Customer success
is a term that has recently become frequently used in the Japanese business scene. This is largely related to the historical background in which subscription-type services have become widespread in Japan. However, although many people have heard of the term customer success, they may not know exactly what to do.
Therefore, in this article, we will specifically explain the overview of customer success, why it is necessary, and what you should do. We will also explain the points you should be aware of when it comes to customer success and how to achieve success, so please use this as a reference.
What is customer success?
First, let’s start with an overview of customer success. Customer success is about helping your customers succeed. Customer Success literally translates to “customer success (experience),” and means that companies actively engage with customers and support their success.
In the past, efforts were made to collect customer opinions by setting up call centers and after-sales follow-up services. However, these efforts were passive and did not mean that the company was actively working on them.
The difference between customer success and customer support is whether it is passive or active. Customer success is about verbalizing customer success and supporting them to realize that success. In customer success, we not only actively listen to customer feedback, but also provide support in the form of a consultant.
Why is customer success necessary?
So, why is customer success so important and necessary? There are two reasons for this:
- related to CX
- The market is maturing
Let’s look at each in turn.
related to CX
Customer success is related to CX. CX stands for “customer experience” and represents the kind of experience customers have through services. In recent years, all services have been able to provide customers with an experience that exceeds a certain level of quality, making it extremely difficult to differentiate. As a result, it is currently difficult for customers to choose which service will give them the best experience.
To solve these problems, the need for customer success is required. While competitors are providing traditional services, if your company can actively support your customers with customer success, that will be an overwhelming point of differentiation from your competitors. Additionally, if you improve your CX, your services will naturally spread through word of mouth, which will also help reduce advertising costs.
The market is maturing
There are some similarities with the above, but one of the reasons why customer success is necessary is that the market is maturing. It is difficult to differentiate services, and all companies can attract customers with attractive advertisements, making it difficult for customers to choose services that will increase their satisfaction.
Additionally, the growing popularity of subscription-based services is another reason why customer success is required. With subscription-based services, the point at which a customer signs up for a service is not the goal; it is just the starting point. Services other than subscription-type services are generally sold under a “sell-out model,” where the goal is to provide the product.
However, with a subscription type, the starting point is the time of contract, and a high level of satisfaction must be maintained throughout the contract. Therefore, customer success is considered important as one of the means to achieve these high levels of satisfaction.
What exactly does customer success do?
From here, we will introduce three specific things you should do in customer success.
- community activities
- Introduction support
- monitoring
Let’s look at each in turn.
community activities
Customer success often incorporates community activities. There are communities where customers can voice their opinions directly to companies, and communities where customers can actively provide solutions to other customers’ problems based on their case studies.
Creating a community will increase customer satisfaction as users will use your service more often. This has the advantage of increasing service continuity.
Introduction support
In the case of services that are difficult to use or services that the customer has no knowledge of, there are many cases where it is difficult just to introduce them. If you offer these services, consider providing implementation support.
In addition to implementation support, you can increase opportunities for customers to use your service by providing chat support, telephone/email support, and opportunities for meetings about once a month. .
monitoring
Set up a dedicated management screen and perform monitoring. On the management screen, you can monitor the number of logins, tool usage, number of inquiries, etc. for each customer. This will enable you to identify customers who are not utilizing your services and provide proactive customer support.
Additionally, during customer support, you can identify areas for improvement in your own services by asking them why they are not using your services and what parts of them are difficult to use.
Terms to remember when doing customer success
When working on customer success, it is important to remember the following two terms:
- LTV (lifetime value)
- Onboarding
I will explain each in turn.
LTV (lifetime value)
LTV
(lifetime value) is a metric that clarifies how much a customer will spend on average when using your company’s services. For example, if one user continues a service of 300,000 yen per month for 7 months, the LTV will be 2.1 million yen.
Find out the average unit price and duration of all customers and check the LTV of your service. If your company’s LTV is low, you can hypothesize that your unit price is too high or that you are providing a service that is not worth continuing, so it is important to find ways to improve it.
Onboarding
Onboarding refers to the guidance that helps customers properly use your services. Software handled by
BtoB
services and
SaaS
services are often difficult to use for first-time users. Onboarding at these times will ensure your customers are able to use your tools without any issues.
As a result, you can reduce the possibility of your subscription being canceled due to “difficulty in use”. This will also lead to increasing the LTV mentioned above.
Points to be aware of in customer success
When it comes to customer success, it is important to be aware of the following three points.
- LTV or churn rate
- customer loyalty
- Upsell/Cross-sell
I will explain each in turn.
LTV or churn rate
First, let’s analyze your company’s current LTV and churn rate. If the current LTV is 1,000,000 yen, we will analyze the reason why it does not reach 1.5 times, 1,500,000 yen. If the average churn rate in the 6th month is 50%, analyze why the remaining 50% do not cancel, and what are the reasons for customers who cancel. By analyzing these, you can find out how many times a month you need support, and what you should do for implementation support.
customer loyalty
Customer loyalty is a term that expresses how much a customer feels about a company’s services. Conduct a customer survey and ask them to rate each item on a scale of 1 to 10. A score of 1 to 3 indicates no attachment, a score of 4 to 7 indicates average, and a score of 8 to 10 indicates attachment. In addition, we ask them to write down why they received such a score, and identify areas for improvement in their services. In other words, if customer loyalty increases, it will be easier for your company to accept any improvements you make to its services.
Upsell/Cross-sell
Upselling means getting customers to sign up for a plan one level higher than their current plan, and cross-selling means getting them to sign up for an additional service that is different from their current plan. If you can upsell and cross-sell, you can increase LTV.
For customer success to be successful
Customer success doesn’t happen overnight. To be successful, keep the following two points in mind.
- Work across the organization
- Verbalize customer success
I will explain each in turn.
Work as a whole organization (company)
It is important that customer success is an organization-wide effort. In addition to the efforts within a department, it is also necessary to share what other departments are doing and how customers are reacting to those efforts. By working across your organization, you can deliver a more uniform service to your customers and accelerate customer success improvements.
Verbalize customer success
For customer success to be successful, you need to verbalize customer success. Because customer success is about supporting customer success. Let’s clarify what conditions would make our customers satisfied and create an organization that can support them.
summary
In this article, we have explained about customer success. Customer success is about supporting your customers to achieve success. In the past, the mainstream approach was to set up support centers and other facilities to respond to customers, but this was only a passive approach, and there were no opportunities to proactively support customer success. Customer success is done with the purpose of actively supporting customer success and maximizing customer satisfaction.
To achieve this, it is important to verbalize customer success while working across the organization. Why not start by creating an organization that handles customer success?