What is Customer Success? An Introduction for SaaS Companies

What is Customer Success

When you sell a coat or a bar of chocolate, customer success isn’t necessary.

Those are simple, self-explanatory products that everyone knows how to use.

Even with things like a new vacuum cleaner, customer success isn’t required. A user manual and a hotline is as far as most things go.

With your SaaS product, however, it’s not going to be so easy. Complex analytics platforms, SEO tools, and landing page creators can be set up and used in a variety of ways, solving different problems for customers from marketing agencies, e-commerce stores, factories, and farms.

For software companies, the golden days of unbreakable contracts and technical lock-ins are gone. The industry has diversified, and there are a lot of companies your customers could be choosing over yours, with more attractive branding, master salespeople or better customer success.

When your product needs follow-up and guidance to ensure the customer gets full value, that’s when customer success becomes a must-have.

This is because a customer who speaks to your sales team or reads your landing page is sold on the benefits, not the features.

The customer knows your product can solve their problem, but not exactly how to get that value.

(Click here to skip ahead and get a full high-touch customer onboarding process for SaaS companies)

As a free bonus, check out our podcast episode talking about customer success here.

What is Customer Success?

According to Lincoln Murphy, at its most basic level, Customer Success starts out as an aim, not a department of people or a group of processes— what he calls ‘lower-case customer success‘.

It starts by recognizing that your customers need more than your user manual, your automated onboarding flow or email drip campaign for your app to live up to the promises made on your landing page.

Keeping customers close, and working with them 1-on-1 is a customer success style known as concierge onboarding. While startups and SaaS companies are starting to focus on it only now, the early results are promising — doubled conversion rate to paid and Mainstay reduced churn by 50%.

I’m going to talk more about the benefits next week, but for now it’s obvious that a customer who is staring at the configurable dashboard of your product and wondering how they can set it up for their own company is likely to cancel their recurring payment and go look for something they understand — something that it’s easy to see the value of straight away.

Customer success is a system, run by people whose only goal is to help customers get the best out of your product. It happens straight after a sale is processed, as shown below:

CS Process

To define customer success, you have to know what success looks like for your customers. The definition will be different for each customer, and the method of achieving it will be different for every company. The first thing about customer success you have to know is that it’s not customer support: it’s a way of proactively working with your customer

If your customers aren’t constantly getting value from what they’re paying you, you can understand from a business perspective that they will stop paying.

The Features of Customer Success

Customer success is a mindset before it’s a department. It takes an analytical approach towards retaining existing users and draws on great communicative skills to forge long-lasting relationships with customers. It’s part client onboarding.

Customer Success — with initial capitals — is still in its early days as an official department. Google Trends shows that its popularity has been steadily increasing from zero since mid-2012.

Customer Success Manager

Boaz Maor, VP of Customer Success at Mashery, divides Customer Success teams into 3 groups by function:

  • Professional Services: Project management, initial implementation, and setup of any add-ons required.
  • Technical Support: Resolves technical issues, freeing up the manager’s time to work closely with customers.
  • Customer Program Success Management: At Mashery, Customer Success Managers are responsible for 20 customers each. The full-time job of these managers is to be the face of the post-sales operation and the person the customers build strong relationships with. They also coordinate the efforts of the professional services and support groups.

Customer Success Goals

Additionally, Customer Success teams take part in the customer onboarding process which is the vital initial setup of the product in line with the customer’s vision.

A Brief History of Customer Success

The history of Customer Success is pretty short. It only really became recognized recently.

As products increase in complexity at a rate faster than customers can use them, Customer Success as a department has come to the forefront.

In the past, sales operations were sometimes divided up into Hunters and Farmers, with Hunters taking on the responsibility of modern sales teams — turning leads into sales — and Farmers acting as what we would now call Customer Success Managers: nurturing customers to make sure they keep on paying their subscriptions, making referrals, giving references and providing data for case studies.

Customer Success Benefits

In a field like SaaS, where products require implementation and setup before they can offer full value, the Customer Success department is no longer a nice-to-have but a must-have.

It also helps salespeople focus on their job, and not having to continue nurturing customers after the deal is closed.

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