The Hierarchy of Customer Success
Many companies today still focus on the top of the funnel and closing the deal. But businesses that have recognized that customer success needs to be on equal footing with sales are coming out on top.
This is no surprise. According to Harvard Business School, a 12 percent increase in brand advocacy on average doubles a company's revenue and growth rate, plus boosts market share. It's no longer about getting the deal signed, it's about understanding what makes a customer relationship profitable and—and, ultimately, how to move customers up the hierarchy of the customer success pyramid to build brand advocates. Doing so will help businesses drive better relationships and increase opportunities for growth.
Levels of Success
The three levels of the customer success hierarchy are satisfaction, loyalty, and advocacy. These are separate measures and should be viewed as a hierarchy of customer relationship strength. A customer won't renew unless he is first satisfied. A loyal customer that renews isn't always an advocate. So how do you know where your customers sit on this hierarchy? How do you move them from one level to the next? You will need data and a plan to manage these insights.
Step One: Satisfaction
Until you can measure that customers are happy with their purchase decisions, they should be flagged as at risk for churn. How can you ensure your customers are satisfied? Here are a few steps you can take:
Ensure a smooth handoff. Make certain the transition from sales to post-sales is a smooth one. For high-touch customers, sales should take an active role in the onboarding process, ensuring proper transfer of knowledge to the post-sales team. For low-touch customers, your onboarding campaign should clearly communicate where users go for training, answers to questions, or help.
Track initial usage patterns. Who is using your product and when? Are they using key features? If usage is low or infrequent or key features are not being used, the value of their purchase could be at risk. Tracking and taking action on this data is key to building satisfaction.
Pay attention to early feedback. Proactively listening to your new customers is critical. Are you examining new user support tickets? Are you sending a new customer survey? Is your team reaching out to ensure they are happy in the first 90 days? Consider multiple channels for this information and have actions planned against these key insights.
Step Two: Loyalty
Your customers are now familiar with your product, but are they finding real value? Is it significant enough that they will repeat their purchase? To build customer loyalty, you will need to track the following:
Ongoing usage. Determine if there is sustained usage and sustained value. Is usage growing? Are customers using stickier features tied to higher levels of value? Understanding usage patterns associated with customer value and early outreach if there are issues is critical.
ROI. Can customers clearly see the return on their investment? If not, you will need to connect the dots. Your team or a thoughtful campaign must point out the success they've achieved in order to build the business case for the renewal.
Feedback.If you want to know if your customers are getting value from your product, ask them. This can be via a marketing survey or your team reaching out and asking if they intend to renew. The key is making certain you solicit feedback from all levels of the organization that either influence or own the renewal decision.
Step Three: Advocacy
This is the highest and hardest level to achieve. True customer advocates are the collection of individuals at your company who not only love and recommend your product, but do so at all levels of the organization. How does a customer grow from loyal to advocate? To make that happen, there are several actions you need to take:
Remember product is king. For a customer to stand on stage on your behalf or walk you into other areas of his business, your product must be rock solid. Are you listening to your customers' feedback and taking action where needed? Your company must be focused and committed to constant improvement.
Make relationship depth a top priority. Your end users love your product, but do the executives? Leveraging end user enthusiasm to higher levels of your customer's organization is key to broadening product awareness and building true advocacy.
Roll out the red carpet. To maintain and grow customer advocacy, you need a program to manage it. Take the time to ask your top advocates what would motivate them to participate in a loyalty program. The rewards must be meaningful to ensure participation.
Understanding where your customers sit on the customer success hierarchy and having a repeatable way of taking actions on key insights will help you manage and grow customer relationships from satisfaction to advocacy. Building this foundation is as mission critical as setting up your lead generation process, because the only key that will unlock the highest rate of revenue and market share growth is advocacy.
Catherine Blackmore is the chief customer officer at Bluenose Analytics, provider of a customer success platform for software-as-a-service businesses. She has worked with SMBs and Fortune 100 companies for more than 20 years.