Essential Customer Success Activities

Essential Customer Success Activities

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Essential Customer Success Activities

Customer Success—and the recurring revenue it generates—results from a series of intentional, interrelated activities performed throughout the customer relationship lifecycle. As shown in this graphic, effective customer success activities comprise a continuum:

 

Essential Customer Success Activities

Effective Customer Success activities fall into 6 distinct categories.  All are essential, yet recent ServiceXRG research revealed that half of companies surveyed are doing only half the job:

Customer Success Activities Commonly Used

Source: ServiceXRG 2020

Customer Success Activities Defined

Onboarding Activities

Onboarding activities aim to remove barriers that may inhibit successful product use. Onboarding can encompass activities to welcome and introduce customers to the resources necessary to use new products, as well as verification that customers can access and use products.

Onboarding activities can include:

  • Initial welcome
  • Kick-off-meeting
  • Goals and objectives inventory

Success Planning Activities

Success planning helps customers realize the full potential of products. These activities can increase understanding customer business objectives, introducing customers to product capabilities, and aligning services to help yield tangible business results.

Success Planning activities can include:

  • Goal setting
  • Account planning
  • Journey mapping
  • Business reviews

Activities to Drive Adoption

Adoption activities occur throughout the product ownership lifecycle. They are designed to advance Customer Success by encouraging the full and successful use of product features and capabilities by all targeted users.

Adoption activities can include:

  • Coaching
  • Training
  • Best practices
  • Templates

Health Monitoring Activities

By monitoring the customer ownership experience, your team gains insights about the extent to which customers are using products successfully. Early-warning signs of low adoption or low success rates trigger corrective actions.

Health monitoring activities can include:

  • Usage tracking
  • Sentiment analysis
  • Risk assessment
  • Intervention

Customer Retention Activities

Customer retention activities facilitate the contract-renewal actions that are necessary to assure sustained customer relationships and continuation of recurring revenues.

Customer retention activities can include:

  • Renewal notification
  • Budget planning
  • Follow-up
  • Win-loss analysis

Up-sell and Cross-Sell Activities

These expansion activities focus on the growth of customer relationship value by offering additional capabilities or capacity. This is where Customer Success activities pay off in additional, and ideally recurring, revenue.

 

Up-sell and cross-sell activities can include:

  • Account reviews
  • ROI analysis
  • Goal setting
  • Opportunity alignment

Make a plan to optimize Customer Success activities

ServiceXRG provides coaching and guidance to help companies optimize their Customer Success strategies, create action plans, and apply best practices.

Let’s make a plan to optimize your Customer Success Activities.

Contact ServiceXRG via the chat button at bottom right or e-mail now; or click on my calendar to set up an initial assessment of your Customer Success planning needs.

 

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Essential Customer Success Activities

Six Customer Success Activities You Need

Six Customer Success Activities You Need

Customer Success is a series of interrelated activities performed throughout the customer relationship lifecycle. The most effective customer success initiatives include activities from onboarding to expansion with an emphasis on assuring customers’ successful use of products. Typical customer success initiatives include multiple success-focused activities, yet nearly half of companies focus on just one or two.

Essential Customer Success Activities

Customer Success Activities Defined

Customer Success Activities Commonly Used

Source: Customer Success Practices and Metrics Study (December 2018)

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.

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5 Principles for Service Success in 2020 and Beyond

5 Principles for Service Success in 2020 and Beyond

There are many approaches to achieve service success and each company must chart its own unique course. Regardless of the path, there are five principles that all companies must embrace.

5 Principles for Service Success

There are five principles of service success. Every company must have an established CX plan, attainable goals, well-defined offerings, optimized service capabilities and the means to measure and improve performance.  These five principles establish the foundation from which to define, execute and achieve tangible, positive service outcomes.  Each principle is described below:

Established CX Strategy

A well-defined Customer Experience (CX) strategy must describe the experience you wish to create with your customers and the means by which you achieve stated outcomes.  A well-defined CX strategy should include the following elements:

  • Clearly stated objectives about the type of experiences you wish to create for customers.
  • The expected outcomes from delivering these experiences.
  • The potential negative implications from not providing the stated customer experiences.
  • The practices and methods to be used to deliver targeted customer experiences.

See All Articles Related to Customer Experience (CX) and Customer Success (CS)

Clearly Defined Organizational Goals and Outcomes

A CX strategy will be executed by individuals and teams and it is imperative to clearly define the roles and responsibilities for everyone involved.  It is imperative to clearly define the roles and responsibilities for everyone involved with the execution of the CX strategy.  Organizational goals and outcomes should include:

  • Clear identification of all teams and individuals responsible for execution of the CX strategy – note that responsibility may cross organizational boundaries and include Sales, Services, Product Teams, and other groups.
  • Defined goals and objectives for teams involved with CX.
  • Individual goals to clearly describe how everyone will contribute to the attainment of team, organizational, and corporate objectives.
  • Incentive structure to reward exceptional performance.
  • Sustained performance management process to monitor individual and team performance to targets.

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Well Defined Offerings

Offerings define the rights and entitlements customers receive and the price they pay.  The blending of rights to use a product and service entitlements through subscription programs and the opportunities to extend service portfolios with success programs requires careful definition of well-defined service programs and offers. Consider the following:

  • Determine if service entitlements will be combined with the rights to use a product or offered for a separate fee.
  • Establish the service entitlements customers need and want to effectively adopt and apply your products.
  • Determine which entitlements will be included and which will incur an additional fee.
  • Establish a pricing and payment model to define how customers pay for add on services.

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Optimized Success Capabilities

The ability to attain strategic outcomes and execute the CX strategy will rely on your ability to deliver services efficiently and effectively.   Optimization of success-focused service capabilities must include a commitment to the following initiatives:

  • Focus product capabilities and services on defining and achieving customer success.
  • Reduce service events through improved product quality, monitoring and proactive corrective actions.
  • Create opportunities for customers to serve themselves through self-help, communities and service automation.
  • Develop tools and content to streamline new customer onboarding and drive ongoing adoption activities.
  • Transition staff from reactive issue resolution to high-touch account management activities.

See All Articles Related to Service Capabilities: Support and Customer Success

Means to Measure and Improve Performance

Service success must be defined and measured.  Few companies will maximize performance immediately and the attainment of desired outcomes will take time to achieve.  It is imperative to implement ongoing and meaningful monitoring of key performance indicators with the means to take corrective actions to improve performance.  Consider:

  • Establish the metrics that will indicate performance against targeted outcomes including churn rate, satisfaction, Net RR, service efficiency and effectiveness.
  • Review individual and team contributions to attainment of performance.
  • Identify inhibitors to performance and develop corrective action plans.
  • Conduct regular team meeting to review performance and introduce corrective actions.
  • Review goals, measures of success and performance targets and timelines with executive sponsors and gain buying to execute.

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Featured: NET RECURRING REVENUE - Using Recurring Revenue to Identify Customer Service Opportunities and Risks

This report provides detailed instructions for defining, measuring and applying NET RECURRING REVENUE to identify customer service opportunities and risks.

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GUEST POST: Sell Services Faster and More Accurately

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read more

Using Net Recurring Revenue to Identify Customer Service Opportunities and Risks

Using Net Recurring Revenue to Identify Customer Service Opportunities and Risks

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.

Net Recurring Revenue

Recurring revenue is, or should be, predictable and expected income earned from ongoing relationships such as subscriptions and service contracts. Measuring Net Recurring Revenue provides an indication of the performance and impact of service offers, products, programs, and customer-focused policies and practices.

Net Recurring Revenue measures the impact of additions and losses to recurring revenue over a specified period and the Net Recurring Revenue Rate indicates if the overall value of customer relationships is expanding or contracting. 

Inputs

To calculate the Net Recurring Revenue Rate, you need to know how much recurring revenue is added and lost within a period.  While you can calculate Net Recurring Revenue Rate by knowing the aggregate recurring revenue you add and lose within a period, it is ideal to have as much granularity as possible. 

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.

Net Recurring Revenue is a time-based measurement.  Choose a period such as a month, quarter or year.  The shorter the period the more likely you are to find variations from period to period due to time-based market factors and customer behaviors.

The Formula

The formula for Net Recurring Revenue is straightforward. Start with your existing recurring at the start of a period, subtract recurring revenue lost during that period and add recurring revenue added.  See the formula below.

The Meaning of Net Recurring Revenue

Measuring Net Recurring Revenue yields obvious findings including 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 examine 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?
  • What are the primary factors that contribute to revenue gains?

Net Recurring Revenue Trends

It is important to understand the trends in in recurring revenue growth or decline.  Of course, revenue growth is preferred, but decline may also occur.  Establish a reasonable representation of recurring revenue performance over a period that is long enough to accurately reflect typical customer buying behaviors and normal sales, adoption, and renewal cycles.

Measurement Period

The first consideration is the examined measurement period.  Short duration measurements (e.g. monthly) may reflect short-term factors that may overtime be normalized.  Measurement over longer periods can provide a more accurate reflection of the actual trajectory of recurring revenue performance.

The Sources of Growth

If Net Recurring Revenue is growing it is important to understand why so that growth can be sustained or accelerated.  Growth will come by establishing new customer relationships or from increased spending by existing customers.  Differentiation and understanding the sources of growth is important.

New Logos

Is growth coming from entirely new customer relationships?  If so, chances are that your product/services are in demand, customers are aware of your products, want access to your capabilities and that your reputation is positive.  This suggest that Sales and Marketing efforts are working.

Consider if growth can be accelerated.  Are your reaching your maximum addressable market or are there even more customers that you can win over.  Ask new customers why they choose your product over other possible alternatives.  Is it your reputation, your capabilities, price, other factors, or a combination of all the above?  You may be able to sharpen market messaging and enhance the overall value proposition to attract new customers.

Acquiring new customers is great, just make certain that you can nurture and sustain new relationships relationship.

Expanding Customer Relationship Value

How much revenue growth is coming from existing customers through increased spending? Perhaps one of the strongest indicators of customer satisfaction is their willingness to expand their relationship with you.  Expansion may be a result of the utility of your product and services and may indicate that your products are easy to use and/or that the success services you have in place effectively help customers successfully adopt and apply products.

Growth attributed to existing customers is something that every company must understand.  Engage your customers that increase their spending with you to understand why.  Determine how you can accelerate expansion of customer relationship value.

Low or No Expansion of Existing Customer Relationship Value

If you determine that very little growth is coming from existing customers, ask yourself why?  Are customers still trying to achieve value with what they already have.  If so, you may need to provide more assistance to help customers with onboarding, adoption training and success planning.  Its is also possible that growth may be inhibited by lack of value-added offers and extensions.  Examine your product and service portfolio.  Do you offer what your customers need?  Are there additional services that your customers are willing to buy from you?  If so, it is time to expand your portfolio of offerings.

Reasons for Loss

All the gains from new customer relationships and revenue expansion within your existing customer base can be quickly erased if you do not retain the customers you have.  Even if you have a positive Net Recurring Revenue Rate, losses are eroding your full revenue growth potential. 

Customer Loss versus Revenue Loss

Recurring revenue loss may occur because existing customers choose to spend less with you from period to period (e.g. downgrade their subscription level or number of licenses).  In these situations, you retain the customer relationship, yet you get less revenue from an existing customer.  Understanding why customers choose to reduce their spend level is important and should be examined so that underlying issues can be mitigated.

Most recurring revenue loses are likely the result of losing a customer relationship.  Customer attrition is inevitable.  Companies go out of business and sometimes legitimately no longer need to use your product.  Many of the reasons for customer churn can be mitigated when identified and understood.  If customers cannot derive value form your products understand why.  Perhaps it is simply a matter of not being able to achieve the outcomes they expect – if so, consider better onboarding, adoption and training programs.  Perhaps the products lack the features a customer needs or product capabilities are limited, or performance is unreliable.  These are issues that need to be raise to the attention of the product development teams. Customer attrition may also result from poor sales, service and renewal practices.

It is imperative to understand how much revenue you are losing and what percent of that can be retained if changes are made to products, programs and customer-facing practices and policies.

Retain, Expand and Grow

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.

Retention and Recurring Revenue Model

This article is based on ServiceXRG’s Retention and Recurring Revenue Model which helps companies examine the financial health of customer relationships to identify the factors that affect recurring revenue retention and growth.  For more information contact Tom at tsweeny@servicexrg.com.

If you don’t have the time to review a lot of data, there is one metric that can provide a great deal of insight into the health or customer relationships and indicate the performance of Services and other customer facing departments. The one indicator that rules them all is Net Recurring Revenue.  When measured on a monthly, quarterly or annual basis you can learn a lot.

Featured: NET RECURRING REVENUE - Using Recurring Revenue to Identify Customer Service Opportunities and Risks

This report provides detailed instructions for defining, measuring and applying NET RECURRING REVENUE to identify customer service opportunities and risks.

This report is available for free – Register or login to get your copy.

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read more

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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.

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The Journey from Support to Customer Success

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Service Onboarding

Service Onboarding

When new customers purchase service agreements you must make certain that they understand how to access and use the services they are entitled to through a formal service onboarding process.

To successfully onboard customers contact them personally by phone or e-mail (personal touch) or by automated e-mail (tech-touch) and provide them with welcome kits, service guides and even how-to videos.  Help them to get setup with service access (e.g. credentials for the Support portal).

A single initial contact is typically not enough. Monitoring service entitlement use is important to identify customers that are not benefiting from their service relationship.  When you enable customers to use the services they have access to, you increase the likelihood that they will receive benefit and renew their relationship.

Best Practices

  • Contact new customers personally by phone or e-mail (personal touch) or by automated e-mail (tech-touch) to introduce them to their service entitlements.
  • Create a welcome kit with a service guide and usage tutorials to teach customers how and when to engage services.
  • Make certain customers know how to access and use services, especially self-help resources.
  • Discourage the practice of attaching service contracts to products without reviewing service terms and conditions with customers.
  • Monitor service use. When customers do not use services engage them to encourage consumption of service entitlements.
  • Coordinate service onboarding with product onboarding activities.

Featured: Customer Success Practices and Metrics

This study examines the approach companies use to organize, deliver and measure their Customer Success initiatives. Log-in to get your copy.

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*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.

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GUEST POST: Sell Services Faster and More Accurately

Company executives understand that selling services alongside core product offerings leads to greater alignment and customer value, while subsequently decreasing the likelihood of customer churn and loss of recurring revenue. Well-defined services and the means to sell them are imperative. so why is selling services so difficult? This article introduces 10 ways to help Sales teams sell services.

read more

The 2 Keys to Preventing Support Issues

Our research has revealed that nearly a third (32%) of Support demand stems from questions related to either installation, configuration, or setup. This understanding gives companies an immense opportunity to reduce this demand—and we see two major keys to ongoing Support issue prevention.

read more

Poor Support Case Management Practices = Missed Opportunities

Incomplete case records diminish Support’s ability to identify root causes of support demand and plan mitigation efforts such as enhanced self-help, product improvements, and training. This article describes how poor support case closure practices lead to missed opportunities.

read more

Is It Time to Modernize Your Service Portfolio?

Modern, well-defined post-sales service portfolios that combine elements of Customer Support and Customer Success can significantly increase your ability to help customers use and apply products; reduce churn; and expand revenue growth. This article will help you to determine the type of post sales service portfolio you need.

read more

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

Selling Service Value

Selling Service Value

Selling the value of service is making the case for why the customer is better off with it than without. Selling services demands that you establish a credible and compelling value proposition.

The Guide to Selling Service Value

Selling services demands that you establish a credible and compelling value proposition. The value proposition describes the relationship between the price and benefits from the services a customer receives. To be compelling, the benefits must be perceived to exceed the cost. Service benefits may be intangible – insurance against risk, or tangible – a commitment of specific resources or attainment of a specific outcome.

Although difficult, it is imperative to quantify the value of all service benefits so that they can be compared to the price. A compelling value proposition is fundamental for successful sales and renewal activities. Selling the value of services requires the following:

 

  • Understand your customers’ needs and expectations from the product and services they buy from you.

  • Offer a robust portfolio of services. Not all customers will need or benefit from the same types of service so develop offerings that can align to the customer segments you serve.

  • Set reasonable prices for your offerings. This does not suggest that reasonable is low, but it must be justifiable. Customers must understand and agree that the benefits of service are consistent with the price they pay.

  • Create a clear and compelling value proposition.

  • Help sales channels and renewal teams understand the elements of the value proposition so that they can clearly articulate it to customers during sales and renewal activities.

Support Program Design, Competitive Analysis and Pricing Strategy

Support program design and pricing is challenging. Contact me to learn how ServiceXRG can help you determine if your service portfolio is up to date and aligned with customer needs.

  • Do you offer the right programs?
  • Is your portfolio Customer Success-Ready?
  • Do customers need more or less than what you offer?
  • How well is your pricing aligned with customer expectations?
  • What do your competitors offer and what do they charge?

Contact us now to learn how we can help develop and optimize support and services portfolio offers.

Chat with us (see link on right side of screen), send an e-mail to tsweeny@servicexrg.com, or use our contact form.

Featured: Selling Service Value

Selling services demands that you establish a credible and compelling value proposition. To be compelling, the benefits must be perceived to exceed the cost. This playbook describes the essential steps to develop a compelling value proposition to maximize support sales and renewal activities.

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