This article is oriented to those of you being part of a customer-centric organization or anyone that aspires to build one. Some key takeaways I'd like for you to take home: to understand what is customer success, why is it important and how can we measure it. There is a wide range of related aspects about it, so I'd try to remain it as open as possible while it being precise. I'll narrow it down in next articles.
How do we define customer success? what is customer success?
We can find several definitions. Lincoln Murphy from SixteenVentures defines it as follows.
"Customer Success is when your customers achieve their Desired Outcome through their Interactions with your Company".
While the Hubspot guys define it differently:
"Customer success is the process of anticipating customer challenges or questions and proactively providing solutions and answers to those issues prior to them arising. Customer success helps you boost customer happiness and retention, increasing your revenue and customer loyalty".
In my opinion, the latter definition of customer success is more accurate. It makes a differentiation between "Customer success", the outcome, and "customer success management", the array of activities or frameworks orientated to achieve the said outcome.
Could we put it all together? I'd summarize it like "we (org) win only when you (customer) win ". We shape it by structuring the success of our product or service around our customer's success. Customer success is a result depending on all the areas of the company, not only the ones directly interacting with the customer. Considering it a goal exclusive of the marketing or the customer success manager is fundamentally deceptive. Avoid that.
Photo by Austin Distel on Unsplash
Why should I care about it?
It is important for obvious reasons. Aligning your team around customer success increases retention. A happy user is a user less likely to churn, ensuring a healthier, more sustainable business. On the other side, putting the customer at the centre of our operation lets us nail down our value proposition. Building feedback loops in our processes helps incrementing the understanding of the problem and increasing the odds of it being able to solve it more efficiently.
How do we measure customer success?
An accurate way of measuring business success is revenue. If the customer is willing to pay us for the service, then we tend to consider it the goal. It is not completely wrong. Parting ways with money is a hard choice, so it is a great way to validate it. Even in situations where it is not such a good indicator. When the budget is unlimited and people can dispose of it seemingly freely, there is still a process in place to enforce it is used wisely. The fact that clients are giving you their beloved cash is always a strong validation indicator. The problem is, it is pretty limited when we try to build a customer success strategy. We need better metrics.
Focusing only on revenue exposes us to several risks. A certain one is a better solution appearing in our market. Our customers might be willing to pay for our solution, but it might well be the case of them doing it only because there is not a better product to serve their need. We want to improve our experience and the value we deliver regardless of the client somehow being tied to our product. Some of those scenarios include not having clear competitors, high friction to switch to another vendor, internal reluctance to change existing processes... Those situations bring fragility to the business. A new contender could wipe out your company overnight.
On the other side, nobody wants to be that product that people hate to use. I remember being forced to work with a CMS, for diverse reasons, for almost 12 months. It was a nightmare. The fact that we were not able to get rid of it made it even worse. In said scenario, the moment a solution "closer" to the customer appears, the customer retention blows up and churn rate figures skyrocket. How do we prevent that? when establishing criteria to measure our success in a customer-oriented business, we should focus on proactively understanding product usage, assess the health of the customer base and create those feedback loops.
Every product is different. You might be questions away from finding your own set of customer success metrics. What are the key moments of the experience you are creating? How are those moments defining and swinging the results for your customer (and your company)? What are the jobs each piece of your machinery is being hired to do? Can you score how well they are doing right now? can you narrow it down at any specific customer? Can we break it down to the aspects that compose the perceived experience of the user? Speed? Understandability? complexity? familiarity?
What is next?
In the following articles, I'll walk you through some of those exercises. Will help you bring those customer insights to the table, create your set of customer experience metrics and show you how to shape a proper customer experience strategy. Stay tuned.
