As SaaS companies increasingly look beyond simply closing a new customer and towards increasing the value of the customer relationships over time, businesses are zeroing in on the role of customer success to add value, influence customer outcomes, and build loyalty to increase revenue.
But there is much more. Customer Success is critical today because what most SaaS companies fail to realize is Customer Success is more than avoiding churn, it’s also a key component of the entire SaaS infrastructure. Understanding the behavior of your customer and proactively driving customer engagement benefits the entire organization. This outside-in view shapes everything from product development, sales, and marketing to support and services – even your operational and financial business models. It will also address some of the business results challenges your SaaS company is currently experiencing and prevent pitfalls around performance indicators that are surfacing.
In the following scenarios we illustrate business challenges that could be improved by introducing a Customer Success mandate:
Scenario 1: In this example, 45% of sales staff time is spent on account management post sales. 45% of this time is only generating 4% of growth revenue as opposed to time focusing on new accounts, which typically generate 12% new revenue. They become too busy firefighting current customer deployment issues instead of selling. These costly, skilled sale resources would be more valuable developing new sales, new territories.
Solution: Increase revenue by offloading post sales account management responsibility to the Customer Success team.
Scenario 2: In this example, customer product usage has declined on average by 21%. Our customers contract life has declined by 11%. Revenue churn is at 28%. We are basically selling new contracts to fill in the MRR hole caused by churn. Our customer service survey tells us that customers are dissatisfied with our product; mainly because they don’t use many features because they don’t know how to or don’t know they exist, they are struggling to understand how to deploy it within their organization and the biggest complaint is they never ever see or hear from their sales guy. The cost of customer contract lost on average is ~125K.
Solution: Reduce customer churn by increasing customer facing planning, deployment and operational skills; and by increasing the customer’s voice through an advocacy program.
Scenario 3: In this example, the sales team is currently generating 4% current customer growth revenue. The low growth sale is due to the lack of our sales team’s experience in guiding customers through day-to-day detailed deployment – it’s just not in a sales executive’s DNA. Each day presents an opportunity for customers to use new product functions, to do something better or different with our product and for us to develop a deeper relationship with our customers bringing in new perspective, ideas, and budget. These are all growth sales opportunities and it takes a well-rounded team to take full advantage of a customer’s maximum potential revenue value. Between sales and customer success, hunting and farming would each have the right skill set.
Solution: Increase growth by leading our customers in a controlled, predefined deployment and operational life-long journey:
The results will, of course, vary depending on your product or service offering and how your company is organized. However, by clearly articulating the opportunities for improvements you can provide concrete evidence for your customer success mandate.
About the Author
Paul Philp is a leading innovator in SaaS and Customer Success. As Founder and CEO of Amity, Paul has spoken with Customer Success professionals from over 1,000 SaaS providers. Paul has a lifelong passion for helping business put customers first.Follow on Twitter More Content by Paul Philp