What is customer success

Customer success is a relatively new approach that helps businesses manage their relationships with customers in succeeding in their goals. Vendor businesses use customer success initiatives to help their clients in better leveraging their products and services in order to meet their desired goals. In return, the customers are able to scale their operations and give a share of their business back to the vendor as a result of the growth.

Therefore, customer success helps to create a positive customer experience among customers, improve customer lifetime value (LTV) for the vendor company, improve brand loyalty, and create long-term revenue streams. In essence, customer success helps B2B companies to train their customers how to best use their products in order to succeed in their business goals. It’s a long and virtuous cycle of customer relationship management wherein businesses can sow the seeds for their future revenue.

In recent years, several companies have used the customer success initiative to reduce churn, create new opportunities to upsell their offerings and create brand stickiness.

Why every business needs customer success

Customer success, although a still-emerging concept across industries, is quickly becoming an important factor for businesses of all types to manage their relationships with customers. Experts predict that customer success management, as a client management approach, is a definitive force that can decide the fate of businesses in terms of their sustenance or, alternatively, their extinction from the business map.

It’s very simple to analyze why customer success is so important—the success of your company is directly proportional to the success of your customers. Therefore, it’s extremely important for your business to adopt a set of processes, people, tools, and practices in order to ensure that your clients get the most out of your product. It’s impacts boomerang right back into your pockets.

There are five core benefits that you can drive out of implementing customer success mantra into your business.

 

Let’s discuss them in detail to understand how creating a culture of customer success can lead your business to each one of these

1. Reduce churn

Customer churn is a direct result of customer apathy; customers decide to leave a brand when they fail to see the value in their products or services. Customer success fills that gap and ensures that your customers fully understand what your product stands for and how they can exploit it to succeed in their missions.
 

2. Improve loyalty

When you go the extra mile to help your customers in achieving their goals, it automatically creates a long-lasting customer retention. Your relationship with customer thrives and you will be able to retain them for the long-term not just because your products are superior, but because they appreciate and value the relationship.
 

3. Increase revenue

The cost of acquiring a new customer is much higher than retaining them. Ensuring their success will turn them into your brand advocates and create future opportunities for you to do repeated business with them. Additionally, it’s an investment into your own growth because your revenue will soar as they scale.
 

4. Branding

Although it might not have a direct impact, dedicating yourself to customer success initiative helps your brand create a positive brand image among your existing and potential client base. It helps your business become more likable, increases your brand valuation, and enables you to hire the best talent in the industry. It will help you attract investment opportunities as well.
 

5. Improve acquisition

Your investment into the customer success strategy will start paying off dividends when your existing customers start volunteering themselves as brand ambassadors for your product, carry out a word-of-mouth advertising on your behalf, and spread a positive word about your brand. It will be effortless for you to acquire new customers as a result of positive branding.

Is customer success same as customer service

If you think customer success management is an extension of customer service, you are not alone. Most people assume that customer success is a branch under the broader realm of customer service, which is not true. Customer service is very different from customer success, although the common aspects between both philosophies is that they are customer-centric business approaches that help businesses improve their client relationships.

Customer service is a broader concept than customer support, but it is narrower in scope in comparison to customer success. To start with, customer service is a reactive service whereas customer success management is a more proactive approach to build relationships with customers. If businesses just stick with delivering good customer service, they might be limited in their capacity to understand the wide range of customer experience with regards to their product. There is no doubt that customer service is a feedback loop for businesses to understand customer pain points and improve their customer experience; yet, it’s myopic in its approach.

Customer success, on the other hand, is an approach for businesses to go the distance and dig out everything there is for them to understand what it feels to be in the customers’ shoes and try to solve their problems. If customer service is about feeling empathy for customers in trying to solve their issues, customer success is all about practicing that empathy. Customer success initiative is a much more fulfilling approach to build meaningful business relationships.

Customer success and its relationship with marketing

Customer success, in many ways, has a lot of overlaps with relationship marketing. Just like relationship marketing, customer success management focuses on creating long-term product engagement, building customer retention, and fostering meaningful interactions.

The difference lies in when and where customers experience these two applications; e.g. relationship marketing takes place when prospects are evaluating your brand for purchase while customer success happens when they are already your buying customers. Ultimately, both approaches are about fostering a strong connection between the brand and the customers to yield mutually beneficial results.

Customer success and its relationship with sales

Customer success almost always starts once a sale is made. Although customer success is distinctly different from customer service, it is a function closer to support than sales or marketing. For example, many businesses who take the initiative to practice customer success approach in their offerings do so by appointing their customer support experts to drive customer success. Customer success always begins after the sale and leads to repeat sales in the long-term.

Customer success versus account management

Besides the similarities customer success shares with relationship marketing, it sounds a lot like account management on prima facie. However, it’s rarely the case. When businesses assign Account Managers to their customers, they are basically appointing a customer support and billing contact person who can respond to customer queries and remind them about account renewals. The job of an account manager is mostly reactive. They don’t have as much in-depth knowledge about the product as a pre-sales professional or a product manager would. Therefore, when a customer raises a query, account managers escalate the query to the respective department and act as a mediator between the two parties.

On the other hand, customer success is always a business-initiated approach to probe into the customer experience with a product. It’s shadowing the customer journey and taking anticipatory measures to make sure their brand experience is always smooth.

Is customer success same as customer service

If you think customer success management is an extension of customer service, you are not alone. Most people assume that customer success is a branch under the broader realm of customer service, which is not true. Customer service is very different from customer success, although the common aspects between both philosophies is that they are customer-centric business approaches that help businesses improve their client relationships.

Customer service is a broader concept than customer support, but it is narrower in scope in comparison to customer success. To start with, customer service is a reactive service whereas customer success management is a more proactive approach to build relationships with customers. If businesses just stick with delivering good customer service, they might be limited in their capacity to understand the wide range of customer experience with regards to their product. There is no doubt that customer service is a feedback loop for businesses to understand customer pain points and improve their customer experience; yet, it’s myopic in its approach.

Customer success, on the other hand, is an approach for businesses to go the distance and dig out everything there is for them to understand what it feels to be in the customers’ shoes and try to solve their problems. If customer service is about feeling empathy for customers in trying to solve their issues, customer success is all about practicing that empathy. Customer success initiative is a much more fulfilling approach to build meaningful business relationships.

How to drive customer success in your business

Different companies and different industries might have varying definitions of ‘customer success’ and also the ways to measure and manage it. For some businesses, success might be defined purely by return on investment on a product they have bought. For others, it might be the achievement of a specific milestone, such as cutting down their deployment time by 50% within six months of adopting a software.

But whatever their understanding of customer success might be, they all agree that you need to have a concrete customer success plan in order to meet those measurable metrics. Many companies extract the data of their customer success management process at regular intervals and use it to calculate a “customer health score.”

Here is a step-by-step guide to creating a comprehensive customer success plan for your business

Understand customer expectations

The reason why customer success management is different from customer service is that it takes an initiative to try and look into the potential of customer problems even before they arise. It’s unlike the reactionary customer support approach that firefights customer challenges. Therefore, identify a sample size of your customers and talk to them about what their needs are, what they expect from your service, and where they would need your help. Your customer success plan should be able to understand customer pain points even if the customers are unable to articulate it. You should be in a position to calculate and assume their unstated requirements and capture it for your customer success team to consider.

Set up processes

Your customer success team will be able to create processes based on a set of feedback you will get after talking to your customers. For instance, if customer onboarding is a frequently mentioned customer pain point, you can set up an onboarding team and create a better onboarding process for new customers to ensure the customer experience is smoother. Some of these problems will require you to create new teams and processes, whereas many will demand changes in your existing scheme of things. If you cannot map a team or a process to certain customer expectations—like setting up a new onboarding team—treat it as an exception that needs to be addressed.

Define metrics

If customer expectations are measurable, then they warrant metrics in order for you to track them properly. But not all customer expectations can be quantified, such as their subjective desire to have certain features added to your product or making your UI more intuitive. It’s still worthwhile to associate these vague expectations with metrics—such as loyalty and increased adoption—rather than drawing a blank at them and neglecting them. For more concrete expectations, assigning proper metrics will help you define a timeline, estimate your efforts, and stay the course to meet them. For example, if customers need set-up and implementation help, you can measure it based on the man hours it requires to help one client.

Identify tools

Your customer success team would need a set of tools and technologies in order to ace their success goals. Live chat, for example, is a great tool for a customer success team to help customers at any point of their customer journey, be it trial, onboarding, or support. Live chat for customer success helps your teams to improve customer engagement, increase revenue, and stay in touch with every customer formally and informally. Live chat for customer success can be used as a proactive approach to nudge customers into interacting with your team, or it can be used as a reactive tool to respond to customers when they have concerns. Live chat also breaks the silos between your teams, including the customer success team, to allow closer cross-team collaboration to happen.

Assign roles

Assign people or teams for every customer expectation to be met so that you can attribute the success or failure of a plan to them. Ideally, this should be responsibilities you assign to members in the customer success team. If you don’t have a customer success team, you can hire people from your existing sales and support team to form a new one. When assigning roles, you have to be careful about not designating them as account managers to certain customers, but to make them accountable for certain goals that have an impact on multiple customers. Make sure they have all the process-related data and tools to help customers succeed in their goals.

Measure

There are a lot of overlaps between measuring customer success and measuring other customer service-related processes. For example, you can use customer satisfaction (CSAT) to measure customer’s reaction to your offerings, or you can use Net Promoter Score (NPS) as a tool to understand how they perceived your customer success efforts. Measuring customer success is a complex process that needs a more in-depth discussion; let’s cover this topic in the section below.

How to measure customer success

Customer success can be a vague goal to measure because it’s perceived and therefore highly subjective. However, there are certain specific ways to measure customer success, namely:

1. Customer happiness

To measure the perceived effect of your customer success initiative, you can borrow key performance indicators (KPIs) from the service department. Use customer satisfaction (CSAT) surveys and run net promoter score (NPS) tests to gather customer feedback. You can also leverage other similar methods such as customer effort score (CES) to understand how happy and engaged your customers feel about your customer success initiative. These KPIs can prove to be the keyholes for your business to understand the gaps lying between customer expectation and happiness. Most importantly, it will give you concrete ideas on how can you create better customer experience to bridge those gaps.

2. Churn

Measuring churn is probably one of the best ways to gauge your customer success endeavors because there is a direct correlation between helping customers proactively and customer retention. The churn status also speaks volumes about the revenue you are making or losing based on your customer success initiative. You can measure different subsets of churn, such as customer churn, monthly recurring revenue (MRR), Expansion MRR rate, and net MRR churn percentage to understand how many customers are willing to invest in the relationship with you.

3. Customer health score

Measuring customer health score can be extremely useful for companies to understand how effective their customer-centric strategies are. The health score gives you an insight into the health of a customer relationship with your brand and gives you specific reasons to work on improving the metric. Your customer success team can use the customer health score to analyze the past behaviors of customers, understand their present opinion about your brand, and make recommendations on how should you approach your relationship with them in the future. Understanding customer health score can also help your business in segmenting customers by their level of engagement with your brand and speaking a common language with the score at the center of your discussions.

How to scale a customer success team

Scaling customer success is unique to every business because it requires a mix of different teams, processes, and tools. But before you scale your customer success initiative, you should understand two things: a) it should be a worthwhile investment for your company in terms of improving customer loyalty, and b) it should be financially justifiable for your bottom line goals.

So how do you scale customer success? Here are some great tips to help you do just that.

1. Hire the right people

Customer success management lies at the crossroads of sales, support, and technical product know-how. At a glance, it is easy to look at customer success as the next-step destination for the customer service department, but in reality, it’s more complex than that. In order to grow your customer success team as a core part of your business operations, you have to hire the right mix of people with the sales, support, and product knowledge. Your customer success team should have people who have lower inhibitions to initiate an interaction with customers (just like marketers or sales professionals). They should also possess high empathy to understand customer apprehensions and pain points. Essentially, you are gathering a group of ‘farmers’ to take care of your existing customer base and cultivate them for your future sustenance. Scaling the human capital of your customer success team becomes easy when you set a customer-centric culture with the first few hires in the team.

2. Segment your customers

Not all customers are alike; nor do the success metrics for one customer apply to all others. Therefore, it helps to identify the different customer personas your business has and categorize them into organized groups so that your customer success management scales up well. For example, most small and medium businesses (SMBs) make up for the 40–50% of the customer base for most SaaS startups. You can’t handhold them and set them up for success the same way you do for your enterprise clients. Your biggest clients in the enterprise sector might need a more high-touch, technical, and repetitive support whereas the SMB clients might need a few low-touch interactions in order to meet their business goals. Therefore, building a buyer persona and segmenting your customers is a good foundation for scaling your customer success team.

3. Use the right tools

Giving the right set of tools and technology compliments your customer success team to overcome their challenges and improve their success rate in the long-run. Equipping your customer success team is half the battle when you have the right people in the group. To scale your customer success team, you have to equip them with the right kind of tools, techniques, training, and confidence. For example, you can automate the standard touchpoints with customers by using automated emails, push notifications, event-based in-app messages, and so on. A live chat software is extremely valuable for your customer success team in order to engage and succeed with customers because it offers the perfect balance between automation and human touch. You can optimize your self-service content within your live chat widget for making the customer journey smoother or deploy chatbots to engage with customers for specific use cases. Similarly, you can also use it as a collaboration tool within your customer success team to keep everyone on the same page. A modern live chat tool also integrates perfectly in your software stack so that your team productivity goes up and customer churn comes down.

4. Set up processes

Your customer success initiative can bomb if it doesn’t mature into a systematic process in due course. Because customer success is not a one-off, project-based endeavor, you need to operationalize into a process culture that becomes easy for the decision-makers in your organization to understand, follow, and monitor. It can be somewhat challenging to set processes and stick by the protocols when you are starting out new in your customer success initiative. However, once your customer success team is confident about taking up roles and responsibilities, you can start thinking about building workflows in the team to make execution easier. The customer success workflows can stem from the support team for repeatable customer handoffs, for example, or they can be in harmony with the sales team when the success team is able to create new revenue opportunities.

How Freshdesk Messaging can help you ace customer success

Freshdesk Messaging enables you to engage with customers proactively and support them through live chat conversations on desktop, in-app, from mobile, within your product, and even on social media platforms. You can create campaigns and triggered messages based on user behavior and events to initiate a communication or help customers find solutions to their queries.

Here are a few more ways in which Freshdesk Messaging can help you ace customer success:

Freshdesk Messaging is multi-dimensional

Customers use live chat for support inquiries, to exploit a product’s use cases and applications, and to discover self-service content. Businesses use Freshdesk Messaging to support existing user, re-engage with them, and create new upselling opportunities.

Freshdesk Messaging makes your team more productive

Freshdesk Messaging is faster than phone and email communication, your success team agents can multitask by chatting with 4-5 customers at a time, and collaborate within themselves with features like Priority Inbox and Labels.

Freshdesk Messaging is 24x7

Helping your customers through Freshdesk Messaging is always-on and continuous. Businesses can deploy chatbots to engage with customers outside their business hours or map self-help content results to the right team.

It’s a perfect mix of personalized care and automation

Freshdesk Messaging breaks the boundaries of traditional support channel because it’s highly conversational and efficient. Live chat blends the familiar UX of an instant messaging app with the productivity of a business software.

Freshdesk Messaging support leads to improved CSAT

The power of live chat to enhance customer engagement naturally leads to improved customer satisfaction (CSAT) ratings. With Freshdesk Messaging, you can measure your real-time team metrics and improve customer happiness.

Freshdesk Messaging offers omnichannel support

You can free up your customer success offerings from the traditional channels like emails and phone calls. With Freshdesk Messaging, you can create an interactive, cross-platform support system that can break the wall between your business and your customers.

 

Freshdesk Messaging is a must-have for your customer success

Live chat empowers support teams to overcome the archaic communication barriers. It enables businesses to become agile, more proactive, and more engaged in supporting their customers. For customers, live chat is a friendlier and more convenient means of contacting their favorite brands.