Building Customer Success into a Revenue Driver

Nick Mehta

Nick Mehta
CEO, Gainsight

Building Customer Success into a Revenue Driver

The introduction of the SaaS subscription model ignited a major transformation in the way businesses look at their relationships with customers, marked by the shift from customer service to customer success. As the CEO of Gainsight and co-author of The Customer Success Economy, this transformation became my life’s work.

Customer service is an institution that thrives on customers being content enough with your product to not call you. Think about running a cable company in the 90s: As long as your customers aren’t angry, you’re fine.

Customer success, on the other hand, is a more holistic way of building relationships and then driving greater revenue. Customer success acknowledges that customers aren’t bound to your company. If they aren’t happy, they can end their subscription—and the revenue they send your way. That’s why growth-minded companies invest heavily in the customer success category and place the buyer at the center of the business, as I explain in my recent interview on The Forecast.

Building customer success into a revenue driver

The SaaS model certainly gives more power to the customer, but it also benefits companies that can build annual recurring revenue via building meaningful customer relationships. In addition to the recurring revenue, of course, is the potential for upselling and relationship expansion.

Creating strong customer success departments is no easy feat. In fact, leaders tend to overlook two critical components of customer retention:

  • Easy product onboarding. Customers must see the value in their investment immediately. Make sure your product is easy to adopt, so that your customer can be onboarded quickly. The faster they are onboarded, the faster they can recognize value. Consider implementing product analytics to tell you whether a sales person or CSM is using your product, as well as what features they are using, or not. All of these aspects play a critical role in your customer experience.
  • Sales communicates with customer success. Customers work with the sales team for a long time before they buy, so a lot of their information is gathered. No customer wants to be offloaded to customer success only to answer the question, “So, why did you buy our product?” Your customer success team should know everything about that customer before the first phone call. That way, the customer feels like a VIP and no time is lost doing more explaining.

Both of these aspects will significantly decrease your time to value and improve your chances of renewal.

Diagnosis customer relationship health

As a customer, there is nothing worse than hearing crickets from a vendor throughout the year and then receiving a phone call on month 11, when it’s just about time to renew. Your customers have no obligation to stay with your product, so you want to maintain a solid relationship with them year round.

The companies that are nailing customer success are doing four specific activities to ensure the health of their customer relationships. We call it the DEAR score which is an acronym:

  • D stands for deployment. Having a product that is easy to set up significantly increases your chances for renewal.
  • E is for engagement. Talk to the executive sponsor for your account every 90 days, without fail.
  • A is for adoption. Monitor how much your customers are using the product and if they’re not using all the features, find ways of helping them do so.
  • R stands for return on investment. Are your customers seeing the value in your product, based on business outcomes?

The DEAR score helps companies see the true health of their customer relationships and diagnose any issues.

The future of customer success

Customer success and sales have grown up in parallel. For many companies, customer success came out of customer support and professional services, and up until a few years ago, wasn't perceived as being very strategic. So, customer success and sales were very siloed, with most companies prioritizing sales. However, the two departments are beginning to balance out and integrate together more closely as people realize that in the future, every dollar of revenue is going to be based on the success of the customer,

About the Author:

Nick Mehta is the co-founder and CEO of Gainsight, a Customer Success Software business that empowers companies to increase revenue, decrease customer churn, and drive advocacy. He also is the co-author of The Customer Success Economy.

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