What Is Customer Success? A Comprehensive Guide to Maximizing Client Value and Growth

What is customer success?

Customer Success (CS) is a business strategy that leverages your product or service to assist customers in meeting their goals. This approach prioritizes building strong client relationships, aligning customer objectives with company goals to create mutually beneficial results. 

Customer success involves a business's efforts to ensure its customers achieve success with its products and in their own operations.

Customer success maximizes user proficiency with the product, increasing their likelihood of staying long-term. For subscription-based companies, this is crucial for growing monthly recurring revenue (MRR). For other businesses, the benefits include valuable product insights and positive word-of-mouth marketing.

Customer success often intersects with roles like customer support, customer experience, and account management. While it’s essential to define what customer success is, it's also important to clarify what it is not.

Key Takeaways

• Customer Success (CS) is a strategy that helps customers achieve their goals with a product or service, fostering strong client relationships and aligning customer objectives with company goals.
• CS teams focus on metrics such as expansion rate, churn rate, and average monthly recurring revenue (MRR), differentiating them from the metrics used in Customer Support and Account Management.
• Effective CS strategies increase customer retention, loyalty, and satisfaction, leading to higher revenue and positive word-of-mouth marketing.

Today, it’s not enough to rely on the entire company to handle customer success. For customers to excel, you need a dedicated team focused solely on this goal. These teams use proactive, data-driven strategies to help customers utilize products effectively.

Depending on the team’s size and experience, they may manage everything from engaging trial users to ensuring renewals. This all-encompassing strategy helps businesses achieve key objectives like:

• Increasing renewal sales and revenue.
• Fostering customer loyalty and retention.
• Enhancing customer lifetime value and annual recurring revenue (ARR).
• Reducing churn.

Customer success vs. customer support

Customer success teams often operate within the same organizational structure as support or service teams and share a customer-focused approach, but there is a significant difference between them.

Customer service and support are generally reactive, addressing issues after they arise. In contrast, customer success is proactive, aiming to predict and fulfill needs before customers reach out. 

Another major difference lies in the metrics used to measure success. Customer support metrics include:

• Time to response
• Customer satisfaction
• Handle time
• First response resolution

Customer success teams, however, focus on metrics such as:

• Expansion rate
• Churn rate
• Average MRR
• Customer health

Although there is some overlap, customer service concentrates on metrics at the individual interaction level, while customer success looks at metrics on a relationship or lifecycle level.

Customer success vs. account management

Similar to customer support and customer service, account management (AM) teams provide reactive assistance to customers who request help.

Account managers address issues after they occur, specifically for a designated group of customers. These customers are typically high-value accounts or those with significant growth potential.

Although both account managers and customer success teams are concerned with the overall health of their customers, account managers focus primarily on financial aspects. Their role involves growing accounts and generating revenue for the business.

While some customer success teams also prioritize revenue and MRR, it is not usually their sole focus.

Customer success vs. customer experience

To clarify some terms, it's useful to differentiate between Customer Success and customer experience. Customer Success involves helping companies understand and improve the customer experience, which is how customers interact with and perceive your product.

In essence, customer experience is about the "how." Customer Success leverages insights from the customer experience to achieve better outcomes with the product. This goes beyond just analyzing the "how" and focuses on three key aspects:

• Understanding the "how"
• Understanding the "why"
• Using data to help customers optimize their use of the product

Why is customer success critical?

In essence, Customer Success enables companies to maximize the value of their solutions, leading to a significant return on investment (ROI). When customer success teams help buyers reach their goals, it proves the product or service's worth, resulting in:

• Stronger relationships
• Increased trust
• Greater customer satisfaction

Moreover, interactions with customer success teams offer valuable insights that can enhance various departments, including product development, marketing, and sales. Understanding client needs better enables teams to provide high-quality experiences and nurture a healthier customer lifecycle.

Your business's success is tightly connected to your customers through sales, revenue, and retention. Happy and loyal customers often become brand advocates, spreading the word through positive reviews, social media, and personal recommendations.

How does customer success work?

Effective customer success requires three key elements: a customer success solution, a dedicated team, and a well-defined strategy.

1. Choose a Customer Success Solution

To manage all customer interactions proactively, implement customer success software and tools. For example, the HubSpot Service Hub allows you to connect with customers on their terms and grow through their success. This tool brings customer success to the forefront, helping you create happy customers who stay loyal, refer friends, and promote your business.

2. Hire and Train a Customer Success Team

You'll need a dedicated person or team to focus on customer success. The size of this team will depend on your business size and available resources. As your company grows, remember to expand your customer success team to continue providing proactive support.

3. Create a Customer Success Strategy

Your strategy will depend on your product and customer needs, but some universal steps include:

• Establish a customer success team.
• Implement the appropriate customer success tools and software.
• Identify your customers' end goals and understand why they need customer success.
• Create a roadmap for success, outlining your business's short- and long-term goals for customer success.
• Share and implement the strategy with your team, ensuring everyone knows their individual and team expectations.
• Analyze your results to ensure customers have the tools and support they need.
• Adjust your strategy and team as your business and customer base evolve.

Now that you understand the importance of customer success, let's explore ways to help your customers succeed.

6 tips for enabling customer success

Creating an effective customer success strategy is crucial for achieving the best results. Here are six essential tips to guide you:

1. Form a Dedicated Customer Success Team

• Start with the Right Team: Establish a dedicated team focused solely on customer success, distinct from customer service and account management.
• For Small Businesses: Consider hiring one specially trained customer support representative.
• For SaaS, Enterprises, and Subscription-Based Businesses: Create a larger department with team members assigned to specific accounts, led by Customer Success Managers (CSMs) responsible for long-term customer success.
• Diverse Team: Ensure your team includes members from varied backgrounds and experiences, bringing different skills and perspectives to foster innovation and creativity.

2. Diagnose Problem Areas and Replicate Wins for Your Customers

• Leverage Technology: Use technology to identify major successes and challenges for your customers.
• Review Customer Complaints: Have support agents and other customer-facing departments log interactions and note common complaints. Use a CRM to track and share information.
• Analyze Data: Identify recurring issues, which may be simple yet annoying to customers (e.g., billing problems).
• Learn from Successful Customers: Understand what’s working well for them and replicate those successes consistently.
• Build on Insights: Use this information as the basis for a strong customer success strategy.

3. Get Everyone to Buy into the Customer Success Process

• Company-Wide Initiative: Customer success should be embraced by the entire company.
• Engage Leadership: Regularly share the benefits of customer-centric efforts with C-level executives to gain their support.
• Spread the Culture: Once leadership is on board, it’s easier to get the rest of the company aligned. Team leaders can drive customer success initiatives, approve new policies, and implement product changes to enhance the customer experience.

4. Make Sure the Onboarding Process is Proactive

• Comprehensive Onboarding: Provide plenty of educational materials to ensure new customers start on the right foot.
• Highlight Benefits: Show customers how your product or service fits their needs and teach them to use it effectively.
• Balanced Information: Offer video kick-off calls for paying customers and in-app, checklist-style onboarding for free trial customers. Ensure information is digestible yet informative.

5. Choose Your Customers Selectively

• Target Wisely: Focus on customers with the highest likelihood of success rather than targeting everyone.
• Tailored Messaging: Being selective allows you to tailor your messaging and better address the needs of your ideal customers.

6. Start a Referral Program

• Leverage Relationships: Use your successful customer relationships to attract new ones.
• Reward Referrals: Implement a referral program that rewards existing customers for bringing in new ones, such as offering a free trial or a free month of service for each new referral.

By keeping these tips in mind, you can develop a robust customer success strategy that drives better outcomes for both your customers and your business.

What’s the best customer success solution for your business?

Customer Success is crucial for all companies. If you have customers, ensuring their success is key to your company's growth. However, your Customer Success strategy and solutions must be tailored to your company's unique size, resources, and goals.

Determine Your Customer Success Maturity

The first step in identifying the best Customer Success solution for your company is to assess your Customer Success maturity. This can be achieved through a Value Creation Plan. Understanding your company's maturity level will guide you in taking the appropriate next steps.

Early Stages of Customer Success

• Focus on Digital Customer Success: In the early stages, leverage one-to-many tactics that allow your Customer Success Managers (CSMs) to scale their efforts efficiently.
• Implement Basic Tools and Processes: Use digital tools to handle a broad customer base and streamline your operations.

Mature Customer Success

• Embrace Full Automation: For more mature companies, advanced automation at scale becomes essential.
• Monitor Health Scores: Use tools to track the health scores of thousands of customers, combining digital touchpoints with CSM interventions to ensure customers achieve their desired outcomes.
• Advanced Strategies and Tools: Implement sophisticated strategies and tools to provide personalized support and proactive solutions for your customers.

By understanding your Customer Success maturity, you can choose the right tools and strategies to help your customers thrive, ultimately driving growth for your company.

Help your customers succeed

The most successful businesses prioritize the ongoing happiness and success of their customers. By establishing a customer success program, you can ensure your customers feel supported throughout their entire journey with your company. This approach will help transform customers into loyal advocates for your brand.

By focusing on customer success, you'll achieve sustainable growth and build long-term relationships with the people who matter most: your customers.