Tag: Customer Success

The Definition Of Customer Success In This Era Of Big Data

Even though the realm of customer success is an explored territory for more than a decade, however, it is only in the recent years the technology-based industry has recognized the value of CSM (Customer Success Methodology) initiatives. This is because the combination of SaaS (Software as a Service) and Big Data has created a perfect breeding place for maximizing customer relationships with the help of customer success programs, which has nowadays become analytics-driven and quantifiable that makes predictive modeling of customers possible using an easy to use CRM software.

Even though the realm of customer success is an explored territory for more than a decade, however, it is only in the recent years the technology-based industry has recognized the value of CSM (Customer Success Methodology) initiatives along with the growth in adoption of easy to use CRM software.

2% increase in upselling leads to a 28% increase in valuation - Goldman Sachs Click To Tweet

This is because the combination of SaaS (Software as a Service) and Big Data has created a perfect breeding place for maximizing customer relationships with the help of customer success programs, which has nowadays become analytics-driven and quantifiable that makes predictive modeling of customers possible using an easy to use CRM software.

Moreover, in the SaaS space which is presently flourishing with enterprises and consumers, CSM has become most essential, since SaaS businesses model can only work if their customers are times and again attaining their business objectives successfully.

This is because, in the old software world, the cost of acquiring a customer was recovered over a single transaction when a contract was signed, and so vendors of software solutions were not concerned whether their offering(s) was making the customers successful and hence as long as organizations kept signing deals, ‘shelfware’ (software) kept on being sold, irrespective of how customers react on the shelfware solution once it is out of their hands.

But in modern times, shelfware(s) does no longer exist in this fast-paced SaaS world.

Therefore, if a company is not finding value from its SaaS purchases today, it can (and certainly will) terminate that contract at the end of the billing period- irrespective of whether the billing cycle is of a year, quarter or a month.

Hence today in the SaaS space while happy customers mean a growth in business, unhappy customers can similarly lead to corporate collapse which makes CSM extremely important for SaaS businesses.

Now what does customer success look like in the SaaS space and what are the factors that signal a data-driven, and successful CSM program?

Well, the answer to this question is right below:

Low Churn Rates

Customer Churn is almost a killer in the SaaS space, and therefore customer success programs must address this cursed phenomenon first and foremost for finding business growth.

This is because even a small reduction in the churn rate for any SaaS business can lead to exorbitantly high returns.

For example, even just a 2% reduction in churn can lead to 20% higher multiples in valuation.

Therefore, after implementing a CSM program the clearest indicator of its success and effectiveness can be measured by viewing lower churn rates which can be easily monitored using an easy to use CRM software.

High Upsell/Recurring Revenue

The very opposite of customer churn is not acquisition, but its ‘retention’ for SaaS businesses.

This is because it is a well-accepted fact that the cost of acquiring a new customer (especially an enterprise-level customer) can take around 18 months to recoup, and therefore existing customers in SaaS businesses become more and more profitable once you have overcome their acquisition costs.

Therefore to become successful in SaaS, the recurring revenue from your existing customers must be of greater value than any new customer for finding rapid business growth.

Moreover, CSM programs should also aim at up-selling and cross-selling to their existing customers, which will also translate to increased revenue in the long haul.

According to a report published by Goldman Sachs:

“2% increase in upselling leads to a 28% increase in valuation.” – Which is just one more reason why SaaS companies those that excel in customer success should focus on retention of their customer base and hence use easy to use CRM to aid in their CSM programs.

Change from “Firefighting Mode”

Although this is not a quantifiable metric, nevertheless this is an indicator of CSM done right which can usher a shift from “firefighting mode” to proactive customer management in the company.

Even though most CSM programs are conducted to fight some form of churn, but real customer success, when it is done correctly, does not just douse the fire, it also acts as a proactive department in the organization that squashes customer-facing problems before they escalate and loops the VOC (Voice of the Customer) into the organization in a meaningful way.

Shift in Organizational Behavior

Perhaps the biggest and the most important of impeccable CSM program is a radical change in the behaviors of the employees in any organization.

This is because customer success is not the domain of any single department in any company since it can impact other aspects as well of the organization, which includes lowering the cost of acquiring customers through advocacy.

According to certain studies just a 12% increase in brand advocacy can easily double an organization’s revenue and growth rate.

Conclusion

Therefore in a gist, companies that are seeking to attain true customer success for their businesses must adopt CSM throughout their establishment, since irrespective of whether any department is directly involved with the customers, in the end, everyone in your business benefits when customers continue to do business with your brand.

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Redefining the Values of Customer Success Initiatives in the Era of Big Data

The field dealing with customer success is a discipline that has been around for more than a decade. However, it is only in the recent years that the technology industry has recognized the importance of customer success initiatives with the growth of Customer Life Cycle Management, mostly aided with CLM CRM technology. Pragmatically speaking, the combination of SaaS (Software as a Service) technology and Big Data has created the ideal cradle for heightening and maximizing customer relationships through programs on customer success, which has escalated the sudden interest in this field.

The field dealing with customer success is a discipline that has been around for more than a decade. However, it is only in the recent years that the technology industry has recognized the importance of customer success initiatives with the growth of Customer LifeCycle Management, mostly aided with CLM CRM technology.

Top business establishments those that are specializing in customer success analytics like Gainsight, ChurnZero, MindTouch, Customer Thermometer and many others have raised approximately more than $96 million in funding as of date, and this number is likely to grow as more companies like NomNom Insights, Optimove and others are entering this zone.

12 % amplification in brand advocacy doubles a company's revenue and its rate of growth.- Forrester Click To Tweet

Pragmatically speaking, the combination of SaaS (Software as a Service) technology and Big Data has created the ideal cradle for heightening and maximizing customer relationships through programs on customer success, which has escalated the sudden interest in this field.

Customer success in the recent times has become completely analytics-driven and hence quantifiable, thanks to the advancements in big data technology, which has made predictive modeling of customer behavior possible nowadays. Additionally, SaaS is also flourishing with cloud based CRM software systems in consumers and enterprises adding value to customer success management with CLM CRM technology.

In the Software-as-a-Service space, customer success is essential, as the modern-day SaaS business model only performs if consumers are consistently achieving their business objectives speedily, which is a complete turnaround from earlier business for software.
What we mean to establish over here is that in the earlier software world, the cost to acquire a customer was recovered when a contract got signed. Therefore, suppliers and vendors of the software were never concerned whether their product or service was making their consumers successful since the item for consumption was already out of their hands. Hence, the concept of ‘selfware’ was introduced, whereby companies kept signing contracts, with little regard to customers feedbacks on the software being sold.

Unfortunately, with stellar growth in SaaS technology ‘shelfware’ does not exist in this fast-paced modern IT world. In the present times, if a company is not gaining value out of its purchase, it can and will terminate the contract at the end of a billing cycle, be it a year or after a month.

It is this modern concept that makes customer success management most crucial for any SaaS business, whereby happy customers implies growth in business, while unhappy consumers can mean complete degeneration of business growth.

So, how does success looks like in today’s SaaS space?

Well, there are several factors that signal a successful, data-driven customer success program. Here is a list of the main factors that drive customer success management in today’s world:

Low Churn Rates

Churn is a killer in the SaaS zone, and so any customer success program should primarily address churn rates. This is because even a very little decrease in churn rates can lead to substantially higher returns. For example, just a 3% reduction in churn can lead to 30% higher multiple in valuations. Therefore, after implementation of customer success programs, the best indicator of its resultant effect is the decrease in churn rate.

High Recurring Revenue and Up-sell Rates

The exact opposite term of ‘churn’ in modern businesses is not ‘acquisition’- but its ‘retention’. The cost to acquire a SaaS-based product’s customer, especially if it is an enterprise-level customer, can take even more than 18 months to recoup. Therefore existing customers for SaaS-based products eventually become more valuable and profitable for the company, since you have already covered their acquisition cost. Hence, if your company is successful in SaaS your company’s recurrent revenue from the existing customers will have greater value than for any new customer logos you can add to your brand’s website. Moreover, customer success programs should also highlight cross-sell and up-sell opportunities for your present customers, which obviously translate into increased revenue and sales.

According to a report published by Goldman Sachs:

“2 percent increase in up-sell leads to a 28 percent increase in valuation”- which is exactly why customer retention is another indicator of data-driven customer success programs in the SaaS zone.

Change from the old “Firefighting Mode”

 

Although this customer success metric is not very quantifiable, nevertheless an indicator of customer success done right is a gradual shift from ‘firefighting mode’ to proactive customer management protocols. Although most customer success programs in the present times are built to eliminate and fight against churn, true customer success when performed correctly does not just douse the fire during an emergency. A true customer success program rather teaches how your company can engage its customers, and squash issues become they turn dramatic, and encourages bringing the VOC (Voice Of the Customer) into the organization in a meaningful way.

The shift in Organizational Behavior

Lastly, the most prominent and perhaps the most subtle indicator of a successful customer success program is a change in your organizational behavior. What we mean by this, is that since customer success is a journey, is not inside the domain of a singular department in your organization, and can affect every other aspect of your business. Therefore, reduction in cost for acquiring new customers through brand advocacy is also another big indicator of customer success in the modern times.

According to Forrester research:

“12 % amplification in brand advocacy doubles a company’s revenue and its rate of growth.”

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Takeaway

Therefore, companies that are aspiring to attain true customer success initiatives in the era of big data, throughout their enterprise, irrespective of whether any department is directly involved with customer interactions in the end, they must follow these above stated guidelines, since everyone in the organization ultimately benefits when the customer continues to do business with you.