What it means
Imagine buying a powerful new software tool for your business. You're excited about its capabilities, but where do you begin? How do you navigate the complex features and make it work best for your needs? This is where the Customer Success (CS) function comes in.
In software companies, CS teams function as personal guides who help customers get the most out of their purchase. Unlike customer support — which is reactive, handling issues as they arise — CS is proactive. This team ensures customers aren't just using the software but are engaged and gaining tangible benefits from it.
From mapping out customer journeys and conducting personalized onboarding and training to preventing potential issues before they emerge, a CS team is invested in customer outcomes right from the start.
Why it matters
In a world where software choices abound and switching costs are low, customer success has become a pivotal function. Here's why:
Reduced Churn: The ability to retain customers is as crucial as winning them. When customers are able achieve their goals with your software, they are less likely to jump ship. Picture this:
Acquiring a new customer can cost 5-7 times more than retaining an existing customer.
Increasing customer retention by 5% can increase profits by 25-95%.
Expansion Opportunities: Happy customers are a rich source for upselling or cross-selling. They are more open to exploring additional services, features, or products. A CS team can identify these opportunities, leading to revenue growth. By the numbers:
The success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customers is 5-20%
Loyal customers are 5x as likely to repurchase
Advocacy: The ripple effects of a successful customer can be profound. Happy customers can become brand advocates, bringing in new customers via referrals and positive word-of-mouth. If you're selling expensive or enterprise products, new prospects will likely ask to speak to an existing customer as they vet your offering.
Product Improvement: The CS team is a rich resource for product feedback as they gather voice of customer and analyze customer behavior. CS teams are able to clean, sort, and summarize this data and channel it back to the product development team, driving continuous improvement and innovation.
Onboarding: A Customer Relationship Management (CRM) software company has just onboarded a new client. The CS team steps in, guiding the client through setting up the system, importing contacts, segmenting customers, and even automating their first campaign. This hands-on, consultative approach ensures the client can use the tool effectively from day one, paving the way for a fruitful relationship.
Proactive Check-ins: A software company offers a robust analytics tool. Their Customer Success team has been closely tracking usage patterns and realizes a client isn't leveraging a new predictive analytics feature. The Customer Success Manager (CSM) initiates a call, provides a demo, and explains its potential benefits, prompting the client to use the feature and extract more value.
Renewal and Upsell: An enterprise client is approaching their contract renewal date. The CSM, in their review, notices an opportunity for the client to benefit from a higher-tier plan with added features. In the renewal discussion, the CSM introduces the option and explains the potential benefits. The client sees the value and opts for the upgraded plan, driving additional revenue for the company.
Stack It - Resources & Tools
Customer Success Platforms: Tools like Gainsight, ClientSuccess, and Totango offer insights into customer health, automated communication, early warning signals for at-risk accounts, and more. They can be invaluable for scaling your CS function.
Onboarding: A strong, automated or templatized onboarding process is the first step towards successful software adoption. Invest in creating step-by-step guides, tutorial videos, webinars, and other educational resources that help customers get started with ease.
Continuous Learning: Promote ongoing learning through regular product updates, tips and tricks, best practice sharing, and advanced training. Platforms like Skilljar can help you deliver and track customer education.
Community Building: Platforms like Influitive can help you create customer advocacy programs, build a community, and enable peer-to-peer interactions. This not only strengthens relationships but also provides additional avenues for customers to find solutions and share their experiences.