Customer Success is more than a buzzword – it’s a proactive strategy with many components that work together to create the optimal customer journey experience. Customer Success is all about understanding your customer’s goals, creating a smooth onboarding & adoption process, deciding the right outreach cadence, and meeting target KPI’s that consistently drive greater ROI. Master these and you’ll be well on your way to creating customers for life. But does your organization have the team, structure, processes, and resources needed to do this effectively? If not, outsourcing may be a great option.
In this blog, we’ll discuss the 6 key benefits of outsourcing customer success, and how it can help you achieve your revenue goals.
1. Better Understand Your Current Metrics and Goals
Most businesses only look at all-in renewal rates or total dollars YoY (year-over-year) to gauge the effectiveness of their customer success efforts. This approach only measures total value. It isn’t granular enough to really understand what specifically is (or is not) working in your program to help you drive better outcomes.
By breaking down your metrics into incremental parts, customer success teams can understand your value plus volume, instead of simply measuring the value of each account.
Some of the basic metrics that should be tracked:
- Customer Usage – including logins, feature usage, consumption
- Customer Support – number of support tickets, and resolution timelines
- CSAT (Customer Satisfaction) – Survey results, NPS scores
- Risk Level – Risk reason (tech or human determined)
Tracking Success for Customer Onboarding
It is critical to understand why customers bought the product/service and what’s considered “value” to them. It’s equally important that the customer also understands why they’re buying your product/services, and what they expect out of it.
Milestones are set based on these determined “value points” generated during the first 30 days and three, six, and 12 months out. The right KPIs (key performance indicators) are then applied to track the initiatives to give you a granular understanding of every aspect of customer success.
During the onboarding process, a customer success rep should be very hands-on with the customer. Some key onboarding and adoption metrics that should be measured include:
- Onboarding completion % (30 / 60 days)
- % of users activated
- Average days – first login (1 user/all users)
- Usage % based on use case
- Feature usage %
By evaluating what you’re currently measuring, how you’re communicating throughout your entire organization, and determining the specific goals to achieve for each engagement, you’ll be able to properly expose any inefficiency in the process – quicker.
2. Know the ROI For Your Customer Success Team – Achieve it Faster
ROI is paramount for any customer success program, especially when these initiatives are outsourced. It helps you understand your gain based on the total spend you’re investing into a customer success program.
There are many ways to measure your return based on specific goals, for instance:
- Revenue (e.g., an incremental increase in revenue by $X)
- Customer Lifetime Value (average revenue a customer would generate throughout its business lifetime. Multiply CLV with the number of customers you have to get your total revenue forecast)
- Customer Growth (e.g., improvement in renewal rates by Y% vs. minimized churn rates by Z%)
- Business Expansion of the overall customer base
- Brand Advocacy (measure with a simple NPS survey)
Because everyone measures ROI differently, it’s paramount to determine what you consider value upfront. A reputable outsourcing firm will operate by a pay-per-performance approach. This ensures that we consistently track and measure performance to ensure you are achieving your ROI as quickly and efficiently as possible.
3. Grow Your Long-Tail Customers More Effectively
Managing and improving customer retention should be across the board, not just for your high-dollar-value customers. Chances are, you have many smaller, long tail accounts that may have the potential to grow exponentially if your in-house team had more bandwidth to cover them (we call this, “collecting the golden dust”). It may not make sense to allocate your in-house resources, time, and money needed to properly address and nurture smaller accounts into their full potential. This is where outsourcing can help. Dedicating a customer success team to cover your long tail will ensure that you are capitalizing on every opportunity and growing every customer, not just your high-dollar customers.
4. Enable More Consistent Communication to Improve Customer Loyalty
Communicating with customers outside of the renewal cycle is key to demonstrating value and ensuring continued satisfaction. If you reach out to customers only when you’re trying to sell something, they are less likely to buy. On the other hand, if you check-in with them every quarter, ask open questions, and make sure they get the most value from your products, you are in a good place to drive more revenue when it comes time to discuss contract renewal.
5. Maximize Wallet Share Throughout the Customer Lifecycle
Current customers have been using your products and trust your brand. The renewal conversation should not be the first time you learn more about your customer’s needs and explore cross-sell and upsell opportunities.
Having consistent health checks and proactive conversations every quarter with a customer is key to capitalizing on cross-sell and upsell opportunities when it’s time to renew.
6. Generate Insights from Complex Data
One of the biggest hurdles that many organizations come across is the lack of technology and insights needed to get a complete view of their business and pipeline. This lack of tech and cohesive communication also makes it difficult to make informed decisions that define policies and processes.
Some companies may already have tools in place, like Salesforce or Gainsight, to gather their customer’s data, but a vast majority of businesses we have seen have very basic customer data to approach and improve issues, like churn.
Let’s look at two scenarios where a customer success manager (CSM) is having a conversation with a customer to assess churn risk, given the amount of data they have in front of them:
A CSM has a conversation with a customer. Before the conversation, the CSM has two key data points to frame the conversation, those data points are:
- Original contract
- Usage data
In this scenario, with these data points, the CSM is approaching the conversation by looking through a keyhole. They are approaching the conversation with more questions for the customer than answers. They do not understand customer sentiment, whether they are achieving the outcomes they hoped to achieve.
A customer success manager has a conversation with a customer. Before the conversation, the CSM has gathered four key data points to assess the churn risk of a customer, those data points are:
- Lifetime transaction data: Tracking if a customer has expanded usage of the product already.
- Case entries: If the customer has any technical problems with the product, and how quickly the issue was remedied.
- Usage data: Tracking any increase or decrease in usage.
- Customer survey tools: Tracking customer sentiment on if they are achieving the outcomes they desire.
In this scenario, the CSM has all the data necessary to address all the concerns of the customer and approach them as a consultant with a more holistic conversation. The CSM can put the customer at ease, as opposed to raise more questions.
The key is to approach the customer as a consultant. To proactively address where customers might churn versus raising more questions for the customer.
So again, why consider outsourcing?
When you outsource customer success, you place a focus on creating a customer-centric business model that nurtures your relationships and creates clients for life. Outsourcing not only increases ROI and minimizes customer acquisition cost (CAC), but it also saves time and helps uncover useful insights needed to make more informed decisions.
Don’t know where to start? We can help.
ServiceSource has the tools, best practices, processes, and people to cover the entire customer base and treat each customer as if they’re the only customer you have. We have over 20 years of proven success with leading global organizations in the SaaS, hardware/software, industrial manufacturing, access management, and cloud computing industries.
Schedule a time to see how ServiceSource can help you build stronger customer relationships, minimize churn and achieve your customer success goals.