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Who’s in charge of your business? You or your client?

If you answered “I am”, you probably don’t know the term Customer Success and you are at serious risk of putting your company in danger.

We are living now in Customer Age, a moment where those who buy your products or services are the ones who have the power to decide the way your company does business.

Haven’t you understood? We will explain in detail to you in this post!

Customer Success: what is it after all?

In the second industrial revolution, the world knew the electric motor and saw the emergence of centralized force in industry, and the first big cities. In this same period, Henry Ford created Fordism in 1914 and established the world’s first assembly line.

Ford’s famous phrase – “Any customer can have a car painted any color that he wants so long as it is black” – shows that, at that time, the industry had the final say on production. Customers had no power to choose.

But everything changed with the establishment of telecommunications and digitalization. Social networks and sites such as Reclame Aqui gave voice to consumers, who in turn showed that they can cause great damage when unsatisfied.

Customer Success has the purpose to prevent consumers from becoming enemies.

It’s the “area in charge of managing the relationship between a supplier and his customers, aiming to make it as successful as possible“.

Why did the concept of Customer Success arise?

Customer Success came to being from a need of SaaS (Software as a Service) companies.

The SaaS model provides the software and all the required structure, so the customer can enjoy the service. The customer uses the software through the Internet and pays a monthly fee.

Each time a customer joins the platform, the company invests money. If a customer gives up and decides to cancel his/her subscription in advance, the investment’s profit cycle will be interrupted, leaving the company in the red.

To avoid such damage, the concept of Customer Success arose. It’s a set of strategies that puts customers and suppliers in close contact, and measures the health of users (i.e. the level of satisfaction with the platform).

The results of this healthy relationship can be perceived through improved usability, the development of new products, and – of course – customer loyalty.

In this way, SaaS companies retain their customers and revenue for much longer.

Types of customers

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By analyzing data, you can identify the types of customers in your platform: promoters, detractors or neutrals.

A good Customer Success work fits your customers into just one of the categories below:

1. Promoters:

The loyal customers, who do the best for the brand and are keen to recommend it to other consumers.

2. Detractors:

Also known as “haters” in social networks, they don’t like the brand at all. These are people who had a bad shopping experience and speak ill of the brand to others.

3. Neutrals:

Those people who speak neither good nor bad. They don’t criticize, but they don’t promote also any particular brand.

The 10 laws of Customer Success

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Maybe you have seen these laws somewhere else on the Internet. But it’s always good to reinforce the importance of new standards, particularly when they make total sense in today’s world.

The following 10 laws were taken from a book called “Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue“, co-authored by Dan Steinman, Lincoln Murphy and Nick Mehta.

The authors invited top CEOs from around the world to build these laws.

If you haven’t read the book yet, read it. And if you have already read it, please read it again. You will be certainly convinced of the importance of adding these laws to the culture of your company:

1. Selling to the right customer

In the SaaS model, the chances of churn are very high. In this case, if you sell your service to the wrong customer, he/she will most likely cancel the subscription and you will lose money.

2. The natural tendency of customers and suppliers is to move away from each other

As the title of this law suggests, after the sale, customers and suppliers tend to stay distant from each other. CS comes in to fill this gap and create a partner relationship.

3. Customers expect you to render them successful

Delivering the product isn’t enough. Customers want to reach a goal when making a purchase, which can be both personal and professional. In addition to a product/service, you must also deliver support, content, online resources, etc.

4. Monitor and manage customer health relentlessly

Keep always in mind that your customers can be promoters, detractors or neutrals. Thus, it’s important to monitor customer health, to understand in which of the three types they fit into. To do this, use all data in your favor. Customer Success will be effective only when monitoring and management are relentless. Otherwise, it isn’t even worth bothering.

5. It’s no longer possible to build loyalty just with personal relationships

Personal relationship is important, but it can’t be the only active approach to your customers. Even because it’s not a smart move to leave this operation in people’s hands entirely. E-mail marketing, webinars, events, content and several other marketing strategies should be conducted.

6. The product is the only scalable differential

Most of times, the product is the main cause of dissatisfaction with a brand. And the more complex the product, the more painfully customer success will be achieved.

That’s why Customer Success and Product teams must work together, in order to build something good, easy, simple, intuitive and pleasing to consumers.

7. Improve time to value obsessively

The time to value concept is similar to ROI, but instead of measuring the financial success of an investment, it indicates the effectiveness of such investment.

So, if the moment of subscription renewal is approaching and your customer isn’t still convinced of the platform’s value-adding power to him, beware! Most likely, he will not renew his subscription and you will lose a user.

Helping customers extract value from your product is crucial.

8. Understand the metrics of your customer in depth

Software companies must control and understand the reasons for renewals, upsells, churns and downsells.

The following 5 steps can help in this case: (1) define how behaviors will be measured; (2) define period and frequency for measurements; (3) determine the contracted recurrent monthly revenue (CRMR), along with withdrawal categories; (4) understand how to identify churn signs; and (5) establish reporting and control models for withdrawal and retention.

In this way, you can have a more consistent view of what is happening to your customers.

9. Drive customer success with strict metrics

The Capability Maturity Model (CMM) for software is a set of best practices to appraise process maturity in software companies.

It has 5 levels: (1) initial, (2) replicable, (3) defined, (4) managed and (5) optimized.

With them, there are three categories of metrics that can assist you in achieving customer success: (1) customer behavior; (2) Customer Success managers’ activities; and (3) results of your business processes.

Thus, you can see what can and should be measured, as well as the benefits that each metric can provide.

10. Customer Success is a challenge for the whole company

The most important law on the list evinces a single fact: Customer Success is 70% company culture and 30% strategy.

So it’s time to start sharing this philosophy with everyone.

 

In his 2014 book “Customer Success: The Definitive Guide”, Lincoln Murphy, a guru on this matter, stresses: “No customer Success = No your Success”.

In other words, without customer success, your company won’t be successful too.

What have you been doing to keep your customers loyal to your company? Tell us about yourself!