MarketStar Blog | Customer Success (5)

You are being measured. How do you stack up? Are you proving your client’s return on investment (ROI)?

Key Insights

• The pandemic has led to trustworthiness becoming the top priority for customers

• Forging deeper ties with customers will be incomplete without a strong focus on effective customer success strategies 

• Outsourcing key customer success activities can contribute in several ways to revenue and growth 

• A clear vision and meticulous planning when it comes to customer success strategies can be the key differentiator between failure and success 

Amid shifting business priorities and disrupted operations brought about by the COVID-19 pandemic, one lesson stands out above all others: The critical significance of customer success in growing and protecting relationships with existing customers.

Trustworthiness is now a top priority, as highlighted by a Salesforce study.

Not only has trustworthiness become more important to customers than before the pandemic but it has also grown more difficult to earn.

Building trust among B2B customers requires a sustained focus. And as the function focused on ensuring these outcomes, customer success is now a vital requirement for business continuity and growth. 

It is no surprise that customer success teams only showed an upward trajectory during the pandemic.

What Defines Customer Success? 

Before discussing the benefits of customer success solutions, it’s essential to define what customer success is. 

Customer success is a business methodology that ensures the desired outcomes for your customers throughout the customer life cycle. 

A research by Deloitte identifies three types of value that constitute customer success:

• Performance value focuses on the use of the product itself

• Business value focuses on how using the product or solution contributes to achieving specific business outcomes 

• Experience value centers on the ease of doing business and the depth of the business relationship between customer and vendor 

It also bears certain key differences from customer service and customer support.

Customer support and customer service teams are activated when customers reach out with a specific problem and are geared toward resolving the problem within a single interaction.

Customer success, on the other hand, continuously seeks to innovate new ways of gaining value for customers, providing new use cases and perspectives before customers ask for them.

Why Do Companies Need Customer Success?

In today’s B2B world, getting the signature on the dotted line is only the beginning of the customer life cycle.

With customers finding it easier than ever to switch vendors when dissatisfied with a product, a methodology focused on delivering customer experience, product value, and business value offers several distinct advantages.

Below we have listed the top benefits of customer success in business.

1. Improved Retention

Given the significance of retention, it is important to note that one of the traditional and most effective aspects of customer success is retention.

In the 2020 State of Customer Success report by ClientSuccess, customer success contributed to an average net retention rate of 99% for 411 customer success professionals across 347 organizations.

Retention, unsurprisingly, is cost-effective for companies, with estimates suggesting that retaining an existing customer is 6-7 times cheaper than acquiring a new one.

2. Increased Upsells & Cross-sells

While retention protects the revenue base, growth depends on upselling and cross-selling.

Effective customer success best practices can secure this growth by increasing the likelihood of customer satisfaction.

In fact, vendors are 60-70% likely to sell to existing customers, against being only 5-20% successful in selling to new customers.

This is because satisfied customers recognize the value of a product or service and are aware of how it contributes to securing their business outcomes.

3. Improved Advocacy

Second-order revenues, that is all those sources of revenue which are indirectly influenced by a customer, can significantly contribute to revenue growth.

One common route for second-order revenue is when a champion customer changes companies and brings the product on board with the new company.

The other is word of mouth or referrals from satisfied customers to others in their professional networks.

In either case, by directly impacting customer attitudes toward the assessments of the product and vendor, customer success is significantly responsible for driving second-order revenue.

4. Operational & Product Improvements

With its finger constantly on the pulse to uncover customer pain points, customer success is a key avenue of feedback not only on a product or solution but also on how organizational operations impact customer value.

Customer success teams can create efficient feedback loops and judge the impact of new releases and updates, gathering valuable data for optimizing the product roadmap.

Customer success can also aid in optimizing operational processes across all customer-facing and other teams by identifying key bottlenecks or sources of friction that frustrate customers.

How Outsourcing Can Help You Build Effective Customer Success

At first glance, outsourcing more transactional engagements such as customer service or customer support may seem more reasonable than doing so with a long-term, relational role like customer success.

However, outsourcing key customer success activities can contribute in several ways to revenue and growth: 

• Cost-savings: Companies can save on operational costs related to onboarding and training, renting and maintaining office space, management costs, and investing in the latest tools and technology stacks

• Overcoming talent shortages: Outsourcing can ease this process by doing the heavy lifting when it comes to hiring quality customer success representatives

• Access to expertise and technology: Outsourced CSMs have not only been hired for their skills but also undergo the necessary training in a variety of approaches, processes, and technologies so that they can hit the ground running for any organization

Effective management of the long tail: Outsourcing the long-tail customers can help organizations move beyond an 80-20 trap in their revenue generation

The Bottomline

In the wake of the pandemic, the writing on the wall is clear: customer success is integral for the survival of business organizations in a subscription economy.

Satisfying the expectations of existing customers, retaining their business, and increasing revenues through customer advocacy are all vital for sustainable growth.

However, building in-house customer success teams may not always be cost-effective or viable.

Instead, taking on a blended approach of outsourcing specific customer success functions can provide important efficiencies and resource boosts that allow for better engagement of customers.

Key Insights

No matter which industry you’re in, the issue of customer experience is likely your focus area for 2022 and beyond. 

Customer experience was rising to the surface, even before the onset of the COVID-19 pandemic. 

But the disruptions and uncertainties brought on by multiple lockdowns has made one thing very clear: people want to be heard. 

This concept forms the core of customer experience. 

People want to be seen and appreciated by the companies they buy from. They want these companies to alleviate their pain points and offer solutions that are tailor-made for their needs. 

Solving customer pain points becomes a critical factor of success in this context. 

The customer engagement landscape has transformed significantly over the past decade. Customers no longer rely solely on emails or call centers for support; instead, they tweet, send in-app messages, or engage via chatbots, expecting quick and seamless responses. They also demand support on their preferred channels, rather than being restricted to company-designated ones. 

An omnichannel strategy enables businesses to provide a unified, seamless customer experience across all communication channels. According to Aberdeen Research, companies with well-defined omnichannel programs experience a 91% higher year-over-year increase in customer retention¹. However, one of our earlier studies found that 75% of businesses have yet to implement omnichannel support in their contact centers². 

Here are five key steps to successfully implementing an omnichannel support program. 

The traditional on-premises software distribution model is fast becoming a thing of the past. While it’s still relevant in some contexts, it has been largely upstaged by the advent of SaaS. The rise of the subscription economy, driven by the numerous benefits of adopting SaaS, including lower costs and greater flexibility regarding upgrades, means that SaaS is here to stay; it has firmly established itself as the business model of the foreseeable future.

With more companies looking to create recurring revenue models based on subscription sales, the impact of customer churn is higher than ever. The only way that a recurring revenue business model becomes sustainable is if you have happy customers who continue to buy what you have to sell. What we have learned is that having a Customer Success team as part of MarketStar’s Sales as a ServiceⓇ offering is essential to reducing customer churn.

The opening scene of Mission Impossible 2 featured Tom Cruise climbing a sheer mountain face, only to receive a mission embedded in a pair of sunglasses that activated after a retinal scan confirmed his identity. 

Most B2B SaaS organizations experience two periods of intense activity in a customer lifecycle – when onboarding the customer, and just before the account’s annual renewal date. That approach is proving to be unsuccessful now with several businesses finding their churn rates increasing year over year.

As business solutions grow increasingly complex, some buyers require additional assistance to successfully introduce new products or services into their companies. It’s no longer enough for business-to-business (B2B) sales organizations to sell a product or service and leave the customer to their own devices—today they need support and knowledge over the long haul. 

The need for longer-term success is why Customer Success teams are becoming increasingly common in B2B sales organizations. However, it’s important for sales leadership to understand that Customer Success is not the same as other sales functions. Here, we take a look at the key ways in which these two roles are different and why a Customer Success team may be exactly what your organization needs.

The ongoing COVID-19 pandemic has had an incredible impact on a variety of industries around the globe. There’s no doubt that it’s been a challenging year, and we’re still not out of the woods. 

But that means this summer is a great time to reassess your sales approach, determine what’s working and not working, and consider what your customers need, both now and in the future. 

As the economy regains focus amid and after COVID-19, Customer Success in particular should be part of your plan. Today, we’ll take a closer look at the benefits of a Customer Success team and how to best implement one in your company.