Top Findings from the Customer Success Practices and Metrics Study

by | Dec 11, 2018

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.

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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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