Customer Success – Why Services Should Lead

Customer Success – Why Services Should Lead

BLOG

Customer Success – Why Services Should Lead

Products get built, products get sold and then Service steps in to take it from there.  At least that how it used to work.

Now – as an industry – we are aware that it’s a good idea to help customers use the products they buy, and it’s even better if we can make certain that customers are successful.

So now that the industry is buzzing with talk of customer success, what does it mean for Services?

Who better than Services to understand the challenges customers face in using products and the gratitude that can be earned by helping them.  It is time for Services to take a leadership role in driving the principles of customer success across the company.

Service organizations are in a unique position to drive customer success initiatives.  It is not enough however to stop at the edge of the Service silo.  For customer success to be fully effective other customer facing departments need to embrace success-oriented principles.

What should customer success look like at your company?

  • Sell quality products that have the features and performance customers need.
  • Onboard customers to help them use and apply your products.
  • Teach customers to be proficient and support them when they need help.
  • Demonstrate that your products are indispensable and accelerate customer outcomes.

When customers use your products effectively, they do not churn and are prime targets for renewal and expansion opportunities.

The principles of customers success are well documented, and many companies have already launched initiatives.  Yet, more than half of companies surveyed by ServiceXRG indicate that customer success is an activity within a single department, most often within Services. Customer success must be a company-wide effort. Sales, Marketing, and Product Development all play critical roles.

The Leadership Role for Services

Services organizations have been in the business of customer success for decades and many are actively engaged in success initiatives today. Services can take the lead and make the case for customer success company-wide.

Look to renewal rates, ARR/MRR growth, NPS and satisfaction as indicators about that current impact of customer success.  If you don’t have the data now, begin collecting it.

Highlight the activities that yield positive customer outcomes (onboarding, success planning, account management, etc.) and those the create customer angst (poor product quality, sales and service policies, poor hand-offs between departments, etc.).

If you would like to discuss how you can develop a compelling justification for implementing or expanding customer success at your company give me a call.

The Meaning of Net Recurring Revenue

Measuring Net Recurring Revenue provides a clear indication about the extent to which recurring revenue is growing or declining.  The more important insights from this metric come by examining the reasons for growth or contraction of Recurring Revenue.  Consider the following when examining Net Recurring Revenue:

  • What is the trend in Net Recurring Revenue – growth or contraction?
  • What is the rate of rate of change in growth / contraction?
  • What are the primary reasons for loss of recurring revenue – loss of customers or contraction or exiting of relationships?
  • What are the primary factors that contribute to revenue gains – new relationships or expansion of existing relationships?

The type and magnitude of changes to Net Recurring Revenue Rate can provide important insights into the reasons for changes to the value of customer relationships.  Use these insights to develop strategies to stem customer churn and reduction of contract value. Build upon practices and circumstances that lead to new customer engagement and growth of existing relationships.

Net Recurring Revenue

Recent Posts

Beyond NPS: Eight Metrics for Support and Success

High Net Promoter Scores as the desired outcome of Support and Customer Success interactions, while positive, is not enough because they it does not connect service delivery excellence with tangible business outcomes.

How to Measure Net Recurring Revenue

Net Recurring Revenue is a comprehensive indicator that reveals the extent to which you are retaining, expanding and growing customer relationship value. Examining the specific underlying elements that contribute to the calculation of Net Recurring Revenue provides the necessary insights to identify the root causes of churn, attrition and contraction. In addition, examining the reasons for revenue growth presents opportunities to embrace and expand practices that encourage expansion of relationship value.

Success Marketing and Portfolio Management

Technology service programs are evolving to offer new value and benefits such as use and adoption assistance and resources to help attain successful outcomes. As technology service programs change service marketing must evolve beyond selling the initial service engagement and focus on sustaining and growing relationship value.

Scaling Support Delivery

Scaling Support Delivery requires the digital transformation of support and an increased use of digital technologies to improve and extend core support processes and enable new service capabilities. Digital transformation includes human-assisted, self-assisted and fully automated support transactions. This article defines and introduces key characteristics of the digital transformation to scale support delivery.

Essential Customer Success Activities

Customer Success is a series of interrelated activities performed throughout the customer relationship lifecycle. This article identifies and defines critical success activities.

Top Findings from the Customer Success Practices and Metrics Study

Top Findings from the Customer Success Practices and Metrics Study

Top Findings from the Customer Success Practices and Metrics Study

The State of Customer Success

Customer Success has become a widely used and universally accepted term to describe a variety of customer-focused activities. The term has many meanings: A department; a team; a role, a business strategy.

The fundamentals of Customer Success are not new, the general concept has been around for some time, but current practices suggest that something more profound is happening across the industry. There is broad recognition that helping customers adopt and apply products successfully will help retain and build customer relationship value.

Companies based entirely on “as-a-service” models have known for some time that landing new customers is just the beginning of the relationship. Companies that have evolved from the world of perpetual licensing have been slower to recognize that the imperative to retain and expand existing relationships applies to them too.

Customer success is not a one-sized-fits-all methodology and there is no right or wrong way to apply the principles of customer success provided that the outcome from success initiatives result in the ability to sustain and grow customer relationships.

Customer Success Structure

Top Findings

  • Customer Success is a series of interrelated activities performed throughout the customer relationship lifecycle.
  • Effective customer success initiatives include activities from onboarding to expansion with an emphasis on assuring customers successful use of products.
  • Nearly half of responding companies focus on just one or two customer success activities.
  • Customer Success reports to the CEO or Chief Customer Officer a quarter of the time (22.6%).
  • Typically, Customer Success is organized within an existing department, and most often within Service or Support (57.0%), sometimes Sales (16.1%) and least likely within Marketing (4.3%).
  • The primary customer success Key Performance Indicators (KPI) are strategic with an emphasis on the health and value of customer relationships.
  • The top customer success KPIs include customer sentiment as measured by customer satisfaction or NPS; recurring revenue, and retention (churn).
  • Companies report “positive” or “significant positive” results from their customer success initiatives with the greatest positive impact focused on recurring revenue rates and product adoption.
  • Customer success is reported to have the least impact on customer churn (retention) and margin.
  • 60 percent of the time the group responsible for establishing a new relationship is not responsible for the ongoing account relationship.
  • A formal hand-off from the sales channel to the team that “owns” the post-sales relationship occurs two-thirds of the time.
  • Less than half (41.5%) of companies provide formal onboarding services. Those that do are most likely to assure that customers can access and use the product or service they have purchased.
  • The initial customer welcome as part of the onboarding process, remains a personal activity using a combination of personal e-mails, phone calls and on-site visits.
  • Many (42.4%) companies use an automated welcome e-mail, but fewer than 5 percent rely on a fully automated welcome.
  • When account resources are included with product purchase they are often provided to fulfill vendor-focused objectives.
  • The responsibilities for customer retention and recurring revenue are seldom shared across multiple post-sales teams and are most often the burden of a single department.
  • Nearly half of companies surveyed indicate that they do not actively track formal Customer Success metrics.
  • The most common metric used to evaluate Customer Success team performance is customer sentiment expressed as satisfaction and/or NPS.
  • Less than half of companies have tools to enable core success activities. The majority of companies that indicate use of specific success systems built their own solution often based on their existing CRM infrastructure.

Download the full report for complete data and analysis.

Featured: Customer Success Practices and Metrics

Customer Success has become a widely used and universally accepted term to describe a variety of customer-focused activities. The term has many meanings: A department; a team; a role, a business strategy. Unfortunately, the broad use of the term has obscured the diverse and complex activities that underlie a potentially transformational initiative. This study examines the approach companies use to organize, deliver and measure their Customer Success initiatives.

[et_pb_df_wc_restrict_content_open_tag admin_label=”Not Logged In – Open” shortcode=”wcm_nonmember” start_after_trial=”off” _builder_version=”3.0.100″]

[/et_pb_df_wc_restrict_content_open_tag]

Please Login

Members, please login for access to this and other reports.

[et_pb_df_wc_restrict_content_close_tag admin_label=”Not Logged In – Closed” shortcode=”wcm_nonmember” _builder_version=”3.0.100″]

[/et_pb_df_wc_restrict_content_close_tag]

[et_pb_df_wc_restrict_content_open_tag admin_label=”Success Access – Open” shortcode=”wcm_restrict” plans=”success_plan” start_after_trial=”off” _builder_version=”3.0.100″]

[/et_pb_df_wc_restrict_content_close_tag][et_pb_df_wc_restrict_content_open_tag admin_label=”Success Trial – Open” shortcode=”wcm_restrict” plans=”success-trial” start_after_trial=”off” _builder_version=”3.26.3″]

[/et_pb_df_wc_restrict_content_close_tag][et_pb_df_wc_restrict_content_open_tag admin_label=”Success Enterprise / Team – Open” shortcode=”wcm_restrict” plans=”success-enterprise-plan, success-team-plan, success-trial” start_after_trial=”off” _builder_version=”3.0.100″]

[/et_pb_df_wc_restrict_content_close_tag]

[et_pb_df_wc_restrict_content_open_tag admin_label=”Not Logged In – Open” shortcode=”wcm_nonmember” start_after_trial=”off” _builder_version=”3.0.100″]

[/et_pb_df_wc_restrict_content_open_tag]

Login

*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

[et_pb_df_wc_restrict_content_close_tag admin_label=”Not Logged In – Closed” shortcode=”wcm_nonmember” _builder_version=”3.0.100″]

[/wcm_nonmember]

[/et_pb_df_wc_restrict_content_close_tag]

**A copy of the current findings (as of 12-4-18) will be sent upon the completion of the study.

Related Articles

How to Measure Net Recurring Revenue

Net Recurring Revenue is a comprehensive indicator that reveals the extent to which you are retaining, expanding and growing customer relationship value. Examining the specific underlying elements that contribute to the calculation of Net Recurring Revenue provides the necessary insights to identify the root causes of churn, attrition and contraction. In addition, examining the reasons for revenue growth presents opportunities to embrace and expand practices that encourage expansion of relationship value.

read more

Customer Success – Why Services Should Lead

The industry is buzzing with talk of customer success, what does it mean for Services? Service organizations are in a unique position to drive customer success initiatives. Who better than Services to understand the challenges customers face in using products and the gratitude that can be earned by helping them.  It is time for Services to take a leadership role in driving the principles of customer success across the company.

read more

Support or Success – What Type of Post Sales Service Portfolio Do You Need?

Support and maintenance portfolios have been the foundation of many post-sales service offers, yet Support offers alone are no longer adequate to sustain and growth customer relationship value. Modernization of support portfolios and the evolution to customer success-focused programs and offers is the future of post-sales service portfolios. This article will help you to determine what type of post sales service portfolio you need.

read more

Pin It on Pinterest