Insights | Marketing

Customer Success Team: What Is It and Do You Need It?

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Loren Straub

January 16, 2017
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Customer Success is a popular buzzword right now in sales and marketing, but what exactly is it and do you really need it?

First, What Is Customer Success? The Customer Success team works with many different aspects of a company to improve its chance of growth and prosperity. It does this by managing the business and technical relationships between a company and its customers, in order to maximize things like customer retention and acquisition, churn reduction, contract renewals, and most importantly, revenue. Customer Success, if done correctly, can decrease Customer Acquisition Cost (CAC), while increasing Customer Lifetime Value (LTV). Those two things in consequence can increase revenue by staggering numbers.

Second, do enterprise SaaS companies need a Customer Success team? The short answer here is Yes, but to expand on this, we’ve laid out 3 reasons why you need a Customer Success team.

(1) Ensure Customer Happiness and Reduce Churn: If you are not checking in with customers on a regular basis, you risk losing them. The Customer Success team is responsible for managing the relationships with existing customers and understanding their needs and addressing them in a timely fashion. A good CS team is devoted to predicting high risk customers early and stopping them before they churn. Particularly for early stage companies, not only do you need to know exactly how your customers feel about your product, but you need those customers to champion your product. Early customers can and should be a valuable resource and reference for you, if you make sure they’re happy.

(2) Improve the Customer Renewal Rate: With today’s perpetual subscription based SaaS models, companies are more frequently contemplating their subscription renewals. The Customer Success team helps manage these renewal conversations by properly preparing materials that are relevant to each individual customer. Consistent dialogue with existing customers enables the CS team to know exactly what the largest pros and cons are for each customer and can thus have a productive and successful renewal conversation.

(3) Upsell and Cross-sell Customers: If you are solely focused on attaining new customers, then you are missing out on a massive opportunity within your existing customer base. CS teams focus not only on retaining current customers, but also on trying to upsell and cross-sell your products. When done properly, upselling and cross-selling can become a significant source of incremental revenue.

Customer Success is all of these things and more, and can be useful to any SaaS company. For more on customer success and exactly how to setup your initial Customer Success team, tune in to this Friday’s podcast where we will be hosting Allison Pickens, the VP of Customer Success at Gainsight.

Special thanks to Jack Blattman for his contributions to this post!