Customers Are Forever In New Strategic Approach

Here’s a term you may not have heard yet: customer success (CS). What is it? It might be easier to define it by what firms are not doing rather than what they are doing. 

For example, only 14.8% report that their CS focus is comprehensive, geared to the entire lifecycle of the customer, according to How Impediments & Under Organization Lead To Limitations In Customer Success, a study from Strikedeck, the provider of a customer success platform, with research done by Service Excellence Research Group.

The remainder focus on fragmented efforts, seeking only to retain customers and minimize the number of service or support requests, the study says. 

One tactical problem is that 41.5% provide no formal onboarding services. Of those that do, 66.7% seek to ensure only that the customer can access the product or service. Only 47.3% assist with product set-up or configuration. 

Transactional email programs play a great role in onboarding, a factor this study does not address. Failure to deploy email when bringing new customers onboard drastically reduces the ability to upsell, cross-sell and generally drive loyalty. 

Another challenge is a lack of systems and tools. Of the firms surveyed, 30.3% have limited tools for logging cases or capturing customer contact information (presumably including the email address, increasingly becoming the key identifier and the door to all future interactions). 

Then there is the more fundamental issue of faulty organizational structures.

Only 12% have so-called CS departments. Of those, however, 81.8% say it’s just a renaming of their service unit. And a mere 18.2% say CS is independent from service or support.

What’s more, of these respondents, 88% report being part of larger departments, including 58% in the service group, 29.3% in sales and 12.2% in technical support.

But let’s say you’ve established a stand-alone CS department and are committed to serving customers and garnering revenue from them across their entire lifecycle.

Here are the possible KPIs you could be using: 

  • The Net Promoter Score — Yes, the old NPS, the metric created by Bain’s Fred Reichheld. This is based on a single question: Would customers be likely to recommend the company to their friends? This is used by 85.3%, but real-time comments from customers may be more meaningful at this stage, the study claims. One thing is for sure: Once the NPS has dipped, it’s hard to restore it.
  • Annual recurring revenue, or monthly recurring revenue — One or the other or both are used by 55.8% of the respondents. The challenge for brands is to spot customer experience problems before the numbers plummet.
  • Retention/churn — This is used by 52.6%, but it too is dicey because of the lag-time issue, the study claims.
  • Revenue growth — This is dependent on factors such as sales execution and competitive issues, and may not be reliable. Still, it is used by 46.3%.

From the sound of it, the concept might change before most firms are fully using CS. 

Want to get ahead of the curve with CS? Strikedeck has these recommendations: 

  • Reduce churn to a specific percentage or number
  • Emphasize a “Right Start” approach to onboarding, meaning that the customer needs and goals are fully met.
  • Identify upselling opportunities and expand revenue through broader usage/access. Establish a quantifiable goal.
  • Reduce the load on support/service unit by proactively training customers.
  • Help customers achieve greater product proficiency so that they derive greater value; this will improve “stickiness.”
  • Provide experiences that boost positive word-of-mouth.
  • Gain insights into how customers interact with a product or service.

The study is based on a survey of 308 companies and follow-up interviews with some of these.

1 comment about "Customers Are Forever In New Strategic Approach".
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  1. James Smith from J. R. Smith Group, August 30, 2019 at 6:01 a.m.

    While the project noted isolates some common problems and very typical metrics, this all seems like a product or brand centric approach, cloaked as customer success focus.  Perhaps a link to the orignal study would help to more fully assess the value.

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