The Secret of Low-Touch Customer Success
One of the things that the SaaS model almost always leads to is a long tail of low-revenue, generally self-service customers. You often see the term low-value used, only to indicate the relative financial value of those customers, but words are important, and how would your customers feel if they heard you call them low-value?
Self-service SaaS lowers the barriers to purchase in many ways, including:
- No direct infrastructure costs because that's absorbed in a highly efficient way by the vendor across all customers
- Low software costs because it's a monthly rental, not a purchase, and
- Reduced people requirements because IT/Ops' involvement is typically smaller.
Given all that, most SaaS companies end up with a very non-bell-shaped curve of customers as measured by revenue.
So, the question is, what to do with this long tail?
The Long-Tail of Low-Revenue Customers
One common solution I have seen disguised in various ways, is to simply ignore them.
It's easy to do, requires no resources or brainstorming, and can even work pretty well – if your product is perfect. Otherwise, not so much.
Most would agree that the logical approach is to try to deal with these customers with a lower-touch model, maybe even a no-touch model.
This is a tough call, particularly if you've already been treating these customers with white gloves. The change for them could be abrupt and unpleasant.
If you have a reasonably small number of customers when you make this decision, say 200 or fewer, you might just bite the bullet for existing customers and consider them all high-touch regardless of contract value, and implement something different for new customers only.
If you are past that point and need to deal with the ugliness of reducing your service level for existing customers, you'll need to do the very best you can to position this change, perhaps work out a plan for making the transition gradually, and forecast a higher churn rate for that set of customers.
You probably want to start thinking about that last point regardless, if you haven't already.
There aren't a lot of universal truths in the Customer Success world, but one is that lower-revenue customers tend to churn at a higher rate; so plan accordingly.
Customer Segmentation is Key
Once you've drawn the lines between level of touch segments, then what? You better have a plan.
My suggestion is that you assign a Customer Success Manager (CSM) to own this segment of your install base.
If you are hiring a CSM specifically for this purpose, you might look for someone with more of a Customer Marketing background rather than pure CSM, because you'll find is that this role is more marketing and less customer success.
Introducing Customer Success Marketing
The broad-brush job description might be something like this – Here are your 600 customers. Your job is to keep their overall retention rate at 85% or higher and you are forbidden from using the telephone. Go get ‘em!
This is a job that requires out-of-the-box thinking which is why an experienced CSM might actually be the wrong person.
The problem with experienced CSMs is that most of them are really good at building relationships. It's their go-to play whenever possible.
Well, if you join a team where that play has been torn out of the playbook, you may find yourself lost no matter how much experience you may have.
Low-Touch Customer Success Marketing Tools
Well then, what are the tools that this hybrid CSM will be able to use to accomplish their goals? Think about anything that can be effective in a one-to-many situation. It's helpful to think of these as channels and there are several available:
- User groups
- Customer advisory boards
- Customer Summit
- Social media
You can see from this list why I say that this role is more marketing than it is traditional Customer Success Management.
I think the perfect person in this job has both Customer Marketing and CSM in their background but, since this has never really been done before, you'll have a hard time finding that profile.
So, pick someone smart who is good with details and process and set them forth. Following the marketing theme, there is much experimentation that can be done here to find out what works and what doesn't. A/B testing of emails, webinars, tweetstorms, and Community topics should abound. Experiment and iterate, rinse and repeat.
Who Owns Customer Success Marketing?
One obvious question we are begging here is where this person should sit organizationally. If they are more marketing than customer success, does that mean they report to Marketing? I'm not sure it matters a lot since there will need to be a high level of collaboration regardless of reporting structure, but my instinct is to put them in Customer Success.
Branding won't change but voice and messaging and targeting most certainly will.
One decision point might simply be which system they will spend more time in – your Marketing Automation tool or your Customer Success application. I believe it's the latter and that, along with the retention target they will have, leans me towards Customer Success.
Customer Success Marketing is a Unique Discipline
One thing to be wary of here is the definition of Customer Marketing. Customer Marketing is not a new idea. Many companies, maybe most, are already doing this.
The problem with it is that it usually means taking the current Demand Gen processes that are working for customer acquisition and simply aiming them at your install base.
The result, if you'll allow me a slight exaggeration, is a flurry of emails to your existing customers saying Please buy this, Here's a new great product you should have, Wouldn't your life be better if you owned this? Nothing wrong with selling new products and services to your customers at all.; you just can't make it the central point of every email.
Think of this as marketing for loyalty. You are, in fact, trying to convince those customers to buy something – the product they already own. In our new world of recurring revenue, every interaction with a customer is pre-Sales.
Demand Generation with a Captive Audience
One great benefit to you as you go down this path, is that the trail has already been blazed. Although I poked a little fun at Demand Gen earlier, the refining of their processes over the past 10 years will make your life SO much easier.
In fact, the process is identical in many ways - highly targeted content going to the right person (role) at the right time. The article you send to a user 30 days after onboarding will be different from the content delivered to your executive sponsor 60 days before their third renewal which will be different from what you send to your power user when they haven't logged in for 14 days.
This is basically Marketing Automation happening AFTER the sale. The driving factors will be will be very similar, too.
|Demand Gen||Marketing for Loyalty|
|Behavior||- Web page visited||- Product usage/non-usage|
|- Email opened||- Survey response|
|- Content consumed||- Community engagement|
|- Event attended||- Support questions|
|Role||- Buyer||- Exec Sponsor|
|- Influencer||- Admin|
|- Executive||- Power user|
|- IT||- User|
|Timing||- Pipeline Stage||- Lifecycle Stage|
If you are doing pre-sales demand gen you might send an ROI analysis to a CFO who just visited the pricing page on your website for the third time this week. If you are marketing for loyalty you might send a customer testimonial and an on-demand training link to a user who has not used the newest feature you shipped 60 days ago.
Marketing for Loyalty
When you are marketing for loyalty, you are constantly reinforcing your brand and the choice your customers already made as well as helping them to get more value from your product (the CSM part of this equation).
The marketing side of the equation is true demand generation but a bit more subtle because you may never mention the renewal (or an ongoing financial relationship of any kind).
The goal of demand gen is to lead prospects down a path where a Sales Rep calls them at exactly the right time. The goal of marketing for loyalty is customers for life.
The advantage you have is that you know SO much more about your customers than you could ever know about a prospect.
Segment your customers to identify those you want to touch less often and those you want to touch more often. Practice your high-touch account management with the latter and hone your one-to-many programs for the former.
Use all of the channels available to you and experiment constantly. Marketing for loyalty – the new Customer Success frontier.