Customer Success Excellence – How to Maximize Results

Customer Success Effectiveness Precision

If you draw a straight line from San Francisco to Los Angeles and are 1 degree off, you’ll end up 6 miles away from your target. After 8 years of customer success experience, I’ve noticed that this applies to our industry too. If you’re a customer success practitioner and asked if you know what customer success is, you’ll answer “yes”, but what does that mean? What level do you understand customer success? It’s a conundrum for our customer success community as much as it is for employers and c-suite executives.

Customer success effectiveness requires the attention of an astronaut and the focus of a doctor conducting a complex surgery to maximize results. I call this Customer Success Excellence. Customer success isn’t something you check off and if you have something in play you got it right or you’re done. The value customer success delivers depends upon how and what you do to drive it.

Does Customer Success Excellence Even Matter?

Like drawing that straight line from San Francisco to Los Angeles, customer success requires taking a precise direction and it matters. I went to a customer success meet-up in San Francisco where someone stood up and said, “My boss told me I am going to run our new customer success program and I don’t know anything about customer success.” That boss should either rethink that decision or be replaced. Why? Because there are severe consequences in selecting an unskilled person to run your customer success initiative. Customer Success is far to important to leave it in the hands of someone who knows little or nothing about it. This opens you up to unnecessary risk because your company’s success depends on it.

According to SatisMeter , a 4% decrease in churn of a 300-client cohort over a 5-year period for a $50 recurring revenue product and with a $200 acquisition cost will result in $1650 less revenue or Customer Lifetime Value (CLV). Because the total CLV is $650 for the 6% churn example, you’ll end up spending more money than you make, so this is significant. Also, you’ll need to acquire 94 new clients during this time period to stay even and not lose revenue. Even a small change in churn can result into millions of dollars of CLV value.

Regardless of your pricing, you can see how critical customer success is to your profitability. Average break-even (when you start to make money) is 12 to 18 months, so it may cost you more to acquire clients than the revenue attained from it. Therefore, profitability is more important than new client acquisition and customer success is your tool to address long term retention that leads to profitability. As you can see, customer success does matter.

Digging a little deeper, customer success can positively impact profitability and revenue beyond the effects of reducing churn, expansion opportunities, and so on. For example, creating standardized managed service offerings as opposed to unique service offerings drives profitability, however most customer success practitioners aren’t thinking or considering these out-of-the-box kind of strategies. As customer success professionals we aren’t tasked with just retention, upsells, cross-sells, and expansion opportunities, but everything that increases profitability, especially from existing clientele.

Bringing Customer Success Excellence to Your Practice

One point of this article is to understand that what customer success means to you and to someone else will in most cases vary a lot. So, don’t assume if you ask someone if they know what customer success is that you’ll understand their response. Dig deeper to understand their level of understanding by asking questions that help you to gauge their customer success comprehension.

Even more importantly, customer success excellence should be your goal as a customer success practitioner. This means constant and consistent work and effort to understand what is working and isn’t within our customer success community. It could be as simple as putting a formal process around client feedback or having an apology framework strategy. Consider applying newly learned innovative ideas to your customer success practice. Like any new project, measure, monitor, and optimize. The adage of asking these questions applies here, “What do we keep doing? What do we start doing? and What do we stop doing?”

Some lessons will come from cohort testing, but a lot can and should be learned from others who have already tried certain strategies and shared their results. Seek out customer success strategy sources. Curating them will be your best friend in achieving this lofty goal, but well worth it.

Quick Nav says this about boat steering, “One of the most important tasks in your yearly boat maintenance routine will be the inspection and potential repair of your boat steering system. Whether it is mechanical, hydraulic, or electronic, it is what keeps your vessel able to safely navigate, so it has to be in perfect shape.” Wouldn’t you agree that your company’s profitability strategies should be taken as seriously? If a boat’s navigation is this important, which it is, I submit that your company’s ability to thrive long-term is just as important and deserves yearly check-ups too.

Don’t end up 6 miles away from your goal because you didn’t consider the importance of customer success excellence.

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