5 Proven Customer Success Best Practices
I recently had a great conversation with a start up that was researching the strategy of launching a Customer Success team. He inquired about the top things that he should focus on for his company. Of course, Customer Success models will differ depending upon the type of product sold, the industry served, and even the stage of the company.
Regardless of where a company is in their Customer Success adventure, there are some Customer Success best practices that I consider to be table stakes for any company that wants to win in the cloud economy.
1. Segment Your Customers
This is one of the most critical Customer Success best practices because it helps to determine what Customer Success model you’ll implement and what actions should be done for each of your customers, as well as under which circumstances. Without proper segmentation, Customer Success teams are hard pressed to be efficient and effective, and leadership will be challenged to fully execute their strategy. This ultimately leads to knee jerking both internally and externally, and a poor customer experience.
The best way to segment out your customers is to define the services that you want your Customer Success team to perform, associate a value to each of those services, and then assign said services to be provided to each segment based upon value and ROI of your own efforts. If you’re looking for a speedy, no fuss, way to create segments, Average Recurring Revenue (ARR) or Monthly Recurring Revenue (MRR) is a simple way to segment. From there, you can prescribe actions for your different Tiers.
2. Early Warning System
An Early Warning System is an instrumental Customer Success best practice because it enables your teams to go from a reactive, firefighting mode to a proactive mode that halts problems before they spiral into major issues. As the name implies, an Early Warning System is something that alerts the Customer Success team to some form of change in an account that could result in an undesirable outcome. For example, this could be a steep drop in usage or the executive sponsor leaving your account.
A great aspect of an Early Warning System is that it gives Customer Success teams a way to prioritize their activities. If you’re alerted to something going wrong with a Tier 1 account, you can bet that fixing that issue will move up on your to-do list. The best kind of Early Warning System is a tool that incorporates structured data like CRM with the intelligence and personal knowledge of the account managers.
Even if your company isn’t at the point where it can invest in a Customer Success solution, effective leaders can create an Early Warning System manually in a spreadsheet. While the manual version won’t be as robust as full-fledged system and will require consistent updating, keeping track of three or four aspects you care most about will go a long way in the early stages of your Customer Success efforts.
3. Process, Process, Process
It may sound like common sense but you must have processes in place to handle common Customer Success interactions. Many Customer Success teams are brought in to handle a raging churn problem and many get stuck in a reactive mode where they’re doing anything and everything to ensure customers are retained.
A “catch-as-catch-can” approach only scales so far (in many cases, it’ll scale your team right to the market for more antacids and aspirin). Customer Success leaders must create and implement processes to manage account situations. Ideally, this should include processes for onboarding, training, managing escalations, business reviews, renewals, and upsells/cross-sells.
It is also imperative to have programs for customer advocacy, lifecycle marketing, and an Early Warning System. Lastly, you want to make sure you are always listening to voice of the customer and have a process for incorporating that back into your organization in a meaningful way.
If you are starting small, I’d advise prioritizing development of strong processes for escalations, renewals and business renewals/upsell. Importantly, these processes should also be somewhat transparent to the customer so that they know what to expect during each part of a phase. All of these processes can be greatly assisted with the help of Customer Success playbooks, particularly as you scale.
4. Business Reviews
I want to specifically call out business reviews as a Customer Success best practice because it’s one that is most often deprioritized or omitted from process when a team is faced with picking which fire to fight first. I’d argue that deprioritizing business reviews leaves money on the table and does not solidify adoption with your users. Not taking advantage of driving adoption is the antithesis of having a Customer Success team in the first place.
A business review is designed to go over the customer’s KPIs and these utilize metrics to show that they’re achieving their business goals. If you’re not tracking your customer’s goals and conveying that successful information back to them, it’s tough to expect the customer to renew or buy more. Remember: Business reviews also serve as a way for Customer Success to share the product’s value with a wider audience.
5. Executive Buy-In
This is a big one: if the executive leadership team hasn’t bought into the Customer Success Mindset, it’s nearly impossible for the organization to pull off world-class Customer Success. If you’re considering a position as leader, ask tough questions of your potential CEO or Board of Directors about how committed they are to this mindset and how this materializes in alignment of company goals around Customer Success.
Leaders can earn a seat at the E-staff table by demonstrating a clear command over the company’s business, financial and strategic impact of Customer Success on the top and bottom line of their companies.
