In 1975, Kodak engineer Steve Sasson built the first ever digital camera, but Kodak’s management just didn’t see the appeal. After all, profit margins were far higher on film than on the cameras themselves, and this was filmless photography. In Sasson’s words, “management’s reaction was, ‘that’s cute, but don’t tell anyone about it.’” This was Kodak’s chance to be at the forefront of the digital revolution, but they wouldn’t commit to a new and disruptive technology. The company folded in 2012.
Dozens of companies have failed due to their failure to commit — to a new strategy, a new product, or a new market. These days, the hot topic across the corporate world is Customer Success, and unfortunately, many executives are slapping the CS label onto existing departments without really examining what that means.
But Customer Success isn’t just a buzzword. It’s also not a relabeling of Account Management, Customer Support, or Customer Service. It’s a thoughtful, proactive practice to ensure your customers are happy and successful, keep them returning for repeat business, and encourage them to bring new customers into the fold through the power of word-of-mouth communication. Here’s how.
How Customer Success Affects Everything You Do
Some executives fail to embrace Customer Success as comprehensively as they should because they can’t visualize the effect that CS can have on their business. While it was once viewed as a niche category only for born-in-the-cloud tech, Customer Success is coming into its own as a vital component of any company.
After all, your company’s success is contingent on your customers’ success — if they aren’t using your product or can’t fully take advantage of the services you offer, they’ll abandon you and look elsewhere. With that in mind, here are a few ways that Customer Success permeates key areas of your business:
- Customer retention: with more and more businesses transitioning to a software as a service (SaaS) business model, gaining long-term, repeat business is more important than ever. If you can help your customers to be successful, they’ll be more likely to adopt and renew your product.
- Customer acquisition: retention and acquisition go hand in hand — the more you can foster success in your existing customers, the more likely they are to advocate for your company and services to their friends, colleagues, and coworkers. Retained customers contribute directly to new customers in the SaaS customer lifecycle.
- Churn reduction: everyone knows what churn is, but the more important question is why churn happens. In a lot of cases, it happens because the client simply isn’t seeing the value in a product, or they’re not able to get what they need from it. Customer Success can address this by ensuring that customers are easily able to onboard, adopt, and realize the value of your product.
- Brand promotion: Customer Success is about being as helpful as possible to your customers. Sure, the primary goal is to keep them on board, but it certainly doesn’t hurt your brand image to build a reputation for reliability and helpfulness. Billions of dollars are lost every year when customers jump ship after negative experiences with a brand — that’s business you can’t afford to lose.
- Company efficiency: like it or not, all the time your company has to spend putting out fires for customers will add up. Reacting to problems as they arise is time consuming, difficult to plan for, and expensive. Instead, Customer Success is proactive, anticipating and solving problems before they show up. With an upfront investment in education, onboarding, and automation, you can save your company and your staff a lot of headache down the road.
The Difference Between Customer Success and Customer Service
A huge mistake that companies tend to make when their view of Customer Success is hazy is to lump it in with Customer Service or Customer Support. We’ll primarily use the term Customer Service here, but if your company uses the Support vernacular, the message remains the same.
When a customer has an interaction with Customer Service, that generally means they were using your product and encountered a problem. They place a phone call, send an email, open a chat, or make contact on social media. In a perfect world, you’ll solve their problem quickly and efficiently and they’ll go about their day.
But here’s the thing — they still had to experience the frustration of that problem interrupting their day. No matter how quickly the problem was resolved, it was still a problem, and one too many problems can (and often does) result in that customer deserting you and switching to a competitor.
Customer Success exists to pre-empt those problems. In fact, Customer Service and Customer Success are much closer to being antonyms than synonyms in our view. One is reactive, one is proactive. One plays defense, one plays offense. One is initiated by a dissatisfied customer, one is initiated by an informed CSM. One is all about fixing a problem, one is all about identifying a potential problem before it happens to prevent that frustrating disruption.
Customer Success Statistics to Be Aware Of
All these ideas sound great in theory, but how do they stack up in real life? Here’s a taste:
- 86 percent of buyers will spend more on a product or service if they’re getting a better customer experience. From the first website visit to their purchase, onboarding, adoption, and renewal processes, customers value the way they’re treated and ease of use above almost anything else.
- Companies that prioritize Customer Success generate 60 percent higher profits than companies that don’t. Part of this is due to better retention — it’s far more profitable to retain customers than to acquire new ones — and part of the phenomenon is due to the fact that delighted, successful customers are more likely to lead to cross-sells and upsells.
Go Big or Go Home
A lot of executives are jumping on board and building CS departments simply because it’s a hot buzzword. But without the right knowledge and resources to back that up, a Customer Success team simply can’t succeed.
We recognize this is easier said than done, and that ‘swallowing the fish’ to fully understand and embrace new strategies like Customer Success is expensive and time-consuming in the short-term. But consider the long-term impact of making that investment. True proactive Customer Success = higher retention of existing customers + cheaper acquisition of new customers + increased organizational efficiency + better reputation. That’s a lot more than a buzzword in our view.