If you didn’t put your customers above all else in 2014, this is your year to do that. Gartner says 80% of a company's future profits come from 20% of its existing customers. NewVoiceMedia found that over $41 billion of revenue is lost each year due to poor customer experiences. The data backing customer success is there. You just need a strategy to make the most of it.
At LevelEleven, we spent 2014 testing how our customer success strategy should look. We found some things that work. There are four best practices we attribute to this strong feedback from our customers, and offer them here for you to consider as you get ready to put 2015 customer success plans into play:
Shockingly, not everyone feels this way. Do you truly care about your customers success, or just hope for it? Many businesses get caught up in being too product, marketing or sales focused. As we embark on this new year ensure you’re not one of them, by taking time to internalize this: Your purpose is to help your customers succeed. If you do that, good things will happen. As one of our investors, and a personal mentor of mine, Dan Gilbert says, "Money and numbers do not lead; they follow."
Too many SaaS-based companies err their headcount toward engineering or sales, leaving customer support as second fiddle. Over 20 percent of our company consists of customer success, equaled only by engineering. Early-stage companies need to keep an eye on their spending to ensure they’re investing in the right areas, but we’ve learned that if there is one area to spend like a drunken sailor, it's customer success.
With an abundance of software tools available, there are countless ways to measure customer engagement. You’ve probably looked at some, if not all, of these metrics:
Net retention is most critical, as it sees through everything. However, you must also watch each of the other numbers closely, in order to identify where potential weaknesses exist. This is no different than sales: Closed business is your most important metric, but you need to keep an eye on other things like lead velocity, lead quality, close rates, meeting-to-opportunity conversions and pipeline-to-quota ratios. Obsess about one; then measure, motivate and coach around many.
I'm often pleasantly surprised to hear how customers say we are "easy to work with," which is one of the areas where we received high marks from G2 Crowd. Turns out, many software companies operate with an emphasis on being transactionally minded. They don't genuinely try to understand a customer’s business, respond quickly to support issues or remain hands-on after a prospect becomes a win. It can be difficult to train your team to take an opposite approach, but we’ve learned that if you hire good, genuine people who have it in their nature to be helpful to others, this one can actually happen organically.
I’d argue that perhaps the most important initiative for any business right now includes ensuring those 2015 plans make this the year of the customer. Keep your team aligned in producing output meant to help the people who keep your business alive and growing. Then you can remain confident in the 80% of your future profits that will come from 20% of today’s customers, and you won’t have to worry about that $41+ billion cost of poor customer experiences. Plus, you’ll see serious growth.