Customer Success 2.0 is a concept that describes the new trends in customer success for the next five years.
First of all, customer success means “providing customers with the results they seek and resolving their issues through your products and services”.
So what does “Customer Success 2.0” mean?
McKinsey & Company, an American consulting firm, proposed the concept in January 2018.
It means that customer success will be universally adopted in any business and will play a larger role in driving the business forward.
There are two specific points to consider.
This table shows the changes in the industries that are working on customer success.
In Customer Success 1.0, sales people did the onboarding while customer success’ role was to visit customers who are at risk of churn at renewal time and encourage them to renew.
However, in Customer Success 2.0, it’s role turned into maximizing sales by tackling their customers to up-sell or cross-sell while continuing to manage the risk of churn.
Furthermore, customer success staff are now expected to provide feedback to marketing, sales and product development teams from the perspective of maximizing LTVs and managing churn risk of existing customers.
Here are some specific cases of Customer Success 2.0 taken from our clients.
On the left is an example from Usac System, a RPA software company.
Usac System has achieved churn improvement through the customer portal run by Commmune.
In addition to churn improvement, they have managed to streamline customer support operations, improve the sales conversion rate, and receive more product feedback efficiently.
In this way, customer success is fulfilling various different roles derived from its traditional role of churn improvement, and is functioning as a business growth engine that creates value.
The example on the right is from Sharp Corporation, which provides a cooking appliance called Hot Cook.
Hot Cook is an electric cooking pot service which is based on the BtoC consumer-oriented hardware non-subscription model.
Since they started working on customer success using our platform, the degree of Hot Cook customers’ utilization has actually increased drastically.
In the case of a non-subscription model, it is tempting to think that an improvement in customers’ utilization is not significant, but it actually leads to up-selling, such as purchasing optional products.
As they worked on maximizing the value provided to existing customers in the non-subscription, BtoC domain, they achieved up-selling, cross-selling, and receiving important feedback for marketing, sales, and product development teams.
In order for customer success to provide value to a wide range of companies, you need to elevate customer success from a department to a philosophy.
To achieve this, it is important for every non-customer success department to work on their business in a way that leads to customer success.
For example, in the case of Sharp Corporation, after receiving feedback from customers, the company sorts out what should be reflected in the products and what should not, then actually implements it and reports it to the customers.
In contrast to this case, if, for example, the product development department thinks that its products are superior and does not listen to customers’ opinions, or if the support department does not respond to customers’ feedback, those kind of attitude toward customer communication will not achieve customer success, thus the value provided to customers will not be maximized.
One of the great things about Sharp is that the entire company, including other departments, recognizes that “maximizing the value provided to their customers = success for the company”, and it is a very important point in customer success.
To share this understanding, the customer success department must lead spreading its philosophy throughout the organization.
It is important to spread the philosophy that the customers’ success is the most significant factor in maximizing the company’s revenue and is the benchmark for management decisions, as well as that the customer success department plays an active role in the company’s operations.
The more you expand the scope of customer success, the more ambiguous the role becomes, and the more it overlaps with other departments.
This is because customer success has the potential to be a significant indicator for business decisions so that it can potentially increase the value provided and include other departments’ business in its role.
In most companies, each department fulfills its own role to maximize the outcome.
It is important to define the role alignment and collaboration between departments, such as what types of work the customer success team does and what to ask the marketing and sales team to do, in this corporate structure.
In doing so, you need to define and design roles from the perspective of how the department should operate in order to promote company-wide customer success, rather than prioritizing maximizing the outcomes of the customer success department.
In order to increase the value provided by customer success, you need these actions: upfront investment, clarifying investment criteria, and executing the investment.
If decision makers perceive that the role of customer success is only to prevent churn, they will consider that up-selling, cross-selling, and feedback to marketing, sales, and product development teams, which are the roles that should be fulfilled, will only require further resources and deliver poor ROI.
Therefore, you need to determine that expanding the role of customer success and contributing to the organization leads to investing in customer success as a whole, as well as to take a stance that the entire company will invest in customer success.
The reason why you need to invest in customer success is that the outcomes are slow to come in for customer success.
In the case of customer success, the metrics you work on are more on the side of lagging metrics and outcome metrics, so you need to invest in advance.
In general, we tend to look at customer base in the early stages and revenue base in the middle and later stages.
In order to strengthen customer success to accelerate providing value a talent engine is very important.
A talent engine means hiring the best people, leading them to grow and deliver outcomes.
The first thing you need to do is to define the requirements of the people you need to maximize the value of customer success.
Depending on the company’s products and the characteristics of its customers, the criteria for what kind of background is suited for will vary from company to company, so defining the requirements for the best customer success person for your company should be the first step.
Then, when a candidate joins the company, you need to define the skills and levels required in the customer success team, and visualize your own positioning and start training.
The last step is to visualize their career path.
Since customer success is a relatively new concept, it is important to show the path of which career they could build after working in the customer success team.
The last but not least one.
You need to use technology to work on customer success strategically, scientifically, and efficiently.
As the roles required of customer success and the industries to which it applies expand, there are limits to approaches that rely on willpower and human power.
Therefore, leveraging technology to tackle customer success in a scalable way is critical.
In addition, you need to set up customer touch points and establish workflows for customer success operations before tackling advanced analytics and data integration.
After establishing the high-touch, tech-touch, and low-touch mechanisms, leveraging technology as a means of optimizing them will lead to the desired outcome.