Customer success sounds significant but what is it, why is it important, and why should we be focused on it now?
Present day business models are jumping onto the subscription economy 'bandwagon' - A subscription economy is where products are purchased as services. This is primarily because monthly operational costs are often easier to justify than large resource expenditures. Several industries like publishing, computer storage, marketing agencies, entertainment, and media in general, are moving in this direction. This move to a subscription-based delivery model is most evident in B2B software, as discussed in Liz Herbert’s TechRadar analysis of the SaaS market.
"Nearly 15 years after the appearance of software-as-a-service (SaaS) startups such as salesforce.com, NetSuite, and Google, software-as-a-service is nearing its tipping point. SaaS adoption is poised to surpass the 50% mark within the next 12 months — with adopters using an average of four SaaS solutions (a number that we expect will double in one year's time). With the greater prevalence of SaaS across applications categories, technology sourcing executives must help with researching solutions, piloting and purchasing, and contract negotiations."
This is very telling of the direction that SaaS is headed and expresses an urgency to those who have not considered it as a successful model.
What is customer success management?
In a subscription economy, the barriers to churn are low. It becomes much more important to manage the customer relationship to ensure that they are realizing the economic value of their investment. Customer success managers actively manage customer relationships to: reduce turnover, increase existing revenue and influence new sales.
Why is customer success management important?
Actively managing and strengthening your customer relationship has a quantifiable ROI as measured by turnover reduction; increased revenue from cross-sells and upsells and new lead generation. All of these items are of utmost importance to all business owners. The industry has now recognized this and there are presently over 5500 jobs open for this position alone.
How do you start?
Customer success management is not entirely about account management or technology. It is a strategic approach of having:
the right customer engagement discipline
defining and following standardized engagement processes
hiring the right person and operationally leading the team
accurate customer information, goals, feedback and any other data that can empower customer success managers to have the right conversation at the right time.
These are the most important tools in a customer success manager’s toolbox. The strategy of approaching the customer will rely on the managers own conversational and strategic goal tactics.