Customer Success: Part 1
The Evolution of Customer Success in Organizations
Written by Suraj Pandalai, Head of Customer Success at Aion Digital
Before the advent of Customer Success (CS), on-premise software was the norm, it was general practice to lock customers into long-term contracts, and because of this, customer service wasn’t always a priority. Once a customer signed their contract, where were they going to go? Although on-premise software still exists, in recent years digital transformation marked a significant shift from on-premise to subscription-based software solutions. Every day, new Software-as-a-Service (SaaS) solutions were added to the market so much so that supply began to outweigh demand. We had entered an age of the customer — annual and monthly contracts made it easier to churn and the customer had a bevy of options to choose from. In the new business ecosystems, there was no choice but to continuously deliver value or customers would end their contract and take their money elsewhere. Thus, began the practice of Customer Success.
From Start-Up, to Scale-Up, to Enterprise, and Beyond
Client Success teams were created to own the customer from point of inception (sometimes pre-close) all the way through the entire lifecycle of the customer. When you think about customer success, the simplest possible unit you can reduce it to is one customer, one vendor, one product, one relationship. It’s almost like a single-celled organism. But as that organism evolves in complexity and sophistication, the people, process, and technology required to keep it optimized evolves in tandem. And likewise, since the advent of customer success, the strategies and tactics companies use have evolved as well.
Typically, the roots of Customer Success lie in a recurring-revenue business where the Customer Success teams emphasizes the proactive delivery of outcomes and an excellent customer experience. That said, in the recent past well-established, on-premise companies with legacy solutions, and even non-tech or non-subscription businesses, are starting to see the money-saving and revenue-driving effects of CS. While a company may have sophisticated customer-facing organizations like Support, Professional Services, and Account Management, it doesn’t necessarily mean they’re carrying out Customer Success. Customer Success is not the job of one person or department, it’s a company-wide initiative and in order to deliver value, you’ll need cross-functional processes tied to widely distributed data that follow the customer journey end-to-end.
As organizations seek to transition from a start-up, to scale-up, to enterprise, and beyond they will need to progress across each of the operational maturity stages (fig.1) to establish credible growth. A strong Customer Success lead approach will enable them to achieve this by focusing on four key drivers:
· Improved customer retention
· Rapid expansion
· Increased advocacy
· Along with improved efficiency across our teams
The success of CS depends on an aspiration driven by individuals who whole-heartedly believe that customers matter — it is these individuals collectively who give organizations their competitive edge.
Source: Gainsight, Forbes, Air B&B, Salesforce, WNDYR, HBR.org