Utilize behavioral indicators, leading indicators, and lagging indicators to compare your company to best in class Customer Success teams.

In a recent article, we defined the right Key Performance Indicators for Customer Success teams. If you have invested the time to collecting this information, your next step is comparing yourself to other companies’ Customer Success teams.

 

Download our Customer Success Benchmark Tool to determine your customer success benchmarks, to evaluate 9 different metrics to determine your customer success, and to leverage different metric types in 3 areas: Behavioral, Leading, and Lagging.

 

Before we compare your Customer Success team to other companies, let’s have a brief discussion of Benchmarks vs. Benchmarking.

 

  • Benchmarks

     

    A quantitative statement showing the average performance for a set of companies. While this is interesting, there is limited value in comparing yourself to your “average peers”.

     

    There are several great sources of Customer Success benchmarks, including: TSIA, Gainsight, and Totango’s annual reports. These are ultimately a starting point for your Customer Success journey, and can help you identify areas of improvement.

     

  • Benchmarking

     

     Looking at the inputs, processes, and outputs that generate great results.

     

    Compare your current actions to the best in class.

     

    By understanding how they reach that level of success, you can apply those learnings to your organization, and ultimately improve your processes. This is a more impactful exercise, and is one way you can leapfrog your competitors. 

     

Utilize the following three areas to compare your company to best in class Customer Success teams:

 

  1. Behavioral

     

    • Password Resets – Often, this is one of the few data points our clients can easily obtain. What you are looking for is that 5-10% of users are resetting password. This indicates at least attempted usage (you don’t want this to be zero).

       

    • Logins, per user  – You want close to 100% logins. . . if someone is not even logged onto the tool, you need to actively pursue them to ensure the company is obtaining value. This can indicate user engagement, on-boarding, and training opportunities.

       

    • Monthly active users – While you will always have low, medium and heavy users.  An unpaid license is a bad thing because your customer can’t generate value, and that puts expansion at risk (for example, a play that either gets that user engaged, or lets you shift to another internal buyer is helpful when you have a gap). You want to understand the patterns here and embed your tool into weekly and daily workflows. This is important to monitor throughout the life cycle, and is a key input to customer health score.

       

  2. Leading Indicators

     

    • Value Realization – There should be a VRP for every customer above a certain amount. Anywhere you have enough to have a designated CSM, should have a VRP you are working towards. Historically, you are shooting for a 10X ROI to get a customer attention. In SaaS, it helps that your costs are not as front loaded as in the on prem world. The job of Customer Success, though is to ensure the tasks are in fact completed, and that the value is in fact delivered. You are looking for 100% on time completion of internal tasks, and close to that fur customer tasks (a key Customer Success competency is to be able to get Customers to take actions).

       

    • Projected Value – this is a report you would use with your customers to show what they are on track to achieve. It’s intended to drive utilization closer to 100% and ultimately deliver value at or above what is identified in the VRP, and during the initial sales cycle.

       

    • Value Generated – How much of the ROI promised by sales did CS ultimately deliver? Validating value during the sales cycle is a key role of Customer Success, since they are ultimately accountable for delivering this value.

       

      While benchmarks are not published on these, you want to apply the benchmarking method to see how Customer Success teams execute on these processes at scale.

       

  3. Lagging Indicators

     

    • Win/Loss – Best in class companies win 65-75% of existing customer opportunities (compared to 20-30% new logo win rate).  It is important to review the details here, as the verbatim feedback can be applied to refresh your buyer’s journey and personas.

       

    • Surveys – Effective benchmarking involves identifying the patterns in your survey, applying root cause analysis, and fixing the underlying issues. The biggest danger is seeing the same issue over time.

       

    • NPS –In certain industries (Airlines, U.S. Health insurance), the industry leaders are in the 20 range.  In the consumer space, Apple has scored a 70, which outpaces their competitors in the 50’s.  We recommend that you monitor your progress over time (and CSMs should be incented on NPS improvement for their book of business).

       

If you are interested in benchmarking yourself vs. best in class Customer Success teams, please contact us, and we can schedule a discussion with one of our experts.

 

Download our Customer Success Benchmark Tool to determine your customer success benchmarks, to evaluate 9 different metrics to determine your customer success, and to leverage different metric types in 3 areas: Behavioral, Leading, and Lagging.

 

 

Additional Resources

 

Looking for a unique, facility for your next executive off-site? If so, book a 1-2 day meeting at The Studio, located in Dallas, TX. Our facility offers state-of-the-art meeting rooms, lounge, full-service bar, and a studio used to tape our TV shows. SBI provides the location and facilitators, all at a compelling price point.

 

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ABOUT THE AUTHOR

Fred Penteado

Guides private equity portfolio companies in a variety of industries on how to make their number.

Prior to joining SBI, Fred held a variety of leadership positions with multinational Fortune 50 companies. He has worked in product/program/channel management, sales operations, and served as a Chief of Staff.

 

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