I have to admit, I was a little sceptical of the trend sweeping the parts of the IT world by storm—“Customer Success Management”—but as I learn more about it, I’ve realised that it’s rooted in strong foundations that I now agree are vital to the success of B2B SaaS companies.
Kate Leggett at Forrester sums up a nice definition: Customer Success Management (CSM) is all about actively managing the customer’s experience to ensure they are maximizing the economic value out of your product or service. She also mentions three goals CSMs are trying to achieve: 1) reduce churn, 2) increase revenue from existing customers through up-sell and cross-sell and 3) influence new sales*.
The theory for CSM in SaaS B2B vendors is that since more and more of them deliver their solution via the cloud under subscription based models, the barriers to churn are much lower so there is an increasing emphasis on improving the customer experience in order to keep the customer renewing their subscriptions on a monthly basis.
But does Customer Success Management have to be limited to B2B SaaS companies or is there potential application across the larger IT industry or even beyond?
My view is that it can be transferred to other parts of the IT industry. In fact, I’m in the process of what I like to call “hybridizing” the cloud services/SaaS model into my IT distribution company. Previously my management team and I were measuring our success based on internal metrics. How many boxes are we shipping? How fast are our delivery times? How many times are our products and services getting renewed? And so forth…
I have since realised though that perhaps these aren’t the right questions to ask. Perhaps the right questions are: how are these products and services being received not only by my customers (resellers) but also by their customers – the end users? Which products and services are gaining the most traction and why? How we can help our resellers take more of the spend from their customers? By reframing the questions around our customer’s metrics rather than our internal metrics, we are starting to change how we view success. Success should be in the eyes of our customers not necessarily ourselves.
As a result of reframing these goals, the way my teams are interacting with customers is also changing and they have already identified some knowledge and service gaps that we can quite easily fill. We are now expanding our service offerings to incorporate these gaps, for example additional professional services or brokerage. Identifying these gaps and enhancing your offering makes it more compelling for your customers to stay with you. Returning to the goals of CSM – this hits nicely on all three: reduce churn, increase revenue through cross-sell and upsell and influence new sales.
So in summary, it’s definitely possible for CSM to be applied beyond B2B SaaS, but it requires you to reframe how you operate based on what success means to your customer’s organization more so than what it means to your organization. Although, the term Customer Success Management might be new, the concept of providing excellent customer service and growing your business profitably are not.