It is excellent to acquire new customers. It is much better to keep the customers you already have. The SaaS model has made retention a critical tool for long-term growth and high valuation. Small gains can be made through incremental improvements. According to one source, increasing customer retention by 5% can boost your revenue by 95%.
It also requires a different approach. Customer loyalty is not a result of one interaction. It reflects the entire experience they have had with your company. A customer success strategy is essential to tap retention as a growth channel. It elevates customer success teams and places customers at the center of everything you do.
Customer success has many benefits. It can increase customer value, net revenue retention (NRR), and product-led growth.
Customer success increases customer value.
Understanding your customers’ goals is key to increasing the value of your product. To better understand customers’ business goals, customer success teams should work closely with them. They will then be able to identify customers and create a customer journey that meets those needs. They must monitor their customers’ progress and intervene if they get stuck or fall behind.
If a customer is proficient in a solution, it may indicate a potential opportunity for upselling. Your teams can then present expansion offers based on the customer’s actual value. The customer success team uses consultative touchpoints to monitor and increase customer adoption throughout the customer’s lifecycle. These touchpoints are usually associated with milestones like renewal and onboarding. Effective teams create touchpoints based on product usage and behavior (e.g., time spent or completed activities), but they also consider customer behavior. Your team will be able to provide guidance that maximizes customer value and reduces churn.
Technology and data are essential.
Data is the foundation of customer success strategies that provide customers with the most significant value. Data is key to improving the customer experience. This can be partially automated as your business grows. SaaS companies that are forward-thinking and innovative are:
- Segmenting their customer base to provide prescriptive and apt advice.
- Creating customer-centric onboarding and in-app product walkthroughs to accelerate time to value.
- Customer outreach to increase engagement is triggered based on product usage data.
- To create health scores that monitor early signs of discontent, expansion, or advocacy and automate action plans based upon those scores.
You can reach customers wherever they are with a digital-driven customer experience. Intelligent Automation triggered by insights allows you to do more with less.
Customer Success Increases Net Revenue Retention (NRR).
SaaS companies work on subscription terms. It pays to have a team focused on expanding and maintaining accounts. Although it took some time for this idea to become mainstream, it is still the driving force behind high-performing SaaS companies.
This was previously the responsibility of sales or account managers. Companies realized that a sales representative who comes to a customer’s house to sell more creates a transactional, one-sided dynamic, leading to a poor relationship. You can make money conversations more real by giving your customer success team partial or complete ownership. They are the ones that ultimately drive value.
Customer success teams can also operationalize revenue streams to increase their NRR. Automating renewal tasks, communications, and customer service managers (CSMs), creates a personal experience that is both high-touch and frees them to concentrate on strategic initiatives and high-risk accounts. CSMs can use their health scores to predict churn and growth, which helps them prioritize outreach. Communication trends can be identified by creating playbooks shared across all business books. Automation enables you to provide consistent and intuitive services that turn customers into your most incredible supporters and source for growth, like the previous point about delivering value through information.
Customer Success Leads to Product-Led Growth
Many product-led growth strategies offer customers a free trial or product to help them attract, retain, and grow customers. They can increase your product’s use and expand your buyer base. The downside is that anyone can signup, regardless of product fit or intent to purchase. However, I believe that product positioning helps users self-select.
Although you can eliminate human-led sales and customer onboarding, product-led development still requires human-led refinement. This role can be fulfilled by customer success. Customer success involves identifying high-value prospects among the large pool of trial users, nurturing them to a subscription, and encouraging their expansion.
Product-led growth is tech-touch-based. It relies on customer segmentation and journeys to help guide the user experience. However, high-value customers will still require human contact at crucial lifecycle points. High-value customers can be engaged by customer success teams to identify their needs and goals beyond the information captured on a signup form. They can track customer journeys and ensure product adoption by mapping them. Models that rely on monthly subscriptions are especially vulnerable to impulse cancelations. Analyzing product usage data can help you determine the expansion readiness of high-value customers and the best time to connect.
All Customers Can Be Successful – Embed Customer Success
SaaS companies need to retain and grow customers to succeed. Customer value must be your top priority. Customer success is the responsibility of everyone. However, it cannot be abstracted. It must be tangible and easily accessible. Start putting customer satisfaction at the core of your business from the CEO, and you’ll be happy with the return on your investment.
