Customer satisfaction is not a new goal for technology companies — or any company, for that matter. But creating systems that improve customer happiness on a recurring basis is a relatively new concept in the technology industry.
This systemised customer happiness process is called 'customer success' — and I believe it is especially important for the software-as-a-service industry.
Customer success in the age of technology 'dating'
Customer success is the process of strategically engaging with customers to help them use your technology most effectively so that they are continually seeing its value. This engagement is intentional, proactive and ongoing.
A systemised customer success program is particularly important to software and SaaS businesses that use a subscription-fee revenue model, which is rapidly becoming the norm in our industry. According to technology research firm Gartner, more than 80 per cent of software vendors will change their business models from traditional license fees and maintenance fees to subscription fees by 2020.
Customers think and act differently under a subscription model. The lack of long-term contracts means they are not married to subscription-based software – it’s more like a dating relationship, in that they can 'break up' with your company at any time by cancelling their subscription. And like any person who wants a casual relationship to become something more serious, subscription-based software companies must continuously impress customers and quickly show them the value of their investment in the software.
Keeping customers happy is vital because retaining an existing customer is much cheaper than selling a new one. According to consulting firm Bain & Company, a 5 per cent increase in customer retention rates has the potential to increase profits by 25 to 95 per cent. Of course, customer success matters to new customers also. The quality of a customer’s experience is anticipated to become the most influential brand differentiator — above both price and product — per a Customers 2020 report.
Defining the success team
Customer success is not customer support, which reacts to specific technical issues, or sales, which focuses on closing new business – and it should not be a part of these departments. It can certainly interact with them and share information, but it should not be directed by the customer support or sales departments.
Customer success is best executed when a designated team of employees have a full-time focus on customer retention efforts that are guided by a plan of strategies and tactics. This team is charged with proactively engaging with clients regularly, discovering their pain-points and navigating them towards best uses of your technology so that the value of the technology and the support behind it is always top-of-mind.
In essence, customer success representatives are a customer’s internal advocate at your company. They work with product managers, the development team, company execs and others to make sure that clients’ voices are heard throughout the company – that they aren’t left on their own poking and prodding the software, guessing their way to using it effectively.
Because relationships are nurtured long-term under the customer success model, companies also have opportunities to expand accounts and generate new business referrals. Happy customers, after all, are most likely to purchase value-added services or refer you to a potential new customer.
That said, customer success teams generally:
- Have a well-defined structure and schedule for client engagement
- Understand how to find the unique challenges customers face in using the software, and are able to walk customers through those challenges
- Work with product development teams and support teams to mitigate challenges and maximise software effectiveness
- Know how to spot opportunities to upsell value added services, as well as generate new business leads that can be passed on to the sales team
- Track key performance indicators that flag potential client stressors or successes
Nurturing success with personal education
Customer success won’t happen overnight. It’s about building and maintaining relationships, which will naturally take time to develop. But this process can be expedited – in some cases to just a matter of days – with software training programs, especially those that are presented in person instead of via a conference call or a webinar.
Software training programmes, such as those like Salesforce University and many others, offer the element of face-to-face communication that naturally builds rapport. They also provide uninterrupted time to listen to and teach clients. And when taught in person, your clients will come away with a better understanding of your technology than if done remotely. In fact, a Forbes Insights report showed that an overwhelming majority of more than 750 business executives felt that face-to-face interactions are best for engagement (85 per cent), persuasion (91 per cent) and clarity (74 per cent) — all of which are essential for customer retention and technology adoption.
Launching a training programme is uncharted territory for many SaaS firms, but the concept is quite simple — invite customers to hosted workshops and share best practices for using software. Offer deep dives, session break-outs and question-and-answer opportunities so that as many technical stones as possible can be turned over and dealt with. Listen to their needs and respond to their questions. When this occurs, you will see four primary elements of customer success begin to unfold:
You build relationships
At these training workshops, you have an opportunity to engage in small talk, shake hands and demonstrate that you empathise with customers. People remember and connect to faces far more than voices over a phone.
You’re able to demonstrate the value of technology
With your experts leading software demonstrations and Q&As, you can show customers step-by-step how to best use your software, and how they can address specific pain points they might have within their company.
You introduce the value of a customer network
Customers can interact with and learn from other customers while at your workshop — building new business or inner-industry relationships.
You instil confidence
Often, the person attending the workshop will be relaying new insights to others in her company. With personalised training, they’ll have the technical knowledge they need to confidently advocate for your software in their company.
Because relationships are essential for long-term customer retention, forging emotional bonds is just as important as imparting technical knowledge. So make what happens outside the conference room as effective as what happens inside. When training is complete for the day, take your customers out on the town. Look for ways to interact with clients at happy hours or sporting events. And if they’re are coming in from out of town, be a tour guide and show them the best restaurants and nightlife your city has to offer. Being a welcoming host and making memories with customers creates a sense of family — and there’s not a better foundation for a strong relationship.
All of these elements of a strong customer success system — engagement, advocacy and in-person training — can be implemented in small phases, and then scaled as teams become more defined and comfortable in their roles. But the software companies that scale quickly and effectively will own a key competitive advantage in the marketplace, and will see profit margins rise as customers feel valued enough to stick around for the long-haul.
Ben Velker is Senior Vice President of Growth at Edgenet
Image source: Shutterstock/Jirsak