If you’ve been paying attention to our content the last few weeks, you know Gainsight is excited about our 10 New Laws of Customer Success.
It’s not just that the new laws prove evolution, growth, and maturity for CS as a category — although that is awesome! But we’re also grateful and inspired by the ways leaders across all industries use CS teams to add value and increase momentum for their companies.
Of course, we know not everyone is as enthusiastic about the 10 New Laws of Customer Success. Maybe you can’t yet see how they will act as a growth engine for your entire organization. That’s fine. You’ve found the right blog that will explain it to you.
Here are the five ways the 10 New Laws of Customer Success will add value for your business and help you reach your goals over the next 10 years.
1. New Value-Driven Metrics
Inside the CS community, the impact of each engagement and daily tasks are felt acutely. You will see it in the way customers talk about the product. For example, the thank you emails and the excitement felt in each check-in. However, in the past, many people outside of that didn’t quite see the immediate effect.
As our Chief Customer Officer Kellie Capote put it, the impact was “squishy” at best.
But things are starting to change. More and more, the efforts of Customer Success Managers change essential, value-driven metrics for the better. Things like time-to-value, average monthly users, and product adoption all improve based on strategic, timely efforts from CSMs.
If your intent over the next year is on performance metrics, there are two very specific new laws that you should focus on:
- New Law #3: Constantly drive more value or expect churn.
- New Law #8: Leverage Product to accelerate time-to-value.
Benefits to Expect
When your company dedicates itself to constantly driving more value or expecting churn, what you’re doing is personalizing the experience of your product. Each customer has their own set of goals and outcomes. To achieve them, the customer needs your product to help them in specific ways. You can’t assume that your customers inherently understand the value you provide just because they purchased it. You must prove value day after day. That means:
- Better product trainings
- Personalized engagements based on behavior data
- More strategic customer journeys
- Detailed Mutual Success Plans
- Digital-led success playbooks
In terms of digital-led success strategies, specifically, that’s where New Law #8 comes in. Use in-product engagements to prove value, understand goals, fix issues, and introduce new features to users. Many companies use in-product onboarding in combination with in-person training to ensure that their product is sticky for new customers.
The specific playbooks you design will be determined by your customer base and their unique goals. However, the universal benefit of these two new laws is improved value-based metrics that affect your value as a company.
2. Operationalized Systems and Strategies
Lane Holt, the Director of Customer Success, encourages Gainsight and Gainsight customers to ask themselves, “What can we do to make it easier for CSMs to be CSMs?” The answers are different for each company, but essentially, what she’s challenging all of us to do is think of ways to operationalize our strategies so that they can scale.
By now, all companies are using customer success in some way. Customers demand it. They need support, communication, and a commitment from their vendors to deliver on the promises made. The most successful companies are using customer success to help them scale faster. The easiest way to do that is to operationalize your systems and strategies as quickly as possible.
Digital-led success strategies are a great way to do that, as we mentioned. But there are more critical and fundamental events that need to be operationalized to drive growth. Those include:
- New customer journeys
- Customer story creation
For example, it is always possible to stumble into a customer story. But if you’re trying to scale your business, you need a way to identify and produce them consistently. CS Operations makes that possible.
If these seem like crucial changes for your company to make, here are the most important new laws for you to pay attention to:
- New Law #2: Create an integrated journey from Sales to CS.
- New Law #6: Operationalize sponsor changes.
Benefits to Expect
The cost of acquiring a new customer is much higher than the cost of selling to a current customer — more than twice as high. Shifting Sales efforts to existing customers is a matter of ROI. But Sales alone cannot identify opportunities. They need to partner with CSMs along with data analysis to reveal those opportunities.
But remember what Lane said. We need systems that make it easier for CSMs to be CSMs. They need operations that can identify these opportunities automatically, so their focus remains on CS strategies. The same is true for renewals, reviews, referrals, and all other activities, including sponsor changes.
First, let’s assume you’ve delivered on the goals, outcomes and made your customer successful. If your executive sponsor changes roles or leaves your customer for another job, your company needs a set playbook to know what to do:
- Identify your new sponsor and understand their priorities, including any new goals they may have.
- Congratulate the previous sponsor for their new role, and keep the relationship strong to create an active prospect.
- Collaborate closely with Sales on both scenarios.
- Look for other advocates within the customer base to supply Custom Success Quality Leads (CSQLs).
Together, these efforts will prevent churn and help acquire a new customer with lower overall costs. As more people change jobs and companies, operationalizing this part of your business will be critical to your growth goals.
3. Visibility and Collaboration Across Teams
Silos create friction in companies and impede growth. You don’t need us to tell you that. But, knowing it’s a fact and making sure that your company supports and encourages collaboration are very different things. The 10 New Laws of Customer Success outline, in no uncertain terms, states that CS should constantly collaborate with all other teams in your organization. In fact, they should be at the core of all that your organization does.
The two most important new laws to focus on if your company is having a difficult time getting support for the essential CS efforts are:
- New Law #1: Build Customer Success into your core.
- New Law #7: Product teams and Customer Success teams should be BFF
What does that look like? Here are just a few examples:
- Product holds regular training sessions with CS to communicate new features to customers.
- CS teams meet with Product Managers to talk through customer wishes for new features.
- CS and Product create in-product engagement strategies.
- Marketing to leverage CSM knowledge to inform messaging, assets, and other strategies.
- Adding CS and CS Ops to board meeting agendas to communicate performance metrics and provide visibility.
Set your team up with the right tools, like Gainsight PX and CS, to establish a single source of truth for the reporting and execution of these operations. Everyone should feel accountable for the success of these operations and thus, need visibility into their performance in real-time.
Benefits to Expect
When you prioritize collaboration and shared knowledge across your organization, you can expect the following benefits:
- Better contextualized insights
- More meaningful data to drive more intelligent decisions
- More efficient processes
- Increased ROI in Sales, Marketing, Product, and CS Operations
- Increased customer sentiment
And perhaps more importantly, you will have a happier organization. Your team members will inherently build trust with each other, help each other problem-solve, and succeed. That kind of human-first culture is what all organizations should be striving for in 2022 and beyond.
4. Faster ROI from CS Investments
As mentioned above, organizations see a better return on their investments when they sell to current customers compared to trying to acquire new customers. What we didn’t say is that the ROI is also faster with existing customers than when selling to new customers. The work of earning trust and proving value is already done with current customers. It doesn’t take two years of relationship building to convince them to buy an additional product or service. Often, companies see the return on their upsell efforts in the same fiscal year.
If your main priority in the new year is the improve ROI, consider the following new laws:
- New Law #5: Invest in Customer Success Operations
- New Law #4: Customer success takes commitment from the customer too.
We’ve already talked about the need for CS Ops, so let’s focus specifically on why you need to get your customers to commit to their own success. Customers expect that your product will make them wildly successful. We know this from the original 10 Laws of Customer Success. But, what they need help with from your organization is how to define that success. Also, how do they build a clear path towards those goals?
How do you get your customers to commit to their own success? Here’s what we suggest:
- Verified Outcomes that define what success looks like at regular intervals
- Mutual Success Plans that outline the roles and responsibilities of your organization and your customers
- Strong relationships with individuals at every level of your customer’s organization
Benefits to Expect
With a focus on operations and customer commitment, you’ll start to see improved time-to-value, higher NPS scores, reduced churn rates, and better advocates from your customer base.
That will make it easier for your CSMs to facilitate up-sells, cross-sells, and other critical scalable activities. Additionally, you’ll have an easier time marketing to new customers. Now, you can reduce the cost of new customer acquisition and the time it takes to sign a new customer. All of these are important metrics that will help your board understand the value of CS and invest more time and resources into it.
5. NRR As North Star for All Strategies
Finally, when you implement the 10 New Laws of Customer Success, the most meaningful difference you’ll see is in your Net Revenue Retention rates. NRR is the North Star metric for all companies.
It measures your momentum as a company and indicates how much more money your customers are willing to spend on your products compared to the amount they spent last year. In terms of measuring the impact of CS on the success of your business, nothing is more important.
A world-class NRR rate is 125%. If your company is not yet close to that number, you should focus on these two essential new laws:
- New Law #9: Deeply understand Net Revenue Retention
- New Law #10: Customer success must be metrics-driven.
A distinguishing feature of NRR, compared to other performance metrics, is that it encompasses efforts from across your organization. Where Gross Revenue Retention speaks mainly to the efforts of Sales and Marketing, NRR highlights the value that Product and CS add to the bottom line. As a result, it works as a unifying metric for your entire organization. Positioning NRR as your North Star as a company helps everyone commit to the collaborative nature of New Laws #1,2,7 and 8.
Benefits to Expect
The most apparent benefit to deeply understanding and prioritizing NRR as a company is increased valuation and growth. At the end of the day, that’s what we’re all pushing towards. But you can also expect to see changes in:
- Scalable systems and strategies to improve performance in each department
- Increased collaboration to identify efficiencies and optimization opportunities
- More visibility into processes and performance
- More meaningful data from which to pull insights and make business decisions
- More inspired team building better customer relationships
When we put it this way, it seems like everyone should start adopting the 10 New Laws of Customer Success right away. Hopefully, now you understand why we’re so excited about them!
Learn all 10 New Laws of Customer Success
To learn more about the 10 New Laws of Customer Success, including our bonus law, download a copy of our ebook. Inside, you’ll learn how current Gainsight customers implemented the laws and the growth they experienced as a direct result. It’s all free and can be found by clicking here.