According to the popular definition, about half of startups survive the first 5 years and only 1 in 200 become actual scaleups. Many startups in their early stages believe that customer success isn’t for them. Well, that’s something where they get it wrong! Let me tell you why-
The scaleup has already reached that sweet spot, whereas the startup is still exploring its potential and figuring out how to effectively sell its product. Scale-ups are businesses that grow at a rate of 20% per year for three years.
This suggests that despite having an apparently scalable business plan, a firm can never expand up due to a lack of (client) growth. As a result, in order to grow up your firm, you must secure client success.
Many early-stage firms place a greater emphasis on gaining and expanding their client base, which is understandable, but not at the expense of losing existing consumers. As a result, they should concentrate on figuring out how to keep their current client base happy and profitable. Startups are encouraged to hire dedicated teams that focus on retention once the questions to these responses become evident.
How Customer success can help expand your startup?
A Customer Success program should not be an afterthought. It should be an integral part of your business vision, goal, and mission.
Suggested Read: How to start Customer Success
Customer Success for B2B SaaS is a function of all departments with the obvious contributors being- Customer support, Onboarding specialist, and Customer Success team.
How to execute customer success practice into your SaaS?
Having a clear picture of a customer journey roadmap will help you define your execution process for your SaaS startup.
In any given scenario, a customer goes through the following steps in a customer journey-
Check out this blog to get a detailed overview of what a customer journey looks like- What are customer journeys in SaaS?
1. Deliver Value when onboarding
The effectiveness of customer onboarding decides how successful the customer will be in the future. Hence you should aim at providing the promised value to the customer in the shortest time possible.
More Resources: 5 Steps that defines a perfect Customer Onboarding process for a SaaS Customer
Although Customer Success is usually thought of as a post-sales role, sometimes it’s vital to get Customer Success involved pre-contract. This way, they can start to develop a trusted relationship with the customer. After all, Customer Success isn’t just a department in a company. It’s the functioning mindset of your company.
Additional Read: Knowledge transfer from sales to Customer Success
2. Expansion- Upsell and Renewal
For a SaaS business, it is the recurring revenue that is going to make or break your SaaS business. And expansion is one such window to get the desired growth.
Upselling in B2B SaaS is a strategy designed to sell a more feature-rich product edition to an existing customer. Prioritizing customer acquisition should not be your only priority for upselling growth. You have to look ahead towards long-term growth and retention to design strategic upsell paths.
Here are a few strategies that an early-stage startup should adopt to increase upsell and get better on renewals.
- Segment your customers
Just like you should not onboard all your customers in the same way, you should not have the same upsell plan for all customers. The number of upsell plans will depend on the use cases and also the different product plans that you have. Segmenting your customers in a proper way and building custom upsell plans for each of them will increase your conversion rates drastically.
- Use Customer Feedback & Ratings
The feedback and ratings of the customers can help you improve your product and make sure you grow in the ever-changing market.
Referrals are the holy grail of SaaS, growing your user base (and revenue) without the need for added investment. And customer success almost entirely drives referrals. Only happy, successful customers will want to recommend your SaaS product to their personal network.
4. Define Your Metrics
It’s difficult to know how you’re doing if you don’t have any measures in place. Knowing what metrics you’re focused on not only helps give your team direction, it will also help you progress as you move forward.
There are a few that are pretty common for customer success teams to use:
- LTV – Lifetime value refers to the amount of money a customer spends over the entire time they do business with your company. Having this as a metric helps determine what a good acquisition cost target is. Also, you can dive in and see what items contribute to higher-value customers to have an area of focus for feature adoption or a specific vertical.
- Customer Effort Score – A Customer Effort Score(CES) is pretty straightforward. It’s referring to how difficult it is for a customer to complete a specific task. You can use this data to reduce friction the customer is experiencing when using your product .
- Customer satisfaction refers to how satisfied the customer is in general. Usually, this isn’t meant to measure anything specific but is more a broad measure of general sentiment.
- NPS – Like Customer Satisfaction and Customer effort score, NPS measures customer sentiment. It’s interested in finding out how likely a customer is to refer your company to others .
Additional Read: NPS industry trends 2021
- Churn Rate– Churn is the single most important metric for assessing the health and growth of your SaaS business, after MRR. However, one of the most common mistakes we see is SaaS companies incorrectly calculating churn rate, which leads to distorted customer and revenue growth statistics.
Check out the 10 Customer Success KPIs every SaaS company should track.
Remember, the majority of the revenue from your relationship with a customer happens post-sale, and you’ll inevitably face new challenges as your customer base grows and your team scales. But, with the right foundations and a thoughtful approach to team-building, you will be starting your Customer Success journey on the right foot.
P.S. – The main image has been taken from pexels.com