Across decades, in any industry, business leaders have obsessed over their customers. Whether a business serves five or 500,000 people, the opinion and experience of those customers are critical to the longevity of that business.
Today’s leadership also obsesses over their customers with one key difference. Namely, many think in terms of their customer’s success. They ask what investments they can make in their customers today to ensure tomorrow’s growth. What best practices will inspire loyalty, expansion, and success for all?
That shift in perspective is revolutionary. But it didn’t happen overnight. So how did we get here? And how has customer success evolved since its introduction in 2013? We’re glad you asked. The evolution of customer success happened in three stages, and each played a critical role in where we’ve been and where we’re going. Allow us to explain.
Shift One: A Change In Customer Experience
Before customer success emerged, the customer experience mostly involved reactionary actions. Think about the typical shopping experience in a brick-and-mortar retail store. One employee greets a customer as they enter. After the customer decides on their items, a second employee rings them up at the register. And in the event of a return, a third employee will help either via email or in person.
In each instance, the customer initiated the engagement.
Before 2013, tech companies approached customer relationships in much the same way. Marketing and outreach were proactive, but post-sale, businesses rarely initiated conversations. Only when a fire started, and a customer threatened to terminate their contract did anyone step in to address questions or improve the customer’s experience.
We know now this was unsustainable. And largely unsuccessful.
In 2014 and 2015, leaders recognized that proactive relationship management improved customer experience, satisfaction, and sentiment. But, more importantly, investing in the customer’s success reduced churn and helped spur the growth of many SaaS companies.
Simultaneously, because none of us exist in a vacuum, all of our expectations as customers started to shift. At home and work, people received personalized communications tied to their specific needs from vendors and other companies. As a result, anyone who created a hostile or cumbersome experience stood out more and more.
Customers forced businesses to change the way they built relationships. Businesses adopted proactive, procedural customer success models to step up to the challenge of growing expectations. As more companies made the shift, customer expectations grew, and that cycle continues today. As a result, customer success strategies became essential to any business model looking to thrive in a market that constantly expects more.
Shift Two: The Marketing and Sales Funnels Transformed
The second shift occurred around 2017. Well, technically, it started in 2007 with the introduction of the iPhone and other smartphones. Still, it took about ten years before businesses needed to transform the structure of their marketing and sales funnels.
Smartphones and other devices dramatically shifted the way we communicate with each other. That part, we all know. But, in business, this change meant that a company could no longer control the narrative of their product, especially if they were under-delivering on their promises.
In previous decades, sales reps provided almost all the information a potential customer learned about a product. They gave demos, offered references, and sent any supplemental information necessary to convert. Anything else a customer learned was based mainly on luck. If they didn’t know someone with previous product experience, they believed what the reps said. Now, review sites exist for everything from SaaS to shoelaces.
Information is available to anyone, at any time, from anywhere. The old model couldn’t survive.
Customers were less likely to enter into long-term contracts with access to more information about products and services. Instead, they wanted to leave the door open for change if necessary. That meant that the pressure to deliver value never really dissipated for businesses. A purchase order matters, but it does not guarantee long-term success. Any customer could change their mind at any time based on a product’s performance and what they learned about the competition.
So, what was the solution? A more robust offensive plan for post-sales relationships.
Companies introduced email sequences, SMS messages, phone calls, direct mail pieces, in-person meetings, in-app notifications, and chatbots. And not just when closing a deal. Businesses created engagement plans for any possible scenario to direct the conversation and sentiment towards delivered value.
The customer journey was (and is) no longer linear or finite. It ebbs and flows and continues for as long as a business exists. The funnel is now dynamic and requires effort from every department, not simply marketing and sales. As a result, companies changed their approach from a siloed focus on sales to a holistic view of human relationships. Customer success made it possible to execute this new philosophy and provided the best practices necessary for their CSMs and customers to thrive.
Shift Three: Revenue Philosophies Evolved
The most recent shift centered around revenue. After significant investments in customer success, leadership needed to know what the return was. Quickly, people saw that renewals didn’t capture the whole picture of what was possible with a thriving customer success model.
Implementing success plans for each customer, for example, lead to unprecedented expansion numbers for businesses. More importantly, expansion could happen at any time. Renewals had a fixed schedule with steady and predictable growth. Expansion added tremendous value and proved which engagement strategies were working and which needed improvement.
This change also opened up the possibilities for smaller customers. In years past, most of the effort from customer success managers needed to focus on enterprise accounts. They provided the most revenue, so they received the most attention. By implementing customer success best practices, digital-led customer journeys, and a new perspective on revenue growth, CSMs could focus their attention appropriately. As a result, companies develop strategies for all customers, both big and small. The result is exponential growth in both reputation and revenue.
Now, many future-focused leaders see net revenue retention as the standard metric for their success. And they see customer success as the primary driver of that metric.
So what does that mean for the future? It’s impossible to know for sure. Technology and customer expectations change year after year. But what we do know is as long as businesses adopt a customer-first approach, starting with the 10 New Laws of Customer Success, the future will be bright.