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10 Customer Success Best Practices to Improve Retention

by Insight Onsite

Introduction

The importance of retaining customers and sustaining long-term relationships is nothing new. The lower costs of retaining existing customers is a fairly entry level management lesson. But software businesses have taken these ideas to another level in recent years, bringing with them a land-and-expand philosophy that defines everything from the sales process to customer support initiatives. The idea is simple and you're probably well aware of it. As you market your product and initialize relationships with leads, you immediately start to consider how you can both meet their immediate needs and long-term goals. From there, you focus on landing the initial sale and, once it’s made, start laying the groundwork for an expanded relationship.

In simple terms, expansion is achieved through strategies like customer training solutions to ease the onboarding process and continued relationships with sales representatives to ensure product satisfaction and offer new purchasing opportunities. But as software companies start engaging in practices like these as a de facto method of operations, they need to go deeper into the relationship to stand out from competitors and set themselves up for a long-term relationship. This is where the idea of customer success is starting to take hold. By boiling down what a successful customer relationship looks like into key metrics and attributes, businesses are defining and tracking every facet of customer success so they can maximize their opportunity to expand the relationship over time and avoid churn.

Measuring customer success usually involves taking a mix of key metrics and evaluating them contextually alongside one another to determine how well the customer is engaging with your solutions. You'll likely end up tracking metrics like:

  • Monthly and annual recurring revenue
  • Usage statistics
  • Retention rates
  • Click-through rates for marketing emails

These types of metrics can paint a picture of how clients engage with you. For example, if you have a customer that is not generating much recurring revenue, but you can see they use your solution frequently and often click-through on your newsletter and engage with content, you'll know that the customer is engaged and interested in your technology. Now you have to ask why they aren't using it more. Do they simply not need more resources from your system? Do they have all the features required? Are you not offering the capabilities they'd need to expand? By tracking these customer success metrics, you've identified a client who you may want to reach out to for more information about how you can help them grow their business. You already know they're willing to engage with you, so the effort isn't likely to go wasted.

This is just one example of customer success programs. In practice, you can use engagement, marketing, and sales data together to measure the relationship you have with a customer and identify signs of a healthy relationship and signs that you need to intervene to either prevent churn or take advantage of an opportunity for expansion. With that in mind, here are 10 key customer success best practices to consider as you develop your strategy:

1. Use Recurring Revenue as a Guide

Your recurring revenue – whether you track it monthly or annually – is a key guide point in your customer success program. You'll want to determine how to track based on your contract structure. If you have annual contracts, go with annual recurring revenue and go with monthly if your contracts are month to month. In a broad sense, this metric will give you visibility into your financial health and ongoing income. But you can also use the data you gather in this process to identify your most valuable and risky accounts.

Tracking recurring revenue on an account basis, not just at a big-picture level, lets you see how your customers are altering their contracts in a more cyclical way. When you compare multiple clients you can identify:

  • Groups of customers (E.G. consistent purchasers, clients with highly variable contracts year to year, companies at risk of churn) that you can market to as subsets of your target audience.
  • Noteworthy and standout customers that you want to put extra effort into reaching and retaining.
  • Customers who will likely not deliver enough value to justify significant resources. It doesn't mean you don't want to keep engaging them, but that you should do so in a more measured, low-touch way.

Recurring revenue data gives you the insight you need to prioritize customers and engage them in more strategic ways to drive success.

2. Dig Deep Into Engagement Metrics

The specific engagement metrics to track can vary depending on your solution. Some SaaS providers are more likely to track the number of users accessing the system over a period of time while others may be better off looking at the amount of time users spend logged into the software in a given day. Most likely, you'll want to mix various engagement metrics to better understand how different customers use your solution.

For example, imagine you have one high-revenue client that only has a few years regularly signing into your software. None of those users are your primary contact for future sales and account management, but they spend a great deal of time in your application each day. You may want to use that knowledge to open up lines of communication with the people actually leveraging your software, so you can better refine the relationship for their needs rather than dealing with the manager or IT rep who is purchasing the software on behalf of that team.

Tracking usage granularly is particularly important, as you can get into how specific modules are leveraged and use that nuanced information to sell specific features and refine your development roadmap to better meet customer needs. In this way, your usage and engagement metrics end up playing a pivotal part in guiding both how you adjust your solution to drive customer success and how you market and sell your software to ensure a continually expanding relationship.

3. Track Retention Rates and Dig Deep

On their own, retention rates are invaluable in telling you how long customer relationships typically last. This lets you refine your sales, marketing, and retention strategies along an appropriate curve with realistic expectations for when customers will likely move on. However, digging deep into retention rates and splitting users out into groups based on their rebuy tendencies can help you become more nuanced in how you reach different types of customers, maximizing your resources and creating a stronger pathway to successful customer relationships.

4. Define Your Buyer Journey and Set Benchmarks

You can't effectively track customer success if you aren't intimately aware of your buyer journey. You'll want to cover the entire funnel, from awareness out through rebuys and retention, to ensure you're considering how customers engage with your sales and marketing teams at every stage of the journey. From there, identify best practices for reaching different buyer personas at various stages of the journey.

For example, you may find that many of your longest, most valuable relationships actually begin with an executive who learns about your brand at a conference and uses a mobile device to explore what you do. With that in mind, you can work to digitize elements of your conference-related marketing materials so you have mobile-ready content to send those executives to cultivate a more personalized first impression.

By defining the buyer journey for your different personas and identifying the key benchmarks in their relationship with you, you can then target your content and engagement strategies around those milestones and position yourself and your customers for success.

5. Identify What Customer Success Means Across the Journey

Once you understand your buyer journey and have set your benchmarks for essential touchpoints on the way, you're ready to look into measuring the success of those specific interactions within the larger relationship. Nailing the first impression can be extremely valuable, and you can track the correlation between how customers initially interact with you to their lifetime value. But you can use similar strategies across the buyer journey. Ask yourself key questions like:

  • What is the relationship between the initial purchase size and the extent to which clients grow their spend over time?
  • What is the relationship between sales and marketing channels used by clients and the size of purchase?
  • What is the relationship between the number of post-sale touchpoints and rebuy trends?

You can gather data to answer these questions, taking your internal sales and marketing benchmarks and combining with client engagement data to identify correlation between different behaviors in your buyer journey and customer success. The result can be a powerful tool in refining your tactics based on different buyer personas.

6. Gather Feedback from Diverse Customer Types

Holding customer surveys, asking your sales or support teams to ask specific questions as they engage with clients, and using similar methods to gather customer feedback is critical. You can hold entry and exit interviews, reach out via email or run a user conference to bring people together. The key is to look for consistent feedback and from a wide range of sources. If you only get information from your satisfied customers, that may help you increase some rebuys for other happy customers because you'll have a better idea what they're looking for. However, you won't have a stronger understanding of why churn takes place and what specific issues cause customers to transition to competitor solutions. Make sure you try to get feedback from both satisfied and unhappy customers. This kind of data can be instrumental in measuring customer success by helping you pin down specific signs of positive interactions and negative situations that may otherwise slip through the cracks.

7. Align Messaging Across Teams

Engaging in a customer success strategy means you're always going to be selling. That customer support call from a frustrated user experiencing a glitch becomes an opportunity to build trust, maybe mention an interesting new feature or module that could solve a problem the individual mentions and lay the foundation for a future sale. That initial marketing campaign meant to drive brand awareness is starting a narrative that will continue to grow and evolve beyond the sale. The initial onboarding process creates an opportunity to bolster the relationship and build an impression of strength and competency that drives long-term success.

Whether it's your sales, support, training, marketing or executive teams, everybody who interacts with a customer has the potential to contribute to an eventual sale, upsell, or rebuy. Because of that, you need incredibly clear, consistent messaging to ensure your teams are using the same terminology and touting the right value propositions across all interactions. With more people involved in client success, there are more opportunities to accidentally mislead a customer if you aren't careful about messaging.

8. Ensure Strong Transitions Between Teams

At some point in a customer relationship, you're going to hand accounts over between sales and customer support. Each transition is an opportunity to showcase your organizational strength and prove that every part of your business can support your clients’ needs. But if you don't have a good transition plan and end up losing track of key account details, you can quickly damage the relationship. Nobody wants to, for example, hear a sales pitch from one representative that they just declined a month ago from somebody else because word of that interaction never made it to the new contact. Strong transitions are vital to customer success and you can often measure them by tracking internal assignment shifts or points in the buyer journey when they occur and see how customers respond in terms of sales and churn metrics in the vicinity of those points of change.

9. Maintain Consistent Touchpoints

You never want to hound a customer, constantly trying to upsell or push for a rebuy. However, you do need a consistent presence to ensure you don't slip so far in the background that customers aren't really thinking about what you can do for them. Track data on issues like average contract and relationship length alongside rebuy and similar sales trends to pin down the best times to check in with existing customers to see if there's anything they need.

Taking this strategic approach reduces the likelihood of wasted check-ins and positions you to potentially make each interaction more valuable by timing it in such a way that you get ahead of problems or initiate a re-sell process before a customer seriously considers going elsewhere.

10. Build Supporting Systems

Tracking all of the data pertaining to customer success and determining best practices for your specific situation can be daunting. It's often too much for your existing sales or support teams to do on their own. A few ways to better support customer success programs include:

  • Hiring a specialist to come in and provide leadership for your customer success initiatives.
  • Creating a team specifically devoted to tracking customer success and developing your strategy to reach customers.
  • Ensuring cross-disciplinary conversations to keep all teams engaged and on board with supporting customer success initiatives.
  • Train a member of each major customer-facing team (sales, marketing and support) to be a customer success advocate.
  • Ramp up your analytics capabilities so you can better gather and analyze data from various stages of the customer journey.

All the data and ideas about customer success won't amount to much if you don't have the resources to put those assets into use. Your ability to drive customer success through a better awareness of what a good relationship with clients looks like depends on your ability to assess those relationships and act on what you learn. You need leaders and employees capable of driving those gains. Those workers need technology systems and other support to help them get the job done effectively. A customer success program is more than a background initiative your exec team runs, it increasingly needs to be a part of everyday work in the modern software company.

Sustain Customer Success Momentuming

Fast-growing software businesses can use customer success programs to strengthen and deepen their relationships with clients, laying a pathway for rapid and sustainable growth. But engaging with customer success requires a great deal of time and effort. A strategic partner can go a long way in filling resource gaps you may have and empowering you to handle the demands of a customer success initiative. At Insight Partners, we take a highly hands-on approach to working with our portfolio companies. We instead take a diagnostic philosophy and work to help you ask key questions about your business and execute on what you learn. We can provide expertise, training, and resources to help you determine the best way to launch a customer success program and sustain the new strategy as your grow. Contact us today to learn more about how we work and explore whether partnering with us may be a good fit for your business. We'd love to chat.

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