Recently I wrote about how everyone in an organization, in some way, owns customer satisfaction. Even if you never interact with a customer directly, the work you do impacts them in some way.
The article was written around the premise of formalizing customer success. You know, a person or department dedicated solely to ensuring customers are happy and sticking around.
"But I've got good customer service; why do I need a formal customer success team?"
It's usually the first question I get when talking to people about Customer Success. To most companies, there are some procedures in place for ensuring customer happiness and retention.
The question is valid. Having a customer service department and account managers to respond to customer issues has been the status quo for decades.
Most companies get by well enough simply putting out customer fires when they arise and answering questions when they can.
But, then again, why is customer loyalty in such a dismal state? Why do trillions of dollars change hands every year due to brand hopping?
Something is missing, and the answer is a formal, proactive effort to ensure customer success.
So how can you know if it's time to get serious about customer success and put some dedicated resources to it?
Churn is obviously a sign that something isn't right with your offering. A large percentage of the population will switch brands just for the heck of it, and most people will bail after a poor customer service experience.
Churn is natural and unavoidable. Most companies will only take notice when a major customer churns. The good news is if you can fix the issues facing those major customers, you'll probably help a lot of smaller customers as well.
But churn is usually just a symptom or a larger issue, or even a series of them.
Speaking of…
And this is where it gets sticky. Do you know why customers are churning?
Are they using the product the right way? Are they not getting it?
Is customer service rude to them? Why? And why are they calling customer service in the first place?
The first step to fixing customer issues is to know what they are. Not just making educated guesses, but having data and real feedback on what's causing churn.
Surprisingly, most companies only know that they're losing customers, and have no clue why.
A Customer Success effort will be able to perform autopsies, so to speak, to get to the root of why customers leave. They'll be the ones to examine the data, speak to the customer, and find the weaknesses that are leading to churn.
My last article mentioned that everyone in an organization is responsible for customer success. Every employee, in some small way, impacts the eventual customer experience.
And yet, not everyone can be held accountable for churn. The buck has to stop somewhere, and a Customer Success professional should be that person.
It isn't just about taking the blame, however. Responsibility also means being able to make strong decisions without having to run everything up a chain of command.
If you find your customers being left solely in the hands of customer service, or account managers, then you really don't have an empowered presence accountable for customer success.
Which brings me to the next sign…
I'll dive more into this topic later, but there needs to be a clear delineation of roles.
In most organizations, customer success is falling back on a call center, or even an AI bot on a website.
In some, customers simply deal with the sales person who signed them up. In others, there may be an account manager.
The problem with these is they're designed to be reactive. Customer service puts out fires, while account managers are beholden to meeting deliverables and SLAs. Both are incredibly valuable, but they’re simply not in a position to put in the time or effort to proactively maximize customer success.
In the case of sales, most of them aren't motivated to work on customer success. Their income is dependent upon closing deals. Sure, they'll love the recurring commissions on customers that renew, but they don't have the time or the inclination to focus on proactively helping customers meet each of their goals.
Which brings me to the final, and maybe most important sign you need a formal Customer Success effort…
The best bet to retain them is to prevent that cancellation call from ever happening. You've got to stop being reactive and start solving problems before they arise.
Think of it this way. Customer Success holds a metaphorical crystal ball. They can see in the future where customer issues are going to arise. Then, they can head those off before they ever come to pass.
They're the ones who know that a customer who hasn't logged in for two weeks is more likely to churn.
The customer who hasn't completed their online profile? Goner.
The customer who didn't sign up for the loyalty program? They're not going to stick around.
Customer Success can see the future before it happens, and proactively put procedures in place to prevent bad events from ever occurring.
For many executives, adding more payroll for something that doesn't have a straight dollar-for-dollar ROI is out of the question. And that's going to be the initial reaction many executives have when faced with formalizing Customer Success.
But that's a mindset that has to change.
Nothing generates ROI like an engaged, loyal customer. They spend more, more often, refer their friends, and overall cost less to maintain - even with a Customer Success department supporting them, not to mention customer service, account managers, sales reps, and every other role in an organization.
Some organizations are content to write churn off, replacing old business with new business.
But what if those organizations could add new business on top of old business and keep them all?
A true Customer Success effort can make that happen.