7 Reasons You Might Not Be Ready for Customer Success …..Yet!

July 28, 2014 Pam McBride

customer success

Customer success is an exciting and game-changing opportunity, and a prerequisite for the majority of B2B SaaS companies, but are you ready for it?

According to an Aberdeen Report* on Customer Experience Management, the top three drivers for investing in customer experience management (customer success management and customer experience management are often used interchangeably) are:

  1. Improve customer retention – (42%)
  2. Improve customer satisfaction – (33%)
  3. Increase cross-selling and up-selling (32%)

And to add more fuel to the fire:

  • The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics
  • A 5% reduction in the customer defection rate can increase profits by 5 – 95% – Bain & Company
  • A 2% increase in customer retention has the same effect as decreasing costs by 10% –Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.

So are you asking yourself right now (and maybe turn to your colleague to do the same), “Are we ready for customer success?”

Here’s a look at 7 reasons (or maybe these are excuses?) why you may not be quite there…but with these insights, you’ll be so much closer.

1. You don’t have a plan.

Before you begin, you need to have a plan in place to bring customer success to its full potential. This includes your vision, goals, customer data, metrics, timetable, journey map etc. — and the involvement of key stakeholders. With a plan it will be easier to get the executive buy in that you need – see #2 below.

It sounds daunting – so much that you might not even know where to begin. But don’t despair! Start with making a list of all things that need to be considered. There is a plethora of information and insights out there (customer success is a very hot topic right now) to guide you in right direction. Do a quick Google search on “customer success management” or “customer experience management” – here is a great example of a search result that contains the steps to doing customer journey mapping. 

2. You don’t have executive buy-in.

Customer success doesn’t just happen. It requires sponsorship from the top, starting with the CEO. Without executive buy-in, it is difficult to shape the corporate mind-set around the importance of the customer and his or her experience. And from the CEO on down, the entire senior leadership team will play a role in influencing every department in the organization on the importance of the customer, hence paving the way for the success of the Chief Customer Officer.

How do you get the CEO to buy in? A number of CEOs have walked in the shoes of their customers. They gain first-hand experience dealing directly with customers by spending time engaging them, learning their business needs and the value they derive from using your product/service. So with plan in hand, propose a challenge to your CEO to walk for a day or even a couple hours in the shoes of the customer. If they do this already – you are way ahead! If not, here is a great example from the CEO of Zuora, Tien Tzou.

3. You don’t have data.

Relevant and comprehensive customer data is the foundation upon which your customer success program will operate.  Most organizations have customer related data, it’s just a matter of identifying it. If you don’t already know, find out what your company uses to capture account or contact information, billing data and support tickets. Once you’ve found the data, the next step is to put it into the context of what is required for customer success.

Without a purpose-built platform, you are likely accessing it from a variety of different sources. Often referred to as the 9-window problem. There are so many applications open on your desktop as you are trying to get a grip on the customer. Being able to identify what exists and where is resides will not only demonstrate that you have some data to work with but that it would be much better if it was contextual to each customer.

3. You don’t know your customers.

Well you probably do know who they are. However, segmentation of your customers and personalized engagement is one of the key benefits of customer success. This is why you should start thinking about how customers are organized and categorized before you implement a customer success program.

Knowing your customers is the first step to strong segmentation. By organizing your customers into targeted groups, you can ensure that each customer receives the right level of information and attention at the right time. It also helps to strongly support #2 above.

4 .You haven’t collaborated with other departments.

Since customer success will touch multiple departments, getting input and buy-in from each team is an absolute must.  Understand their thought processes and incorporate their feedback into your plan for customer success. Outcomes of customer success have a direct impact on sales, marketing, product development and technical support to name a few, not to mention the bottom line.

For example, marketing may have originally planned to send an email to an at risk customer, promoting a new offer to them. Working with marketing, customer success can quickly identify that it isn’t the correct point in time to send an email of that nature.  This wouldn’t have been the way to salvage that relationship.

5. You don’t have metrics or KPIs.

We all want results from our customer success program, but the metrics that go deeper and beyond those areas are crucial for monitoring, refining and optimizing. This might not be a showstopper for you though. You can define initial metrics and KPIs that are important to the organization in your plan and then use this as a requirement to find the right platform to meet your needs. Chances are that metrics around churn reduction, upsells and cross-sells are already being discussed somewhere in the company.

6. You don’t have a process.

Most B2B SaaS companies have identified a need to reduce churn and grow the lifetime value of their customer base and believe customer success is the way to go about achieving this. And it is! However, since customer success is so new a lot of companies are just trying to figure out how to stop firefighting and get out of the chaos. Any customer success process put in place today, is better than no process at all – it will evolve as your organization, your product and your customers mature. Finding the right technology to support your process and evolution will be key.

7. You haven’t chosen a technology to support your customer success efforts.

There are many factors to deciding on the appropriate technology to support your customer success efforts, but the most important aspects to keep in mind are the ones that mean the most to your business and your goals. Some organizations believe that they can just use an existing CRM implementation or build something in-house. An existing CRM won’t work (and here’s why) and as far as building one in-house – you likely don’t want to distract a developer from the mission-critical work of building your product. And it wouldn’t be a one-time effort either – there will be updates!

Below are a few high-level factors to consider. If you are looking for the ideal customer success platform, we sat down with Daniella Degrace, Former EVP of Customer Success at radian6 and Salesforce.com and she defined it for us – one read might just save you some time.

  • Functions such as customer insights, workflow and automation to deliver customer success AND business results predictably, repeatably and scalably
  • Usability (how easy is it to use?)
  • Reporting and analytics to support metrics and KPIs and satisfy executive reporting requirements
  • Integration with other business applications and service providers (such as an existing CRM, billing and support systems)
  • An API
  • Number of users/access
  • Cost

If you’ve gotten all or even the majority of these items planned out and under control, then let’s celebrate! You’re ready for customer success and all of the opportunities ahead.

* Source: Aberdeen report – Customer Experience Management: Engaging Loyal Customers to Evangelize Your Brand

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