By Harshi Banka, Senior Director of Strategy, Digital Customer Success
The last few months have been rough for SaaS businesses with multiple headwinds including the economic downturn, rising inflation, and decreasing investments. While tech companies witnessed unprecedented growth over the past couple of years, 2023 is a whole new game. Everything from how we serve our customers, retain them, and grow our business has changed—customer retention is no longer a nice-to-have; it’s a critical growth axis.
As a result, SaaS businesses are focussing on building durable businesses by keeping existing customers rather than acquiring new ones. They are redirecting efforts towards increasing lifetime value (LTV) through upsells and cross-sells to drive revenue. According to a 2023 Trends and Outlook in Customer Success report from Bain & Company, retaining customers is at least five times more cost-effective than acquiring new ones.
There’s no doubt that customer success (CS) has become existential to SaaS. But companies can no longer continue with the old ways of running CS for three primary reasons:
- Investors are asking to improve margins while also improving Gross Revenue Retention (GRR) and Net Revenue Retention (NRR).
- B2B customers are expecting round-the-clock help (similar to B2C customers).
- CS teams are struggling with burnout, as they’re being asked to do more with less and deliver on customer expectations.
This is where Digital Customer Success (DCS) comes in.
What Is Digital Customer Success?
DCS is a strategy to efficiently drive customer adoption, retention, and growth by providing a personalized user experience via omnichannel engagement.
It’s customer success with digital superpowers. Think AI, in-app guidance, customer communities, and other one-to-many customer engagement programs—they’re all leading the evolution of customer success into Digital Customer Success.
It blends digital and human interactions and empowers users to self-serve by leveraging data-driven automation and centralized resources. On the other hand, it optimizes the time and efforts of Customer Success Managers (CSMs) toward the most valuable activities for both customers and the business.
Key Drivers of Digital CS in 2023
- Increased Competition: With the increasing number of B2B SaaS companies in the market, competition has become fierce. Digital CS is a key differentiator that can help companies win new business and scale efficiently to get a competitive edge. For instance, an online community of like-minded peers can help develop a sense of community and belonging, especially in the current remote work world.
- Customer Expectations: Research shows certain experiences are actually more favorable via digital channels, and customers prefer to keep it that way. According to Salesforce’s 2023 State of the Connected Customer report, 57% of users prefer self-service over human interaction. Customers have come to expect a seamless digital experience in their personal lives and are now demanding the same in their business interactions. B2B SaaS companies that fail to meet these expectations risk losing customers to competitors who can provide better digital customer engagement. For instance, serving in-app guides, onboarding checklists, and a knowledge base can drive faster time to value.
- Increased Efficiency: Digital CS can help companies streamline their processes, reduce costs, and increase efficiency. Self-service portals, chatbots, and other digital tools can help customers find what they need quickly and easily, reducing the need for human interaction. For instance, businesses can deploy self-service portals, empowering customers to find answers to their questions without contacting their CSM or Support.
- Customer Retention: According to Harvard Business Review’s 2022 Achieving Growth with Positive Product Experience report, 81% of the respondents strongly agree that a strong digital product experience positively impacts business growth. Good digital customer experience can improve customer retention rates. Customers are more likely to continue doing business with a company that provides a positive experience such as immediate help, when they need it, where they need it. For instance, automating key adoption programs accelerate your customers’ journey towards value realization with your product.
Check out how Personio used its digital community to help customers self-serve and learn from each other.
DCS Opens up a World of Opportunities for CS Teams
Here are a few ways that DCS helps CS teams do their job more easily, and efficiently, while achieving improved outcomes.
Do More With Less With Scale and Automation
DCS empowers CS teams to reach a significantly larger user base and in newer ways, which CSMs can’t do with traditional CS or high-touch motions. With the help of data-driven automation, companies can scale their customer success efforts and provide a consistent experience to thousands or even millions of users. For example, chatbots can handle routine customer queries, allowing Customer Success teams to focus on higher-value or revenue-generating activities.
Learn how Experity automated and optimized their CS process.
Curate the Customer Journey With Personalization
One of the biggest misconceptions that prevents CS teams from leveraging digital channels is the fear of losing the personal touch. With DCS, customer data and product analytics can be used to tailor customer success strategies based on individual goals and needs. For example, a customer’s health score can trigger adoption journeys helping them achieve their product goals.
Work Smarter With Intelligent Customer Experiences
Going forward, the role of AI will be pivotal to DCS. By leveraging AI-powered tools, businesses can proactively identify and address potential churn risks, upsell opportunities, and areas for improvement in customer satisfaction with content recommendations, automated renewal motions, and multi-channel analytics. A great example is the use of predictive analytics to identify customers who may be at risk of churning or using smart summaries to help prep for an executive check-in or Executive Business Review (EBR).
Achieve Greater Profitability With a Digital-First Mindset
Organizations that operate with a digital-first approach leverage omnichannel tools to drive efficiency, innovation, and growth. Customer Success leaders must adopt digital channels and technology like in-app engagements, customer portals, and email campaigns to adapt to changing customer expectations, streamline internal processes, and drive customer retention and growth—efficiently. According to the same 2022 HBR report, “39% of respondents say their organization has achieved greater profitability with product experience initiatives.”
Access New Career Growth Opportunities
The evolution of DCS is creating numerous, innovative career opportunities including: Scaled or DCS Leader or Manager, Digital or Pooled CSMs, Customer Marketing, Customer Lifecycle Manager, Customer Adoption Manager, CS Content Developer, DCS Strategy, DCS Ops, etc.
Digital CS helps companies differentiate from competitors, meet customer expectations, and boost NRR—at scale. The degree to which companies are able to deliver personalized experiences at scale will ultimately dictate organizational and customer success in 2023 and beyond.
Want to learn more about Digital Customer Success? Register for our DCS Bootcamp.