The 7 Laws of Customer Success Image

The 7 Laws of Customer Success

By Lincoln Murphy

The laws of physics are presumed to be immutable; bodies at rest tend to stay at rest and all that.

Well, the laws of Customer Success may not rise to the level of immutability, but if you take them for what they are – directionally accurate and, in many cases, irrefutable – these laws will serve you well in your career.

Okay, let's count down the laws, starting with...

1. Your Customer's Initial Desire is to be Wildly Successful with your Product

Nobody buys a software product or signs-up for a service planning to fail, although it happens frequently.

Your customers are no different.

No doubt there will be times in your lifecycle with them when it feels like they just don't want to be successful.

But it will be valuable to keep in mind that their initial desire - presumably something you can recapture - is to be a great customer getting tremendous value from your product.

In fact, there's almost always someone at every customer who has the same goal as you do.

They really want it to work because their neck is on the line, too.

2. The Natural Tendency of an unattended Customer is Towards Churn

The best metaphor for this law is to think about two rowboats in the middle of a lake side-by-side but unoccupied. If you come back the next day, what are you more likely to find, the boats still side-by-side or having drifted apart?

Pretty clearly, the likelihood is they've drifted apart because there was no one taking action to keep them together.

You and your customers operate similarly.

Without some intervention and engagement, your customers will drift away from the value proposition of your product.

Because their business needs change, their view of what "success" means to them changes, because their people change, or their product changes.

There are so many forces at play, few of which are pushing you together!

At it's core... this is why Customer Success exists.

So, give your customer an oar and you take one, too, and paddle like crazy when needed.

3. Your Churn Rate is your Choice

This law is actually intended for your CEO. They have the power to reduce the controllable churn rate to zero.

Think about it, if there was one CSM for every customer, or five CSMs for every customer, what would your churn rate be? Probably zero, right? Well, your CEO can make that choice.

It would probably not be a wise decision to solve for zero churn because of a little business concept known as profitability. But, the point is, it could be done which says that, if it's not zero, a better product, better processes, better tools, and more/better people could move it in that direction.

It certainly won't happen without the proper investment.

4. All Customers are Not Created Equal

This may seem obvious, but we've covered it before because, frankly, even if it is obvious, it's rarely implemented correctly. You'd be surprised how many companies treat all of their customers exactly the same.

This simply will not work at scale.

You need to segment and prioritize and probably have different retention goals for different segments.

But do not proceed with the assumption that all customers are equal. They most certainly are not.

5. Traditional Relationship-based Loyalty Doesn't Exist

Back in the day when every customer was paying at least multiple hundreds of thousands of dollars for your software solution, you could staff enough to create loyalty based simply on 1:1 relationships.

But today, aside from the economics generally working against this, relationships aren't the catalyst for long-term deals any more. Value realization is. Achieving success with your product is the catalyst.

The only thing a relationship-sans-value does is make it slightly awkward to tell your friend that you've had to choose a different vendor. But we can still get coffee on Thursday, right?

Customers won't know you well enough to renew their contracts because they like you. And if even if they do, that's not enough. They will renew their contracts only if they are sure the value exceeds their investment.

6. It's Not Customer Success' Job to Make Customers Happy

We've also covered this before. Your job is to make customers successful. Are successful customers always happy? Absolutely not.

You may find that your most successful customers -and least likely to churn - are the most demanding and never seem to be happy.

That's fine because happiness is not your goal, their success leading to loyalty and eventually advocacy is the goal.

7. There's a Natural Retention Rate for you and it's Not 100%

You could say this is the inverse of #3 above, but the context is a bit different. And again, this is another one primarily intended for your CEO.

Basically, this speaks again to the expense of approaching 100% retention, but more to the idea that there are probably some customers who you'd be better off not having.

Ideally, you can learn from the experience of acquiring and serving customers that - ultimately, and for various reasons - you wish you hadn't.

This, by the way, is just one way that Customer Success management can feedback into Sales and Marketing; please avoid bringing in more of these unprofitable, difficult customers.

So there are your seven laws of Customer Success.

You'll find that being a good CSM requires large doses of common sense and most of the laws are just common sense laced with a lot of experience.

If you don't have time to wait for your Customer Success Managers to get that experience... enroll them in Customer Success University now.

customer-success-university-enroll-today

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Lincoln Murphy Chief Customer Evangelist at Gainsight Lincoln Murphy is Chief Customer Evangelist at Gainsight
4 Comments

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  1. Reginald
    Sep 30th, 2014Reply

    Hey Lincoln,

    Great article! Coming from customer service industry, I would say yes you are absolutely right!

    No customer is equal and we should be always ready to exceed the expectations. Well, that’s what we are paid for right?

    Thanks for sharing!
    ~Reginald

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