Developing a strong customer success strategy is vital to the long-term success of your subscription business. It helps you get ahead of your customers, demonstrates the deep value and benefits you offer, and sets you apart from the competition.
We’ve talked before about the importance of customer success, especially as it relates to customer service—but now we’re here to answer a different question: “What customer success goals do you put in place to track how well your strategy is working?”
In this article, we’ll explore:
- The customer success goals you need to set
- How to measure progress against those goals
- Customer success KPIs
You’ll be able to understand how streamlined, efficient customer success processes contribute to the health and growth of your business. Here’s how to think about your customer success strategy and goals in 2020 and beyond.
A Quick Recap of Customer Success
Before we get into specific goals and measures, it’s worth clarifying what we mean when we say “Customer Success.” One common viewpoint is that customer success and customer service are the same thing, but that’s a misconception.
Customer success comes from the proactive things you do to help your customers meet their business goals—like share information and tutorials, explain how to get the most value out of your product, and demonstrate features and benefits. Customer success builds trust with your clients and helps them see your products and services as the right solution.
Customer service, on the other hand, is a reactive function. It aims to fix issues and problems that are stopping your customers from getting value from your products. Customer service focuses on resolving incidents, understanding what caused a problem, stopping it from happening again, and communicating with your customer. Customer service reassures your customers that you take their problems seriously and can resolve issues quickly and easily.
Defining Your Customer Success Goals
Any subscription business is going to have similar high-level goals:
- Maximize profit margins on every signup and product or service sold
- Reduce customer acquisition costs as much as possible
- Boost customer engagement with the business
- Maximize customer retention rates
- Maximize the lifetime value (LTV) of each customer and overall subscription values
- Maximize subscription lengths
- Minimize customer churn
Now you just need to see the contribution that customer success makes to each one. In our view, getting customer success right helps with the following parts of a subscription business:
- Greater customer engagement with products and services, strengthening product use and benefits
- Better advocacy from existing customers and enhanced content SEO, reducing acquisition costs
- Improved subscription lengths and values, driving up LTV
- Reduced churn rates and enhanced retention rates, reducing overall costs
How Your Customer Success Processes Influence Your Goals
As you identify customer success goals, you’ll need to define exactly what processes drive those achievements. That way, you can put accurate KPIs in place to demonstrate success. We’ve shared some examples below.
Boosting Customer Engagement
The key activities and processes for driving up customer engagement include:
- Proactive and ongoing relationship management that shares the benefits and features of your subscription services. Not waiting until a few weeks before the renewal is due to reach-out.
- Publish engaging and useful content highlighting how to get more value out of your products.
- Consult with customers to get a deep understanding of their challenges and needs.
- Demonstrate subscription products and services to build business use cases.
- Measuring and providing easy visibility into the level of engagement over time and identifying the key people at the customer and within your own teams.
Customer Engagement Goals, Metrics, and KPIs
Here are some examples of the goals you can set for customer engagement:
- Proactive outreach to customers: Positive CRM interactions and communications with customers.
- Published content and resources: The number and quality of resources published, SEO performance, and customer interactions.
- Direct consultations: Documentation of meetings with customers including requirements analysis, action plans, and suggestions for improvement.
- Demonstrations: Number of potential customers trialing subscription services and engagement with the sales team.
- Product usage: Analytics of how customers are using products and services and measuring the amount of value they are getting over time.
Reducing Customer Acquisition Costs
The key activities and processes for reducing acquisition costs with customer success include:
- Sales and relationship management that builds trust, strengthens relationships, and turns customers into advocates.
- Publication of high-quality, SEO optimized content to drive traffic to your website and media channels.
- Integrated marketing campaigns to cross-sell and upsell to existing customers.
Customer Acquisition Goals, Metrics, and KPIs
Here are some examples of the goals you can set for customer acquisition:
- Training in relationship management: Deeper and more frequent customer interactions.
- SEO and marketing optimization: Content strategy effectiveness, user engagement across multiple channels, and marketing ROI.
- Revenue from customer success: Promotion, marketing, and sales engagement resulting in enhanced revenue through expanding paid-for product usage.
Optimizing Subscription Customer Lifetime Value
The key activities and processes for driving up customer LTV include:
- Analyzing your customers to understand the factors driving those that tend to remain customers in the long-term versus those that tend to churn.
- Subscription options and price points that give customers multiple options and encourage them to sign up for longer.
- Regular proactive outreach to customers, not just as they’re coming to the end of trial periods or subscription expiration.
- Package deals and add ons that clearly meet the needs of your customer base.
Customer LTV Goals, Metrics, and KPIs
Here are some examples of the goals you can set for customer LTV:
- Average subscription length: The duration of customer subscriptions and the amount of revenue generated.
- Sales at specific price points: Split testing of subscription pricing to identify better conversion rates, revenue, and reduced churn.
- Customer engagement at specific periods: Number and percentage of trial and potential renewal / lapsing customers as subscriptions expire.
- Options chosen when starting or renewing a subscription: Customer choice in paying for features as part of the base package, an enhanced package, or designed as bespoke options.
Reducing Customer Churn Rates and Enhancing Retention Rates
Ultimately, all of the above activities and goals are designed to do one of two things:
- Expand your new customer base through new customer acquisition.
- Retain your existing customer base through customer retention.
Both of these activities reduce your overall costs and help you maintain business stability while driving growth. Although customer success can help with acquisition—through good customer advocacy and a strong content strategy—it’s in retention and lowering churn rates that it really shines. If customer retention is top-of-mind for you, here are the customer success goals we recommend focusing on:
- Build trust through proactive CRM and outreach: Train your sales, retention, and customer success staff to understand customer needs and to initiate communication.
- Share features and benefits: Understand how your products and services solve problems for the customer and show this through demonstrations and other activities.
- Let customers solve their own problems: Publish useful resources and guides in multiple formats so customers can engage.
- Meet with customers and act on feedback: Drive future product and service development based on customer priorities.
- Communicate with customers at vulnerable times: Identify when customers could lapse and provide incentives and reasons for them to stay.
Get these areas right, and customer success will be a driving factor behind your subscription business. It’s time to get those goals and KPIs in place!