Hello friends in customer success. First and foremost, I wish everyone good health along with physical and mental wellbeing while dealing with significant change both personally and professionally. COVID-19 has impacted many different facets of societal norms, not to mention the day-to-day business. I want to provide guidance for the short term, but also consider the significant opportunity that customer success must make a lasting impact on your customers and your company.
3 Changes Customer Success Teams Can Make Today
1. Virtual Engagement
According to our own TSIA Benchmark data, 91% of Customer Success Organizations work in a completely remote or partially remote team. There are many lessons learned that you could share inside of your company and with your customers. This is a leadership opportunity for customer success organizations, as many global colleagues are experiencing a completely remote environment for the first time. TSIA created a list of tips and best practices for effectively working from home. Additionally, customer success managers (CSMs) are often seen as trusted advisors, so this presents much needed time to connect and engage with their customers.
2. Revisit Your Success Plans
If your high touch customer success team was executing in-person business reviews, these should continue remotely. During your business reviews, it is critical to revisit your customer success plans. Here are some important questions:
- What is the COVID-19 impact on your customer’s business? For specific sectors like hospitality and tourism, telecom, travel, or energy this could be significant.
- Have your customer objectives shifted priority? If there were multiple business goals that were listed when they purchased your technology and services, has a lower priority bubbled to the top. It is important for your CSMs to bring value to each conversation, so brainstorming is critical to bring forward new ideas.
- Can you accelerate adoption to meet changing demand? It would be an obvious statement to make, but supply chains are stretched. Are there adoption plays or new playbooks that can be created to meet your changing customer’s needs?
3. Recalibrate your Customer Health Scores
TSIA identified ways to improve your customer health scores. One of the recommended approaches is to iterate on the score itself. As you think about the shift in your customer’s business, now is the time to revisit how you categorize, weigh, and measure the components of your customer health scores.
The primary internal use case for health scores is an early warning of churn. Look for shifts in consumption of your technology. Some members have already reported an increase in consumption while others a decrease. But also be open to new data sources. An example would be evaluating cash flow for any company that reports their financials publicly. This may create a working partnership with your renewals function to identify payment extensions or other considerations.
3 Customer Success Strategic Opportunities
At TSIA, we have been using a car racing analogy to explain the current business impact to organizations. Top race car drivers return to the pits to optimize their cars during a yellow flag when the track is “on hold.” They do so to increase their chances of winning once the track returns to full power.
In much the same way, companies that excel after a difficult economic downturn do so because they spent their time during the downturn wisely and productively. In effect, they optimize their time spent during the “pit stop.” The question to our customer success executive community – what are you planning on doing during your “pit stop”?
At our Technology and Services World conference in October 2019, we spoke to our member community in preparation for an economic downtown. We mentioned two core tactics to address this. The first is an increase in revenue responsibility and the second is scaling your organization. Little did we know at the time of the significant human and economic impact that COVID-19 would have. TSIA members can access that presentation here, but let’s revisit a portion of the guidance that some have already started to implement.
1. Streamline Sales and Marketing Costs
A common question that comes up in these times is controlling costs. One of the more critical questions that will come up in your leadership meetings is how to efficiently manage commercial costs, from acquisition, retention, and expansion. It is also a safe assumption that acquiring customers may be more difficult in this environment unless your technology or service has increased in demand (i.e. video conferencing, specialized healthcare, etc).
When Customer Success organizations take on direct revenue responsibility, two things happen to the financial performance of your company – sales and marketing costs decrease, and subscription growth rates increase.
2. Monetize Customer Success
While introducing a new revenue opportunity for your company sounds counter intuitive given the circumstances, I encourage you to rethink this. Our TSIA data correlations are powerful. Companies that monetize customer success have seen the following benefits:
- 17-27-point increase in NPS
- 10 percentage point increase in Dollar Expansion Rates
- 2 percentage point increase in Dollar Retention Rates
There are important tips to unlock this, but as I mentioned before, if you can accelerate your customer’s business goals using your technology and services, now is the time to put that on the table. The other obvious consideration is this is the easiest way to solidify funding of your organization.
If you want to learn more about these first two opportunities read “How to Increase Revenue Responsibility Within Customer Success.”
3. Dynamic Engagement
Last May, TSIA introduced a new framework called the “Dynamic Engagement Model.” Dynamic engagement represents the alignment of human and digital resources to cost-effectively deliver against the promise of your company’s technology and service offers. The foundational principle of the Dynamic Engagement Model is to put the right resources at the point in the customer’s journey that delivers the best possible experience, but in the most cost-effective manner.
The initial use cases for this framework target customer success management organizations, but we expect a broader push to different organizations with new use cases inside of technology companies. In short, the Dynamic Engagement Model was developed to help shape infinite work for a finite workforce. This represents a seismic shift to improve your customer lifecycle and make meaningful efficiencies. Everyone can read more about the Dynamic Engagement Model in the “TSIA State of Customer Success 2020” report.
TSIA is Here for You
We understand that our member companies, the technology industry, and the world at large have been impacted by COVID-19. Now, more than ever, we need to work together to get through these challenging times. TSIA is committed to providing visibility as quickly as possible into the changing industry trends and practices that come as a result of COVID-19. Visit our Rapid Research Response Initiative resource page for more information.
With over a million individual data points, 130+ B2B customer success members, and over two decades as customer success practitioners, our TSIA customer success research team can provide a steady hand in uncertain times. If you have any questions related to how COVID-19 is impacting your organization, we’re here to help.