A Brief Guide to Customer Success

A Brief Guide to Customer Success

In this post, you’ll find the answers to common questions about customer success program basics, a growing concept that has taken center stage in the business world.

What is Customer Success?

The term “customer success” is commonly both used as a theme and an organization, both of which represent helping customers successfully achieve their goals with their purchase.

As a theme, customer success is considered the intersection between a supplier’s technology and/or services and the business outcome the customer hopes to achieve with it.

As a function, Customer Success teams are made up of the individuals within a supplier organization responsible for ensuring the customers are receiving the full value from their purchase and on track to achieving their goals with their technology. It is a common practice for these organizations also take on some commercial responsibility.

Why Do Businesses Need Customer Success?

The goal of customer success is to enable effective adoption of technology and services, which can lead to contract renewal and more revenue from existing customers through upsell and cross-sell.

Today's customers are more interested in buying a product or service based on how it can solve their business challenges rather than its features. Suppliers are making a promise to help the customer solve their problems with their solutions, and the customer is investing in that promise by purchasing the supplier's product or service.

The goal of customer success is to enable effective adoption of technology and services, which can lead to contract renewal and more revenue from existing customers through upsell and cross-sell.

That promise is extended throughout the supplier's organization—the Product Management team conceives the promise, engineers develop and build the promise, Sales sells the promise, and ultimately it is up to the Customer Success team to execute against that promise.

For any technology vendor that has sold hardware or software maintenance, the recurring revenue streams generated through renewal and expansion have always been top of mind. However, renewal and expansion are especially valuable to businesses with subscription-based, “as-a-service” (XaaS) business models.

What Are the Benefits of Customer Success?

Here are some of the benefits of having a Customer Success function and an outcome-oriented focus within your organization.

Increases Technology Adoption

Once your company has acquired a new customer, your next goal is to get them up and running and using your solution. Successful adoption of your products and services can unlock countless opportunities for cross-sell, upsell, and renewal, but getting customers to that first critical milestone of value realization requires ensuring that they not only understand your technology and services, but are using it effectively. Customers who are clearly receiving value from your products and services are most likely to expand their spending with your company and renew their contracts.

Improves Customer Retention

Retaining customers and avoiding customer churn has always been a crucial element to business success, but especially in “as-a-service”, subscription-based business models, as they heavily depend on securing recurring revenue. But customers will only renew their contracts if they continue to receive value from their purchase.

That’s why Customer Success is essential to reducing churn and keeping customers on your platform. The primary responsibility of your Customer Success team is to make sure your customers are continuously extracting the most value from their technology and service offers. The ongoing relationship and conversations between Customer Success and your customer are about helping them receive the value and return on investment (ROI) they expect from their purchase, which goes a long way in combating customer churn.

Expands Customer Spending Through Cross-Sell and Upsell

Customer Success teams interact with customers 5-15x more than Sales teams, which puts them in the unique position of being able to naturally identify cross-sell and upsell opportunities through their regular customer interactions. Because they have a better visibility into customer goals and struggles, they quickly become the customer’s “trusted advisor”.

This allows them to prescribe solutions with the primary goal helping the customer achieve their desired outcomes, but also translates to expanded spending with that customer. Because of this relationship equity they build with customers, Customer Success teams can go where salespeople can’t, making them a valuable cross-sell and upsell resource.

Improves Customer Acquisition

The best brand evangelist is your current customers, and when you continuously deliver value, they’ll recommend your products and services time and again. This third-party validation can provide your company with more potential customers, lower customer acquisition costs (CAC), and enhance your reputation among your prospects, elevating you above the competition.

The customers that are the most likely to be your biggest advocates are the ones that are effectively using your technology, continuously receiving value, and achieving their business outcomes with your products and services. This is the type of customer that can be directly nurtured through Customer Success interactions.

What Does a Customer Success Organization Look Like?

Before getting into the structure of the Customer Success organization, you need to first understand what their primary goal, or charter is.

The Charter of a Customer Success Organization

Customer Success organizations can fall into at least one of three charters: Adoption, Retention, and Expansion, according to TSIA’s Customer Success research.

charters of customer success

According to TSIA member surveys, the majority of Customer Success organizations see themselves as either an Adopter or Retainer.

  • Adoption: Focused on ensuring the customer uses the technology and services and realizes business value
  • Retention: Focused on ensuring that business value is realized in order to improve the likelihood of subscription and/or maintenance renewals
  • Expansion: Focused on ensuring that business value is realized in order to successfully sell more products and services to each account

Who is Responsible for Customer Success?

While there are many roles inside of customer success organizations including Technical Account Managers (TAM), Renewals Representatives, Customer Success Architects (CSA) and Customer Success Engineers (CSE), the most common role is the Customer Success Manager (CSM).

Skills and Qualities to Look for in A Customer Success Manager

Great customer success managers should have a combination of skills. Here are three that rise to the top:

skills a customer success manager needs

Skills a customer success manager needs.

  • Customer Service: Customer success managers should have well-developed soft skills, including communication, presentation, and emotional intelligence, that will enable them to create relationships and become the customer’s advocate. Past experience in account or relationship management is definitely a plus.
  • Technical Knowledge: By understanding the technology from a user’s perspective, customer success managers can help the customer identify the best practices for the intended business use of that technology. Note that this does not mean they need to be a technology developer or a support troubleshooter. They must quickly establish themselves as a power user of your products and services so they can in turn help customer achieve effective adoption and derive the most value.
  • Functional Knowledge: By being able to understand the finer points of the customer’s operation, functional (or industry) knowledge enables a CSM to connect your technology to your customer’s business outcome. This contextual domain expertise may also be commonly referred to as having a “consultative” approach.

Which Programs and Technology Are Used for Customer Success?

Customer success initiatives requires investing in customer-facing tools, productivity tools, and infrastructure technologies that allow your team to ensure that your customers are receiving the maximum value from their purchases.

This also includes technology that can provide earlier signals about customer challenges that need to be addressed (adoption, support, contractual, relationship, etc.) so that they stay on the path to renewal. After all, the only path to achieving higher renewal rates and expansion opportunities is through effective technology adoption.

TSIA’s “Customer Success Tech Stack” report, based on the results from our annual Global Technology Survey, lists 13 separate application categories, as well as the top installed vendors per category, recommended for highly productive, scalable Customer Success teams and programs. These categories include core infrastructure technology, productivity tools, and tools to understand and track customer behavior and sentiment.

Here are the categories of the top installed programs per category:

Communities/Enterprise CollaborationContent MarketingContract/Entitlement ManagementCRM/Incident ManagementCustomer Experience AnalyticsCustomer Success Work ManagementIntelligent Agents/Chat BotsRecurring Revenue ManagementReporting/Analytic PlatformsUpsell/Cross-SellVideo Content ManagementWeb Collaboration/Desktop Sharing

For a complete list of top installed programs and a detailed explanation of what each category means for your business, download the full report here.

Customer Success FAQs and Recommended Resources

While customer success is now a common element of business worldwide, especially in companies that offer subscriptions and rely on recurring revenue, it’s important to fully understand what customer success is and exactly why it’s critical for your success. Contact TSIA today for information on how membership in our Customer Success research and advisory program to get answers to the industry’s biggest customer success business challenges and frequently asked questions, including:

  • What are recommendations related to establishing customer success capabilities and organizations?
  • What technology is available to support Customer Success Management teams?
  • What models do companies use to determine the funding of their Customer Success organization?
  • How are Customer Success organizations staffing their teams for optimum success?
  • What processes and tools do we use to monitor, track, and improve customer experience?

For now, here are some recommended Customer Success resources to help you get started.

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