If you want to retain customers and increase revenue in the software as a service world, you need to establish a customer success strategy.
These famous words often don’t turn out to be true for startups and customer success managers who work for SaaS companies.
Attracting new customers and retaining existing ones is a constant battle, especially early on.
The success of your customers is crucial to the success of your SaaS company in a competitive market.
The difference between a successful company and one that loses ground to competitors can be customers’ success. If a company provides more value to its customers, then the customers are more likely to be successful, which in turn will make the company successful.
This text is discussing customer success and why it is important for companies that offer software as a service (SaaS). Customer success is the term for making sure that customers are actually using a product or service and achieving their desired outcome. This is important for companies because it helps them reduce churn, or the number of customers who cancel their subscription.
What Is Customer Success?
The term “customer success” refers to the strategies and tactics that help customers get lasting value from your product or service.
Instead of feeling satisfied in the moment, customers should feel like they are getting long-term value from using your SaaS solution. This means that they should feel value immediately from activation, and also over time as they use your services. Your company should have improved customer retention opportunities that enable you to grow faster with less capital.
Making sure that your product or service helps solve customer issues and is constantly moving them closer to achieving their desired outcomes is the key to success. This can manifest in many different ways, but the bottom line is that if you’re not doing this, you’re not going to be successful.
The things that get in the way of customers achieving their desired goals are bad for customer success and bad for business. This includes onboarding that is poor and UX/UI that is convoluted.
Helping customers and saving time are two examples of customer success that are more likely to lead to long-term customer retention.
The SaaS Customer Onboarding Experience
Onboarding is essential for any customer success manager so that the onboarding process can go without any hitches.
A poor first experience with a brand can cause customers to lose interest, even if they have been loyal in the past. Researchers have found that up to 30% of people are willing to stop doing business with a company after a single negative encounter.
This means that it is crucial to deliver customer success from the beginning, because competitor SaaS solutions are easy to access and available.
This company had a problem when they started onboarding new customers. New sign-ups would have difficulty using their platform and customer service reps struggled to help them over the phone without being able to see what was on their screen. In addition to this, onboarding times were long, which led to frustrated customers and lower retention rates.
The purpose of onboarding has traditionally been to teach the customer how to use the product or service by walking them through the steps. This process was very impersonal and focused more on the product or service itself than on the customer.
The more modern onboarding process focuses on understanding the customer’s current situation and priorities, demonstrating how the service helps achieve the customer’s desired outcome.
Sales representatives who previously struggled to provide verbal coaching to customers over the phone have found success by taking over their screen and providing live guidance in their browser.
This reduced the number of areas where there was potential for disagreements or miscommunications, which decreased the amount of time needed to train new employees by 66%. Additionally, it resulted in fewer customers leaving.
Understanding SaaS Customer Success Metrics
The primary goal of customer success is to increase profits for the company. To gauge the effectiveness of customer success strategies, data tracking and analysis of the appropriate key performance indicators is necessary. Part of getting data tracking right is knowing what not to track, as well as what to track.
Here are some factors to consider when determining your customer success and profitability:
The amount of profit that a company makes from its customer service efforts is equal to the increase in the customer’s lifetime value from those efforts minus the cost of retaining the customer.
The CRC includes the CS Team’s Salary, Office Costs, Software costs, Existing Customer marketing efforts, customer training programs, and customer loyalty programs.
In other words, the customer lifetime value is the total amount of money that a customer is expected to spend on your product or service minus the acquisition costs.
A company’s CS team should aim to maximize CLV and minimize CRC in order to generate the most profit.
To maximize the team’s profit, it is necessary to maximize the creation of new customer lifetime value (CLV) to new customer acquisition costs (CRC).
We’ll dive into more of the formulas in the sections to follow, but in general, CS profit is achievable by ensuring the following are as low as possible per dollar of CLV created:
- CS team salary
- Office costs
- Software costs
- Existing customer marketing effort cost per acquisition
- Customer training program costs
- Customer loyalty program costs
Data tracking based on metrics is necessary to understanding the effectiveness of customer success strategies. This gives you an advantage over others who do not track data.
Although customer service plays a big role in customer retention rates, very few companies focus on this aspect.
Although companies are aware of the importance of quality metric tracking, few have successfully implemented them or know which metrics to track. The following are some customer success metrics that we recommend monitoring.
A Customer Success Strategy Framework
Precision Marketing Groups’ customer success method can be followed by businesses from any industry to create an effective customer success program.
The blue circles represent the strategies you will use during a customer’s experience with your brand or business. It is important to understand that customers will have different expectations and that you must take this into account when planning your customer experience. Keep in mind that improving the customer experience will lead to customer success.
So let’s break it down.
Customer Success Strategy
Before a buyer even signs a contract with your business, you have the opportunity to make a huge impact. 57% of the buying decision is made before a customer even talks to anyone from the company. The first time a prospect encounters your business will often be a make-or-break experience. Most B2B first impressions are now formed online, through your company website, email, or social media.
Design and user experience are important in creating a “hook.” However, if a visitor looks at your brand more closely, it is the marketing team’s responsibility to provide a positive and consistent experience. Your company’s messaging, look, and content should all match each other. An inconsistent or frustrating experience is likely to cause the customer to stop considering your brand.
The brand awareness stage is when you start to take care of and figure out if potential customers can be helped by your company. You must know who would make a good customer for your company, and this is good for both you and the customer.
You just need to learn how to take advantage of it. The odds are good that your website’s content, branding, and images already make sense for your business and industry. All you need to do is learn how to capitalize on that. You need to identify:
- Who exactly are you trying to reach?
- What do they value?
- What problems are they trying to solve?
- And what content is going to resonate with them most?
No matter what your business does or what you’re selling, it’s important to establish buyer personas. This is the first step to constructing a solid base for customer success. Even if you haven’t finished this process yet, you can still follow a customer success strategy by publishing and promoting content that focuses on the needs of your audience.
If you are creating content that is relevant to your company, you are already addressing the needs of 69% of B2B buyers. This is because they believe that relevant content is the most influential aspect of any vendor’s website.
Some customers may enjoy your content but not understand how it applies to your product. Your product might be new to the industry, so potential customers may not trust it yet. Or, customers might not be aware of the problem they’re experiencing, so you’ll need to explain it to them and how your company can help.
Even though these customers may not be ready to buy your product or service right away, they can still be valuable leads. You can turn them into customers by providing free content that gives them more information about your company or industry. This can be in the form of blog posts, emails, interviews with employees, etc. The goal is to make your brand look more credible and trustworthy to potential customers.
If you educate your potential and current customers, you will create a more user-friendly customer experience. This will ensure customer success by minimizing the number of potential roadblocks they will face while using your product or service.
It’s your sales team that’s in charge of customer acquisition. Prospects become qualified leads and move along the funnel, and their experience and expectations of your business begin to take shape. This is why it’s so important that:
- A member of your Sales team builds a strong rapport with the prospect.
- Each person from your team with whom the prospect has contact is “on the same page.”
- Operations or a member of the customer’s future account team is brought into sales discussions early on.
Your sales reps are doing a great job during discovery calls with engaged leads. They are learning about customer needs, discussing pricing, and explaining how your company works. This is helping potential customers understand the results they can expect from your product or service delivery team.
Technology is essential for supporting customer success efforts. If a company has invested in customer relationship management software, that is one check on the customer success to-do list. It is also important to have a clear strategy statement that Marketing, Sales, and other key stakeholders agree on. This statement should define the company’s target audience, how the company intends to help them, the role each department plays, and what the team will deliver.
If your Marketing team, Sales team, and Operations team are not working together from the beginning and do not have the same knowledge of the product or service, you will have problems retaining customers.
The Greatest Customer Success Strategy Centers the Customer
The best way to succeed with customers is to focus on them.
Understanding your customer and tracking the right data is essential for customer success. The right tools and strategies can help you make the most of that data.
Customer success software helps to gather data and create solutions to improve customer engagement and success.
If you are looking to improve your SaaS solution to ensure customer success, ServiceBell can help. We focus on increasing user engagement, retention, and onboarding new users so that your customers have a successful experience.
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