Often, a Customer Success (CS) practice or team is seen as a luxury that only larger enterprises can take on. The reality is, though, that the two most valuable results from CS—reducing customer churn and increasing upsell and expansion opportunities—are arguably even more important to small and medium companies than larger ones. Of course, companies of all sizes need to carefully manage churn and do everything to minimise it. All companies, too, benefit from selling incrementally to their existing customers. These values, however, are likely more “make or break” factors to small and medium companies than larger ones. In this regard, small and medium companies cannot really afford to be without them.
Of course, some informal style of CS usually takes place in smaller companies. In particular, small companies pour over their initial customers to better understand the fit, value and any difficulties the early customers encounter. As companies grow, they become complacent or unable to scale much more than superficial customer communication. Ironically, it is this stage where such involvement is most necessary. Typically, the early, visionary customers take more risks and are willing to put up with more. Later stage customers are far less flexible and not naturally communicative. Risk of flight is greater, and revenue expansion will not come naturally.
What is necessary for small and medium companies to effective utilise CS to prevent customer erosion and enhance growth?
First, the practice of CS within a company should not be an adjunct or extension of some other function, such as sales, marketing or support. CS should be independent and single-minded in its focus of listening to customers, assessing their experience and ensuring overall success. A result of this focus should be a reduction in churn and an increase in additional selling opportunities, but these things occur if CS has been devoted to the single factor of customer success. Making CS a part of sales or support fundamentally changes the way they operate.
Second, companies should shift their CS from being short-term focused to the long term. Producing a good, solid start is essential, but it is only the beginning. CS should keep on providing help and support for getting customers up and running in the smoothest way possible. It’s important that customers stay happy and can move from initial success to proficiency. CS can help foster continued growth for the customer, making them more likely to stay on as customers and more likely to want or need more.
Third, take a broader view of CS. Consider the entire customer lifecycle. Look, for instance, at how to get customers to use more of a product or service. Many customers only use a portion of what a product or service can offer. The broader the use, the greater the stickiness and general satisfaction.
Fourth, CS should be considered a platform for two-way communication between customers and various parts of the company. It is important to speak to customers to aid and expand their experience. At the same time, listen to them and capture the insight. Often there will be great thoughts about product usage or features that could be added. Maybe there is feedback about service or support. Maybe comments about invoices or renewals. Get such input to the right people inside the company to drive continuous improvement.
Communication should also enable a “it takes a village approach” to both involve multiple parts of the company to help customers succeed and to learn from them. Communications should be captured as much as possible and information derived from it. The information needs to get to the appropriate people or departments, ranging from development to customer service, sales and marketing. Information also needs to be actionable so that threats can be thwarted and opportunities seized. This seldom happens organically.
Fifth, and finally, the practice of full lifecycle CS requires a proper system of record to manage CS activities and capture customer interaction details and insight. While it may be possible to augment the CRM to be able to contain such details, the result is usually a compromise at best. It is difficult to scale and evolve CS functions in a CRM, especially if it is administered by and for sales. Besides, most CRMs have their own difficulties, and many organisations are struggling with difficult data hygiene and cleansing initiatives. Having a purpose-built system for CS will enable far more efficient and effective operations, insight capture and actionability.
Successful CS can effectively diminish churn. Losing a customer not only means a loss of revenue but it also negatively impacts companies in other ways. Negative word of mouth and tarnished reputation are common bi-products. It also hampers next-stage investors and the favour of industry analysts. In most cases, a customer is the company’s to retain or lose. So much is in the hands of the company, and so much depends on knowledge and proper action.
Also look for opportunities to expand or upsell. These will also result from well-executed CS. A happy customer is, of course, more inclined to buy more. It is between 5-25 times more expensive to acquire a new customer than retain an existing one. [hyperlink: https://www.helpscout.com/75-customer-service-facts-quotes-statistics/ ] Selling to a happy, existing customer is the easiest action for sales, yet it is many times not done. In addition, consider a happy existing customer as a great source for new potential customers and as critical word-of-mouth recommenders.
CS for ongoing customer health and lifecycle is something way too important to put off until a small or medium enterprise grows to a next size. After all, CS may be a decisive factor in getting to that next level.
Shreesha Ramdas, GM and SVP of Strikedeck, Medallia