What are my System Requirements?
Now that you understand why Customer Success matters, how it benefits your business, and why a tech solution is a critical component of an effective Customer Success model, it’s time to investigate Customer Success solution options. To do that, you need to pinpoint your system requirements.
Determine Your Touch Model
A “touch model” refers to the amount of attention a business can afford to pay to each and every customer. Broken into three tiers, touch models typically align with the value of an individual customer.
High Touch (more than $100K annual recurring revenue)
Companies with high customer lifetime values often take a “high touch” approach to Customer Success. In these environments, every Customer Success manager typically manages a relatively small number of accounts (e.g., 5-20), which means they know everything about their customers and communicate with them frequently. They use their Customer Success solution to be better prepared and more consultative in those interactions. Thanks to the software’s intelligence, they know the right times to communicate and what conversations to have. Finally, they can report on customer health internally in a repeatable, quantitative fashion.
Low Touch ($5,000–$100K annual recurring revenue)
Companies with mid-sized customer values often opt for a “low touch” Customer Success model. Customer Success managers manage 50–200 accounts, and their mission is to interact with customers “just in time” rather than all the time. Using their Customer Success solution, the managers will determine which customers to contact—and when—as well as what message to use or approach to take. For example, if a customer is coming up for renewal and isn’t using one of his or her purchased modules, the manager would receive an alert and recommended actions.
No Touch ($100–$5,000 annual recurring revenue)
Finally, many companies have customers with more minimal recurring revenue. Therefore, human outreach may not always be practical or economical. Each Customer Success manager could manage hundreds to thousands of accounts, or there could be so many accounts that none of them are assigned to specific managers. In these types of environments, companies use their Customer Success solutions
to deliver automated and personalized communications to customers based upon data, similar to the manner in which marketing teams use marketing automation software to send “nurture” emails to prospects. For example, the Customer Success solution could trigger messages full of training materials to those customers who haven’t used a particular product. Within the no touch model, the Customer Success software typically integrates with the company’s underlying marketing automation system.
Understand Your Current and Future Growth Stages
Once you’ve determined your company’s touch model, pinpoint your growth stage and how it’ll evolve over time.
Stage 1: Adoption ($1–$5 million in revenue)
When companies are starting out, they often don’t have a lot of renewals coming up, especially if they employ annual or multi-year contracts. As such, Customer Success at this point isn’t about retention or upselling. Instead, it’s about getting customers to use and get value from your product. In this stage, Customer Success solutions can identify and inform Customer Success managers as to which customers are successfully using products, which are struggling, and which are failing to adopt entirely.
Stage 2: Retention ($5–$20 million in revenue)
Once a business has a sizable base of customers coming up for renewal, the company must shift its focus to reducing churn, maximizing loyalty, and increasing lifetime value. Here, Customer Success solutions proactively identify renewal and retention risks and recommend the appropriate actions and timelines.
Stage 3: Expansion ($20–$100 million in revenue)
In an effort to accelerate growth, thereby better positioning themselves for an IPO or another exit event, companies start introducing multiple product lines or take a land-and-expand approach. As a result, Customer Success teams focus on identifying expansion opportunities, and they use their Customer Success solutions to:
- identify the right time to have an upsell or cross-sell conversation with a customer and
- determine what type of approach to take and messaging to use.
Stage 4: Optimization ($100 million–$1 billion in revenue)
In this stage, mature businesses want to scale cost-effectively by automating processes and relying more heavily on the Customer Success solution in order to:
- increase the number of accounts per Customer Success manager or
- push responsibilities to the support team or marketing automation system.
Stage 5: Transformation (more than $1 billion in revenue)
Most newer businesses are still working toward this stage. But that means there’s a huge opportunity for Customer Success to be a long-term initiative—a valuable strategy for the business and its customers. Salesforce is probably the best example of a B2B SaaS company in this stage; its customers view Salesforce as a true strategic partner—integral to their business. Outside of the SaaS world, though, most Fortune 500 and similar style corporations would fall into this stage. Whether your company is a B2B SaaS or a massive, brick-and-mortar corporation, Customer Success software at this stage can help the Customer Success team add value at every single phase of the customer lifecycle.
Identify Your Desired System Capabilities
You’ve identified your company’s touch model and growth stage. Now it’s time to drill deeper and decide what your business specifically needs out of its Customer Success solution. To help determine just that, answer the following questions.
- How do your users want to access the system?
- Do they want to log in to a standalone application, or access it through an existing system like your CRM system (e.g., Salesforce)?
- Do your users want access to data and reports?
- Do you want them also to have a workflow system to manage their activities?
- Which systems do you need the Customer Success solution to integrate with? (Think about your company’s CRM, support, services, marketing, billing, HR, and community systems.)
- How do you plan to capture usage data?
- Do you want to instrument your application with code, or sync data from your existing database to the Customer Success software?
- What type of analysis do you want to do on your Customer Success system?
- Do you want to report on usage and adoption?
- Do you want to segment your customers?
- Do you want to analyze churn and upsell opportunities?
- Do you want to leverage the Customer Success solution’s data science and predictive analytics resources? Or do you already know what causes success and churn within your company?
Customer Success solutions track your customers and their actions; that’s very valuable and confidential data. What are your security requirements for such data storage and collection?
Customer Success technology can be very useful across your entire business. Done right, multiple departments can use the solution to various degrees.
- How do you want the system to scale?
- Do you need it to easily integrate with all of the data in your CRM system?
- Do you need an open API/two-way integration?
Identify Necessary Features
In the chart below, we list some of the most common Customer Success solution features for companies based on growth stage and touch model. Your answers to the previous section’s questions will help you determine if your company’s needs align with the suggestions in the chart or if you’ll need to combine features to create a more custom solution.
||Automated quarterly business reviews
||Churn and renewal
alerts and corresponding playbooks
||Upsell alerts and corresponding playbooks
||Workflow and team management
||Alerts to trigger email campaigns
||Retention analytics and upsell trends
How Should I Choose a Customer Success Solution?
Your company is unique, and so are your customers. Plus, like most enterprise businesses and tech companies, you have an in-house IT or engineering department. So, you might be saying to yourself: I get that my company needs Customer Success software; why don’t we just build our own? Perhaps your developers will build it on top of your business intelligence platform or natively into your CRM. Stop right there. Custom-built is not the answer. Read on to learn why.