“Customer success” is a phrase we’re hearing more frequently in the services industry. In fact, if you type these words into a LinkedIn search, you receive over 100,000 results; an amazing number of jobs available for a concept that didn’t exist just a few years ago.
But what does customer success mean? Some companies feel that they’ve been promoting customer success for years, and that caring for and serving customers is all that’s needed to keep them happy. While products and support remain a large part of the equation, there is a dramatic shift occurring in the technology industry where companies must quickly transform themselves into becoming a customer success organization in order to remain successful.
What is Customer Success?
The reality of this change in the industry is unavoidable: in order to succeed, companies must not only offer products and services, but also focus on customer success. The industry is no longer about fixing a broken product, installation and configuration, or training options; it’s about what outcome the customer hopes to achieve with your products and services, and how you as a company will help them meet their goal. If the customer uses your product or service to improve their bottom line and receive measurable results, you’ve created value to that customer that goes beyond what you manufacture or offer. The value becomes the outcome you provide.
By making your products and services valuable to the customer as a means for them to achieve their goal, they will return time and again for the same measurable results. The customer’s success, in turn, drives the supplier’s success.
Where Do Products and Services Fit into Customer Success?
By no means does the advent of customer success minimize the traditional services the technology industry has to offer. The industry has changed to the point where we can no longer rest on our laurels. While customer retention used to rely on how fast we can resolve a technical issue or install a product, customer satisfaction is no longer an indicator of customer churn or loyalty.
We now need to utilize a different set of measurements driven by an understanding of how our customers use our products, the amount of time they spend interacting with them, the features they are using, and the number of transactions they process. As Thomas Lah, executive director of TSIA, states, “customers will not abandon technology they are using on a daily basis.”
Measuring Customer Success
Never before have customer adoption and consumption metrics been so important to the health of technology companies, and collecting this usage data is a critical step in transforming into a customer success organization. At TSIA, we talk to our members frequently about developing adoption models, which are defined as “data-driven frameworks that are used to determine where a customer is on their adoption journey.” Does your organization have adoption frameworks? Do you know how and when a customer is truly interacting with your product?
Last month, TSIA released our first member survey about customer success, where we asked how companies are currently measuring customer success and adoption of their technology. Here are 6 questions we asked our members, which you can use as a checklist to see where your company is on the road to becoming a customer success organization:
6 Questions To Ask About Your Organization to Help You Improve Customer Success
- How are customer success budgets allocated across staff vs. other expenses?
- What are best-in-class renewal rates that customer success organizations are achieving?
- How leveraged are customer success compensation models?
- What is the typical ratio of customer success manager to customer accounts?
- How do companies determine which accounts receive customer success coverage?
- Have customer success organizations established documented adoption frameworks to use in assessing customers?
Based on the answers we received in this survey, we learned that less than 50 percent of respondents have a defined adoption framework that allows their company to assess how well specific customers are adopting their technology. Furthermore, just over half of the respondents report the ability to remotely monitor actual customer usage and activity. We can already see that as an industry, we are still in the early stages of adoption and understanding what customer success means, as well as discovering how to make this transition in order to become more valuable to our customers.
TSIA members will have access to the full report of these survey results, as well as an in-depth analysis during our fall conference, TSW Service Transformations, which runs October 20-22 in Las Vegas. Registration for TSW is still open, and attendees will have access to insightful sessions that cover current and future trends in the industry, including my "The Key Capabilities of Customer Success" Power Hour.
No matter where you are on your customer success journey, TSIA can help. Please email me with any questions or comments. I’d love to hear your unique stories about how your organization has created a model for success for your customer and your company.
About the Author
Judith Platz is vice president of research, Support Services, for TSIA. During her over 25 years of customer support experience, she has been responsible for supervising and coordinating multiple functional, strategic, organizational development and technical work streams, including technical support, account management, business consulting, implementation management, and training. Judith can be contacted at firstname.lastname@example.org.