Customer-centricity key to commercial success
Inflexion regularly brings its portfolio together to share knowledge and best practice, with Jonathan Battye, Assistant Director focused on commercial strategy and effectiveness, recently inviting two thought leaders to share their experiences in customer success and retention.
Customers have long been at the core of commercial success, but the way they’re treated has evolved dramatically over the years. Forming a strong relationship with customers not only turns them into positive advocates for your brand, but also helps with more tangible and measurable benefits such as improved retention, better cross-sell or reduced acquisition costs.
“The customer is increasingly critical,” says Dan Steinman, Chief Evangelist at Gainsight and speaker at the Inflexion Exchange. “Your best salesperson is a happy customer. Whether you like it or not, prospects talk to customers, so you need to pay attention.”
Dan explains that the way businesses operate has been turned on its head in the last two decades: “Previously we made a product and then tried to sell it. The consumer was far less important to the product’s design or delivery, but now it’s the opposite.” He puts this partially down to the meteoric rise of SaaS based subscription model businesses, such as Salesforce. “This really switched thinking in favour of customer-centricity. The pay-as-you-go instead of one upfront payment model, means organisations have to keep delivering value to ensure successful renewals or up-sell down the line.”
Whilst the model of putting the customer at the heart of your business may be most evolved in the software industry, Dan is unequivocal, “the core principles of customer success apply to all”.
Show me the value
Marc Talbot, Global Head of Customer Success at Chambers, concurs with Dan’s insights at the Exchange. After 20 years with the data business Acuris, he joined Inflexion-backed Chambers to bring his customer success acumen to Chambers’ loyal rankings customers. Marc explains:
The customer lifecycle sits at the heart of the Chambers approach. It starts with building awareness in the market so that the value proposition is clear, with marketing tailored on whether a previous purchaser or new prospect. Once they subscribe, customers are onboarded and a CSM is introduced. Thereafter comes the crucial phase of demonstrating value, which comes through ensuring the customer is making the most of their subscription through regular check-ins. If relationship is built well, the annual renewal journey is typically smooth, with discussions focussed on possible up- or cross-sell opportunities.
Data is also central to the model. NPS is tracked, and critical KPIs at each stage are agreed. Customer health or propensity scores are used to determine how to focus limited resources on the more important customers, and a continuously evolving test and learn programme helps the team refine the model and approach.
On all fronts, Marc’s lesson is clear. Start simple and build from there: whether through increased complexity and sophistication, further automation, or greater personalisation.
Building the team
The panellists also reflected on the criticality of setting up a high performing Customer Success organisation. Getting the right model is the right place to start. Dan explains:
A central leadership team is essential to create the right processes and a consistent approach, however as the company matures, some decentralization is frequently necessary because a single CSM cannot be an expert on all parts of all products.
When recruiting great CSMs, they often have many of the same strengths as great sales people, however one of the key differences is this willingness to truly be a product and domain expert to help resolve underlying customer issues”. Marc goes on to explain: “I’ve found great candidates from all walks of life – not just those in existing Customer Success roles but teachers, hospitality…even an archaeologist! As long as they have the right motivations and personality traits, the relevant industry background can easily be taught.”
Regardless of the nature of your business, from software through logistics, even to your local restaurant - the panellists are convinced that the discipline of Customer Success is here to stay.
Retention is crucial for every organisation. It relies on people coming back. If you create value, they’ll return.
4 key takeaways
- Customer success is important for everyone. The principles apply to all sectors and companies – but moving from a product or transactionally focussed business to a customer-centric one won’t happen overnight
- Impacts are significant. Customer success can help you drive efficient revenue – with significant savings in acquisition costs, driving revenues via up-sell or cross-sell, and reducing churn through stickier customers
- Start simple. Map your customer lifecycle, but then just take a single use case or customer journey to understand what’s working well, and test and learn what interventions have the biggest impact
- Data is key. Capture NPS or customer satisfaction to focus on the most important and impactful areas; customer health scoring is a great way to focus on the most impactful areas, and of course, it’s critical to track impact and course correct as you go