The Long-Term ROI with Customer Success
So, you thought your customers were the only ones you had to show value to…afraid not. This isn’t sales or marketing, it’s customer success, which means that it requires a little extra effort to get your executive team bought in. Imagine you’re sitting with your CEO and trying to discuss why it’s important to build out a post-sales experience and customer success team. They are drilling you with questions which seem to keep focusing on the cost related to creating this new team and program. So where/how do you start to breakdown the ROI and upside so you can get him/her (as well as the rest of the leadership team) on board?
For many companies and customer teams who are considering moving to a customer success model, this is a very common occurrence. It’s easy to see the near-term costs of hiring new employees and the related overhead. However, with customer success it’s the major long-term impact I’ve found which you truly have to bring to the front of these conversations. If the short-term thinking continues to dominate the conversation and be the focus, you’ll never get over the hump for buy-in needed from your company’s leadership. It’s this all-in understanding you need in order to have a supported and powerful customer success team. Below are some of the main areas I’ve found which ring true for leadership teams seeking to get a grasp on customer success and proving it can be much more than just a new cost center. From these, you’ll need to add on all the great month/quarterly/annual metrics (post to come) you’ll be tracking to prove it out over time.
Metrics Matter in SaaS
On average, 80%+ of a company’s annual revenue comes from renewals & upsells in a recurring revenue model
Optimized SaaS companies have annual renewal rates of 90%+ for B2B and 75%+ for B2C structures
Acquiring new customers can cost 5-25 times more than retaining current ones
CS identifies key customer input for internal use and drive product development
Customer Success Drives Revenue By
Creating upsell opportunities to sell more licenses or seats to your product
Lowering the cost of customer support by resolving questions proactively
Providing valuable content (case studies, testimonials, metrics and more) for marketing to help drive sales
Maintaining customers long-term who buy more and become product advocates
Customer Success Reduces Churn By
Driving product engagement, which is also an essential piece to having solid long-term relationships with your customers
Being laser focused to provide a proactive customer experience vs only reactive support to solve issue resolutions
Understanding a more strategic view for your customer’s business, which helps identify major risk factors which could cause them to churn
Knowing which levers to pull and actions to take in order to create a more predictable renewal model
GK
