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Today’s business environment is tough — as such, customer success has become a crucial aspect of generating revenue. It’s no longer enough to simply acquire new customers; retaining and expanding existing customers is equally important for sustainable growth.
In this article, we’ll explore how customer success can drive revenue and provide strategies for maximizing its impact on your bottom line.
Understanding customer success
Before we dive into how customer success can propel revenue forward, let’s first define what it is. Customer success is the process of ensuring that your customers achieve their desired outcomes while using your product or service.
It involves proactively engaging with customers, understanding their needs and providing them with the resources and support they need to be successful, which in turn increases customer loyalty.
The importance of retention revenue
One of the key ways that customer success management can stimulate growth is through customer retention. Retention revenue refers to the revenue generated from existing customers who continue to use your product or service. We all know that net new customer acquisition costs more, yet so many companies insist on following this playbook. However, today’s investors are paying closer attention to retention rates and churn rates than ever before.
According to research by Bain & Company, increasing customer retention rates by just 5% can increase profits by 25% to 95%. This is because loyal customers are more likely to make repeat purchases and are also more likely to refer others to your business.
By focusing on customer success and ensuring that your customers are achieving their desired outcomes, you can increase customer satisfaction and loyalty, leading to higher retention rates and, ultimately, more revenue. There is no more compelling reason to introduce a solid customer success strategy.
The power of expansion revenue
Another growth strategy is through expansion revenue. This refers to the additional revenue generated from existing customer relationships through upselling, cross-selling and renewals.
By proactively engaging with customers and understanding their needs, you can identify opportunities for upselling and cross-selling. This not only increases revenue but also strengthens the relationship with your customers by providing them with additional value, so bake this into your customer onboarding processes.
The key here is ensuring your customer success team is a part of the revenue team, aligning it with sales (and also marketing) and making it responsible for part of the financial targets. Not only does this spread your revenue risk, but you’re also putting the customer experience front and center. No one wants to be chased by a salesperson they haven’t spoken to in a year for a renewal — a sale is far more likely to convert if driven by a trusted advisor who’s built a relationship with the account. According to Forrester research, trust is the most important brand attribute for buyers — so lean into it.
Strategies for driving revenue through customer success
Proactive engagement and personalization
Proactively engaging with customers and providing personalized support is crucial for growth via customer success. By regularly checking in with your customers and understanding how their business needs may be shifting (aka really knowing them), you can identify opportunities for that all-important upselling and cross-selling. The best companies, however, will plan this as part of the customer lifecycle and lifetime value. It can be usage-driven for SAAS companies and service-driven for business services; wherever an opportunity is available, you should have a natural progression plan.
Additionally, personalized support can help customers achieve their desired outcomes, leading to higher satisfaction and retention rates. This can be achieved through personalized onboarding, regular check-ins and tailored resources and support.
So much of content marketing is focused on bringing new customers on board, that existing ones often get overlooked. That playbook is dead. It costs more and doesn’t have great ROI — it’s time to flip the script. This is why customer success and marketing teams must work together to build more long-term client relationships and achieve negative churn.
Utilizing customer data
Data and the resulting insights are another powerful tool. By analyzing customer data, you can identify patterns and trends that can help you better understand your customers’ needs and behaviors. For example, by tracking customer usage data, you can identify which features are most popular and which are underutilized. This can help you tailor your upselling and cross-selling efforts to offer customers the features they need and are most likely to purchase. It will help you identify what features, additional products or services to develop based on the most desired outcomes of your customers.
It can also help with churn. We recently implemented a Net Promoter Score process for a client who’d never done one before. When low scores came in from several customers, it was a wake-up call for the team, who had thought everything was ticking along just fine. This allowed them to react, drill into the issues and save the accounts.
With metrics and insights in place, you become proactive instead of reactive by keeping a regular pulse on your customers. Note: You should implement a 360-view of them across one CRM to facilitate this and achieve the best results.
Collaboration between customer success and sales teams
As highlighted above, collaboration between customer success and sales teams is crucial for driving revenue growth and a seamless customer experience. For example, the former can provide sales teams with insights into customer must-haves and behaviors, helping them tailor their pitches.
According to Gartner, 43% of vendor-related regret happens at the handoff between sales and implementation. Why? Many teams still work in silos, and as such, there tends to be a gap in communication and handover — allowing for buyer remorse and worry about big-ticket investment. By working cross-functionally, you can nip this in the bud and ensure a smooth transition.
Technology can play a significant role here as well. For example, a customer success platform can track usage data and trigger automated emails or notifications when a customer reaches a certain usage threshold, indicating an opportunity for upselling. You can also build automated workflows within your CRM, ensuring those valuable check-ins and customer satisfaction surveys aren’t missed — achieving a level of personalization at scale.
Times are tougher than ever, and buyers are in the driving seat. Therefore, customer success is even more crucial for nailing those sales targets. You can win bigger and maximize this team’s impact on your bottom line if you, 1) tear down those team silos and start working together and 2) be proactive instead of reactive by using technology, data insights and good old-fashioned relationship building.