Every business wants to succeed and establish itself in the industry for which they come up with new sales and marketing strategies every now and then. But do you think it is enough in a decade when customers have endless options and preferences? The answer is: No.
To achieve success in business you need to focus on customer success as well. Considering the fact that customer acquisition cost is also increasing, you cannot avoid investing in customer success.
Many businesses lag behind their competition as not every business knows about customer success. So, in this blog, we will cover everything about customer success so that no one misses the opportunities due to a lack of information.
Let’s take one more step towards success and move ahead.
Topics to be covered:
- What is Customer Success?
- 5 Customer Success metrics that you need to know
- 5 Best Customer Success software
What is customer success?
Customer success is simply defined by a process of identifying customer difficulties or queries and giving them solutions and responses proactively. The customer success process helps companies boost customer retention ultimately leading to increased revenue and customer loyalty.
Importance of Customer Success
Since customer loyalty and happiness help companies to grow, customer success is the key to business success as it assists customers to succeed.
Customer success contributes to reducing churn rates, boosting renewal and satisfaction rates, and hence increasing revenue.
It has the potential to increase the number of cheerleaders and promoters for your business.
Reducing churn and boosting client retention directly boost your company revenue as it helps to acquire retainer customers.
Elements that make Customer Success work
Customer Success will not be possible alone. Effective customer success needs these three elements:
1. Customer Success Tool or Software
To effectively manage your interactions with customers you will require a customer success tool or software. This tool or software will help you to make customer success a priority so you can ensure you have happy and satisfied customers who want to be your life-long customers and promoters.
2. Customer Success Team
Even though you own a tool or software, you will need a team who can bring output via that tool or software. The size of your customer success team will depend on your business size and available resources. Also, don’t forget to expand your team as your company grows.
3. Customer Success Strategy
Every action needs a strategy so does customer success. Your company’s customer success strategy will depend on your products and customer needs. Here’s an idea of steps you can follow to create your customer success strategy:
- Identify the end goal of customer success
- Choose a suitable customer success tool or software
- Build a customer success team
- Create a short term as well as long term customer success roadmap
- Implement the strategy and keep all team members in the loop
- Analyze the results and make modifications accordingly
As now you have an improved understanding of customer success and its importance, let's look at some customer success metrics that will help you to measure and analyze customer success.
5 Customer Success Metrics that you need to know
The growth of a company is linked to the ability of its customers to use that company’s product successfully, especially for SaaS companies as their customers explore their products themselves. These successful customers have more chances to convert and stay longer.
Now the question arises of how to measure this customer success. Customer success can be measured using various customer success metrics. For your reference, here are 5 customer success metrics that you can use to measure customer success.
1. Customer Retention Rate (CRR)
Customer Retention Rate (CRR) measures the percentage of a company’s existing customers retained over a time period. CRR is more suitable for companies with more ongoing customer relationships.
To calculate the CRR, find out the difference between the number of total customers at the end of the time period and the number of recently acquired customers. Then divide the result by the number of customers you had at the start of that time period. At last, multiply the result by 100 to get the percentage, and here is your CRR.
2. Churn Rate
Churn Rate sees your customer retention from a different viewpoint. Churn Rate measures the number of customers your company lost over a given time period i.e., usually a month.
Churn rate is usually measured as either the number of customers lost or the revenue loss that those customers represent.
To measure churn in a useful way, you need to define your churned customers (lost customers) which may vary depending on the business.
Once you’ve defined your churned customer, you just need to divide the number of churned customers by the total customers you have at the beginning of that time period, then multiply the result by 100. Now you have your churn rate.
3. Net Promoter Score (NPS)
Net Promoter Score (NPS) is different from other metrics as it depends on direct customer feedback and the VoC (Voice of Customer) data.
NPS is based on customer responses to the NPS survey. The NPS survey has questions posed next to a 10-point scale.
- Respondents between 0 and 6 are called detractors
- Respondents between 7 and 8 are called passives
- Respondents between 9 and 10 are called promoters
To calculate NPS, you just need to subtract the percentage of detractors from the percentage of promoters. NPS is expressed as a number instead of a percentage.
4. Customer Satisfaction Score (CSAT)
A customer satisfaction score (CSAT) is also based on customer feedback and it is measured by the rate that customers give to their experience with your company.
To calculate your CSAT, you need to create a CSAT survey first. Once you receive responses, you can calculate CSAT by using this formula:
(The number of positive responses / The total number of responses) X 100
5. Customer Effort Score (CES)
Customer Effort Score (CES) measures the effort customers need to put into using your product or service.
Measuring customer effort is an important part of evaluating your customer success performance since the more effort required, the fewer customers you will have.
CES is calculated via one question survey that asks customers to rate their level of agreement with a specific statement about their experience.
To calculate your CES, simply find the average of all customer ratings.
After knowing customer success metrics it's time to see customer success software that you can use to help your customer success team for effective management of customer success.
5 Best Customer Success Software
For long-term growth, customer success teams require the best customer success software that focuses on customers’ needs. These tools help your team to perform tasks more effectively and ensure that all the members are on the same page.
But choosing the right customer success software from those hundreds of software available in the market can be challenging. So to help you with that, here are the 5 best customer success software options for your customer success team to manage their work.
Gainsight is one of the most popular customer success software solutions. This software combines data from a variety of sources into a single picture. You can also view a customer's whole chronological history and analyze your company's activities with them. Gainsight can also use AI to analyze your customers' behavior and predict possible outcomes.
Custify is the best customer success software for B2B SaaS businesses. This software provides a comprehensive view of your customer's lifecycle by providing insights into your product usage and adoption. It also informs you if a customer has stalled onboarding or is likely to churn by sending notifications via message or email.
ChurnZero is a real-time SaaS platform that helps customer success teams to better understand their customers and reduce churn. It tracks usage statistics to give you insight into how your customers use your product, evaluates your customer's general health and renewal likelihood, and automates your customers' experiences.
Catalyst is a customer success software that provides a complete holistic view of customers and creates customized customer health profiles based on data from your existing software. It also has one-click integrations with Salesforce, Zendesk, Slack, etc.
Olvy is one of the best customer success software that helps companies to measure and analyze all the saas customer success metrics via one platform. It’s easy to create and send surveys for data collection to calculate customer success metrics. Olvy makes the tedious tasks super simple for customer success teams.
Businesses that make customer success their priority succeed. So, you need to establish a customer success process in your organization so that your customers feel supported. This way you can grow as well as build long-term relationships with your customers.
Also, the customer success metrics highlighted here are best to measure customer success with your product. These metrics help you uncover areas for more in-depth research and measurement so it’s essential to make the best use of those metrics.
With Olvy, you can help your customer success team with measuring customer success metrics so that you get the most out of your customer success process.