Customer Success
How to Monetize Customer Success
By Stephen Fulkerson
Join us as we investigate how you, as a customer success executive, can successfully go to market with your monetized offerings, compete with other organizations' monetized offers in a hard economy, and make the right investments to monetize customer success.
How to Monetize Customer Success
In today's challenging business environment, companies are often faced with the difficult task of growing their business with fewer resources. This is especially true when companies are forced to lay off employees and implement a hiring freeze, all while trying to maintain customer satisfaction and retention.
So, what’s the solution? One strong contender is the concept of monetizing customer success. While some organizations see this as a way to add revenue to the bottom line and fund essential customer success initiatives, others are hesitant to take this approach. However, by looking at the available data and research on the topic, companies are able to make informed decisions about whether or not monetizing customer success is the right strategy for their business.
At TSIA, we recognize the importance of this strategy and are investing significant time and resources into examining the latest developments in monetized customer success offers. If you're looking for ways to improve your customer success initiatives and achieve business success, monetizing customer success may be the key strategy you need.
In this blog post, we will explore:
The Benefits of Monetizing Customer Success
In today's competitive business environment, customer success is more critical than ever. However, monetizing customer success has been met with mixed reactions. Some believe that customer success initiatives should be free, while others see the value in monetizing customer success to drive revenue and fund important initiatives. In fact, according to TSIA research, 49% of the industry had already implemented monetized customer success offers as of 2020, showing positive correlations between monetized customer success offers and improved net promoter scores (NPS), expansion, and renewal rates.
Monetizing customer success can bring significant benefits to organizations:
- Aligns the interests of the organization and its customers. When an organization monetizes customer success, it’s essentially offering customers a value proposition that guarantees they will receive the full benefits of the product or service. This can lead to greater adoption and, ultimately, greater customer loyalty and retention.
- Allows organizations to transition from a cost center to a profit center. By developing and selling monetized offers, organizations can generate revenue streams that can offset the costs of customer success programs. This can not only improve the financial performance of the organization but also allow customer success executives to demonstrate the value of their programs to senior leadership.
- Helps organizations stay ahead of the competition. With more and more organizations recognizing the importance of customer success, those that are able to offer effective monetized solutions will have a competitive edge. Furthermore, by developing monetized offers tailored to customers' specific needs and goals, organizations can deepen their relationships with customers and enhance their overall customer experience.
- Helps organizations create a more sustainable business model. By generating revenue from customer success programs, organizations can invest more in the development of new products and services, as well as in the improvement of existing offerings. This can help ensure long-term growth and success, both for the organization and its customers.
The importance of monetizing customer success cannot be overstated. By aligning the interests of the organization and its customers, helping to drive greater adoption, and creating a more sustainable business model, monetized customer success can bring significant benefits to organizations in the technology industry and beyond.
The benefits that come with monetizing customer success.
Monetizing Customer Success: Aligning with Adoption
Organizations that monetize customer success are essentially aligning their offers with the goal of adoption. This means that they are creating and deploying offers that ensure customers get full value from their technology or service offerings. In other words, the focus is on adoption value alignment.
As part of our monetizing customer success research journey, we will be examining the best practices in offer development and alignment for customers. In 2021, we captured a number of distinct best practices, including discounts, offer types, billing types, and alignment with renewals and expansions. However, given the recent economic shifts that have taken place, we believe it is time to revisit this topic.
Monetized offers are like an insurance policy on the customer's investment, providing a means to expedite implementation and reduce risk while ensuring that perceived value is received. Therefore, the offers developed must demonstrate value and align with reducing risk and expediting time to value.
In 2021, the majority of companies developed a three-tier monetized value offering, resembling the "good, better, best" approach. Ideally, organizations should align their offers with adoption plans to help customers achieve their business outcomes faster and more successfully. However, there are still challenges in the industry that need to be addressed to prevent problems before they arise.
Monetizing Customer Success: Top Challenges and Common Mistakes
Monetizing customer success can be a challenging endeavor for organizations, particularly when it comes to offering technology or service bundles that may not be appealing to customers. However, there are several other challenges that often prevent companies from even starting monetized offers.
One common issue is the failure to ask customers whether they are interested in paying for additional services. Another is the old-school mentality that customer success should not be charged for because it has never been charged for in the past. Similarly, some organizations believe their customers will not be willing to pay for it, despite data showing that 45% of companies monetized customer success in 2021, indicating that there is demand for these types of offers.
In order to remain competitive, it is important to develop a customer experience that sets you apart from your competition, which may include offering monetized customer success activities. To better understand the possibilities and best practices for these offers, we encourage you to research your own customers’ monetized offers and competitors’ monetized offers, which may be available on their websites.
One final mistake we see with monetizing customer success is hiding the costs in the base costs of the technology or services offered. This implicit approach can make it difficult to allocate revenue value to profit and loss (P&L) for the monetized offers. To successfully monetize customer success and transition from a cost center to a profit center, it is important to be explicit about the costs associated with these offers and to clearly allocate them to the appropriate P&L.
The Journey to Profitable Customer Success
In today's fast-paced business environment, customer success has become a key component in the overall success of an organization. As a customer success executive, it is important to constantly evaluate how to pivot your organization from a cost center to a profit center. Monetization is one of the best ways to drive greater value to your customers, promote adoption, and fund customer success initiatives.
At TSIA, we are committed to helping our members stay ahead of the curve in customer success monetization. Our upcoming Research Journey will navigate how to monetize customer success and provide valuable insights and data to help you make informed decisions that positively impact your business and the customer experience.
We understand that there are challenges that come with monetizing customer success; that’s why we offer data and research on the best practices that top tech companies use to manage their customer success monetization programs. We invite you to join us on this journey and learn from the experiences of others. Together, we can transform your customer success organization for the better, creating a win-win situation for you and your customers.
May 10, 2023