APRIL 8, 2020 BY ANNA TALERICO
Customer success in SaaS is fast becoming the first line of attack to boost conversions, raise customer happiness, and reduce churn. Every day, a strong customer success strategy is becoming more and more essential for SaaS companies.
So what exactly is customer success, how does it work, and are you “doing it right”? Don’t worry, we’ll explain it in this article.
Customer success isn’t complicated. In fact, it’s one of the simplest concepts in the SaaS world. In the words of SaaS customer success expert Lincoln Murphy:
“Customer success is simply ensuring that your customers achieve their Desired Outcome through their interactions with your company. That’s it.”
Lincoln Murphy
Customer success has some overlap with customer support. The key difference is that customer support is reactive, while customer success is proactive. Customer success doesn’t wait for problems to arise before fixing them. It anticipates potential issues and cuts them off before they become actual issues.
Customer success in SaaS is all about things like:
How important is customer success in SaaS? At the 2015 Gainsight Pulse conference, Jason Lemkin laid it out: “Customer success is where 90% of the revenue is.”
Let that sink in, and extrapolate the impact to your business.
“Customer success is where 90% of the revenue is.”
Jason Lemkin
These days, companies of every type are employing customer success strategies. But ultimately, customer success is rooted in the world of SaaS. That’s because the SaaS business model requires continuing customer satisfaction. Previously, software companies—like many current non-tech companies—could simply sell a product and make a profit. After that, there isn’t too much need to stay in touch with the customer unless they had a real problem and reached out to the company for help.
But times have changed. Now, SaaS companies have to keep customers happy to make a profit. Instead of selling a piece of software for a lump sum, you might sell a subscription to an app for a monthly fee. That means customers have to keep getting value out of your software in order to maintain their subscription. If your customers succeed with your product, they’ll keep using it, and your business will profit.
In short, you need customer success.
Of course, the key to promoting customer success is data, which is another reason for the prevalence of customer success in SaaS. It’s generally easier for SaaS companies to monitor the usage of their products’ usage over time. If someone buys car tires, for example, the seller won’t know exactly when the buyer put them on their car, how much they drive with it, or how happy they are with the performance.
SaaS companies, on the other hand, get much deeper insights into how and when their products are being used. They know when problems arise. This gives them an easier pathway into a proactive customer success strategy. Sure, other companies are getting creative about keeping tabs on how customers use their products or services—but SaaS still leads the pack.
Many of the most successful companies treat customer success as important. HubSpot claims that growing companies are 21% more likely than floundering companies to describe customer success as “very important.”
But even if you know that customer success in SaaS companies is important, that doesn’t mean you’ll know how to actually do it. So how do you get started with customer success?
That depends on the unique details of your company. What works for you will look very different from what works for other SaaS businesses. In fact, it might look very different from what works for some of your closest competitors.
That said, there are general principles that must be in play. Here are some tips to put you on the right track:
How can you “get there” if you don’t know where you’re going? A concrete customer success strategy will make it possible for your team to proactively solve your users’ problems and make customers happy. But remember: every SaaS company is unique. Make sure you understand what your customers want and customize your customer success strategy for them.
Brainstorm the questions users might ask about your product or service before they get around to actually asking. You don’t want your users rolling their eyes at the elevator music wafting from their phones while on hold with a crowded customer support line. Instead, make sure they have the info they need before they even think about reaching for the phone.
Your new users will be on shaky legs during their first steps with your product. There’s always a learning curve. Make it easy for them to understand how to get the most out of what you offer. Onboarding customers is a golden opportunity to show off your user-friendly approach and earn trust. (And it helps keep them away from those customer support lines, too.)
Foster healthy communication among the various departments of your company. For example:
A house divided cannot stand. Keep everyone on the same page.
Customer success feeds customer loyalty. Your customers should always feel like they’re getting the most bang for their buck—and that you care. Don’t slack on this front: consistently brainstorm new strategies to make sure they know that you value them.
Your SaaS company is unique. Your customers have unique preferences and needs. They have unique definitions of success. Customer success will look different for them than it would for a different customer segment.
But whatever your customer success looks like for your users, keep an open mind, listen to them, and you’ll find the right path for your company.
Oracle says it well: “Our customers’ success is our success.” Armed with that mindset, you’ll be well on your way to ever-greater heights of customer success in SaaS.
Your users (and your customer retention rate) will thank you for it.
