, knowledgeable experts who can then use the company’s products or services to crush their goals.
And just like we feel a sense of happiness or loyalty when it comes to our friends, customer success teams aim to cultivate similar positive emotions with their clients. For example, Chandler was a Zendesk customer long before she ever joined the Zendesk team. While she loved the platform, she enjoyed the people she was working with even more.
“At the end of the day, it really came down to the people. They made me feel like I was part of the cool kids club.”Sam Chandler, Senior manager of customer success at Zendesk
How is customer success different from other customer-facing roles?
While there are some similarities and overlaps, customer success shouldn’t be confused with other teams like customer support, customer experience, or account management. Customer success differs from these other customer-centric roles by focusing solely on the customers’ long-term growth and continued satisfaction. They aim to add value, drive account expansion, and keep customer churn to a minimum.
- Customer service, also called customer support, focuses on problem-solving. Support agents often answer questions about product features, resolve short-term problems, and provide information about technical issues. But customer success teams strive to anticipate clients’ needs and offer strategic guidance before clients ever even need to contact support.
- Customer experience teams focus on individual touchpoints along the customer journey. They evaluate where there may be issues and how to make every interaction the best it can be. Customer success teams, meanwhile, focus on the end result of that journey—they’re all about delivering the desired outcome and improving their clients’ bottom line.
- Account management primarily handles upsells, renewals, and revenue. Customer success focuses on those, too, but through the lens of your customer. Customer success operates under the assumption that if the clients are achieving their goals, then those upsells and renewals will come naturally.
Ultimately, these teams should collaborate with one another to ensure a positive, successful experience for each customer.
What is the role of customer success?
The role of the customer success team is to help your buyers achieve their goals with your products or services. This results in better customer experiences and strong relationships, which, in turn, lead to growth and additional recurring revenue.
Provide personalized customer experiences
Customer success teams aim to connect with customers on a deeper level and understand what success looks like to them. They treat buyers like VIPs and help them create a customized strategy to reach their goals, making each client feel valued and boosting customer loyalty.
CSMs often stick with the same customer, from customer onboarding throughout their time as a client. They constantly check in, provide best practices and industry insights, and help their customers adjust their plans to best fit their needs.
Providing these positive, personalized customer experiences is critical in the post-pandemic era. Fifty percent of customers say good customer experience (CX) is more important now than it was a year ago, and 75 percent will pay more for a great customer experience. Overall, the message is clear: Consumers demand a tailored and top-quality experience—and they’re willing to spend more to get it.
Customer success also increases retention rates. Customers are less likely to leave if they have a dedicated partner helping them maximize value and meet their long-term goals with your products or services.
A Gartner study showed that “the average probability that [a] customer would stay [with a company] when presented with an opportunity to switch was 82 percent after a value-enhancing service interaction.”
Lingopie, a subscription-based language learning application, is a great example of how this plays out. By focusing on client success, listening to customers, and delivering value, Lingopie reached a retention rate of 79 percent after four months—which was higher than other subscription apps like Netflix and Disney+.
In general, retention is key for ongoing business success. It’s up to 7x more expensive to gain a new customer than to retain an existing one. So, customer success teams work hard to ensure clients continue to see the value in the products or services they’re using, helping to reduce customer churn.
Find opportunities to cross-sell and upsell
Customer success teams are focused on forging relationships, so they’re in an ideal position to cross-sell and upsell. Their ongoing relationships with customers and their understanding of clients’ goals make these sales opportunities feel organic and genuine rather than aggressive.
The basis of a great client–success manager relationship is trust. While a pitch from your sales team can easily come across as pushy, a recommendation from your trusted success rep can sound like a solution. It’s a lot like receiving advice or recommendations from a friend.
Your customer success team should only suggest products when they can truly solve a customer’s challenge or help them grow. So, coach your success team on the strategic thinking skills needed to pinpoint the customer’s actual needs, and teach them how to approach their suggestions in a genuine way. You can also consider creating a cross-selling/upselling “decision tree.” This format would give your CSMs an “if/then” model to use for determining when a cross-sell or upsell may be beneficial to mention to a customer.
For example, the tree may state: “If a customer is complaining about not having enough user licenses, then you should consider whether the customer’s current setup is conducive to their needs or if it needs to be re-worked.” This approach allows agents to present the customer with options based on their needs without overly pushing the additional expense.
Tips for developing a strong customer success strategy
Developing a customer success strategy is critical for the best results. Keep these tips in mind as you move forward with setting your strategy.
Form a diverse and dedicated customer success team
Customer success starts by forming the right team of people who are all in for your clients.
Your customer success team should be separate from customer service, account management, and other similar customer-centric departments. While your team will likely work closely with these departments, you need them to solely focus on building connections with your customers and helping them succeed.
For a small business, a customer success team may be a strategic hire of just one specially trained customer support representative. But in software as a service (SaaS) businesses, large enterprises, or subscription-based companies, customer success should become its own department with certain team members dedicated to specific accounts. You’ll also need customer success managers who lead your support team and are responsible for your buyers’ long-term victories with your products or services.
Also keep in mind that it’s important to have a diverse team—in all aspects. When team members come from varied backgrounds and experiences, they bring different skill sets and perspectives to the table. This enables your customer success managers to be more innovative and creative when helping clients. Diverse teams are often better at problem-solving and decision-making, too.
Diagnose key problem areas and replicate wins for your customers
Once you have a rock-star team in place, you can leverage technology to pinpoint both the big wins and stumbling blocks to success for your customers. Once you’ve identified those areas, you can start to offer personalized solutions.
Have your support agents and other customer-facing departments log client interactions and note common customer complaints and frustrations. A customer relationship management (CRM) tool is extremely helpful here. It can help you track customer interactions, easily share information across departments, and so much more.
You can then dive into the data and look for key problem areas—just bear in mind that a recurring issue may have nothing to do with your product or service at all. Perhaps the problem is relatively simple (but incredibly annoying to your customers), like consistent billing issues.
Similarly, it’s also helpful to look at some of your successful customers and determine what’s going well. You can hone in on what they love so much and start to replicate that on a consistent basis.
Once you’re aware of the highs and lows for your clients, your success team can use that information as the foundation for a strong customer success strategy.
Get everyone to buy into the customer success process
Customer success needs to be a company-wide initiative. The most impactful way to do this is to create a customer-centric culture that starts at the top and trickles down.
Of course, creating a customer-centric culture and championing customer success is easier said than done. Leaders don’t always understand that customer success and business success are intertwined.
A key part of getting C-level executives and leadership on board is sharing the benefits of your customer-centric efforts with them regularly. Discuss the positive effects on retention and revenue, and share numbers whenever possible. It’ll be hard for execs to ignore your endeavors when they see the direct impact on the company’s bottom line.
Once leadership is engaged, it’s much easier to get the rest of the company on board. Leaders can help spearhead customer success initiatives, approve policies or product changes that improve the customer experience, and more. This customer-centric mentality naturally spreads across the rest of the company.
How to measure customer success
Focus on engagement
Engagement is a key indicator of customer success. After all, you can’t have a relationship with a client if one party isn’t really participating.
Key engagement metrics to evaluate include email open rates and response times. You should also track how frequently clients contact you and how often they mention your brand on social media.
Frequent engagement is a clear sign that customers find value in what you’re sharing with them. If they’re not reaching out or responding, it’s a sign that something may not be quite right. And you can’t address those problems or concerns if both parties aren’t communicating.
Engagement and communication between customers and your success team should be habitual—much like you regularly communicate with friends because you value their input.
Collect and act on customer feedback
When customers do engage with your team, they’ll provide valuable insights and feedback. You can document this information and use it to increase success for them, other existing customers, and future customers in a proactive way.
Surveys, focus groups, 1:1 conversations, and community forums are all great ways to gather customer feedback. You can ask questions about what’s going well, where they’re struggling (either with your product or with their ongoing responsibilities in general), and what changes they’d like to see with your product or service moving forward. When you have a good relationship, customers are often forthcoming without you even having to ask.
“Don’t assume, just listen. They'll tell you what the problem is.”Sam Chandler, Senior manager of customer success at Zendesk
If one customer is having an issue, chances are they’re not the only one. You can use this feedback to proactively look at other accounts that might be experiencing the same problem.
Track key customer success metrics
In addition to engagement and feedback, your team should track common success metrics such as churn rate, account expansions, and Net Promoter Scores. This data can provide a big-picture view of how your customer success efforts are paying off.
Churn rate is the number of customers who leave your business (“churn”) during a given period of time. To calculate customer churn rate, divide the number of lost customers during a specific time period by the total number of customers at the start of that same time period. Then, multiply the result by 100 to get a percentage.
(Lost customers during time period ÷ Total customers at the start of time period) x 100 = Churn rate
Ultimately, you want to reduce churn. While many factors affect churn rates—including changes in the business, pricing, and shifting economy—customer satisfaction remains one of the biggest reasons for defection. So, if your customer success strategy is working to improve buyer satisfaction, your churn rate should decrease over time.
Account expansions look at how your accounts are growing over time as a result of upselling and cross-selling. To determine how much an account has increased, take the current monthly revenue and subtract the initial monthly revenue. Then, divide that number by the initial monthly revenue and multiply by 100 to get a percentage.
(Current monthly revenue - Initial monthly revenue) ÷ Initial monthly revenue x 100 = Rate of account expansions
That number will tell you the percent increase in revenue. If your customer success team is resonating with clients and effectively cross-selling and upselling your products, you should see a larger percentage of customers expanding their accounts over time.
Net Promoter Score (NPS) asks one simple but highly telling question: Would customers recommend your product or service to their friends? This question is usually asked in a follow-up survey format. Customers who respond positively are considered “promoters,” whereas customers who respond with a low score are considered “detractors.” To get your NPS, subtract the percentage of detractors from the percentage of promoters.
% of promoters - % of detractors = NPS
If your customer success strategy is working, then customers feel supported—which means they’re more likely to go out of their way to promote you to friends and family.
Invest in a CRM to skyrocket customer success
Customer success is a vital indicator of your company’s long-term growth. The most important first step is defining customer success for your business and making long-term customer happiness a company goal. But once you start, it’s important to track your changing customer statistics over time.
While many customer success metrics can be sourced individually without using a CRM, having technology that puts all your client data at your team’s fingertips is the gold standard of metric management. The best way forward is to invest in a CRM to help your company use customer data to grow your offerings over time.