Customer Success

Chapter 2

The Customer Success Strategy: The New Organization versus the Traditional Business Model

Why Does Customer Success Matter?

Before we dig into the organizational aspects of customer success, let's talk about the desired outcomes that drive the accompanying investment. This is important because the way you organize for customer success will often be driven by your primary motivations for investing in it. There are three basic benefits that come from executing customer success well:

1. Reduce/manage churn.
2. Drive increased contract value for existing customers.
3. Improve the customer experience and customer satisfaction.

Reduce/manage churn. As we explored in Chapter 1, using the early days of Salesforce as an example, churn can be the killer of a recurring revenue business. If churn is too high, one solution is to invest in customer success. It's important to understand that investing in customer success cannot make up for fundamental flaws in other parts of the enterprise. If your product is not good enough or your implementation processes do not meet customer requirements or your sales team is continually setting improper expectations, you will fail regardless of the quality of your customer success efforts. All things being competitively equal, an investment in the people, processes, and technology for delivering customer success will result in a reduction in churn if it's too high or a management of churn if it's at or near an acceptable and sustainable level. The ...