While it is easy to think that they work in silos, both the customer success and sales teams have quite a few overlaps in their day-to-day activities. What binds them together is their ability to nurture relationships with their customers.
Read MoreWhen I first got started in Customer Success (CS), I was over a large US-based organization where we had roughly 60 Fortune 500 companies as customers. These customers represented a large recurring revenue stream for our organization, and it was imperative that we retained more than 95% of our revenue (ARR) and it was more important that we retained logos.
Read MoreThere is not a single business in the world that can say that they haven’t lost a customer. And every business employs a different approach to handling it.
While some look for new customers to equalize the loss, others put their focus on analyzing what went wrong and how to stop it from happening further.
This problem is called customer churn. Your churn rate denotes the number of customers who are leaving your product or service during a given time period.
A HubSpot report highlights that generating leads and enhancing customer engagement strategies are the top priorities for over 50% of companies today.
Organizations, irrespective of their sector, spend vast amounts of resources and energies to reduce churn because your churn highlights how happy your customers are with you.
Despite its importance, many organizations struggle in implementing successful user engagement strategies to reduce churn. So how do you reduce churn? This article deep dives into this very problem.
While an obvious step to reduce churn, it is also a crucial one. You must find out why your customers left. Talking to such customers and getting to know them is one way to go about it. It is also an excellent way to demonstrate that you care.
You should actively make use of all media channels such as phone, e-mail, website, live chat, and social media. Surveys can be a useful tactic too if customers don’t want to talk.
An important step in reducing customer churn is to actively engage with your customers. This is called relationship marketing wherein you take decisive steps in delighting your customers and showing them value in your product/service so they have a reason to keep coming back.
As a starting point, provide your customers with versatile content that deals with the key benefits of your product. It should include regular update announcements and news about special offers.
Simply put, when you engage proactively with your customers, you address their pain points, build trust, and brand preference which translates into a substantial increase in revenue streams.
Getting started with a new product can be overwhelming for your customers. And if they are not able to figure out how to navigate through, they will lose interest, adding to your overall customer churn.
Your customer engagement strategy here is to ease their transition by setting up an effective onboarding process or roadmap. Such a process will guide new customers through your products, their features, functions, and processes.
Such a strategy also gives you greater control over how you want to supplement the information to your customers. Remember that your goal is to empower your customers. So it is vital that you constantly monitor and iterate your onboarding process.
Give your customers a reason to stick around.
Offer them something special such as promo codes, discounts, and loyalty programs among others. These small steps can prove to be quite effective in reducing churn and showing your customers that you value them and their business.
A vital point to remember is the time in your customer’s lifecycle when you should offer these incentives. For instance, it can be at the end of your customer’s journey when you are not sure if they will go for a renewal. You can provide a discounted renewal rate to help them finalize their decision.
Many of the big companies made it big because of their focus on providing stellar customer service. It is an excellent way to prevent churn. Your service reps should be empowered to solve your customers’ queries in a timely manner.
An Oracle report states that incompetent staff and slow service are the top two reasons for customers leaving a company.
Enhance your customer service capabilities by upskilling your labor force or outsourcing your customer success operations.
You can employ customer success managers to ensure that your most valuable customers are taken care of.
Your managers will provide your customers with the right input to maximize their investment in your product.
For your customers, they become the main point of contact, paving the way for more personalized interaction.
A success manager will take care of the following points:
Identifying those customers who are planning to leave your product or service
Nurture the relationship and make them stay
Make way for stronger and persistent communication
There are two reasons why reducing customer churn should be at the top of your mind.
The first is the financial aspect.
According to Forrester, it costs 5 times more for companies to acquire new customers than it does to keep the existing ones. The second reason is that the more customers a business retains, the higher its revenue will be.
But it all boils down to analyzing the right reasons behind your churn rate and swiftly acting on them. However, do keep in mind that you won’t go from 10-15% to 1-2% within a week or even overnight.
Reducing your churn rates is a process that you need to improvise as you go along but it’s worth the time and effort invested.
Best of luck!
Read More“The biggest sources of opportunity are collaboration and partnership. And today, with digital communication, there is more of that everywhere. We need to expose ourselves to that as a matter of doing business.” – Mark Parker (CEO, Nike, Inc.)
Read MoreIn large organizations with teams spread across time zones, coaching is a problem of scale. The inability of managers to find time to address the learning needs of individual sales reps reduces coaching to being reactionary when good or bad outcomes happen. An integrated sales enablement and coaching platform with AI capabilities is perhaps just what the doctor ordered to overcome this problem. So, how can AI help in coaching? Here are six ways how it can.
Read MoreIt is easy to fall into the mindset that customer success is only about keeping customers happy. In reality, customer success is a vital domain that can help you reach your business goals
Between building internally and outsourcing, the right decision lies in having a solid grasp on your needs, as well as confidence in yourself
Take the time to make the right decision, and you will see a big increase in the lifetime value of your customers
Many customer-facing business functions get outsourced regularly. Outsourcing customer success is a standard practice wherein technical teams are used on a contract basis.
So, whether you are in the early stages of developing a customer success team or revamping your existing CS efforts, you may wonder this question: Is outsourcing customer success right for me?
Bringing in an experienced external partner has its benefits, but it is essential to keep your short-term and long-term goals in mind.
Let’s look at the pros and cons of each setup and evaluate which will be the best fit for your organization.
An in-house solution might work for you if you have an organization at scale and the resources who can focus their time and energy on this function.
Company Knowledge: Your people have complete knowledge about the company, its culture, your business goals, and every detail of the product or service. In short, you have a resource pool that has grown with you. Additionally, they share your vision and have been serving customers for years. All this knowledge is already in place when you get to build an in-house CS team.
Better Control: You can have complete control of the entire team when it is in-house. You have power over the goals, strategies, budget, and almost everything that has been etched out by the team. So, if your customers are not happy with your CS team, the responsibility unavoidably falls on you.
Ownership: You have complete ownership of the logistics. When companies sometimes break their partnerships with an outsourced partner, it becomes a daunting task to get everything under control. With an in-house customer success team, you need not worry about this.
Lack of Good CSMs: While it is one of the fastest-growing jobs in recent years, finding a good Customer Success Manager can be challenging. This is because the demand is much higher than the supply. It is also critical to keep in account that CSMs have a higher attrition rate, up to 20% year over year, according to TSIA’s State of Customer Success report.
Consistent Training: If you are building an in-house customer success team, you need to ensure that you have proper training and change management processes in place. Your training module must also match the job roles of the different members of your customer success team.
Inefficient Mapping: You have to segment your customers and then assign the relevant CSM for them. If this part is mismanaged, your customer success module will fail, as your managers will work on too many accounts. Consequently, your customers will be unhappy and might move to another organization with better customer support
An outsourced customer success model is a viable path for businesses that need to expand their customer base quickly. Let’s look at some of the advantages and disadvantages of this model.
Streamlined User Onboarding: Increasing retention rate begins at onboarding. When you outsource customer success, your vendor will assign a CSM for each account, ensuring that your customers are comfortable and satisfied through their journey. Likewise, the Customer Success Manager will be instrumental in retaining a customer who is currently on a free trial by guiding them through the process.
Cost-effective: Building an in-house team involves more than just paying salaries. You need to consider employee benefits, ongoing training, software, equipment, and facilities. Add to this the high turnover rates of losing your customer success manager. You can save these costs with an outsourcing solutions provider that has already invested in these areas.
Expansion: Your customer’s lifetime value is primarily generated through renewals, cross-sells, and up-sells. When you work with an outsourced customer success team you will be better equipped to identify and convert valuable upsells and cross-sell opportunities. Consequently, you will create a more profound association between your customer and your product.
Consistent Experience: Customer success is all about the customer. With an outsourced manager, you can ensure your customer experience is always smooth, even if there are transitions between various points of contact. This is especially important when about 80% of consumers will leave a product after just one bad experience.
Trust: Establishing trust with an external organization can be hard. Your goal should be to find a solutions provider who is passionate about nurturing customer relationships and has established leading methodologies for customer success. Evaluating your ideal outsourcing agency will be a smooth process once you have done your homework.
Loss of Control: If you feel like you need to have visibility and control over every detail of running your customer success department, then an outsourced model might not be the right fit for you. Seamless collaboration can only take place when your outsourcing partner has control over how your CS module should work.
Between the in-house vs. outsource debate, don’t forget to look at the value of having a customer success function.
Long gone are the days when customer success was viewed as a ‘nice-to-have’ function. More than 90% of organizations have identified customer success as a dedicated function in their company.
The reasons to outsource customer success are umpteen and its benefits permeate throughout your organization and work at different levels for the overall success of your business.
Consequently, decide after considering how a particular model will affect you in the long term and the cost efficiencies that will come with it.
Customer Success teams are at the forefront of helping customers achieve their goals. It is through them that a company optimizes its value in the eyes of their customers.
In the dynamic marketplace we are in, customer success teams have become even more critical in the business growth of an organization.
It can also be a challenging task to establish an effective customer success function.
The demand for good CSMs far surpasses its supply. And unless organizations understand the core capabilities they require, the process will not bear fruit.
When software-as-a-service became popular in the mid-2000s, vendors focusing on the business model faced a major problem- customer dissatisfaction. The product in question was complex, and many customers were unable to find value in it.
This resulted in low adoption rates, which eventually led to greater churn.
To counter the problem, companies began building customer-centric initiatives. Many created formal customer success functions with a unique set of tools and methodologies.
In the aftermath of the pandemic, customer success services face a new sense of urgency around protecting and nurturing customers and enabling them to find success with the product or service.
According to a Salesforce research, 89% of consumers are more likely to make a repeat purchase after a positive customer service experience.
With the growing importance of retaining and maintaining long-term relationships with customers, customer success teams have become an indispensable function of any modern subscription-based enterprise.
It’s undeniable that customer success has become the growth engine, with the potential of becoming a company’s most powerful asset.
Deeply engaged with accounts, a skillful customer success manager (CSM) along with the entire team combines extensive product knowledge and domain experience with an intimate understanding of each customer and their objectives.
But the backbone of a well-planned customer success framework is a talented staff. It’s the foundation of any robust customer success initiative.
However, strong customer success leaders are in short supply.
With an already stiff competition to recruit and retain the best in the field, many organizations are also unclear about the necessary skills for customer success management.
So, how do you create a team that will amplify your customer success strategy? Have you set any expectations in advance? And if you already have an established customer success function, are you gauging their efficiency correctly? Let’s get started.
There’s immense power in great customer service.
A company’s focus on customer success solutions heavily impacts its recommendations. It’s critical that 94% of consumers will give a company a “very good” CX rating and will be more likely to recommend it.
As you get down to hiring your talent cluster, it is always wise to start with setting your expectations. Which roles are you looking for, and which skills will help you drive your customer success methodology? What reasons should you keep in mind? Some reasons have been listed below:
Customer Retention: Customer success is about taking every step to ensure that your customers see value in your product or service, making customer retention a critical component.
Consistent Customer Feedback: In this, your customer success manager can help the organization get regular and detailed feedback from your customers. This can help other BUs such as sales, marketing, and product management teams to better align their strategies.
Further Expansion: Upselling and cross-selling are an essential part of any customer success framework. By tapping on these opportunities, your customer success function will drive business growth.
Brand Advocacy: While customer advocacy is usually a company-wide initiative, the customer success manager is responsible for guiding the customer throughout the journey, turning satisfied customers into loyal brand advocates.
With the why behind setting up a customer success function, let’s look at how you can make it a reality.
As a first step, organizations should examine their current team.
Link this information to the desired customer success outcomes, such as adoption, satisfaction, and growth. The insights you achieve will help you to transform your hiring and talent attraction processes.
26% of respondents highlight that the typical customer success manager at their company handles anywhere between 51-100 accounts, according to a survey by Totango.
The number of people you require for an effective customer success framework depends on how many customers you check up on a weekly or monthly basis. Many organizations divide their customer base into three segments: High, Medium, and Low-Dollar customers.
It’s easy to assume that the ins and outs of your product or service are easily understandable to an outsider. But not everyone works on it every single day as you do, which means that what is straightforward to you might not be so for others.
An effective onboarding process can help your customer success team have a thorough understanding of the product, which, in turn, they will proactively use to help your customers gain value from your product. This saves the customer’s time in the early stages of their journey, and you benefit from a reduced churn rate.
Equipped with the insights on your preliminary analysis of the team, you can deploy programs to build on capabilities.
Many companies have established “field and forum”-based training programs where employees alternate between classes and apply them in the workplace.
Ensure that you are creating personalized learning journeys since the strengths and weaknesses of each member of your customer success team will vary.
Segmenting your customers can help your division of labor.
When you divide your customers into groups based on shared features such as customer lifetime value (CLV) or geography, you deliver greater levels of personalized customer experience.
Additionally, your teams provide contextual and relevant information. This type of segmentation can help you determine high-value accounts which require dedicated CSMs.
How your customers feel about their interactions with your customer success team can help you assess their performance. This feedback is a simple yet effective way to boost engagement. Use this feedback to optimize your customer success framework.
Companies derive more value when they identify opportunities to deliver greater value to customers. But few organizations have mastered this mutually beneficial relationship.
Customer success management will only be effective when you have a team guided by the company's vision and mission.
Looking to make customers your best growth engine?
Benefit from a world-class CS strategy at scale with MarketStar.
The overall success of any sales and marketing initiative ultimately hinges on customer success. It’s one thing to complete a sale or close a contract, but the ultimate goal is to ensure that the customer receives maximum value from the sale or engagement. Turning a sale into a successful engagement means happy customers, which translates into additional sales to those customers and reduced customer churn.
Read MoreOutsourcing continues to gain momentum as part of the B2B sales process, especially with the growing trend of sales reps working remotely. The 2020 business disruption caused by the pandemic has resulted in many B2B organizations retrenching and restructuring their sales teams to reduce overhead and maintain sales quotas. For many companies, that meant relying more on sales outsourcing to increase sales.
Closing the deal is only the first step of a successful sale. Once the contract is signed, you have to ensure a smooth transition from prospect to satisfied customer. That is the essence of solution selling: ensuring customer success.
When you understand that customer success is the end game, you can take steps to guarantee that the customer gets maximum value from the contract, starting with a smooth transition from prospect to customer. When you develop an onboarding strategy that focuses on the customer’s needs and on developing a path to solve their problem, you promote greater customer loyalty and increased renewals.
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