SaaS companies have become quite sophisticated in acquiring new customers through the sales and marketing funnel (or buyer’s journey). Over the last few years, SaaS companies have also come to recognize customer success management as a critical business operation because they know retaining customers is cheaper than acquiring new ones. However, the understanding of customer success and its role in the growth of a business is still in its infancy.
What SaaS businesses are in need of now are more efficient and effective ways to not only onboard and retain those new customers, but also get them to expand their accounts and become advocates. That’s where customer growth comes in. Customer growth takes customer success beyond onboarding and retention into true revenue-generating functions: expansion and advocacy.
Historically, customer success teams have been focused almost solely on the adoption and retention stages of the customer journey because reducing churn is a major priority for SaaS companies with many tending to spend most of their time on at-risk customers rather than the most successful customers. However, despite the need for customer success teams to shift focus toward expansion and advocacy, the tools they use today aren’t optimized for these stages and the strategies they’re using are often limited to adoption and retention. This leaves a huge piece of the picture—and significant revenue opportunities—left untouched and, worse, unseen.
How do we remedy this? How do we open up new avenues that allow us to do better by our customers and also bring in new forms of revenue for our businesses? You need to understand three essential tenets:
- Customer success starts from day one
Companies that are truly interested in the success potential of their customers understand that success starts long before the initial purchase. Knowing this should be your first sign that cross-departmental alignment is necessary. Sales and marketing should be just as clear on Ideal Customer Profiles (ICP) and success potential as customer success teams are so they can ensure they’re delivering the right messages to the right prospects and making good promises in the first place.
A new job function we’re seeing crop up in best-in-class customer success organizations is in “Customer Success Operations”—also called Customer Operations or Customer Growth Architect. The emergence of this title is a signal that companies are in need of people who can take the lead on the customer-facing side of their business.
Pro-tip: Our CEO, Rachel Orston, joined ServiceRocket’s #HelpingSells podcast to talk about why this role is fundamental for companies who are looking to move to the next level of growth.
- Focus on your customers and your churn problem will resolve itself
Crossing the chasm from a company with churn to one that has achieved negative churn—a period in which expansion revenue more than offsets any revenue lost from customer churn, downgrades, lower usage, etc.—requires a deep understanding of your customers and their business outcomes, as well as a commitment to hyper-relevant, hyper-targeted engagement.
And that goal is one that is pivotal for growth. That’s the difference between customer success and customer growth: it’s not just onboarding and renewals, but about facilitating the optimization of success throughout the entire customer journey, including expansion and advocacy.
What makes a customer truly successful needs to be clearly defined by the customer. That’s why it’s critical that your customer’s business outcomes are mapped directly to success with the product and that this is done as early as the sales process. This helps maximize success potential and minimize churn potential from the beginning. Doing this is how you’ll ensure your customers are hitting milestones that are important and exciting for them and allows you to design a success path that fits their desired outcome. That’s a win for everyone.
- Optimize the entire customer journey for growth potential
Now you know that success starts from day one and that focusing on your customers is key. Without understanding the value of the customer journey and recognizing the growth opportunities that exist within it, companies can find it hard to reduce churn. Furthermore, many companies who do see the value in the post-sale stages still have difficulty executing strategies toward the goal of customer growth. Moving customers along the customer journey is no easy task, especially the spaces in-between retention and expansion.
Understanding these three principles is the very first step in bringing customer growth strategies into your business. Learn more about customer growth and our tips for making it work for your company in our ebook, The Complete Guide to Customer Growth: Driving Value Across the Customer Journey.