Why Customer Success Is The Next Big Thing
Today the subscription business model has made the software industry a services business where you need to consistently make your customers happy and deliver recurring value.
How to Create A Customer Journey
Need to drive value to customers, for this we can create an use a customer journey, with different stages such as:
- Trial Conversion
- Build value
- Expand value
Key points in this process are:
1. Create and use the customer journey
2. Avoid that you are firefighting all the time
3. Use leading not lagging indicators
4. Listen, Learn, and then Engage
5. There is no one size fits all
6. Identify who is off track and take the right action
Impacting Trial Conversion
It’s a well-known fact that, today, customers are not responding to traditional marketing the way they used to.
Buyers are increasingly researching products and services on their own. Buyers are typically 60 percent of the way through the buying process before even calling a salesperson.
What this means is that you need to put yourself out there and give buyers the tools and information they need to make an informed decision even without your involvement.For SaaS companies this most commonly means having a freemium offering or a free trial that gives users a “try-before-you-buy” option. Nowadays most SaaS companies rely heavily on freemium offerings and free trials to acquire paying customers. For a typical SaaS company, more than 50% of new business comes through freemium and trials users.
Now, as much as putting your product out there for people to use, without your involvement, may feel like losing control of the sales process, when it comes to online apps, you have a silver bullet:
You know exactly what these customers are doing in your app -- and you can use this to your advantage to:
(1) drive users to take actions and experience your app in ways that you know influence conversion positively; and
(2) then figure out who are the serious evaluators vs. the tire-kickers -- so you can prioritize sales efforts and focus on the most important leads and know which ones can be put into your marketing nurture stream
Impacting Churn Before It Happens
Any company who has an online service, eventually experiences churn. It’s important to know is that churn is a lagging indicator. By the time a customer churns, it is too late to reverse the course. Asking them if they are about to churn will not help you either. Research shows that 80% of unhappy customers won’t even fill out survey to warn you before they churn. The #1 driver of customer retention is knowing how your customers use your product, to understand the value they get from it. Usage & engagement are the true leading indicators of customer health.
Impacting Customer Success
The SaaS model depends on expansion and upsell after the initial sale. Today customer success is very reactive. In the future customer success will be the ability of a company to proactively reach-out to clients and help them grow their business. This creates a great opportunity to engage customers, upsell and market to them.
One of the advantages of SaaS, is the rapid innovation cycles
- 3 major releases a year, sometimes even more.
- How can you make sure your customers are using all the new powerful features you are building
- How can you make sure they are getting value from all this innovation.
Customer Marketing and Advocacy
Existing customers make up the bulk of your recurring revenue - up to 80%! Did you know it costs 6 to 7 times more to acquire a new customer than it does to upsell or retain an existing one? Think of all the opportunities waiting to be made.
There’s definitely not a one size fits all approach when it comes to customer marketing - each customer is in their own journey, even if they do go through similar paths. That’s why you need to segment your user base... like “hot trials” or “power users” or “inactive users”. Even if you have to automate your marketing content, it helps if the content is presented contextually based on their activities or usage. Help guide them to new features, ask them to be your beta testers, a case study or invite them for speaking opportunities.
The right customer marketing will help you win over happy customers, and these are your best marketing assets. Word-of-mouth promotion, peer referrals, recommendations...these have always been powerful at bringing in new customers. Harnessing their persuasive powers is key; identifying them is the hard part.