Customer Success Articles that are Certified Classics - Part 2

January 20, 2016 Matthew McLaren

Issue 72 - Customer Success Articles that are Certified Classics (Part 2)

A classic article needs to be remembered, enjoyed and recognized not only by the current generation but also by subsequent generations. In this issue of the SaaS Tattler, we've currated a list Customer Success articles that are certified classics.

Join us on January 26 at 1pm ET, as we teach you to transform product adoption for all your customers.

The Aha Moment for Customer Success

For Customer Success, the light at the end of the tunnel is driving adoption and helping customers unlock value from your product. Sadly, many Customer Success leaders find themselves constantly fighting fires and have no time to drive change. In this article, Catherine Blackmore identifies the different ways each department can drive change by aligning their goals with Customer Success.

While the charter of Customer Success is to drive product adoption and help customers unlock the value of your solution, many departments are stuck in red account hell. Escalation management dominates the day and churn prevention is the goal.

This mode of operating can’t continue. In order for Customer Success leaders to get out of this constant firefighting mode they must start to identify root cause issues and work with their e-staff peers in driving change that will ultimately deliver against the promise of Customer Success.

Mapping the entire customer journey is a powerful way to spot and address these issues. This identifies the roles each department plays in creating a satisfied customer, as well as illuminates potential gaps in the process. Demandbase‘s David Lieberman recently wrote about how a clearly defined customer journey can align departments around the goal of driving value.

Why You Should Seperate Customer Success and Customer Service

The scope and scale of Customer Success is much broader than Customer Service. Simply put, Customer Success is a proactive position and Customer Service is a reactive position. In this article, Jeremie Bacon goes into details about the functions of Customer Success and Customer Service and why you should separate the two regardless of how you analyze customer happiness.

When I co-founded my first SaaS company in the early 2000’s, we treated customer success and customer service as one and the same. However, as we grew and reached scale, our one-size-fits-all customer service + customer advocacy model began to break down under the weight of our success. I learned that customer service plays a pivotal part in an overarching customer success program but it is just that - a single part of a much bigger program. In hindsight, we had our service and success reps try to wear both hats for far too long.

The best customer success programs engage every department within an organization to drive toward clarity and consistency across the entire customer experience. Ultimately, customer service can’t thrive without customer success, but neither can product development, sales, marketing, or operations.

Building lasting customer partnerships requires that every team be devoted to customer success, which is why it should be separate from customer service.

Your Customer Success Team. Hire Early. And No Squishy Goals - It's All About the Numbers.

Customer Success shouldn’t be referred to as a cost center but instead a revenue enhancer. A SaaS business should hire their first Customer Success Manager as early as they can afford to but it’s important to remember that you can’t expect to see the ROI overnight. Instead, give it a few months and you are guaranteed to see results. In this article, Jason Lemkin explains why the two most important things you can do with Customer Success are (1) hire early, and (2) measure constantly.

So let’s talk more about this uber-critical position, what it is, when to hire for it, and what to expect and measure.

A modern SaaS Customer Success Manager is something more than an old school Account Manager that would on-board a new customer from sales and then fade away 90 days after implementation.  Rather, Client Success owns the customer from point of inception (sometimes pre-close) all the way through the entire life and lifecycle of the customer.  Sales closes the customer, and Customer (or Client) Success takes it from there — for years.  3-4 or more years, if that’s your Customer Lifetime Value.  So actually, Customer Success has a much longer, and ultimately deeper, relationship with the customer than sales or anyone else in your company, including you.

Client Success is actually your secret sauce to success.  Because in a typical SaaS company, even if you are growing 100% a year — well 50% of your revenue is existing revenue.  And of that growth?  Often as much as 50% of that growth is upsell / additional seats / more revenue from your existing customer base.  So directly, or indirectly, Client Success manages as much as 75% of the revenue of a typical SaaS company.

How to Prioritize and Organize the Work of Your Customer Success Program

I have so many accounts, how do I prioritize them? For the most part, Customer Success teams are fairly small compared to the amount of customers they are managing. It’s impossible for even the best Customer Success professionals to give their full attention to all their customers. Which is why it’s time to make prioritizing a priority. Derek Skaletsky, CEO of Knowtify offers a simple framework to prioritizing your customers by opportunity.

The Framework

Potential size is pretty straight-forward. This is basically the answer to the question -“How big could this account be?” Don’t worry about how big it is NOW, just worry about how big it could potentially get if you were to “squeeze all its juice”.

Express the Potential Size of the Opportunity with letter grades (A, B, C). I also recommend putting a little more definition around these levels by applying some dollar amounts that fit for your business (an A-account should have a potential > $50k; B-accounts between $10-$50k; C-accounts below that – something along those lines).

Likelihood for Growth is a little harder. What you are looking for here is an assessment of how hard it will be to grow a particular account. Do you have a great internal champion that is going to sell this in across departments for you – making your job easy…or are there some major barriers (budgetary, political, legal, etc) which are going to really limit your ability to expand the account? Again, not an exact science, but you should be able to get a good sense for this from the initial sales process and early interactions with the customer.

Express the Likelihood for Growth with numbers (1, 2, 3).

Then when you put the two measures together, you get a grade for an account. An A1 account is one with a lot of potential room for growth AND a strong willingness to grow.

The Best of Customer Success Today

As Product Manager, you’ve developed a product that works – why should it be your problem if buyers can’t figure out how to use it? Why the Customer Success Manager is the Product Manager’s New BFF.

David Bowie died. I had read the headline a few times before I understood. Was this some David Bowie stunt or art piece. Ziggy Stardust doesn’t die. Where’s my Five Years warning? Four Lessons We Can Learn From David Bowie’s Life.

Although Customer Success Management is a relatively new term used within software business, its concept is rather simple. What Makes Customer Success to Tick More than Traditional Support.

Uberflip has embraced a focused and structured approach to drive customer success and better customer engagement, while dramatically reducing churn. Uberflip: a Case Study in Scaling Customer Success.

Every week I issue this roundup of relevant articles from the customer success industry so we can learn from each other and share best practices. If you like what you read here, please consider forwarding to others. New reader? Subscribe.

Find an interesting article you would like featured in the next SaaS Tattler?
Feel free to submit them on this page.

 

Learn how to transform product adoption for all your customers in our upcoming webinar.

About the Author

Matthew McLaren

Matthew McLaren works as a Digital Marketing Manager at Amity. His passion for creative design has motivated him to explore the many uses of technology.

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