A Primer for Founders & CEOs on Customer Success & Customer Experience

The Big Picture

The ultimate goal of Customer Success / Customer Experience as a philosophy and as a discipline is to accelerate recurring revenue growth and lower the cost of revenue acquisition by:

• ?Keeping the customers you already have, for longer
• ?Expanding their revenue footprint with you over time
• Turning your customers into advocates who rave about you to prospects

This creates a revenue flywheel that can generate double digit revenue growth from existing customers alone, even if you never attract another new customer, as measured by Net Revenue Retention Rate (NRR).?And why does this matter? Because higher NRR co-relates with higher company valuation.

However, in order to realize the benefits of this revenue flywheel, your company must establish and mature their capabilities in two interconnected domains: Customer Success & Customer Experience.

Domain 1: Customer Success (CS)

The Goal of Customer Success: Ensure customers achieve their business objectives by using your product, and that they continue to get increasing value from your product over time, even as their business objectives change. The best way to do this is by maturing your Customer Success practices, moving from firefighting to pro-actively and consistently focusing the whole company around customer success.

This can be a multi year journey, however, you see benefits at each stage to both Gross and Net Revenue Retention as shown in the following chart.

Source: Gainsight, study of 100 companies and the maturity of their Customer Success practices.

Insights & Actions is the foundational stage, and where companies should start. Here you need to build or mature:

1)?????Trusted view of all customer related data, in one place, that all customer-facing resources can access and keep up to date. In my book, this includes forward looking visibility to renewal and expansion revenue, so there are no surprises.

2)?????Customer-centric, end-to-end, customer journey map showing layers like touch points, moments of truth, desired sentiment, and key metrics you’ll measure along the way to ensure you deliver a seamless experience and pick up on leading indicators of future churn in time to act.

3)?????Effective and timely onboarding, built around customer personas, use cases and business outcomes, not product menus and feature walkthroughs.?

4)?????Voice of the customer program that captures, acts on, and closes the loop on customer feedback internally and with customers.

5)?????Customer health scores that factor in a holistic set of dimensions, for example, product usage, strength of relationship, open support tickets, business outcomes, and customer feedback scores.

Domain 2: Customer Experience (CX)

The Goal of Customer Experience: Deliver consistently positive experiences that minimize effort customers expend to get things done with your company throughout their lifetime with you.

“Companies with superior CX bring in 5.7x more revenue than their competitors, as measured by 5 yr CAGR, compared to CX laggards.” - Forrester CX Index.

The best way to increase customer loyalty is to reduce the effort required to do business with your company, especially for customer service interactions. This is what truly delights customers over time. The best way to measure this is through a 1 question survey to determine the Customer Effort Score (CES) at key points in their journey, such as after onboarding and customer service interactions. This pairs well with measuring Net Promoter Score (NPS) at the relationship level, several months before renewals, so there is time to act if needed.

Here is an HBR article on Effort Score, as well as a detailed definition.

HBR Article “Stop Trying to Delight Your Customers”

https://hbr.org/2010/07/stop-trying-to-delight-your-customers

Customer Effort Score Definition

https://www.klipfolio.com/metrics/customer-success/customer-effort-score