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20 Tips for Building, Measuring, and Maximizing Your Customer Success Function

It’s no secret that we are big believers in the value of customer success for B2B SaaS startups. Whether you refer to it as customer success, customer experience, or account management, dedicating time and resources to building strong customer relationships will set your company up to thrive for many years to come.

Your ability to communicate with people, set expectations, and meet or exceed those standards will determine whether customers keep coming back. And returning clients are key to fighting churn, increasing retention, and expanding your business.

We recently gathered a group of our portfolio leaders and operating advisors together for a virtual summit on how to build strong, lasting customer relationships. In this post, we’ve captured and categorized our favorite points from customer success leader Andrew Kahl’s “fireside chat” on how to architect, measure, finetune, and leverage customer success at your startup.

Architect customer success at your company

  • Know your customer touchpoints. Start by asking go-to-market leaders about every way you touch customers—across sales, marketing, product onboarding, and support initiatives.
  • Gather external viewpoints. Ask customers how they think you’re doing in terms of processes, overall engagement, onboarding, and the like. Marry those internal and external viewpoints to understanding what’s working and what’s not.
  • Don’t mistake speed for efficacy. Kahl says in almost every case, early-stage companies are missing the mark when it comes to serving their customers because they’re moving so quickly as an upstart. Embrace this opportunity to improve.

Measure customer success

  • Know your key metrics. Look at growth in annual revenue rate (ARR), annual upsell/expansion, and retention rate. These can often be leading indicators even before you receive customer feedback.
  • Study ticket volume and severity. The majority of early-stage products will have quirks and bumps; what’s critical is understanding minor blips vs. major product issues and having a plan for addressing each. Make decreasing ticket volume a key objective for your Customer Success function.
  • For businesses with a services component, consider your attach rate. It shows how many services are being bought (or attached) to a customer deal upfront. Once the deal is underway, study how a customer is using these services (utilization rate).
  • Build a strong digital ecosystem. For a lower touch product, this could be a knowledge base (KB) guided by machine learning. Within your KB, understand which articles customers are reading and how frequently they are visiting for information.
  • Monitor support ticket volume, particularly during new releases. Are customers adapting features with ease or are things bumpy?
  • Plan for the journey and the destination. Understand where your customer wants to be in 12 to 18 months and align your product, customer success program, and any services to their preferred outcome. Ask about their plans for global expansion, hiring, or even acquiring other companies. Gathering this data allows you to come back to them with a plan for how your product can help them meet their expansion needs.
  • Talk to customers frequently. The best customer success-driven organizations talk to customers regularly, and those that don’t are often simply afraid to get bad news. That’s why it’s critical to engage with customers when things are good, not just bad.
  • Conduct quarterly business reviews with your customers, and don’t focus just on reading your metrics back to them, but also on key insights to help them understand what the metrics mean. Show them how they’re using the product, how you’re handling support requests, and key opportunities for expansion and upgrades. For SaaS companies with a higher volume of customers at lower price points, surveys can provide much of this same feedback, with the benefit of aggregate data that highlights trends across industries.
  • Set high satisfaction and referral goals. Aim for a Customer Satisfaction Score (CSAT) of at least 90. Look at your Net Promoter Score (NPS), and set goals for “quantum leaps” in improvement or an increase of 5 points at a time. An NPS above 30 is considered strong, and 70+ is considered world class (Apple has been there a few times). A quantum leap would be a 5-point improvement.
  • Give relationships adequate time. Allow yourself up to three years before deciding to part ways with a customer. Those who have been using your products since the early days may have more issues and kinks to be worked out and it can take up 6 months to fix a product problem. If their expectations are still misaligned with what you can provide, then you can decide whether it’s time to move on.

Fine-tune Your Customer Success Culture

  • Create a customer success department. Setting up an independent customer success team that reports directly into the CEO gives the function a seat at the table and executive representation alongside other key company functions. However, for a highly product-driven organization, nestling it within a product team and reporting to the CTO might make more sense.
  • But remember that customer success should be a mindset—not simply a department. Get every team bought in on what customer success is. For sales that means highlighting customer success as a key selling point when they pursue deals, for product it’s about bringing your insights to them to drive product improvements and new features. Set your sights on repeatability, and consistent, scalable processes—not simply taking good care of customers.
  • Don’t get too hung up on tools. There’s no one size-fits-all product that meets every customer success team’s need. Be sure you have a CRM for customer tracking and account management, a support tool like Zendesk (bonus points for its community and KB features), and a chat tool like Intercom that allows you to easily and quickly talk to customers.

Leverage Customer Success for Efficient Growth

  • Thoughtfully segment customers. Don’t just organize accounts based on how much they currently spend with you, but their overall global footprint and spending potential. For example, a mid-market customer may be maxing out their budget at a $100,000 contract. But you may have a Fortune 500 customer who is only spending $25,000 and has the potential to expand their usage with you by many orders of magnitude. Don’t ignore this opportunity.
  • Focus customer success resources on the right clients. Assign customer success managers (CSMs) accordingly, with a group designed to protect a larger asset (i.e. high-spending account today), and another focused on farming that high-potential customer into a bigger account.
  • Expand your understanding of the “upsell.” Expanding your current product usage to more people is easier than upselling to a more sophisticated product tier or feature set. Take academia as an example. Today your product may be used by a single department at a university, but there’s potential to expand to numerous schools on campus.
  • Invest in community. Put customers in touch with other like minded people who use your product in similar ways, or in new ways they haven’t thought about, to strengthen affinity with your company and product. A community moderator is key here and shouldn’t be outsourced. They can monitor the discussion and engage, respond to questions, foster introductions, and the like. A good knowledge base with the ability to comment can help kickstart this community feature.

Customer success isn’t one transaction that occurs in a finite moment, but unfolds over the long term. Start by experimenting in a few of these areas, and keep the focus on efficient drivers of growth. Thanks to Andrew for the quick-hit lessons (with big impact)!

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About the Author

Josh Stephens

Josh is CTO at Elsewhere, supporting the investment pipeline and providing portfolio companies operational and domain expertise beyond capital investment. He has been an Elsewhere Operating Advisor since 2015 and advised numerous companies including Vyopta, ActivTrak, BurstIQ, and others. Hear more from Josh on his podcast CapitalGEEK and Twitter.