Customer Success Management – Defining and Exploring Best Practices

A definition of “customer success management” (CSM) is needed before offering tips on its implementation. Fundamentally it’s a deliberate strategy for maximizing the value of customers in a sustainable and long-term manner. The “deliberate” part is important because it means a company has to actively manage their business-customer relationships. They must consider these relationships as actual assets that must be nurtured and allowed to grow. How is CSM different than customer service? It’s proactive, not reactive. The business is taking steps to improve the customer’s journey, not just providing fixes to problems or answering inquiries. The people running CSM programs understand the role requires a mindset shift away from the company’s success to the customer (with the company of course gaining in the long run.)

SaaS Models and Customer Success

Within the software world, the need for a focus on CSM rose in step with SaaS solutions. Legacy software programs required clients to buy a huge number of seats and then embark on a lengthy on-premise installation process. This required sizeable capital investment and essentially caused “lock-in” for many firms that couldn’t afford to get rid of an underperforming solution. With SaaS, companies could instead use a solution for a year, and then easily move to another vendor if it didn’t work out. And the pace of innovation and change means a year is an eternity in terms of the development of new features, so a new player that comes out might have the coolest new features and cleanest UI. It’s a completely new industry, where consumers have the freedom of choice and will drop you quickly if you underperform.

CSM in the software context is about making sure every customer gets the max value from their engagement with the company. Once they see this value equation then they’re more willing to renew contracts, expand their service package, and ignore the inroads from the competition. You also have to develop an understanding of how and when your customers use your solution. This knowledge will inform all of your CSM-related decisions because everything should relate to the customer’s actual experience and desires.

A Broad Strategy with Definable Action Items

The actual “nuts and bolts” of giving customers maximum value involves a multi-faceted approach involving several teams. It’s important to remember customer success management is an intentionally broad undertaking, as many internal teams and decisions can influence the outcomes. However, the process is quite granular and requires the company to focus on several areas. For example, each of the following would be considered part of the strategy:

  • Development work for the software that makes it simpler to use
  • Sales people that listen intently to the customer’s needs and then propose solutions that best match those needs
  • Teams stay in touch with customers proactively and on a schedule, not only during problem resolution
  • Gently and slowly encouraging customers to become power users because it’s the right choice for them
  • Hire the right team members who are onboard with the culture necessary for CSM programs. They need to be resilient, adaptable, and empathetic to the customer’s needs
  • Tackle churn by performing exit interviews and acting quickly on suggestions for improvement.

There are dozens of examples of customer success management at work, but even these five bullets illustrate the breadth of best practices. And they all underscore the definition of CSM that involves ensuring each customer receives maximum value for their investment.

Best Practices for Long-Term CSM Wins

Engaging in CSM is a “long game” approach. It’s not a limited-time discount or simply a software update, but an entire ethos focused on satisfied customers. Here are some good best practices for CSM that will set you up for long-term customers that are engaged and devoted to your solution:

  • Improve the value of your onboarding. Customers love to use solutions right out of the gate. Help them along by performing a thorough review of your onboarding process. Invest some resources if needed because it’s a great long-term play. You’ll reduce churn and improve satisfaction scores.
  • Use measurement tools to gauge how the customer is doing and how your company is doing. Look at the customer’s health scores that show a multitude of characteristics including; frequency of support calls, bill payment history, participation in marketing, and community engagement.
  • Provide guidance to the customers on what they need to do with your solution to reach their stated goals.
  • Encourage, collect, and respond personally to customer feedback. You might think you know what the customers want, but they’re certain. Listen intently to feedback to improve all facets of the customer journey. And you can be selective in this process by weighting and actively seeking the feedback of ideal customers that represent the business’ future.
  • Gently push customers to engage with other users in a community and to participate in case studies and speaking opportunities. Present these efforts as a way for them to improve their company’s exposure and to boost their personal brand.

Satisfied Customers Pay Off

It’s a straightforward proposition that satisfied customers are more valuable. This isn’t groundbreaking news, but it deserves consideration and appreciation. Satisfied customers renew more frequently, are willing to accept long-term contracts, and will consider expansion. A happy customer might be willing to offer case study input or speak at your event and become a brand advocate that refers new customers. Developing a multitude of such customers takes time and is essentially about making sure their desired outcomes are easily achievable with your software.

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