SaaS Tattler Issue 65

November 18, 2015 Matthew McLaren

Issue 65 - You made your customers successful, and it was good.

The concept of Customer Success is still very new and it seems that there is no single definition that everyone can agree on. What we can agree on is that Customer Success starts with a change of mindset from providing reactive customer support to proactively eradicate customer issues before they arise. In this issue of the SaaS Tattler we look at how your business can take a proactive approach to Customer Success.

Get started on developing your business case for Customer Success - download the guide now!

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.

The 4 Challenges Facing Customer Success Teams In SaaS Startups

Despite all the other challenges with growing a SaaS startup, there comes a time when management must decide between hiring another sales person or investing in customer success. In this article, Tomasz Tunguz identifies common misunderstandings of Customer Success and 4 challenges that startups face when building a Customer Success team.

Customer success (CS) within SaaS startups is a relatively new idea. Consequently, the benefits of CS aren’t widely appreciated within the ecosystem which means in many companies, customer success teams must educate management teams about the impact they can effect on an organization. This can be a long process. The most salient misunderstanding about CS is that customer success is a revenue generating team, not a cost-center. In addition to mitigating churn, CS teams increase account revenue, which in many SaaS companies, can grow to be multiples of the first year’s customer value. By dramatically increasing CLV, CS teams can actually generate as much more or more revenue than sales teams over the life of a customer.

Part and parcel of the education process is justification. Customer success teams must justify the investment of building a CS team, often at the expense of headcount in another team. Constrained by headcount budgets and burn requirements, startup leadership teams often must choose between hiring an additional sales person or investing in a customer success person, for example. Because the early and fast revenue growth of early stage startups can mask churn and because the impact of a customer success team is most often seen during renewal windows which can be many months away, arguing for additional CS headcount at the expense of immediate, revenue generating salespeople is an uphill battle.

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.

Why Customer Success is a Crucial Metric For Your SaaS Startup

Customer Success is more than just a buzzword; it’s a business model, a philosophy and much more. It starts with a change in mindset from providing support to proactively eliminating customer issues before they arise. In this article, Jawad Khan explains how Customer Success should should change your approach towards the key stages of the customer lifecycle.

With the evolution of SaaS businesses, getting “customers for life” has become significantly harder . The flexibility of the SaaS model, and the ability to pay monthly or periodically for products and services, allows customers to regularly evaluate the actual value they’re getting from a solution.

Jason Lemkin, managing director at Storm Ventures, believes that as much as 90% of your SaaS revenue, and your future growth, now depends on customer success.

Some of the biggest SaaS companies like Salesforce and Box, have succeeded not just by creating great products and offering unmatchable service standards, but also by closely aligning their success with the success of their customers.

And this is the core concept behind customer success.

The best way to grow your business is by helping your customers grow. If your product is actually helping them succeed in their business, and you’re continually creating win-win scenarios, you’ll hardly ever need to worry about churn rates and retention.

The Best of Customer Success Today

Your first customers will be able to provide valuable feedback about your product. So how do you actually get your first customers? How Four SaaS Experts Found Their First Customers.

If there’s one thing your company should never lose focus on, it’s the customers. 8 Ways to Ensure Your Customer is Customer Success Focused.

While the customer journey may sound like a linear path; in fact it’s circular. Activating the Customer Journey: Six Steps to Growing Your Own Diamonds.

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.

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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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