Grow revenues by proactively managing the customer life cycle.
The emerging field of Customer Success is a hot topic, and many have already invested. Are you investing enough? Before you commit your company’s resources to this, vet the concept by asking yourself a few questions:
1) What percentage of your revenue is recurring?
2) What is your renewal rate?
3) Can you make your number if your renewal rate slips?
If retaining 90% plus of your recurring revenue is vital to your success, you should consider investing in customer success. If you are already investing, then continue reading to ensure you are going deep enough. Consider coming to see me and the SBI leadership team in Dallas at The Studio to participate in a working session to review the latest emerging best practices for your company.
Most companies have a customer service team today. Obviously, this is important. But, it is not enough. Customer service teams exist to respond to issues your customers are experiencing. Best in class companies take service to the next level, by being proactive. Driving adoption of the solution, so customers maximize the value they receive. When executed effectively, customers go from happy to delighted. They will become promoters of your company, which will generate additional leads, create references that close a higher percentage of deals, faster.
Don’t underestimate the degree to which selling time is eroding from your sales force as they put out customer fires. Additionally, most companies treat the renewal as an administrative/billing interaction. For example, two months prior to the expiration, customers get a call (frequently from someone in finance and/or billing) inquiring if they want to renew. While many companies renew at a high rate, this type of interaction leaves a lot to chance. Can your company afford to take that risk?
What Great Customer Success Looks Like
Let us contrast that with the emerging best practice of Customer Success. While customer success applies to many companies and industries, SaaS based software is the most frequent use case. Let’s visit the actions you would take from the beginning.
Late in the purchase cycle, you introduced your Director of Customer Success who showed the customer an onboarding plan for the users. You presented a plan for how each user would be trained to ensure that they were fully adopting the tool. Great customer success teams tie the adoption to realizing the goal of the company so that it’s not just adoption for the sake of adoption. This adoption will ensure that your customers receive the value they expected from the tool, and that the business case is realized.
Immediately after the buyer signed the contract, the Customer Success team reached out to the users. They hosted training sessions on the tool, and helped ramp them up. The team was available when users had problems, and they are also proactively reaching out to make sure the users understand how their actions tie to the success criteria the buying decision team articulated.
One quarter after your purchase was made, you host a quarterly business review. The customers are happy with the tool. You can show them that four out of five users are utilizing the tool, and quantifying the benefit. They show a plan to engage the renaming user, who has a unique workflow. The QBRs continue, and in the next one you can show how this user came onboard.
During the final QBR of the year, you present the renewal. Even with a cost increase, the ROI is strong. The users report that this has been integrated in their workflows, and cannot imagine going back to the old way. The renewal “event” becomes a non-event.
If you would like help with developing a Customer Success strategy, come see the SBI leadership team in Dallas at The Studio, SBI’s multimillion dollar, one-of-a-kind, state-of-the-art executive briefing center. A visit to The Studio typically results in getting 3 months of work done in 3 days. The immersive sessions accelerate everything, dramatically reducing the time it takes to develop a customer success solution, and create an implementation plan.
