In today’s competitive market, customer engagement (or lack thereof) could determine whether your company sinks or swims. Due to recent changes in consumer behaviors, wants, and needs, businesses must find better ways to connect with and delight their existing customers. It’s part of a shift toward the Membership Economy, a model based on customer-centric strategy using topics like subscription price, inclusiveness, and digital platforms that draw people in and win their loyalty. At the center is an emerging field you should know about called Customer Success.
Don’t confuse this with Customer Service. That’s the department that handles problems when the customer calls in. Customer Success specialists are the customer’s BFFs—insiders there to help them get the very most out of their product. And according to business consultant Robbie Kellman Baxter, Customer Success is the ultimate engagement model.
“Customer Success Managers (CSMs) are problem solvers and connectors,” says Baxter, author of The Membership Economy: Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue (McGraw-Hill Education, ISBN: 978-0-071-83932-7, $28.00, www.peninsulastrategies.com) and creator of Sales: Customer Success, a class on LinkedIn Learning and Lynda.com. “They do whatever it takes to make their customers happy, and prefer to have the flexibility to find a solution, rather than being hamstrung by bureaucracy. A little bit account management, a little bit support, and a little bit consultant, a CSM is like a best friend inside the company for the customers she serves.”
Baxter says even though Software-as-a-Service (SaaS) companies first established Customer Success departments, other types of businesses can take a page from their model and start engaging with customers today. Why? Because unhappy customers can easily cancel their subscriptions or memberships to most services. Once they move away from your brand, it’s very hard to get them back. But having a Customer Success function is a proactive way to ensure your customers are getting the highest value out of your products. And if done right, your Customer Success department can be a profit center for your business.
“It might start with a call from a CSM who asks whether you need help to implement your product,” says Baxter. “They might follow up a week later if you’re not using the product on a regular basis, to ensure that you understand how to get the most value. And once you’re fully engaged, if they see a change in behavior, they will check in to see if you have concerns. They might also check in by phone, text, or email when a new feature is released to make sure you understand how to use it.”
Keep reading to learn more about Customer Success and why it is so beneficial to many organizations today.
Customer Success focuses on more than just retention. While retention is probably the most important metric these organizations track, good CSMs don’t focus on renewal alone.
“Trying to win a subscriber back after they’ve canceled is very hard,” says Baxter. “It’s much easier to make sure that they make your offering a habit in the days, weeks, and months after they sign up. By the time you get to renewal season, especially in businesses with annual subscriptions, the customer has already decided whether they have made this product a habit and whether they’re going to cancel or not.”
Customer Success wins loyalty through engagement. “As with Customer Service, Customer Success starts with a phone call, but it’s about more than fixing a problem,” says Baxter. “If your mom or a friend called you to ask for help, you’d go out of your way to do what you could for them. You’d use your smarts to find the answer to their problem, even if it wasn’t in your manual. You’d be honest about whether they should or shouldn’t upgrade. You’d share insider tips and tricks to get the most out of the services they’re paying for. This is what you should do in Customer Success. And you don’t just wait for the call to come in. Instead, you might make an outbound call to see how your customer is doing.”
A CSM is ultimately judged on customer engagement, which is a leading indicator of retention, which leads to revenue and profitability. Additional metrics beyond engagement and retention might include net promoter score (a customer’s likelihood to make a referral), actual referrals made, and willingness to serve as a reference. All of these metrics tie to lifetime customer value (LCV).
Customer Success goes beyond Customer Service. Customer Service is about solving problems when customers complain. Customer Service is a cost center, and the goal of most Customer Service teams is to resolve complaints as quickly as possible. It’s reactive, as reps wait for calls and then respond. In contrast, Customer Success is proactive and a profit center. From the moment of the initial transaction, Customer Success Managers are reaching out to customers to ensure that they are getting value from the products and services they are already paying for.
Customer Success is generating the development of new side industries. “Companies like Zuora, Gainsight, and Totango have invested in software optimized to support CSMs,” says Baxter. “Their annual conferences are ‘standing room only’ because so many people are trying to learn about Customer Success.”
Customer Success has become a hot new career niche. As companies try to establish strong Customer Success discipline in their organizations, refugees from customer support, account management, and inside sales are flocking to Customer Success in search of a more exciting career. In fact, Customer Success is one of the fastest growing and most exciting careers available today.
Today, CSMs are found mostly in SaaS businesses, but Customer Success teams are popping up in other places as well. Businesses that depend on long-term engagement to maximize LCV, such as retail and consumer subscriptions, are adding CSMs to their teams at lightning speed. A few unlikely brands with thriving Customer Success functions include Zipcar, Dun & Bradstreet, and Visa.
“If you care about engagement and retention, you should definitely think about implementing your own Customer Success function,” concludes Baxter. “You might discover a great new way to keep in touch with your customers and give them the BFF treatment. Watch what happens. When they are engaged and feel cared for, they are far more likely to stick with your brand for the long haul.”
# # #
About the Author:
Robbie Kellman Baxter is the author of The Membership Economy: Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue. She is the founder of Peninsula Strategies LLC, a consulting firm based in Menlo Park, CA, that helps companies excel in the Membership Economy. Her clients have included large organiza¬tions like Netflix, SurveyMonkey, and Yahoo!, as well as smaller venture-backed start-ups. Over the course of her career, Robbie has worked in or consulted with clients in more than 20 industries.
Before starting Peninsula Strategies in 2001, Robbie served as a New York City Urban Fellow, a consultant at Booz Allen Hamilton, and a Silicon Valley product marketer. As a public speaker, Robbie has presented to thousands of people in corporations, associations, and universities.
Robbie has been quoted in or written articles for major media out¬lets, including CNN,Consumer Reports, NPR, and HBR.com. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business.
For more information, visit www.peninsulastrategies.com.
About the Book:
The Membership Economy: Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue (McGraw-Hill Education, 2015, ISBN: 978-0-071-83932-7, $28.00, www.membershipeconomy.com) is available from major online booksellers.
The post Customer Success: The Secret Ingredient for Engagement appeared first on Home Business Magazine.