What’s the main obstacle preventing your business from fulfilling its maximum growth potential? From generating a few million dollars in revenue every year to hundreds of millions? Sure, your products might be some of the best on the market today. But can you say the same for your customer relationships?
The emergence of the digital economy has changed the game, leaving businesses scrambling in its wake. Customers now realize that if they aren’t served the outcomes they expect and need, they can jump ship for a competitor much faster and easier than before. To avoid this, you need to expand your customer success efforts to the middle market – not just the enterprise – in order to maintain growth and profitability well into the future. It’s common knowledge that it’s more costly to acquire a new customer than to increase business with an existing customer. If your customers continue to churn, you’re unnecessarily stunting your organization’s growth and damaging your long-term prospects.
Renewing Your Customer Promise
High churn rates are unacceptable and unsustainable. By identifying the mid-market customers you’ve ignored and establishing better relationships with them, you can start to combat it. The most effective way to do this is to assign a Customer Success Manager (CSM) to their account. For new customers, make it standard practice to involve CSMs before a partnership starts. TSIA, the leading research organization for today’s technology and services companies, recommends getting customer success teams involved when there is an 85-90% chance that a deal will close. This results in a cleaner handoff after the sale and a faster path to profitable outcomes for the customer.
The CSM role encompasses numerous customer relationship functions, chief among them being onboarding and implementation, consistent and proactive outreach, and ongoing support management. However, the customer success function has recently evolved in an effort to provide even more value, and CSMs are now also tasked with upselling and cross-selling additional services to generate additional revenue.
The adage goes, “What gets measured, gets done.” While expansion efforts have brought more funding for customer success teams, there is now also an increased focus on proving the value that CSMs deliver. So how do you go about doing that?
Dude, Where’s My ROI?
Begin by standardizing a set of benchmark metrics that your CSMs must meet (and exceed) going forward. These should relate not only customer retention but also expansion. As a best practice, CSMs are now expected to keep AND grow customer relationships.
These widely-accepted metrics are key to setting baseline CSM performance scores to improve upon going forward. As importantly, these indicators can help prove the value of CSMs to your C-suite, create better mid-market customer experiences, and ultimately, increase your revenue.
Prove It To Me!
We know customer success drives growth because our CSMs have been doing it for nearly 20 years.
For example, we teamed up with Cisco to improve their Adopt & Expand Partner Program. This involved ServiceSource CSMs working directly with Cisco partners to add value to those relationships and, as can be seen in the chart below, led to much higher customer engagement, usage, and renewal rates.
In another instance, a global telecommunications client of ServiceSource’s enjoyed a 64% uptick in product adoption over just the first year of implementing our customer success solution.
Scaling for Success
There’s a critical matter to keep in mind prior to implementing a CSM strategy for your mid-market customers: to actually move the needle, you need to scale appropriately. Basically, go big or go home.
Companies that try to pilot a CSM program across a few customers most often fail. Customer success can be a significant financial commitment, however you’ll only get out what you put in. The more you prioritize CSMs, the more revenue you will realize over time from your mid-market customers. there will eventually be a cutoff point in your segmentation curve where the cost-benefit analysis of assigning a CSM doesn’t make financial sense. It is these customers that can be most effectively managed through digital and self-service solutions.
Interested in learning more about this topic? Sign up for our upcoming webinar to learn how CSMs engineer better experiences for customers of all sizes, grow retention, and generate more revenue than you ever thought possible.