“In a subscription economy, the barriers to churn are low. It becomes much more important to manage customer relationships to ensure that customers are realizing the economic value of their investments.” – Kate Leggett’s Blog on Forrester.
What do all the hyper-growth SaaS startups have in common? They each have begun focusing on a relatively new business approach called customer success management (CSM). Sure, this might sound like the latest Silicon Valley buzzword, like “growth hacking,” but customer success management is a proven business development strategy dedicated to retaining and optimizing your customer relationships. And it can make or break your sales. In fact, “customer success is where 90% of the revenue is,” says Jason Lemkin, managing director of Storm Ventures and founder of SaaS expert industry blog SaaStr.
So, how can you start implementing CSM into your operations?
Here are 5 ways to win at CSM:
1. Build a Strong Customer Success Team
Customer success involves developing close relationships with your customers. Don’t confuse CSM with technical or product support. The goal of a CSM team is to engage customers on their questions, feedback, and overall experience beyond technical issues. Their role is to proactively communicate with customers in order to avoid problems and gain valuable user insight. According to Jasmine Lombardi, VP of Partner Success at Intronis, a strong CSM team requires leadership, creativity, and product expertise. This team is always thinking of ways to anticipate customer needs, not simply responding to problem.
2. Identify how Customer’s Interact with Your Product
Every SaaS experiences a certain degree of customer “churn,” the percentage of customers that are lost over a period of time. While it’s important to measure churn, this data doesn’t tell you anything about why you are losing customers. Instead, focus on metrics that give you insights on your customers’ interaction with your product. For example, product utilization percentages (also known as customer activity) give valuable data on which features customers use the most and least. By analyzing this data, you can identify which features are underperforming and proactively engage your users about them.
3. Don’t Sell and Run — Make Sure Customers Know How to Use Your Product
A great way to build a strong connection to your customers is to guide them through your product. While you can’t personally guide each one, you can easily scale out this service with WalkMe, a contextual guidance product for SaaS systems that uses an algorithm to analyze user preferences and overlay tip balloons onscreen. If your customer is having any trouble navigating your SaaS, WalkMe pops up and provides step-by-step instructions on the process. It’s like your customer has a personal guide during their experience on your platform.
4. Dumb Down your Interface — Keep it Simple
It might seem tempting to create an original interface with a really cool design, but think of your customers first! Unfamiliar interfaces will lead to customer headaches and confusion. There’s no need to reinvent the wheel. To ensure customer success, use a simple, conventional interface that customers recognize. If you want to get creative, play around the copy on your site, not the functionality. For example, instead of having a button that reads “Sign Up”, you can say something like, “Give Basecamp a try!”
5. Capitalize on CSM and Product Synergies
Your CSM team is dedicated to proactively engaging with customers to get insights on their user experience and areas for improvement. But they can’t act on this information alone. That’s why it’s very important to create a smooth workflow and constant communication between your CSM, product and design teams. Changes can be implemented on once the CSM team shares insights with the product and design teams, who then act in response. Remember, this information sharing loop is not limited to just fixing problems. The CSM team should also loop positive feedback back to various teams so they can build upon and learn from what is working well.
Customer Success Managers who actively manage their customers are incredibly valuable assets to their organizations by reducing churn, expanding revenue streams and influencing new sales deals. Customer Success Managers, it is your time to shine!