Customer success has, in recent times, become more and more of a focus for businesses. A combination of customer expectations, business realities, and cultural trends has forced companies to prioritize it. This comes from an understanding that for a customer to increase their lifetime value, they first need to feel successful with the product. However, the term “customer success” has also caused a lot of confusion. What does it exactly mean? How do you ensure it happens? Are there specific metrics to follow, and can companies adopt specific playbooks to ensure customer success? Today, we hope to answer that for you, as we have put together an explanation of why every business needs customer success.
What is customer success?
Before we can answer why every business needs customer success, we need to explain what it is. Put simply, it’s the effort of a business to help its customers be successful, with their product and in their own business operations. However, it’s no longer enough to assume that the company, as a whole, can take on customer success management. You’ll need someone (or a team, ideally) to focus on customer success.
A team dedicated to customer success will take a date-led, proactive approach to ensure customers effectively use a product. Depending on the structure of the team, they can handle anything from trial user engagement to renewals. Additionally, experts from ConvertMore lead calling software note that while it’s important for a business to advertise properly, customer success is just as important in today’s world.
What is the benefit of implementing customer success?
The reason why customer success has become so important is the benefits it brings. Firstly, it helps with inspiring customer loyalty and increasing revenue and renewal sales. In recent times, a lot of businesses have been changing to a subscription-based model. When operating with this model, retaining customers is by far the most important factor. To put it simply, the product needs to prove its value before every renewal.
Customer success ensures a user’s mastery of the product, and as such increases the likelihood a customer will stick around. And needless to say, this is vital for subscription-based businesses. Additionally, the benefits of customer success also include a reduction in churn and an increase in both lifetime customer value and ARR (annual recurring revenue). Also, customer success proves its value through word-of-mouth marketing, which is important for just about any business.
Why is this important?
The driving force behind the rise of customer success is the growth of subscription-based and SaaS business models. As we have mentioned earlier, more and more companies are moving to subscription-based business models instead of offering big, one-time deals. For a subscription model to be successful, a customer needs to see the value of a product constantly. As such, renewal hinges on helping customers see success and value in a product.
Of course, knowing how to reduce your bounce rate on your website is important for getting new customers, but customer retention is arguably even more important. However, we should note that customer success is still very important for companies that don’t rely on subscriptions. Recent stats show that for every customer which reaches out to customer support, twenty six don’t. By proactively eliminating problems with the product, you have a much better chance of retaining those 26 customers.
How do you track customer success?
Customer success is extremely data-driven. What’s more, the metrics used to track customer success are incredibly influential cross-functionally with other teams. However, to effectively prioritize and sponsor customer success you will need to track the correct metrics and properly share the data across teams. The metrics which need to be tracked are:
- customer lifetime value;
- repeat purchase rate;
- churn rate;
- customer retention rate;
- customer retention cost;
- net promoter score;
- customer satisfaction score;
- customer health score;
- customer effort score.
As mentioned, sharing this information between teams is important. Certain teams will make use of it to boost web lead conversions, others will be able to use the information in different ways. As such, it is incredibly important to make sure the information gets passed around properly so the company as a whole can benefit from it. Planning ahead to ensure this is the best call.
Focus on helping your customers succeed
Even if your business isn’t working on a subscription-based model, you will benefit a lot from helping your customers succeed. Every satisfied customer is likely to recommend your products to someone else. And, every customer which has no issues won’t have to contact customer support.
This also removes the risk of a customer dropping the product completely because they were unsatisfied. Additionally, customers who succeed with your product will be able to provide valuable feedback. This feedback can be vital to your company moving forward.
Finally, customer success is incredibly important for churn, revenue, customer loyalty, and so on. All in all, we can safely say that helping your customers succeed ultimately helps your company succeed. All of this together means that customer success is something that you should definitely focus on in the long term. It’s helpful both for your customers and yourself.
Start focusing on clients
In today’s business world, the focus shifts more and more to subscription-based business models. Because of this, it’s important to make sure customers are happy with the product constantly, so they keep renewing their subscriptions. However, companies that don’t rely on subscriptions still benefit from customer success because of word-of-mouth promotion, customer retention, and customer loyalty. All in all, helping your customers succeed should be a focus for all companies going forward. We hope you found this explanation of why every business needs customer success informative, and we wish you a good day.
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