When we consider customer success as an element in the evaluation of our own enterprise, what exactly are we talking about?
Is customer success defined in terms of the customer’s financial performance? Have we, as an enterprise, failed if our customer is not profitably growing and dominating their own marketspace? If the customer is thriving, making record profits and blowing their competition out of the water, is that cause for us to celebrate our own excellence?
The short answer is, not necessarily.
Unlike most performance metrics, customer success covers much more than a single slice of data extracted from an ongoing continuum of financial numbers. No more than a large cash balance in your own checkbook is indicative of wealth, no single number will reveal the overall health of an enterprise.
An accurate analysis requires more information. A single slice of financial performance data indicates little about the trajectory of financial performance. It reveals nothing about the performance relative to the goals and objectives of the enterprise, nor does it offer any comparative information in terms of competitor performance or performance versus previous or future targets.
In addition, it tells us nothing about how the performance relates to the vision and mission embraced by the company or how effectively the incentives and promotional activities on the part of the company may have impacted the number.
Obviously, there is more to the story of customer success than end-of-quarter or end-of-year financials.
What Is Customer Success?
While financial performance is part of the story, there is obviously more to consider. For sellers who seek to measure their own success in the context of their customer’s success, those considerations start with understanding what the buyer is trying to accomplish. That understanding should extend beyond the immediate goal of mitigating some specific pain and into the actual high-level goals and objectives held by the buyer.
A Vehicle for Success
For example, let’s imagine you sell cars and trucks. Your buyer asks you about choices available for package delivery to local customers. Your conversation covers things like size and weight of the packages to be delivered and the daily volume anticipated. Based on that data, you recommend a small van with center opening doors in the back and access between the driving and cargo compartments.
What you don’t know from your limited conversation is that the buyer also performs field service on installed products along the delivery route and maintains a separate fleet of vehicles for service calls. These vehicles contain storage space for tools and part inventory. If this knowledge had been known to the seller, the proposed vehicle could have been a slightly larger van with part and tool storage made accessible through side doors, and a separate compartment would handle the cargo for daily delivery. The customer would have been able to reduce their fleet size and vehicle operating expense by a significant amount.
Customer Success Is Enabled through Customer Experience
Sellers and buyers need to look beyond the single transaction. Sellers who limit themselves to taking orders will never see the opportunities that exist through a closer, more customer-focused relationship.
Building that relationship requires the seller to engage with customers and prospects at a level beyond “how can we help you today?” Instead, the conversation should start with “what are your goals and objectives for the year, the next five years and long term?”
The customer experience delivered should not be based so much on “wow! I got a really good deal today” and more on “these guys helped us redirect our efforts toward a more efficient process and gave us the capability to thrive in this market with their solution.”
Customer input is seriously solicited and impacts the seller in terms of product design and development. This requires more than post-sale buyer surveys. The customer may actually be included on the design teams for new products or help the financial team build realistic performance objectives with market insights from the customer.
Let’s Get Technical
Specific metrics to measure the effects of the customer-success approach would include things like:
- Customer defections per year
- Average tenure of an active customer relationship
- Number of referenceable customers
- Cross- and upselling sales volume
Positive numbers from these metrics reflect relationships that are long term in nature, and measured annual changes reflect the ongoing effectiveness of the strategy.
Technology in the form of CPQ, CRM, web-based customer portals and guided selling systems all are helpful in redefining the relationship with the buyer. Together, these form the digital backbone of the customer-focused strategy.
Coupling technology with process and practice delivers an enhanced customer experience and lays the groundwork for a customer success-oriented enterprise.