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In this post, you’ll find the answers to common questions about customer success, a growing concept that has taken center stage in the business world.
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.
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.
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.
Here are some of the benefits of having a Customer Success function and an outcome-oriented focus within your organization.
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.
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.
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.
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.
Before getting into the structure of the Customer Success organization, you need to first understand what their primary goal, or charter is.
Customer Success organizations can fall into at least one of three charters: Adoption, Retention, and Expansion, according to TSIA’s Customer Success research.
According to TSIA member surveys, the majority of Customer Success organizations see themselves as either an Adopter or Retainer.
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).
Great customer success managers should have a combination of skills. Here are three that rise to the top:
Skills a customer success manager needs.
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:
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.
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:
For now, here are some recommended Customer Success resources to help you get started.
Post Date: December 10, 2019
Phil Nanus, is the vice president of customer success research for TSIA. In this role, he works closely with member companies to deliver research and advisory programs focused on helping them optimize their customer success organizations and effectively deliver customer outcomes. Throughout his career, Phil has held various positions related to enterprise software and IT services, including global leadership roles in customer success, support, professional services, managed services, and cloud services. Prior to TSIA, he was the vice president of customer success at Infor, where he led a team of Customer Success Managers (CSMs) focused on driving customer adoption of their technology.
The Technology Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.