What is Customer Success?
Customer Success is the cross-functional strategy in which the company consistently delivers on their customers’ desired outcomes while delivering an exceptional experience. Customer Success is a growth driver, changing the way your company approaches the customer journey so you can leverage satisfied customers. The entire initiative is deeply contingent upon the organization and culture of a business. All departments must be properly enabled with the right people, technology, processes, and solid customer data to effectively execute across all functions.
The Customer Success Equation
Customer experience has been used by high-performing companies for decades to build their brand and win repeat buyers. But CX is only half of the equation
CS = CX + CO
The desired key performance indicators (KPI) that your product is being purchased for. It’s critical that you not only help your customers fulfill their desired outcomes, but you demonstrate what has been achieved so the customer fully realizes the value of your product.
The general experience the customer receives as they work towards achieving the outcomes for which they purchased the product. This can be a culmination of interactions with support teams, CSMs, account managers, and anyone else that may be involved in their lifecycle.
Investing in just one piece of the equation isn’t enough to drive long-term growth. For example, if you focus solely on customer experience, but neglect to deliver customer outcomes, you’ll have happy customers but no ROI. This is especially bad when the inevitable budget cuts come around—if you have nothing to show, who’s head do you think will be on the chopping block?
If we think about Customer Success in terms of this equation, it would allow for customers to fall in one of four quadrants. This 2x2 adds visualization to the four states that a customer could be in if all, one, or none of the elements in the equation are fulfilled.
The x-axis represents outcomes—to the left are customers who are not receiving their desired outcomes and to the right are customers who are achieving outcomes. The y-axis represents customer experience—the closer to the top, the better the experience. How are your customers distributed across each of these four quadrants?
The ideal place for a customer to be is up and to the right. These are customers that are having a great customer experience while also realizing outcomes from your product. They are happy, successful, advocates for your product, and powerful growth drivers. They have an extremely high lifetime value (LTV) and have a higher potential to expand your product to other business units. This should be the quadrant you strive for with every customer.
These customers are a perfect example of what can happen when customer experience takes priority over customer outcomes. Customers may be having the time of their lives interacting with your company and product, but when it comes time to present on the ROI and they have nothing to share, they’re suddenly a high churn risk. If you’re not clearly demonstrating the positive impact you’ve made, customers will feel unsuccessful. They may be giving you 9s and 10s on NPS surveys but these can be false signals. Modern businesses need to think about NPS holistically and not assume that all Promoters are using their product regularly.
When you don’t deliver a good customer experience, but consistently demonstrate outcomes, it puts customers in a position where they renew contracts but do not expand. It’s imperative that you revisit the customer journey to improve key touchpoints and increase overall engagement. Maybe your CSM isn’t giving the right level of strategic engagement, handoffs aren’t smooth, or support tickets are taking too long to be resolved.
This is the quadrant you risk falling into if you don’t adopt a Customer Success strategy. Unhappy and unsuccessful customers churn and detract from growth twofold. Not only do they take away their revenue contribution when they leave, if they have had an unsatisfactory experience, they will spread the word and cost you future deals. If they move onto a competitor, they are assets to them because they can preach to the marketplace the difference in experience and success. If you have customers in this quadrant, put in some code red processes to move customers out of it.
Customer Success as a Growth Driver
The way that we think about the Pipeline of hand-offs has evolved and the fastest-growing companies know that strong revenue growth now comes from the Helix
. When you’re working in a recurring revenue model, leads are at the beginning and end of the Pipe. When you’ve delivered and demonstrated successful customer outcomes and experiences, a customer represents at least three new leads:
- Renewal event: The customer will renew their contract.
- Expansion event: The customer will expand their contract to get more value.
- New logo: The customer will be satisfied enough with their experience that they will either act as a reference to speak to prospects or spread the news within their network, bringing in net new logos.
If you make your customers successful, you can experience exponential growth, looping around and up into the shape of a widening helix. Customer Success is a vital element in this new way of thinking because the way a customer feels at the end of their contract fuels growth up the Helix. In order to truly succeed in the Helix, your entire company will need to rethink the way they work together.