Many entrepreneurs and decision makers are realizing how important this is in the current economic landscape. Statistics show that it is generally anywhere between 5 to 30 times more expensive to attract a new customer than retain an existing one.
Customer Success therefore is a crucial concept when building a sustainable and profitable business in order to avoid the exorbitant costs of having to constantly acquire new clients. Companies are slowly realizing they need to keep in mind the lifetime value of their customers and maximize that value by ensuring theircustomers are satisfied, active and regular users of their product or service. This in turn incentivizes future selling to these existing clients, whether in the form of service renewals or new product lines.
The adoption of client success has been, particularly prevalent among software as a service (SaaS) and cloud-based companies. Opinions differ on its terminology, reporting structures and metrics of as the concept is still being developed. However, there is agreement that it always refers to managing relations with the customer post sale and empowering them with an aim towards improving their lifetime value.
If satisfied by the customer experience, 73% of consumers will recommend a brand to others, and 46% say they will trust that brand’s products and services above all others. – SDL Global CX Wakeup Call Report
Key Functions Client Success Entails
> Customer On-Boarding
Almost every software or service requires initial implementation, engagement or installation. The level of setup may vary but regardless of how much effort is involved, the key deliverables, timeframe and structure for on-boarding should be clearly defined. This is also called ‘technical enablement’ and the internal team in charge of this is usually called ‘professional services’.
> Continued Support
Client satisfaction requires ongoing maintenance and support. In the case of “as-a-service companies”, technical support in the form of application performance monitoring is necessary to ensure the best possible customer experience. The most successful companies proactively reach out to their clients as support should not only deal with client pain points when they arise but rather constantly train and nurture their customers.
> Knowledge Transfer
Sometimes also referred to as ‘knowledge enablement’, this entails equipping the customer with all the necessary knowledge to make the best use of the solution, service or software provided. While it can be rolled into either technical enablement or support, it is best provided as a niche, separate team for more complex product offerings.
> Relationship Management
Client relations need to be nurtured and managed so that companies build good rapport with their customers on a human level parallel to all efforts made on the technical side. The customer relations team often acts as an advocate for clients to other internal teams, with the aim of increasing adoption of the solution, renewals and repurchases, which subsequently also increases revenue.
While the specifics of Client Success are still being debated as the term continues to evolve there are some misconceptions about what exactly it entails. It is:
Not Customer Service version 2.0
Is Customer Success just a new label that replaces an existing role? Is it just a fancier version of customer service or support? It may seem that way at first but regardless of the label, the function has evolved in the pursuit of better customer relationships, retention and optimization. The most effective way to retain existing clients has always been by enabling them to get the most out of what you have to offer - to guarantee their success with you.
The client success role may share many traits with traditional account or project management but with one crucial difference - it has a laser sharp focus on the long-term value of each customer. It is about reducing churn and in stimulating higher lifetime returns per acquired customer.
The cost of acquiring a new customer costs 5 to 10 x more than retaining an existing one. Not only that, but repeat customers spend, on average, 67% more - Bain and Company
The manner in which entire industries have evolved is such that recurring income streams from existing customers is a necessity rather than just a ‘nice to have’. If businesses want to survive and thrive in the long run they cannot leave customer success to chance but need to manage it as the strategic asset it is. While it may be an integration of several functions, from professional services to training and support, it is also more than just a sum of these parts - it is the key to long term profitability and growth. Making sure your customers are successful is the secret to your corporate success as well.