The age of the customer and the subscription economy have arrived and bring with them a new set of challenges.
Companies are realizing that an increased focus on customer success is critical to not only growth, but potentially survival.
Customers typically have many options to choose from when selecting a service, and when it comes to subscription based services, switching costs are frequently minimal while brand loyalty is pretty much non-existent.
Companies need to continuously demonstrate value from its solutions to retain customers.
According to Bain & Company, if you can increase customer retention by even five percent, it will result in profit increases of at least 25 percent.
Never before has it been so important to focus on customer success to preserve and grow recurring revenue.
Let’s take a look at 10 tips and opportunities that should improve your chances of ongoing success with your customers.
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1. Evaluate Current Processes
What is your company currently doing to ensure the success of its customers?
Do you have streamlined processes in place that are supported by experienced employees, or are you using thrown together spreadsheets that only keep track of revenue, with little thought towards customer experience?
Ensure you have customer success best practices and playbooks in addition to specific customer goals that drive value for both the customer and your company.
2. Be Proactive Not Reactive
Customer service is a necessary and reactionary function that is primarily utilized when there is an issue or problem that requires support.
If this is the only touch point that your business has with your customers, then it may already be too late, and the customer could have one foot already out the door.
A proactive approach to managing customers would likely neutralize any negative thoughts or opinions of the service, and in turn help protect the recurring revenue.
Customers are not always right so continuously engaging with them and monitoring behavior should increase the odds of a long term and profitable relationship.
You may well be surprised by what you learn by simply asking.
3. Don’t Assume That All Your Customers Know What They Are Doing
Whether you consider the service that your company is offering to be simple or complex, it is likely that the majority of your customers are far from being expert users.
They are going to need training and advice on how to get the most value out of your solution.
This is an ongoing effort and does not stop after the service has been deployed.
4. Determine if You Have an Acquisition Problem
Before you assume that you have an issue with your churn rate, take a close look at the type of customers that you are acquiring, and decide if that is in fact where the root of the problem lies.
Attracting the wrong customers can create huge additional overhead while providing little long term value to the business.
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5. Use KPI Metrics
Without the use of metrics, it is almost impossible to effectively quantify performance and proactively indentify opportunities for improvement.
Some common metrics that your business might consider utilizing are activation rate, adoption rate, churn rate, resolution rate, close rate, up-sell/cross-sell rate and average revenue per customer.
Use these metrics to come up with health scores for all your customers.
6. Increase Up-Sells and Cross-Sells
This is a straightforward way to increase your customer lifetime value (CLV).
A good example of creating opportunities for cross-selling is happening in the CRM industry, where some CRM vendors are expanding upon traditional CRM functionality to also offer software services that deliver functionality for email marketing, call centers and helpdesks.
It may only be a matter of time before CRM solutions offer customer success software as a service as opposed to just an integration option.
7. Analyze Customer Behavior
Use analytics to measure engagement and service usage with the goal of predicting future customer behavior.
Analyze trends and gain more visibility into customer loyalty. Analytics will allow you to align resources and prioritize accordingly.
8. Boost Customer Advocacy
Happy customers can be great advocates for your brand and become a powerful referral channel that can drive a lot of sales.
Try to treat your customers as partners to increase advocacy. A Net Promoter Score (NPS) is a popular method than can be used to gauge levels of customer advocacy through the use of periodic surveys.
9. Set Your Channel Partners Up for Success
Make sure to include any channel partner programs when developing an overall strategy for customer success.
Share customer information, metrics and health scores, while keeping partners educated on opportunities to add value.
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10. Use Customer Success Management Software
The tables are turned here and you should consider becoming a subscriber of a customer success software service to help manage your own customers.
These tools can be an invaluable part of your overall customer strategy as they make it easy to track metrics while providing deep insights into your customer’s behaviors.
While typical CRM software can help you gain new customers, these software tools will help you keep them while maximizing the lifetime value of those customers.
There are plenty of tools to choose from such as Gainsight, Mindtouch and Totango, but as with any purchase decision, be sure to determine what you need before you go shopping.