Leading Growth Experts Discuss Why Customer Success Is Crucial for Growth
Many people see Growth and Customer Success as two very separate functions within a SaaS company — getting customers in the door vs. keeping them. Two teams with different goals, different practices, different subcultures. And, oftentimes, in conflict.
This viewpoint is completely false. Growth and Customer Success are two highly interrelated practices, and each one fails without the other. As growth lead for ProofHQ, a SaaS company focused on speeding up the content review and approval process, I see firsthand evidence of the interdependence of Growth and Customer Success.
To explore this topic further, I spoke with other growth experts to get their take on Customer Success and what role it plays in the growth of a successful SaaS business. I asked:
How does Customer Success impact Growth for SaaS companies?
... and received some surprising and important answers. Many think of growth in terms of acquisition, which, without retention, is not sustainable, scalable or cost-effective. The experts weighed in, and highlighted that, in fact, SaaS growth is predicated on Customer Success, and without exceptional customer retention, a SaaS business (or any business, for that matter) won’t be able to scale.
Lars Lofgren, Growth Manager at KISSMetrics, points out that when customers recognize the full value of your product early on in their trial process, they tend to convert quicker, stay longer, and generally derive more value from your service. Lars said:
Customers with a smoother transition into your product will integrate it more deeply into their lives. Which means they buy more frequently or stay subscribed. And when loyal customers hit a problem, it ensures that problem doesn't drive them away.
This usually doesn't impact your acquisition directly. If you have world-class customer service, you can start to accelerate organic demand and word-of-mouth. Zappos is the classic example of this. But very few companies achieve this; it doesn't happen by accident. However, it WILL give your other marketing and growth initiatives more breathing room, due to increased ROI. Marketing, sales, and growth hacks won't have to recover nearly as many customers to maintain your current sales volume. This means more of your acquisition gets applied to actual growth instead of just maintenance.
Lars’ argument that Customer Success actually improves acquisition efforts by driving up Customer Lifetime Value (CLTV) and earning word-of-mouth referrals is absolutely key; servicing existing customers and ensuring their success will pay off in spades.
Morgan Brown, Head of Growth at Qualaroo, said:
Customer Success is one of the secret ingredients to sustainable SaaS growth.
Morgan elaborated on this by stating that Customer Success done right is a growth driver in three areas:
First, converting a trial user to an active user in SaaS means a significant investment in onboarding. Customer Success creates the framework to drive that transition. Things like email drip series, knowledge base and tutorial materials, webinars, videos, and both proactive and responsive handholding all go into turning a trial user into an active user — a key growth milestone. At the same time these tactics ensure that the learning curve isn't so steep as to turn new users off. With many of the same tools from onboarding, users are moved from beginners to experts, making the product as valuable and sticky as possible.
Customer Success also impacts growth by reducing churn. Understanding what makes accounts successful vs. unsuccessful, the Customer Success team should proactively create the conditions to make as many accounts successful, while at the same time monitoring and winning back accounts that may be slipping away.
And beyond simply reducing churn, Customer Success can help identify and drive negative churn, by generating upsell opportunities and account upgrades through an understanding of the signals that suggest an account is a good candidate for expansion.
These three areas are critical to driving sustainable growth, and the Customer Success team plays a big role in each of them. Morgan’s insights are crucial to understand while growing a SaaS company. By properly onboarding customers and servicing them, Customer Success generates data which can be used to see what differences successful accounts have versus unsuccessful accounts, which allows you to iterate and improve on your growth efforts.
While Customer Success doesn’t directly impact acquisition like inbound marketing or paid marketing does, it’s the key behind making acquisition efforts actually work. In addition, successful customers are the driving force behind the greatest kind of marketing of all time: word-of-mouth referrals. And if they change jobs, they’re much more likely to recommend your product to their new team. If a potential customer is onboarded successfully, they’re also much more likely to continue after the free trial, upgrade their plan, and stick with you during bugs and other hiccups. It’s such an essential piece of growing a SaaS business that every successful SaaS company must engage in some form of Customer Success initiative in order to scale and sustain growth.
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