Customer Success, at its core, helps customers achieve their goals by maximising the value from a product. Thus, increasing the retention rate, and creating a potential opportunity for upsells / cross-sells too. It doesn’t matter how many customers you are signing up every month! What matters is that of the customers who had signed up, how many renewed their contracts. Read on to know how you should start a customer success practice at your SaaS firm.
If you are signing a lot of customers but the churn rate is high, it’s like trying to fill a leaky bucket. No matter how much you fill, it will become empty because of the constant leak.
According to a study, the Life-Time Value of a Customer (LTV) should be at least 3 times the Cost of Acquisition (CAC).
But, how should you start a customer success practice in your company?
1. Segment the customers
Why should customers be segmented?
Their requirements, expectations, use cases are different. You might not be able to give all customers individual attention as that is not going to be feasible. When you segment customers, you can treat each segment of customers as one set. Managing them then becomes easier because their problems and expectations are similar.
You need to first decide on what factors are you going to segment the customers.
Is it going to be on the basis of use cases or the plan that they are on or some other factor? The factors on the basis of which you will segment the customers will help you plan your resources. So, make sure you decide it after consulting with your team.
2. Decide on the amount of resources to spend on each customer segment
Since all customers are NOT equal, you cannot and should not spend equal resources on them. Depending on how you have segmented your customers you have to decide how many resources you have to spend on each of them.
For example, say, you have segmented your customers on how much they pay you. Then you need to have more touchpoints and provide more hand holding to the high valued customers. You need to make sure that their issues are solved on priority. Try to provide the best customer experience possible as they are responsible for bulk of the revenue. Whereas, for customers with low ARPA, you may want to automate the process.
3. Decide what to focus on
Customer success managers have a lot of responsibilities like increasing retention, decreasing time to value, building key relationships, create upsell opportunities, etc.
But when you start, one of the best customer success practices is to focus on one thing and making sure you get early results.
Hence, it is advised to focus on product adoption in the beginning. Once a customer starts using the product and is able to achieve early value, the chances of retention increase.
Specifically, you should focus on improving the onboarding experience for the customer.
We recorded a video with our Founder & CEO, Puneet Kataria to discuss the same.
4. Take help of data and customer success technology
Without data, it’s like searching for gold in a huge barren land. No matter how awesome a CSM is, s/he cannot figure out by just intuition what each of his/her customers is going through.
A customer success software tells you when to focus on which customer. For example, CustomerSuccessBox analyzes millions of data points to track account health, along with a detailed view of product adoption, financial, service and relationship health.
You can also set up alerts so that you get a notification when a customer stops using the product for say 7 days. At that point, a success manager can contact them and solve their problem.
5. Focus on the customer
A customer success practice will not be fruitful if you are not customer focussed. You need to understand the needs and requirements of the customers. Sometimes you may even have to go out of your way to help the customer.
When you focus on your customers, you gain valuable insights that can help improve the product by a mile. At the end of the day, the customer is not only buying a product but also an experience.
Remember that every day products are getting easier to build. It’s the customer experience that usually differentiates your product from competitors.
Empathize with the problems of your customers and try to make their lives easier by helping them achieve their goals.
There is no one way to practice customer success. You may have different SaaS customer success best practices that are specific to your company. It depends on how complex the product is, the stage the company is at, etc.
Start your customer success practice early and take feedback from the customers along the way. Use the feedback to improve customer experience which will result in exponential growth for the company.
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