So much of our attention as business owners goes to things like cash flow, team issues, broken equipment, technology, process failures, on and on…, that it’s easy to lose sight of growing your business with customers.
We’ve been focusing on sales as your path to profit. Of course it’s an essential activity, and essential to be really good at. But your revenue per customer, a key metric for any business, is based on NEW customers and CURRENT customers, in other words, customer retention.
Customer Success is the new customer retention
These days, your profit growth from customers is probably falling behind if you view customer service as a handful of the following activities:
- A customer support person or department
- A help desk
- Account managers
- Hand-holding your big customers
- Customer “check-ins,” focus groups, or satisfaction surveys
- Customer delight or satisfaction mottos, posters, and scripts
Additionally, going after any and all customers by any and all means is considered an ineffective strategy in this age we’re in of closely orchestrating the customer’s journey.
The latest movement to grow profit through customer retention has been dubbed “Customer Success.”
Customer Success defined
Customer Success is when your customers achieve their desired outcome through their interactions with your company. You want to define what success means to your customer and then focus all of your company’s interactions with the customer on that, from marketing to onboarding, through the customer’s entire lifecycle and after (if there is an after).
The recurring revenue portion of our business is the largest and most important, but frequently does not receive the resources necessary to maintain and grow it.
If Customer Success is a growth-driver, and it is, how do you operationalize it?
After scouring the latest thinking, we liked a book called “Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue” by Dan Steinman, Lincoln Murphy, and Nick Mehta. Here are their key points, morphed for small business with our ideas for practical ways to implement them.
- Make it everybody’s goal, not just the customer service department’s. Help every employee define how they contribute to your customers’ success.
- Go after only the “right” customers—your “A” customers, the more profitable ones that buy into your values. If a customer’s not a good fit, they probably won’t contribute to your success. They’ll likely be problematic, take up lots of resources, and churn out quickly.
- Make customizations and exceptions only for the most profitable customers. If you do whatever it takes to please every customer but you do so to the detriment of your company, this’s not Customer Success. If you aren’t a viable, profitable business, your customer loses just like you.
- To insure the customer’s success, offer a variety of ways they can pay so that they can pay via their preferred method.
- Insure a flawless customer experience early in the customer life cycle. A key Customer Success metric is Time to First Value (TTFV), the time it takes from the initial sale to the moment the customer gets actual value. The seeds of churn are planted early. You either engage them here or lose them. You want smooth handoffs from sales to support and you want the TTFV to be a short as possible.
- Don’t wait for the customer to stumble or feel anxious about how to use your product. Instead, of leaving the customer to seek out answers, identify where and when they’re apt to get to that point, and develop proactive support mechanisms. These could be scripts for customer service, written instructions with the purchase, tutorials, and followup calls.
- Monitor customer activities so you know if you need to connect with them. Watch for things like a decrease in usage, late payment, or checking out a competitor. Put procedures in place so that all customer feedback gets shared throughout the whole organization.
- Social proof is powerful. There’s no stronger marketing message than when prospects see others succeeding with your product. Ask your customers to review you online, put their testimonials, including video, on your website and in marketing materials, or celebrate their successes in your newsletter.
- For every customer that churns out, find out why they left and attach that information to their record. Track the churn reasons and use that data to adjust as needed.
On Thursday, Mar. 21, join other business owners as we discuss Customer Success in more depth. We’ll also guide you step by step so that by the end of a day, you’ll have a strategic plan that you can implement that day. It’s a chance to step back, get perspective, define your strategy, and develop a specific and focused plan to guide your business.
Register for the Growth Plan Business Planning Workshop here.
Thur., Mar. 21, 2019, 9 – 3 pm
Hilton Garden Inn Indianapolis Airport, 8910 Hatfield Dr., Indianapolis 46231
You’ll walk away with:
- A clear picture of where you want your business to be in 10-30 years, a 3-5 year plan, a 90-day plan, & monthly goals broken into weekly actions
- Your 12-month goals broken into bite-size quarterly goals, monthly milestones, & weekly actions
Strategies to build your profits through Customer Success
P.S. If you want to focus on shoring up your sales, check out our Sales Growth Plan Workshop here.