Since 2015, the number of customer success positions, especially in B2B tech companies, has grown by nearly 177% year-over-year as reported by Gainsight.
What sets customer success apart from customer service or customer support? What makes customer success the hot commodity of Silicon Valley and SaaS start-up?
This incredible growth indicates a new trend for revenue teams: proactive strategies to help customers get the most out of a product. Interest in customer success has grown significantly in the SaaS industry because simply put, data-driven customer success turns into customer retention, which equates to sustainable revenue. After all, Huify reports that acquiring a new customer is five times more costly than retaining a customer.
On top of improving customer retention, customer success strategies have been proven to help decrease gross churn and increase expansion revenue, as per Reforge.
Here’s a newsflash for tech companies: if your growth strategy doesn’t include a customer success component, you’re already behind the curve. Here’s everything you need to know about why and how to leverage customer support for revenue growth.
What is customer success?
Let’s start with the million-dollar question…
What is customer success?
Customer success provides customers with the resources they need to succeed and carry on as a customer. Customer success managers go beyond the basics of customer support to create systems and relationships that foster positive experiences.
That’s kind of a mouthful, so let’s break it down real quick.
- Customer success provides customers with the resources they need to win big with a product
- Customer success values long-term relationships with customers
- Customer success establishes sustainable systems for customers to get the most out of their relationship with your company
Most crucially, customer success impacts all corners of a business, from product to revenue. Don’t ignore customer success in your organization! It’s not something that belongs on the back burner but instead should be kept at the forefront of everything your business does.
What's the difference between customer success and customer support?
The logical question most people have is: what’s the difference between customer success and customer support? Aren’t they the same thing, just labeled differently?
Not at all.
Customer success is proactive. Customer support is reactive.
In other words, customer support addresses customer concerns when they arise, while customer success aims to provide resources and tools to customers that prevent issues or concerns. Remember HubSpot found that for every customer who does reach out to customer support, 25 customers don’t complain...and churn instead.
The key functions of customer support include:
- Answering customer questions about the product
- Addressing customer issues with the product
- Handling customer requests via phone, chat, email, social media
- Fulfilling specific customer requests and concerns
These functions are ultimately reactive to customer needs. They are a vital piece of the customer’s satisfaction, but customer support functions do not go beyond addressing immediate needs.
The key functions of customer success include:
- Working in partnership with customers to help them get more out of the product
- Driving positive customer experience by building and maintaining meaningful relationships
- Improving customer happiness and loyalty
- Educating customers throughout their lifecycle, including onboarding, upgrades, and product updates
- Communicating between company teams to understand and address customer pain points
Customer success does not make customer support redundant! Customer support and customer success work hand-in-hand as integral parts of a customer’s journey with your product.
Let’s illustrate 👇
Imagine you’re the CEO of Netflix (dare to dream!), and you’re trying to figure out why your platform is experiencing so much churn month-to-month.
You audit your customer experience process and find out your customer support team is flooded with easy-to-answer questions from subscribers. This results in a backlog, preventing your team from addressing significant concerns about bugs and broken product features. Because of this, customers are canceling their subscriptions at an alarming rate.
In this scenario, your customer support processes aren’t providing enough support to keep customers satisfied. You need to think bigger—you need a customer success framework.
Your new customer success framework will go beyond providing reactive support; it will create opportunities for customers to engage with your product at all stages.
For instance, your customer success processes could include:
- A knowledge base that’s easily accessible and available to all users to answer common questions
- A robust onboarding process for new users that helps customers get acquainted with everything your product offers
- Regular customer surveys to gauge customer satisfaction about feature updates
- Regular meetings between your customer success team, marketing, sales, and product to align proactive efforts
- A shared process for tracking KPIs and customer success metrics that aligns expectations for CSM performance across teams
This demonstrates how a customer success strategy utilizes customer support and amps it up to a new level. It’s an ongoing process that invests in keeping your customers loyal.
What is data-driven customer success?
Customer success belongs in every industry. But it has quickly become popular among industries that rely on recurring revenue, such as SaaS, media, communications, and corporate services. These types of businesses typically employ the most customer success managers.
Why? Because it’s good for their bottom line.
The best customer success strategies are built on data. Remember, customer support is reactive—it relies on customers to bring up issues. Customer success is proactive and can predict and address user needs before they become an issue. Data cuts through the noise and helps teams quantify customer needs rather than relying on best guesses.
A quick note about data: make sure that your teams are all speaking the same data “language.” Consider creating a reference that is a single source of truth—explain what metrics are important, how they are defined, and how they are collected. This will cut down on confusion between teams and improve data analysis.
With that in mind, the metrics your company tracks will likely vary, but these are the key data-driven customer success metrics most organizations want to know:
These high-level metrics give businesses a sense of how their customers are (or are not) achieving success with the product or service. Let’s look at how customer success teams can leverage data to improve customer experience.
How to use data for customer success
While companies without customer success teams use customer feedback to make reactive changes, companies committed to a data-driven customer success framework are always looking to improve their user experience. The best part is that the data you need for customer success is all around!
These are the five data sources customer success managers should be mining (and what you can learn from them):
- Product usage - provides insights on how often customers are using your product, what they do with it, and how long they have been users. Using this information helps companies gauge customer engagement and build resources to increase meaningful product usage.
- Billing data - this information can shed light on a couple of things. Firstly, are your customers paying consistently? if not, is it because of a confusing billing system or a deeper issue of product disengagement? Secondly, billing data uncovers customer purchasing habits, such as; do they prefer paying month-on-month, quarterly, or annually?
- Help desk - customer support to the rescue! Bugs and unexpected issues are inevitable, but this quantifiable data allows your team to reinforce customer success efforts if you begin to notice patterns from customer concerns.
- Website and content interaction - what kind of content are customers engaging with on your website? Are they using the “Contact us” form more than your knowledge base? Dig into how customers interact with the resources you’ve created to foster customer success to determine what’s working and what you need to revamp.
- CRM information - take advantage of CRM data enrichment to deep dive into your client accounts. Can you identify the key stakeholders and influencers? In what ways can you create systems that better support your biggest supporters and most valuable users? You can even use this data to improve communication with customers and improve timely messaging.
You can build a reliable customer success strategy that translates into retention and revenue growth with this information. 🤑
Why is data-driven customer success a critical function for revenue teams?
The idea behind customer success is a simple one: you succeed when your customers succeed.
But that doesn’t quite get to the “why” behind customer success, does it?
Answer this question honestly: Do you think a business can achieve long-term, sustainable success without employing customer success strategies?
🚨 The right answer is “no” 🚨
So, what is it that makes data-driven customer success so critical for revenue teams? We asked Justine Wares, Senior Customer Success Manager at UserGems, to shed light on why customer success is crucial for revenue teams.
How customer success drives revenue growth opportunities
A customer success team is one of the most critical teams in a company—like the center of a company’s web. After all, a business would be nowhere without its customers, so their satisfaction is the ultimate priority.
According to Justine, data-driven customer success impacts revenue growth in these ways:
- Customer success initiatives demonstrate your business priorities. Customers have high expectations for businesses they patronize, and with so many options available for users, they’ve become savvier consumers. When companies are late adopters of customer success strategies, customers notice...and they will quickly jump ship to a competitor that can better support them.
- Customer success provides revenue teams with valuable data. More than that, customer success managers can interpret data for storytelling that can close or grow deals.
- CSMs build relationships, not just with clients but with engineering and product teams as well. They are the first line of offence, gathering feedback and sharing it with the company.
- Customer success teams work with every department, acting as the string that tethers all departments together for a common goal.
- Customer success has a hand in all aspects of revenue generation, either from implementation, continued relationships, or fostering growth.
That’s a lot of beneficial impact! Have you thanked a CSM today?
Essential best practices of a great customer success manager
It takes a skilled customer success manager to juggle the proactive and reactive elements of customer success. A successful CSM should be able to do the following:
- Maintain a close partnership with the sales team. Otherwise, both teams are set up to fail.
- Apply a data-driven lens to client relationships to illustrate how customers can get more out of the product while delivering valuable information that customers care about.
- Read an audience. CSMs must be adaptable and able to shift gears to speak to a specific audience’s specific needs and concerns.
- Build connections that bring together sales, revenue, and marketing teams for a common goal: driving growth.
Customer success drives revenue growth
Times have changed, and B2B selling patterns have changed with them. Instead of selling big, one-time packages to clients, many companies are shifting to subscription-based models that rely on customer renewal to maintain growth. It is increasingly essential for companies to help their customers justify this regular purchase. This is where CSMs shine!
As you develop your data-driven customer success strategy for growth, remember to make data a central component of your planning.
UserGems helps companies generate more revenue by combining relationship data with trigger events to surface the most relevant buyers within target accounts. With UserGems, customers get a bigger pipeline and win more often.