Seven Pillars of Customer Success (eBook)

A Proven Framework to Drive Impactful Client Outcomes for Your Company

Wayne McCulloch (Autor)

eBook Download: EPUB

2021 | 1. Auflage
344 Seiten
Lioncrest Publishing (Verlag)
978-1-5445-1659-2 (ISBN)

Infos

As a customer success leader, whose insight do you rely on for success? Your field is still maturing, yet your profession is one of the fastest growing in the world. There are tons of books and blogs written by success professionals sharing their experiences and strategies, but how do you know what will work for your specific situation? Whose advice is the expertise you can trust? Wayne McCulloch has more than 25 years of experience in the software industry-years spent in training, adoption, and customer experience, the building blocks for customer success. Now he's sharing what he knows as a chief customer officer leading global success functions. In The Seven Pillars of Customer Success, Wayne provides an adaptable framework for building a strong customer success organization. From customer journey actions to the development of transformation advisors, you'll read detailed examples of how companies have put these seven pillars to the test. To create a culture of customer success and stand out in the marketplace, you need a proven framework and knowledgeable perspective-this book provides both, and more.

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Chapter 1

1. The Language of Customer Success

I was a latchkey kid. I had a single mom, and we were living at the poverty line. By the time I was six, I was skipping school regularly, and for the next two years, I hung out with other kids who were in similar situations. We would get into all sorts of trouble, such as break into houses and steal car radios; it wasn’t long before I had a run-in with the police. The next thing I knew, my grandparents stepped in. They had recently retired from the police force and lived on a farm. They loved farming life and thought it would do me, a rough city kid, some good.

When I first got there, my grandparents thought it would help me adjust if they taught me some basic bush survival skills. We lived in an isolated environment, surrounded by a state forest, and they thought it was vital that I knew these skills in case I were to ever need them in the future. If I got lost, for example, would I know how to make it back to the farm? If they drove me out into the middle of the bush, gave me a compass, a map, and a canteen of water, would I be able to find my way home?

My grandparents were teaching me the skills to survive in the bush, but it was also a metaphor: they were giving me the skills to be self-sufficient when things went wrong.

In customer success, we want our customer success team to be self-sufficient. When things are bleak, we want them to be able to navigate to a better place. We want them armed with the ability to find their way home—all to create the best experience for the customer. The customer success language and tools give our customer success team those skills.

Customer Success Is Responsible For…

As mentioned in the Introduction, there’s a lot of noise about what customer success is, who does it, and how it’s done. I want to get us on the same page with some foundational ideas and terms that I’ll use throughout the book.

Customer success has five main responsibilities:

1. Eliminate churn through value attainment
2. Drive increased contract value through value expansion
3. Improve the customer experience
4. Gain customer acquisition through building advocacy
5. Proactively lead the customer (to success)

Let’s look at each one.

Eliminate Churn through Value Attainment

There are two different types of churn. Logo churn happens when the customer leaves and doesn’t renew. Let’s say you have a Netflix subscription, but you decide to drop Netflix and switch to Hulu because it has a better selection or costs less. That’s logo churn, leaving one brand for another.

Revenue churn occurs when the customer stays but pays you less. You might be a subscriber to Netflix Premium but wake up one day and say, “You know, I’m not using it that much, so I’m going to change my subscription to pay less.” You’re not switching brands; you’re just downsizing. That’s revenue churn, and CSMs are responsible for managing both.

Revenue churn can happen because the customer no longer finds your product or service valuable. It can also occur when they haven’t used up all their licenses and renew for less. Sometimes it’s even a little bit of both.

Increase Profitability

What happens when we reduce churn? Profits increase.

Customer lifetime value (CTV) is a metric that measures customer profitability. It’s what makes companies like Salesforce extremely valuable. The SaaS company is worth around $200 billion but is earning only just over $20 billion in annual revenue. It is valued at such high multiples because it has a future revenue stream; customers are locked in for two, three, four, or more years. They have contractually obligated, consistent revenue from existing customers.

When you acquire a new customer, it costs a lot of money. First, you have to fund your marketing department, and then you have to buy advertising, attend conferences and trade shows, and demonstrate a proof of concept. You also have to develop and host a website with a great customer user experience and SEO (search engine optimization) and SEM (search engine marketing) built-in.

And those are just the costs to promote your brand and generate awareness. You also need to pay for the people who are going to prospect for customers and more people who are going to convince them to do business with you (field sales, presales, solution specialists, etc.). Once you do, additional people in legal and finance are needed to settle the terms and complete the transaction. All those expenses certainly add up!

Organizations spend more money to acquire new customers than they do to keep existing ones, so to be as profitable as possible, we need to retain customers. That also means, the longer we retain them, the more profit they generate.

In my experience, the breakeven point for a customer to start generating a profit is typically around the 18-month mark. This varies depending on industry, product type, and company maturity, but I have found that if a company churns a customer within the first 18 months, the company will typically lose money. On the other hand, if you keep a customer for five years, everything past month 18 is “practically” pure profit.

Customer retention is one of the simplest ways to achieve profitability, ergo customer success can drive company profits.

Drive Increased Contract Value through Value Expansion

Each customer has a chunk of money to spend on technology, IT, and software, and our goal is to maximize how much they spend with us. That doesn’t mean we’re always selling the customer; the purpose of maximizing contract value is to deliver additional value to the customer. Driving business outcomes is all that matters and the more value we can drive for the customer, the more money they’re willing to spend with us (value expansion). Unlike the sales team that is driven by a quota, customer success is driven by value, and the better the value, the better the sales team is set up to close new business.

Improve the Customer Experience

Customer success professionals aren’t the owners of every interaction your customer has with your company. But they do have the responsibility to point out other areas of the company that aren’t living up to their promises or creating positive moments of truth for the customer.

On the flip side, CSMs are also responsible for telling internal teams when they’re doing an amazing job. Customer success professionals aren’t just the organization’s police force; they’re also parents. They call out the good and the bad—and do it from the perspective of the customer.

Customer Acquisition through Building Advocacy

If we can create, find, and nurture advocates inside our customer base, marketing can amplify their voices via blogs, conferences, case studies, and references. Advocates are another asset that sales professionals can leverage to improve their sales process because ultimately, people trust other customers more than they trust you. You think you have the best solution (of course you do!), but your customers aren’t necessarily looking for the best. They’re looking for a partner that can drive the best outcome, and advocates can communicate that message.

Proactively Lead the Customer to Success

There’s no denying customer success was reactive when it was first created—born out of a need to onboard customers, plug product gaps, manage escalations, and deliver an excellent high-touch support experience. However, as engineering, product, and design teams become smarter (in how they deliver their cloud-based SaaS products) and the voice of the customer is more listened to and more relevant than ever, customer success can now pivot toward its major strength—leading customers to success. (A lot more on this later in this book.)

The Customer Journey

The customer journey is the full set of experiences the customer will have when interacting with your company or brand.

The customer journey is the entire time the customer spends with you as a vendor. It is a path you have either researched or captured. Five of the seven pillars represent stages that happen along the journey, but they aren’t always linear. For example, expansion (pillar #5) leads to onboarding (pillar #2) a new department within an existing customer’s company. These are pillars but are also stages in the customer’s journey. Some customers have a dozen onboarding stages along their journey and others, only one.

Most companies have created or captured the customer journey on a customer journey map (which is simply a visual representation of the customer journey you’ve researched/captured).

Typically, they’re developed by marketing departments and focus on the sales and marketing funnel. Marketing’s main focus is on converting prospects into customers. Nurture campaigns and lead conversions are well mapped out because, for decades, sales and marketing worked together to understand the customer journey through the sales pipeline.

But these traditional customer journey maps often stop as soon as the prospect becomes a customer. Customer success was the first business function to step up and say, “We need to own the journey of the customer after the...

Produkt-Details

• Erscheint lt. Verlag: 27.4.2021
• Sprache: englisch
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Marketing / Vertrieb
• ISBN-10: 1-5445-1659-2 / 1544516592
• ISBN-13: 978-1-5445-1659-2 / 9781544516592